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BEFORE THE HON’BLE DISTT.SESSION COURT

APPLICANT

v.

INSURANCE COMPANY

PETITION INVOKED UNDER SECTION 45 OF

THE INSURANCE ACT

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4

INDEX OF AUTHORITIES - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5

STATEMENT OF JURISDICTION - - - - - - - - - - - - - - - - - - - - - - - - - 6

STATEMENT OF FACTS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -7-8

STATEMENT OF ISSUE - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9

SUMMARY OF ARGUMENTS - - - - - - - - - - - - - - - - - - - - - - - - - - - -10

ARGUMENTS IN ADVANCE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11-13

PRAYER - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 14

LIST OF ABBREVIATIONS

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& And
Art. Article
Govt. Government
Hon’ble Honorable
i.e., That is
No. Number
CrPC Criminal Procedure Code
U/S Under Section
V. Versus
Vol. Volume
Sec. Section
AIR All India Report
SCC Supreme Court Cases
Mad. Madras
SC Supreme Court

INDEX OF AUTHORITIES

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A. TABLE OF CASES
S. Name of the cases and case citation
No.

1. Joel v. Law Union & Crown Insurance Co.

2. United India Insurance Co. Ltd. Vs. M. K. J.

Corporation, (1996) 6 SCC 428
3. All India General Insurance Co. ... vs S.P. Maheshwari on 5
November, 1959 AIR 1960 Mad 484

B. BOOK
1. Conflict of Laws

C. JOURNALS
1. Journal of Banking and Insurance law

D.DATABASE REFFERED
1. www.lexology.com

2. enquiries@lexology.com

3. https://taxguru.in

4. https://indiankanoon.org

STATEMENT OF JURISDICTION

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THE PETITIONER HAS APPROACHED THE HON’BLE DISTT.

SESSSIONS COURT UNDER SEC. 26 OF CrPC.

STATEMENT OF FACTS

For The sake of brevity and convenience of this Hon’ble Court the facts of the
present case are summarized as follows:

1. That in 1942, one M sent a proposal for the insurance of his life.

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2. That, he was examined by Dr D. who submitted two reports, on with the

proposal form and one confidential, in the confidential report it was shown
that M was anemic, had a dilated heart and his right lung showed indications
of old attack of pneumonia or pleurisy and that he was a physical wreck.

3. That, nothing came out of the proposal sent by M and he lapsed.

4. That In 1943, M consulted Dr. L and also was treated by L for anemia
oedema of the feet, diarrhea and panting on exertion.

5. That in 1944, M made a second proposal for the insurance of his life.

6. That in the proposal form there was a question that whether he had consulted
any medical man for any ailment within the last five years, he gave the
answer, “NO”.

7. That he didn’t disclose any of his ailments.

8. That after medical examination by one Dr K. the proposal was accepted and a
policy for Rs. 25000/- was issued on March 13, 1945.

9. That the policy lapsed due to non-payment of premium but was revived in
July, 1946.

10. That in November 1946 M died and his assignee, the appellant, made a
demand for Rs 26000/- but the company on October 10, 1947, repudiated it
on the ground that the policy had been obtained by deliberate mis-statement
and fraudulent suppression of material facts.

11. Thereupon, the appellant filed a suit to recover the amount of the policy
contending that section 45 Insurance Act barred the company from calling in
question the policy after two years on the ground that any statement made in
the proposal was inaccurate or false.

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STATEMENT OF ISSUES

1. Whether the amount of policy should be given to the assignee or not?

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SUMMARY OF ARGUMENTS

1. Whether the amount of policy should be given to the assignee or not?

No, the amount should not be given to the assignee because when asked while
filling the form he had not disclosed any of his details and answered the same in
‘NO’ and that the applicant Misrepresented the company and he did not tell the
company about his medical condition to them. Therefore, the insurance
company as a result of this will not give the amount of Rs 26000/- to the

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applicant stating the fact that the policy has been obtained by Fraudulent
Suppression of material facts.

ARGUMENT IN ADVANCE

1. Whether the amount of policy should be given to the assignee or not?

No, the amount should not be given to the assignee because when asked while
filling the form he had not disclosed any of his details and answered the same in
‘NO’ and that the applicant Misrepresented the company and he did not tell the
company about his medical condition to them. Therefore, the insurance
company as a result of this will not give the amount of Rs 26000/- to the

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applicant stating the fact that the policy has been obtained by Fraudulent
Suppression of material facts.
According to s. 45 of Insurance Act:
Section 45 of the Insurance Act prescribes a statutory period of two years within
which however it is open to the insurance company to repudiate liability on the
contract on the ground of false and inaccurate information furnished by the
assured in these statements, though after this period the Insurance company is
entitled to repudiate only on the ground that the disclosure or non-disclosure of
a material fact has been fraudulently made. A contract of life Insurance has been
called one 'uberrimae fidei' in which the insurer is entitled to be put in
possession of all the material information possessed by the insured.

The contract of insurance is based on the doctrine of ‘Utmost Good Faith’,

which means a person applying for an insurance cover has to disclose and
reveal all material information required by insurance company. Material
Information means all those information on the basis of which underwriter
access the risk profile of the person and decide to accept the risk and issue the
insurance policy or decline the same.
It is not for the proposer to determine whether information sought for is material
for the purpose of the policy or not. The obligation to disclose extends on 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 movement.

The Insurance Regulatory & Development Authority of India, by a Notification

dated October 16, 2002 issued the Insurance Regulatory & Development
Authority (Protection of Policyholders Interests) Regulations 2002.
The expression Proposal Form is defined in Regulation 2(d) thus:
 2 (d) Proposal Form means a Form to be filled in by the Proposer for
Insurance, for furnishing all material information required by the Insurer
in respect of a risk, in order to enable the Insurer to decide whether to
accept or decline, to undertake the risk, and in the event of acceptance of
the risk, to determine the rates, terms and conditions of a cover to be
granted.
Explanation: Material for the purpose of these regulations shall mean and
include all important, essential and relevant information in the context of

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underwriting the risk to be covered by the insurer. Regulation 4, deals with

Proposals for Insurance and is in the following terms: Proposal for Insurance:
1. Except in cases of a marine insurance cover, where current market practices
do not insist on a written proposal form, in all cases, a proposal for grant of a
cover, either for life business or for general business, must be evidenced by a
written document. It is the duty of an insurer to furnish to the insured free of
charge, within 30 days of the acceptance of a proposal, a copy of the proposal
form.
2. Forms and documents used in the grant of cover may, depending upon the
circumstances of each case, be made available in languages recognized under
the Constitution of India.
3. In filling the form of proposal, the prospect is to be guided by the provisions
of Section 45 of the Act. Any proposal form seeking information for grant of
life cover may prominently state therein the requirements of Section 45 of the
Act.
4. Where a proposal form is not used, the insurer shall record the information
obtained orally or in writing, and confirm it within a period of 15 days thereof
with the proposer and incorporate the information in its cover note or policy.
The onus of proof shall rest with the insurer in respect of any information not so
recorded, where the insurer claims that the proposer suppressed any material
information or provided misleading or false information on any matter material
to the grant of a cover.

In -- 'Joel v. Law Union & Crown Insurance Co.', (1908) 2-KB 863 at p. 883
(A), Fletcher Moulton L. J. in explaining this doctrine derived from Lord
Blackburn's dictum in -- 'Brownlie v. Campbell', (1880) 5 AC 925 (B), made
this observation:

"There is, therefore, something more than an obligation to treat the insurer
honestly and frankly, and freely to tell him what the applicant thinks it is
material he should know .... The disclosure must be of all you ought to have
realized to be material, not of that only which you did in fact realize to be so."

“Thus, if a person effecting a policy of insurance says "I warrant such and such
things which are here stated", and that is part of the contract, then, whether they
are material or not is quite unimportant; the party must adhere to his warranty,
whether material or immaterial. But if the party makes no warranty at all but,

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simply makes a certain statement, if that statement has been made bona fide
unless it is material, it does not signify whether it is false or not false. Indeed,
whether made bona fide or not if it is not material, the untruth is quite
unimportant. If there is no fraud in a representation it is perfectly clear that it
cannot affect the contract; and even if material but there is no fraud in it, and it
forms no part of the contract, it cannot vitiate the right of the party to recover.”1
In [United India Insurance Co. Ltd. Vs. M. K. J. Corporation, (1996) 6
SCC 428], Supreme Court of India held as under;
It is a fundamental principle of Insurance Law that utmost good faith must be
observed by the contracting parties. Good faith forbids either party from
concealing (non-disclosure) what he privately knows, to draw the other into a
bargain, from his ignorance of that fact and his believing the contrary. Just as
the insured has a duty to disclose, similarly, it is the duty of the insurers and
their agents to disclose all material facts within their knowledge, since
obligation of good faith applies to them equally with the assured.

Thus, on the above observations in this case the company is not liable to pay the
amount demanded by the assignee.

PRAYER

Wherefore in the light of facts presented, issue raised, arguments advanced and
authority citied, the Counsels on behalf of the Respondent humbly pray for this
Hon’ble Courts that it may be pleased to adjudge and declare that:
- The petition should be dismissed, and
- The insurance company is liable to pay the amount of Rs 26/-000 to the
applicant.
Or pass any other order that the court may deem fit on the light of equity, justice
and good conscience and for this Act of kindness or your Lordships of the
Petitioner shall as duty bound ever pray.

1
All India General Insurance Co. ... vs S.P. Maheshwari on 5 November, 1959 AIR
1960 Mad 484

MEMORANDUM ON BEHALF OF THE DEFENDANT