NDLI: Oriental Insurance Company Limited Vs. Mahendra Construction

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Insurance consumer dispute Duty of Disclosure Insured
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Insurance – Insured – Duty of Disclosure – RespondentComplainant purchased hydraulic excavator machine in 2004-05– Excavator was insured with New India Assurance Company Limited (earlier insurer) from 15 Nov. 2004 to 14 Nov. 2005 – Claim lodged on 12 April 2005 on the ground that the excavator had been set on fire by Naxalites – Claim settled – On 10 Oct. 2006, the excavator was insured with the appellant-insurer from 11 Oct. 2006 to 10 Oct. 2007 – Excavator allegedly caught fire on 15 Oct. 2006 – Insurance claim repudiated on the ground that u/para.25(g) of the printed proposal form, the details of claims lodged during the preceding three years were required to be disclosed, but were not furnished and hence, the insurer was deprived of the opportunity to assess the risk profile of the vehicle at the time of accepting the proposal for insurance – Complaint before State Consumer Dispute Redressal Commission (SCDRC) – Allowed – National Consumer Dispute Redressal Commission (NCDRC) inter alia held that the insurer was not justified in repudiating the claim – On appeal, held: Insurance is governed by the principle of utmost good faith, which imposes a duty of disclosure on the insured with regard to material facts – Information regarding insurance claims lodged by the respondent for his excavator in the preceding three years was a material fact – Mere disclosure of previous insurance policy did not discharge the obligation cast on the respondent, as the proposer, to make a true and complete disclosure of the claims lodged under the previous policy in the preceding three years – Burden of establishing that the insured made false representation and suppressed material facts lies on the insurer – Insurer placed on record the best possible evidence in support of the plea that there was misrepresentation and suppression of material facts – Respondent was under bounden duty to disclose that the excavator was previously insured with another insurer and that a claim for damage to the excavator on 12 April 2005 was settled– It was only in the affidavit of evidence dtd. 6 Jan.2017, that the respondent disclosed that the earlier insurer had paid Rs 36.66 lakhs by cheque on 23 Sep. 2005 – This material fact was suppressed from the proposal form – Impugned order set aside. Respondent-Complainant purchased a hydraulic excavator machine in 2004-05. The excavator was insured with the New India Assurance Company Limited (earlier insurer) from 15 Nov. 2004 to 14 Nov. 2005. Claim lodged by the respondent on the ground that the excavator had been set on fire by Naxalites. Claim was settled. On 10 Oct. 2006, the excavator was insured with the appellant-insurer from 11 Oct. 2006 to 10 Oct. 2007. Excavator allegedly caught fire on 15 Oct. 2006. Appellant repudiated the insurance claim. Complaint filed by the respondent before SCDRC, which was allowed. NCDRC, in appeal, inter alia held that the insurer was not justified in repudiating the claim. Hence, the present appeal.
Judge	Hon'ble Dr. Justice D.Y. Chandrachud
Neutral Citation	2019 INSC 444
Petitioner	Oriental Insurance Company Limited
Respondent	Mahendra Construction
SCR	[2019] 6 S.C.R. 673
Judgement Date	2019-04-01
Case Number	3359

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