Life insurance non-disclosure of an existing policy can justify repudiation within two years on utmost good faith principles.

In life insurance, where the proposal form specifically asks for existing cover and pending proposals, suppression of a prior policy is material non-disclosure and can justify repudiation within two years of commencement. The duty of utmost good faith requires accurate disclosure of facts affecting underwriting and the insurer's decision to accept the risk and on what terms. Section 45 of the Insurance Act, 1938, did not bar repudiation because the claim was repudiated within two years, so the stricter post-two-year requirements were inapplicable. A proposer remains bound by the contents of the signed proposal form, and ignorance of its terms does not excuse false disclosure.

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Issues: Whether non-disclosure of an existing life insurance policy in the proposal form justified repudiation of the claim when the repudiation was made within two years of commencement of the policy.

Analysis: The proposal form specifically required disclosure of existing life insurance covers and pending proposals. The insured answered that he had no such cover, although he had taken another policy shortly before the disputed policy. The decision turned on the duty of full disclosure in insurance contracts governed by uberrima fidei and on the effect of Section 45 of the Insurance Act, 1938. The Court held that the restriction in Section 45, which limits repudiation after two years unless stringent conditions are met, did not control a repudiation made within two years. Even apart from Section 45, the information sought was material because it directly affected underwriting and the insurer's decision whether to accept the risk and on what terms. A proposer cannot avoid the consequence of signing a proposal form by asserting ignorance of its contents, and prior decisions supporting repudiation for non-disclosure of previous policies were preferred over the contrary view taken by the consumer fora.

Conclusion: The non-disclosure was material and entitled the insurer to repudiate the claim. The complaint was therefore liable to be dismissed and the insurer succeeded.

Ratio Decidendi: In life insurance, where a proposal form specifically seeks information material to underwriting, suppression of an existing policy entitles repudiation within two years on the basis of utmost good faith and material non-disclosure, without the stricter post-two-year requirements of Section 45 of the Insurance Act, 1938.

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