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There are three conditions for application of second part of Section 45 of the Insurance Act which are :
(a)   the statement must be on a material matter or must suppress facts which it was material to disclose;
(b)   the suppression must be fraudulently made by the policy-holder; and
(c)    the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
 

The insureds brother was an agent of Life Insurance Corporation of India. It was he, who had asked the insured to take the insurance policy. He, being an authorized agent of Life Insurance Corporation, presumably knew the effect of misstatement of facts. Misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature.

(b)      suppression must be on a material matter or must suppress such a fact which was material to be disclosed;

(c)      suppression must be fraudulently made by the policy-holder; and

(d)      he must be knowing that the suppressed fact was material and it was required to be disclosed for taking the insurance policy. If this is not there, then on the ground of material suppression of fact, the policy cannot be repudiated.

The Court pertinently observed that misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature.

   

Keeping the aforesaid law in mind, the controversy is required to be decided. In the present case, the insured deceased was not suffering from any serious disease at the time of filling up the proposal form for obtaining the insurance policy.

There was no material suppression on his part.

Again, on the same point, we would refer to another decision of the Apex Court in the case of Life Insurance Corporation and others Vs. Smt. Asha Goel and another (supra), wherein after interpreting Section 45, the Court held as under:-

(a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues fight up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any misstatements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.