Insurance: Insurance claim – Repudiation of – Non-disclosure or fraud – On facts, claim raised by complainant as per the Special Contingency Policy – Insurance Company’s case that there was suppression or non-disclosure of hydrology data of previous year by the complainant company – National Commission allowed the complainant – Interference with – Held: Not called for – It is not a case of suppression or non-disclosure of data – Whatever data was available, the complainant has made known to the Insurance Company – Insurance Company was aware of the earlier insurance policy obtained from the previous insurance company by the complainant, there was no reason for not asking for such hydrology data of the previous year – Furthermore, cancellation of the subject policy was also not on account of suppression or fraud played by the complainant, but since the complainant has not acceded to the request of the Insurance Company to modify the sum insured; and insurance company were not able to re-insure the claim in the reinsurance market for protection of their interest – Thus, there was no non-disclosure or fraud, to repudiate the claim. Dismissing the appeal, the Court
HELD: 1.1 There was no suppression or non-disclosure by the respondent in suppressing any hydrology data of the previous year, as pleaded by the appellant. The data of the years 1993 to 2002 could not be provided as the same was not available with the respondent and it was also made known to the appellant. [Para 10][943-D-E]
1.2 The Special Contingency Policy for the year 2001-02 was obtained from IFFCO - TOKIO and sum insured was only Rs.5.00 Crores. When the respondent has requested to increase the coverage to Rs.10.00 Crores, the same was agreed by the appellant and entered into an MoU with the similar terms and conditions of the previous year policy which was with IFFCOTOKIO. Except the amount of coverage was increased from Rs.5.00 Crores to Rs.10.00 Crores in the policy issued by the appellant, all other terms and conditions were the same. The appellant was aware of the earlier insurance policy entered into by the respondent with the IFFCO-TOKIO prior to issuance of the subject policy in favour of the respondent for the period covering from 07.07.2002 to 06.07.2003. If they were to examine the hydrology data of the previous year, it was well within the knowledge of the appellant to ask for such data even before entering into contract. It is not a case of suppression or nondisclosure of data as pleaded, and whatever data was available, the respondent has made known to the appellant. When the appellant was aware of the earlier insurance policy obtained from IFFCO-TOKIO by the respondent, there was no reason for not asking for such hydrology data of the previous year. As such, it cannot be said that there was non-disclosure of hydrology data or any fraud from the side of the respondent, as is projected by the appellant so as to repudiate the claim. [Para 11][943-E-H; 944-A-B
1.3 It is to be noticed that the cancellation of the subject policy vide proceedings dated 25.11.2002 was also not on account of suppression or fraud played by the respondent, but it was only for the reason that the respondent has not acceded to the request of the appellant to modify the sum insured from Rs.10.00 Crores to Rs.5.00 Crores. Further, the cancellation of policy is on the ground that they were not able to re-insure the claim in the reinsurance market for protection of their interest. If there was any suppression or non-disclosure, as pleaded, the appellant would have cancelled only on such ground. No such ground was raised at any point of time either at the stage of issuing notice dated 20.11.2002, or while issuing the proceedings dated 25.11.2002 cancelling the policy for the remaining period by refunding premium on pro-rata basis. [Para 12][944-B-D]
1.4 The submission that the respondent has encashed the cheque which was issued towards refund of pro-rata premium, will not make any difference as the claim was only for the period for which the insurance policy was in force. [Para 13][944-E-F]
1.5 There was no non-disclosure or fraud, as pleaded by the appellant to repudiate the claim. Whether there was any material suppression or not, is a matter of fact, which is to be verified from the facts and circumstances of each case and material on record. [Para 14][944-F]
1.6 The previous policy with IFFCO-TOKIO for the preceding year, for the period from 07.07.2001 to 06.07.2002 was made known to the appellant, as such, it cannot be said that there was any suppression or non-disclosure. [Para 15][945-A-B]
Oriental Insurance Company v. Mahendra Construction (2019) 18 SCC 209 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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