RAMAKANT G SOMANI vs LIFE INSURANCE CORPORATION OF INDIA AND ORS

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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
TH
DATED THIS THE 29 DAY OF SEPTEMBER, 2026
PRESENT
THE HON'BLE MR. JUSTICE ASHOK S. KINAGI
AND
THE HON'BLE MR. JUSTICE SUBRAMANYA RANGARAO
WRIT PETITION NO. 201749 OF 2025 (GM-CON)
BETWEEN:
RAMAKANT G SOMANI
S/O GANGABISHAN SOMANI,
H/O LATE RAJKANYA SOMANI,
AGED ABOUT 53 YEARS,
OCC: CHARTERED ACCOUNTANT,
NO.#3-552 AND 3-553,
SOMANI AVENUE, MILAN CHOWK,
GAZIPUR, KALABURAGI 585101.
…PETITIONER
(BY SRI. AMEETKUMAR DESHPANDE, SENIOR COUNSEL FOR
SRI ANANTH S. JAHAGIRDAR, ADVOCATE)
Digitally signed by
SHIVALEELA D
UDAGI
Location: HIGH
COURT OF
KARNATAKA
AND:
1. LIFE INSURANCE CORPORATION OF INDIA
DIVISIONAL OFFICE,
POST BOX NO.43, STATION ROAD,
RAICHUR 584101.
REP. BY ITS MANAGER.
2. LIFE INSURANCE CORPORATION OF INDIA
CB-1, JAIL GARDEN ROAD,
KALABURAGI 585101.
REP. BY ITS MANAGER.

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3. LIFE INSURANCE CORPORATION OF INDIA
THE ZONAL MANAGER,
SOUTH ZONAL OFFICE, SAIFABAD,
HYDERABAD - 500063.
AP/TELANGANA,
REP. BY ITS MANAGER.
…RESPONDENTS
(BY SRI. UDAY PRABHAKAR, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
ISSUE ANY APPROPRIATE WRIT, MORES IN THE NATURE OF
CERTIORARI AND GRANT THE FOLLOWING RELIEF QUASH THE
FINAL ORDER DATED 25-07-2024 PASSED BY THE NATIONAL
CONSUMER DISPUTES, REDRESSAL COMMISSION AT NEW
DELHI, IN FIRST APPEAL NO. 526 OF 2024, THE CERTIFIED
COPY OF WHICH IS AT ANNEXURE-H, CONFIRMING THE FINAL
ORDER DATED 08-02-2024 PASSED BY THE KARNATAKA
STATE, CONSUMER DISPUTES, REDRESSAL COMMISSION,
BENGALURU PRINCIPAL COMMISSION, BENGALURU PRINCIPAL
BENCH, IN CC-63/2023, THE CERTIFIED COPY OF WHICH IS AT
ANNEXURE-G, WHEREBY THE COMPLAINT FILED BY THE
PETITIONER HEREIN IS PARTLY DISMISSED AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE ASHOK S. KINAGI
and
HON'BLE MR. JUSTICE SUBRAMANYA RANGARAO

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ORAL ORDER
(PER: HON'BLE MR. JUSTICE SUBRAMANYA RANGARAO)
This writ petition is directed against the order dated
25.07.2024 passed by the National Consumer Redressal
Commission at New Delhi (for short, ‘the National Commission’)
in First Appeal No.526/2024, which confirmed the order dated
08.02.2024 in C.C.No.63/2023 passed by the Karnataka State
Consumer Disputes Redressal Commission, Bengaluru (Principal
Bench) (for short ‘the State Commission’), whereby, the
complaint filed by the petitioner herein was allowed in-part .
2. The facts apropos are that on 14.07.2020 the
petitioner insured the life of his wife, Smt. Rajkanya by
purchasing a policy from the Life Insurance Corporation of India
(for short, ‘the Corporation’). The petitioner’s wife expired on
30.06.2022. The Petitioner, upon the death of his wife, late
Smt. Rajkanya, submitted his claim for the sum assured as the
life of his wife was covered under the insurance policy as on the
date of death of his wife. The respondent-Corporation, by

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communication dated 31.03.2023, repudiated the Petitioner’s
claim.
3. The petitioner filed a complaint in C.C.No.63/2023
before the State Commission, Bengaluru, under Sec. 35 of the
Consumer Protection Act, 1986, and sought a direction to the
Corporation to pay Rs. 1,01,00,000/- along with interest at
18% per annum. The petitioner further sought Rs.50,00,000/-
with interest at 18% per annum towards damages for mental
agony, stress, etc., and Rs.4,00,000/- towards litigation costs.
4. The complaint filed by the petitioner was partly
allowed by the State Commission, Bengaluru by the order
dated 08.02.2024 directing the respondent-Corporation to
return the premium amount of Rs.5,42,188/- along with
interest at 6% p.a. and to pay the litigation expenses of
Rs.10,000/- within 45 days from the date of receipt of copy of
the order, on failure to pay the aforementioned amount within
the time stipulated, the same shall carry interest at 9% p.a.
5. Aggrieved, the petitioner preferred First Appeal
No.526/2024 before the National Commission, New Delhi,

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assailing the order passed by the State Commission, Bengaluru.
The National Commission, New Delhi, dismissed the First
Appeal and confirmed the order passed by the State
Commission, Bengaluru. The petitioner has presented this writ
petition challenging the order of the National Commission, New
Delhi, dated 25.07.2024.
6. The learned Senior Counsel Sri. Ameetkumar
Deshpande, Senior Counsel for the petitioner, submits that the
State Commission and the National Commission have
committed a serious error by failing to appreciate the
petitioner's claim in the proper perspective. The learned Senior
Counsel submits that the cause of death of the petitioner’s wife,
late Smt. Rajkanya has no nexus with the alleged suppression
of facts. In other words, the learned Senior Counsel argues
that, in the absence of any nexus or correlation between the
cause of death and the alleged material facts suppressed, the
Corporation's repudiation of the claim is arbitrary and illegal.
The learned Senior Counsel further submits that the
respondent-Corporation, having followed all formalities and
protocols in obtaining the medical test report, etc., covered the

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life of the insured by issuing the policy. That being so, the
respondent-Corporation could not have rejected or refused to
settle the claim, as the life of the petitioner’s wife was covered
under the insurance policy as on the date of her death.
7. Per contra , learned counsel representing the
respondent Nos. 1 to 3-Corporation sought to justify the order
passed by the State Commission, Bengaluru, and the National
Commission, New Delhi. Learned counsel submits that, while
obtaining the policy, the insured did not disclose material facts
and particulars that directly bear on the policy issue covering
the life of the insured. It is further submitted that the insured
was specifically asked for personal and family details relating to
health and habits, and the insured gave a wrong declaration. As
the insured suppressed part of the medical history or material
information, the respondent-Corporation committed no error in
repudiating the claim and refusing to settle the claim made by
the petitioner. In the light of the above submission, learned
counsel seeks dismissal of the writ petition.
8. We have heard learned Senior Counsel Sri.
Ameetkumar Deshpande for the petitioner and Sri. Uday P.

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Honguntikar, learned counsel for the respondents and perused
the documents available on record.
9. The scope of judicial review of the orders passed by
the State Commission, Bengaluru, and the National
Commission, New Delhi, under Article 227 of the Constitution of
India is very limited. This Court cannot assume jurisdiction over
the issue involved herein as a forum of first instance or the
appellate forum. In other words, the State Commission and the
National Commission, having examined all aspects of the
matter, have concurrently rendered their opinion, not finding
fault with the Respondent-Corporation’s repudiation of the
claim.
10. It is imperative to refer to the decision of the
Hon’ble Supreme Court in Radhey Shyam & Anr. Vs. Chhabi
1
Nath & Ors. , where the Hon’ble Supreme Court laid down
the parameters for exercising jurisdiction under Article 227 of
the Constitution of India. The ratio laid down in paragraph 24 is
as under:
1
(2015) 5 SCC 493

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“24. The difference between Articles 226 and 227 of
the Constitution was well brought out in Umaji
Keshao Meshram v. Radhikabai [1986 Supp. SCC
401]. Proceedings under Article 226 are in exercise
of the original jurisdiction of the High Court while
proceedings under Article 227 of the Constitution
are not original but only supervisory. Article 227
substantially reproduces the provisions of Section
107 of the Government of India Act, 1915 excepting
that the power of superintendence has been
extended by this article to tribunals as well. Though
the power is akin to that of an ordinary court of
appeal, yet the power under Article 227 is intended
to be used sparingly and only in appropriate cases
for the purpose of keeping the subordinate courts
and tribunals within the bounds of their authority
and not for correcting mere errors. The power may
be exercised in cases occasioning grave injustice or
failure of justice such as when (i) the court or
tribunal has assumed a jurisdiction which it does
not have, (ii) has failed to exercise a jurisdiction
which it does have, such failure occasioning a
failure of justice, and (iii) the jurisdiction though
available is being exercised in a manner which
tantamounts to overstepping the limits of
jurisdiction.”
The case at hand must be examined in the backdrop of the law
declared by the Apex Court referred to supra . Since this Court
is exercising its jurisdiction under Article 227, the only issue
that falls for consideration is whether the two forums, i.e., the
State Commission and the National Commission, committed an
error in the order passed.

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11. Admittedly, the respondent-Corporation has called
for personal and family details on health and habits in a
question-and-answer format. The proposal form dated
11.06.2020, filled and signed by the insured or the petitioner
herein, did not provide the full particulars, or the information
provided was not true. The insurer, taking the proposal form
submitted by the petitioner and the wife dated 11.06.2020,
issued a life insurance policy covering the life of the petitioner’s
wife with effect from 15.06.2020. The petitioner’s wife expired
on 30.06.2022, i.e., within three years from the
commencement of risk, i.e., 15.06.2020.
12. The claim submitted by the petitioner after the
death of his wife, late Smt. Rajkanya, was replied to by the
respondent-Corporation by the communication dated
31.03.2023. The respondent-Corporation has repudiated the
petitioner's claim for settlement on the ground that the insured,
or the petitioner herein, suppressed or concealed material
facts, as indicated in the communication dated 31.03.2023. The
relevant portion of the aforementioned communication is
extracted hereunder:

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"Ret Clams/Repudiations/2022-2023/646 Date 31-03-2013
To.
Ramakanth Somani,
H/o Late Smt Rajkanya, H.No.3-553,
Somani Avenue, Milan Chowk Gazipur,
KALABURAGI PIN:585101
Sir,
Re: Death claim under Policy Number. 650688738 on the
life of Late Smt. Raikanya
This has reference to your claim under the above policy
on the life of Late Raikanya received by us. In this connection
we have to inform you that afore stated policy has not
completed three years from the date of commencement of risk,
i.e. 15-06-2020.
As such we have examined the claim, keeping in view of
provisions of Section 45 of the Insurance Act 1938. While
examining the claim, we note that from the proposal form
dated 11-06-2020 that, the deceased life assured had
answered the following questions as noted below.
1. Personal and Family details of health/habits
QUESTIONS ANSWERS
b. During last five years did
you consult a Medical
Practitioner for any ailment
requiring treatment for more
than a week? If yes give details Y/N NO
185
c. Have you ever been
admitted to any Hospital or
Nursing Home for general
checkup. Observation, treatment,
operation? If yes give details Y/N NO
e. Are you suffering from or
have you ever suffered, or

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undergone investigation in
the past or have you been
advised to undergone
investigation or treat for the
following ailment ?
Disease Y/N
e. 2. Hypertension, Hypotension,
rheumatic fever, pain in chest,
breathlessness, palpitation,
any disease of the
heart or arteries ? NO
e.7. Cancer /leukemia/lymphoma/
tumor/cyst/Any other growth
/lumps/blood disorder/enlarged
Glands NO
e.9. Diabetes/suffering from
diabetes or have you ever passed
sugar, albumin, pus or blood in
urine/ goitre/thyroid or other
endocrine disorder? NO
e. 14. Any operation, accident
of injury/any bodily defect or
deformity NO
e. 15 Any other disease? NO
(III) What has been your usual
state of health? GOOD
We may, however, state that all these answers were
false as can be seen from the Hospital reports . The
DISCHARGE SUMMARY OF DURGABAI DESHMUKH HOSPITAL
(ANDHRA MAHILA SABHAL HYDERABAD, DLA has a history of
Ml from 2013 (THROMBOLYSED Right Angiogram), DLA was a
known case of DIABETES MALLITUS from 2019, DLA was a
known case of HTN from 2018, also a known case of
HYPOTHYRODISM from 5 years , DLA had undergone 3
cycles of IVF, 6 cycles of IUI, DLA has OVARIAN

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MALIGNANCY STAGE III C ( CANCER OF OVARY ) and DLA
was on MEDICATION.
This suppression of material facts , which have had a
bearing on the granting of risk was clearly done with an intent
to play fraud and deceive LIC. Hence the competent authority
repudiated the claim as per policy terms and conditions.
In case, if you disagree with our decision and feel that
we have not considered any particular facts and circumstances
in support of your claim, you may send your representation
within three months from the date of receipt of this letter for
re-consideration of your claim to our Zonal Office at the
following address.
The Zonal Manager,
LIC of India,
South Central Zonal Office,
Saifabad, HYDERABAD-500 063
Yours faithfully,
Sd/-
Senior Divisional Manager
CC TO: CLAIMS DEPARTMENT, LICI B.O-1.
KALABURAGI(646)."
The contents of the communication, more particularly, the
declaration made by the petitioner or the insured, have not
been disputed. Nonetheless, the learned Senior Counsel for the
petitioner contended that the alleged suppression of facts
relating to disease in the proposal form has no bearing on the
cause of death; thus, the respondent-Corporation's repudiation
of the claim is erroneous. The learned Senior Counsel’s

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submission cannot be accepted. When the petitioner or the
insured is provided with the proposal form containing the
questions and soliciting answers, they ought to disclose the
true information without concealment or suppression. Whether
such suppression or concealment of certain information has any
direct bearing on the cause of death or not would be immaterial
and insignificant.
13. The policy by which the life of the petitioner’s wife
was covered is nothing but a contract between the parties. The
contract between the parties would be void-ab-initio , and its
invalidity would remain or operate from inception when the
other party to the contract suppresses material facts or
conceals true information. In the present case, the
respondent-Corporation, having sought relevant particulars,
found that the petitioner or the insured had provided false
information. Had the petitioner or the insured disclosed the
relevant information sought, the respondent-Corporation would
have been in a position to make an appropriate decision on
whether to enter into a contract covering the life of the
deceased late Smt. Rajkanya.

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14. The respondent-Corporation had proceeded to cover
the life of the insured based on the declaration and proposal
form signed by the petitioner or the insured. The petitioner or
the insured was under an obligation to disclose the true
information about the medical history of the insured.
Contractual obligations rest on the trust and good faith of the
parties entering into a contract. Since there was a breach of
that obligation and a failure to declare the past medical history,
whether material or not, the policy is rendered void from
inception. Thus, the respondent-Corporation's repudiation of
the claim cannot be termed arbitrary or illegal.
15. The Apex Court, considering Sec.45 of the
Insurance Act, 1938, in the case of Reliance Life Insurance
Company Limited and Another vs. Rekhaben Nareshbhai
2
Rathod has laid down the exposition of law and the law
declared is as under:
16. The fundamental principle is that insurance is
governed by the doctrine of uberrima fidei. This
postulates that there must be complete good faith on the
part of the insured. This principle has been formulated in
MacGillivray on Insurance Law12 succinctly, thus:
2
(2019) 6 SCC 175

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“[Subject to certain qualifications considered
below], the assured must disclose to the insurer all
facts material to an insurer’s appraisal of the risk
which are known or deemed to be known by the
assured but neither known or deemed to be known
by the insurer. Breach of this duty by the assured
entitles the insurer to avoid the contract of
insurance so long as he can show that the non-
disclosure induced the making of the contract on
…”
the relevant terms…
The relationship between an insurer and the
insured is recognized as one where mutual
obligations of trust and good faith are paramount.
18 This principle was followed by the Bombay High Court
in Lakshmishankar v Gresham Life Assurance Society
where it was held:
“2.…… where the representations, statement
and agreements made by an assured in his
application for a policy of life assurance are made a
basic condition of the contract by the policy of life
assurance, the truth of the statements contained in
the proposal are, apart from the question of their
materiality, the condition of the liability of the
assurance company. It would therefore follow that
the defendant company was entitled to repudiate
its liability on account of the untrue statement
contained in the proposal form and in the
”
examination by the medical examiner...
19. In Sheoshankar (supra), a Division Bench of the
Bombay High Court noted:
“12…..…The law with respect to insurance
previously was that any mis-statement on the part
of the assured while making the proposal or at any
stage thereafter avoided the contract of policy and
the insurer was not liable for the claim on such
policy. In Condogianis v. G. Assurance Co., Ltd.
[[1921] A.I.R. P.C. 195.], their Lordships pointed
out that if in point of fact the answer is untrue, the
warranty still holds, notwithstanding that the

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untruth might have arisen inadvertently and
without any kind of fraud. Secondly, the materiality
of the untruth is not in issue; the parties having
settled for themselves by making the fact the basis
of contract and giving warranty that as between
them their agreement on that subject precluded all
”
inquiry into the issue of materiality…
The High Court observed that the law of insurance had,
however, undergone a material change by the enactment
of Section 45 of the Insurance Act 1938. Explaining the
provisions of Section 45 the High Court held:
“14…… The section is divided into two parts.
Under the first part, if the insurer calls in question
the policy within a period of two years from the
date on which it was effected, then the insurer
company has only to show that a statement made
in the proposal for insurance, or in any report of a
medical officer, or referee, or friend of the insured,
or in any other document, leading to the issue of
the policy was inaccurate or false. Even an
incorrect statement which may not be on a
material fact and suppression of fact which
may not be on a material point, would be
enough for the insurer company to avoid the
contract of policy under this part. Under the
second part, where a period of two years expired
after the date of policy was effected without any
challenge to it by the insurer, the insurer could call
it in question only on showing that such statement
by the insured was on a material matter or
suppressed facts which it was material to disclose
and that it was fraudulently made by the policy
holder and that the policy-holder knew at the time
of making it that the statement was false or that it
suppressed facts which it was material to disclose.
The question as to the date on which the policy
could be said to be effected and the date on which
the proposal can be said to have been accepted
assumes importance in this case as on the
determination of this question will depend whether
the repudiation by the insurer has been within two
years or after a period of two years from the date
on which the policy was effected.”

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21. In Life Insurance Corporation of India v Smt GM
Channabasamma14, a two Judge Bench of this Court
held:
“7. … It is well settled that a contract of
insurance is contract uberrima fides and there must
be complete good faith on the part of the assured.
The assured is thus under a solemn obligation to
make full disclosure of material facts which may be
relevant for the insurer to take into account while
deciding whether the proposal should be accepted
or not. While making a disclosure of the relevant
facts, the duty of the insured to state them
correctly cannot be diluted. Section 45 of the Act
has made special provisions for a life insurance
policy if it is called in question by the insurer after
the expiry of two years from the date on which it
was effected. Having regard to the facts of the
present case, learned counsel for the parties have
rightly stated that this distinction is not material in
the present appeal. If the allegations of fact made
on behalf of the appellant Company are found to be
correct, all the three conditions mentioned in the
section and discussed in Mithoolal Nayak v. Life
Insurance Corporation of India must be held to
have been satisfied.”
23. In Satwant Kaur (supra) this Court considered a case
which arose from a decision of the NCDRC. The insurer
had repudiated a claim under a health insurance policy on
the ground that the policy holder was suffering from
chronic diabetes and renal failure. This, according to the
insurer, was a material fact a non-disclosure of which in
the proposal form justified repudiation of the claim.
Section 45, which applies to policies of life insurance, was
not applicable since the case related to a mediclaim
policy. Justice DK Jain, speaking for the Bench of two
learned Judges, held:
“18. A mediclaim policy is a non-life insurance
policy meant to assure the policy-holder in respect
of certain expenses pertaining to injury, accidents
or hospitalisations. Nonetheless, it is a contract of
insurance falling in the category of contract
uberrima fidei, meaning a contract of utmost good

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faith on the part of the assured. Thus, it needs
little emphasis that when an information on a
specific aspect is asked for in the proposal
form, an assured is under a solemn obligation
to make a true and full disclosure of the
information on the subject which is within his
knowledge. It is not for the proposer to
determine whether the information sought for
is material for the purpose of the policy or
not. Of course, the obligation to disclose extends
only to facts which are known to the applicant and
not to what he ought to have known. The obligation
to disclose necessarily depends upon the
knowledge one possesses. His opinion of the
materiality of that knowledge is of no moment.
(Emphasis supplied)
In taking this view, the Court relied upon the earlier
decisions in United India Insurance Co Ltd v MKJ
Corporation16 and Modern Insulators Ltd v Oriental
Insurance Co Ltd17. Adverting to the expression “material
fact” this Court explained it as:
“22. … any fact which would influence the judgment
of a prudent insurer in fixing the premium or
determining whether he would like to accept the
risk. Any fact which goes to the root of the contract
of insurance and has a bearing on the risk involved
.”
would be “material”
In a situation which was not governed by Section 45, this
Court applied the fundamental tenet of insurance law
namely, utmost good faith.
25. Regulation 2(d) specifically defines the expression
“proposal form” as a form which is filled by a proposer for
insurance to furnish all material information required by
the insurer in respect of a risk. The purpose of the
disclosure is to enable the insurer to decide whether to
accept or decline to undertake a risk. The disclosures are
also intended to enable the insurer, in the event that the
risk is accepted, to determine the rates, terms and
conditions on which a cover is to be granted. The
explanation defines the expression “material” to mean

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and include “all important essential and relevant
information” for underwriting the risk to be covered by
the insurer. Regulation 4(3) stipulates that while filling up
the proposal, the proposer is to be guided by the
provisions of Section 45. Where a proposal form is not
used, the insurer under Regulation 4(4) is to record the
information, confirming it within a stipulated period with
the proposer and ought to incorporate the information in
the cover note or policy. In respect of information which
is not so recorded, the onus of proof lies on the insurer
who claims that there was a suppression of material
information or that the insured provided misleading or
false information on any matter that was material to the
grant of the cover.
27. Materiality of a fact also depends on the
surrounding circumstances and the nature of information
sought by the insurer. It covers a failure to disclose vital
information which the insurer requires in order to
determine firstly, whether or not to assume the risk of
insurance, and secondly, if it does accept the risk, upon
what terms it should do so. The insurer is better equipped
to determine the limits of risk-taking as it deals with the
exercise of assessments on a day-to-day basis. In a
contract of insurance, any fact which would influence the
mind of a prudent insurer in deciding whether to accept or
not accept the risk is a material fact. If the proposer has
knowledge of such fact, she or he is obliged to disclose it
particularly while answering questions in the proposal
form. An inaccurate answer will entitle the insurer to
repudiate because there is a presumption that information
sought in the proposal form is material for the purpose of
entering into a contract of insurance.
29. Contracts of insurance are governed by the
principle of utmost good faith. The duty of mutual
fair dealing requires all parties to a contract to be
fair and open with each other to create and
maintain trust between them. In a contract of
insurance, the insured can be expected to have
information of which she/he has knowledge. This
justifies a duty of good faith, leading to a positive
duty of disclosure. The duty of disclosure in insurance

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contracts was established in a King’s Bench decision in
Carter v Boehm19, where Lord Mansfield held thus:
“Insurance is a contract upon speculation.
The special facts, upon which the contingent chance
is to be computed, lie most commonly in the
knowledge of the insured only; the under- writer
trusts to his representation, and proceeds upon
confidence that he does not keep back any
circumstance in his knowledge, to mislead the
under-writer into a belief that the circumstance
does not exist, and to induce him to estimate the
risk, as if it did not exist.”
31. The finding of a material misrepresentation or
concealment in insurance has a significant effect upon
both the insured and the insurer in the event of a dispute.
The fact it would influence the decision of a prudent
insurer in deciding as to whether or not to accept a risk is
a material fact. As this Court held in Satwant Kaur
(supra) “there is a clear presumption that any
information sought for in the proposal form is
material for the purpose of entering into a contract
”
of insurance. Each representation or statement
may be material to the risk. The insurance company
may still offer insurance protection on altered
terms.
16. The Hon’ble Supreme Court, in the case of Manmohan
3
Nanda vs. United India Insurance Co. Ltd. and Ors has
held at paragraphs 34 to 42 and 52 as under:
“ 34. Just as the insured has a duty to disclose all
material facts, the insurer must also inform the
insured about the terms and conditions of the policy
that is going to be issued to him and must strictly
conform to the statements in the proposal form or
3
(2022) 5 SCC 582

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prospectus, or those made through his agents.
Thus, the principle of utmost good faith imposes
meaningful reciprocal duties owed by the insured to
the insurer and vice versa. This inherent duty of
disclosure was a common law duty of good faith
originally founded in equity but has later been
statutorily recognised as noted above. It is also
open to the parties entering into a contract to
extend the duty or restrict it by the terms of the
contract.
35. The duty of the insured to observe utmost good
faith is enforced by requiring him to respond to a
proposal form which is so framed to seek all
relevant information to be incorporated in the
policy and to make it the basis of a contract. The
contractual duty so imposed is that any suppression
or falsity in the statements in the proposal form
would result in a breach of duty of good faith and
would render the policy voidable and consequently
repudiate it at the instance of the insurer.
40. Full disclosure must be made of all relevant
facts and matters that have occurred up to the time
at which there is a concluded contract. It follows
from this principle that the materiality of a
particular fact is determined by the circumstances
existing at the time when it ought to have been
disclosed, and not by the events which may
subsequently transpire. The duty to make full
disclosure continues to apply throughout
negotiations for the contract but it comes to an end
when the contract is concluded; therefore, material
facts which come to the proposer’s knowledge
subsequently need not be disclosed.
41. Thus, a proposer is under a duty to disclose to
the insurer all material facts as are within his
knowledge. The proposer is presumed to know all
the facts and circumstances concerning the
proposed insurance. Whilst the proposer can only
disclose what is known to him, the proposer’s duty
of disclosure is not confined to his actual
knowledge, it also extends to those material facts

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which, in the ordinary course of business, he ought
to know. However, the assured is not under a duty
to disclose facts which he did not know and which
he could not reasonably be expected to know at the
material time. The second aspect of the duty of
good faith arises in relation to representations
made during the course of negotiations, and for this
purpose all statements in relation to material facts
made by the proposer during the course of
negotiations for the contract constitute
representations and must be made in good faith.
42. The basic rules to be observed in making a proposal
for insurance may be summarized as follows :
(a) A fair and reasonable construction must be put
upon the language of the question which is asked,
and the answer given will be similarly construed.
This involves close attention to the language used
in either case, as the question may be so framed
that an unqualified answer amounts to an assertion
by the proposer that he has knowledge of the facts
and that the knowledge is being imparted.
However, provided these canons are observed,
accuracy in all matters of substance will suffice and
misstatements or omissions in trifling and
insubstantial respects will be ignored.
(b) Carelessness is no excuse, unless the
error is so obvious that no one could be
regarded as misled. If the proposer puts ‘no’
when he means ‘yes’ it will not avail him to
say it was a slip of the pen; the answer is
plainly the reverse of the truth.
(c) An answer which is literally accurate, so far as it
extends, will not suffice if it is misleading by reason
of what is not stated. It may be quite accurate for
the proposer to state that he has made a claim
previously on an insurance company, but the
answer is untrue if in fact he has made more than
one.
(d) Where the space for an answer is left
blank, leaving the question unanswered, the

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reasonable inference may be that there is
nothing to enter as an answer. If in fact there
is something to enter as an answer, the
insurers are misled in that their reasonable
inference is belied. It will then be a matter of
construction whether this is a mere non-
disclosure, the proposer having made no
positive statement at all, or whether in
substance he is to be regarded as having
asserted that there is in fact nothing to state.
(e) Where an answer is unsatisfactory, as being on
the face of it incomplete or inconsistent the
insurers may, as reasonable men, be regarded as
put on inquiry, so that if they issue a policy without
any further enquiry they are assumed to have
waived any further information. However, having
regard to the inference mentioned in head (4)
above, the mere leaving of a blank space will not
normally be regarded as sufficient to put the
insurers on inquiry.
(f) A proposer may find it convenient to bracket
together two or more questions and give a
composite answer.
There is no objection to his doing so, provided the
insurers are given adequate and accurate information on
all points covered by the questions.
(g) Any answer given, however accurate and
honest at the time it was written down, must be
corrected if, up to the time of acceptance of the
proposal, any event or circumstance supervenes to
make it inaccurate or misleading.
52. On a consideration of the aforesaid judgments,
the following principles would emerge:
(i) There is a duty or obligation of disclosure
by the insured regarding any material fact at
the time of making the proposal. What
constitutes a material fact would depend upon
the nature of the insurance policy to be taken,

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the risk to be covered, as well as the queries
that are raised in the proposal form.
(ii) What may be a material fact in a case
would also depend upon the health and
medical condition of the proposer.
(iii) If specific queries are made in a proposal
form then it is expected that specific answers
are given by the insured who is bound by the
duty to disclose all material facts.
(iv) If any query or column in a proposal form is
left blank then the insurance company must ask the
insured to fill it up. If in spite of any column being
left blank, the insurance company accepts the
premium and issues a policy, it cannot at a later
stage, when a claim is made under the policy, say
that there was a suppression or nondisclosure of a
material fact, and seek to repudiate the claim.
(v) The insurance company has the right to seek
details regarding medical condition, if any, of the
proposer by getting the proposer examined by one
of its empanelled doctors. If, on the consideration
of the medical report, the insurance company is
satisfied about the medical condition of the
proposer and that there is no risk of preexisting
illness, and on such satisfaction it has issued the
policy, it cannot thereafter, contend that there was
a possible preexisting illness or sickness which has
led to the claim being made by the insured and for
that reason repudiate the claim.
(vi) The insurer must be able to assess the likely
risks that may arise from the status of health and
existing disease, if any, disclosed by the insured in
the proposal form before issuing the insurance
policy. Once the policy has been issued after
assessing the medical condition of the insured, the
insurer cannot repudiate the claim by citing an
existing medical condition which was disclosed by
the insured in the proposal form, which condition
has led to a particular risk in respect of which the
claim has been made by the insured.

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(vii) In other words, a prudent insurer has to gauge
the possible risk that the policy would have to
cover and accordingly decide to either accept the
proposal form and issue a policy or decline to do
so. Such an exercise is dependant on the
queries made in the proposal form and the
answer to the said queries given by the
proposer.”
The present case, when considered in the conspectus of the law
declared by the Hon’ble Supreme Court, it can be deduced that,
in cases of suppression or concealment of facts and false
declaration of information, the life covered under the insurance
policy by the Insurance Company under good faith would
become void and cannot be taken advantage of. The Petitioner
and his wife, who was insured under the insurance policy, are
not laymen, and they are practicing Chartered Accountants.
They cannot take shelter behind the argument that the non-
disclosure of information sought from the Respondent-
Corporation in the proposal form was immaterial and had no
impact or bearing on the cause of death.
16. The State Commission and the National
Commission, as fact-finding forums on the petitioner's claims,
have considered them in detail and have concluded that the

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petitioner's claim cannot be entertained in view of the reasons
assigned in the orders passed by the respective forums. This
Court cannot re-appreciate the factual contentions raised by
the Petitioner herein, especially in exercising jurisdiction under
Article 227 of the Constitution of India, which is narrow and
limited in scope.
17. In précis of the foregoing reasons, this Court is not
inclined to interfere with the order passed by the National
Consumer Disputes Redressal Commission. Hence, we proceed
to pass the following:
ORDER
The Writ Petition is hereby dismissed .
Sd/-
(ASHOK S. KINAGI)
JUDGE
Sd/-
(SUBRAMANYA RANGARAO)
JUDGE
SDU
LIST NO.: 1 SL NO.: 19