Mithoolal Nayak vs Life Insurance Corporation Of India on 15 January, 1962
7. The principle as to when an insurer can validly repudiate a contract of insurance on the ground of misrepresentation or suppression of material facts is not in controversy in the present appeal. Mr. Vasudev, the learned Counsel for the appellant has, however, placed a number of decisions both English and Indian dealing with this aspect., but we do not consider it necessary to discuss them here. It is well settled that a contract of insurance is contract uberrim 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 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 oh 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 (1962) Supp. 2 SCR 571, must be held to have been satisfied. We must, therefore, proceed to examine the evidence led by the parties in the case.