Life insurance repudiation requires strict proof of material suppression; ambiguous proposal questions are construed against the insurer.

In a life insurance dispute under the pre-amendment Section 45 regime, repudiation for alleged non-disclosure was justified only if the insurer strictly proved material suppression and fraud by cogent evidence. The insurer's reliance on incomplete, uncorroborated records and unsupported assertions failed to establish that prior policies existed in the insured's name or that any concealment was fraudulent. Proposal form questions were also held ambiguous when read as a whole, so contra proferentem required the ambiguity to be construed against the insurer. On that reasoning, repudiation could not stand and the claim under both policies was directed to be paid with interest.

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Issues: (i) Whether repudiation of the life insurance claim for alleged suppression of prior policies with other insurers was justified; (ii) whether the insurer discharged the burden of proving material suppression and fraud; (iii) whether the proposal form questions were so clear as to sustain repudiation on non-disclosure.

Issue (i): Whether repudiation of the life insurance claim for alleged suppression of prior policies with other insurers was justified.

Analysis: The claim could be repudiated only if the insurer established, in terms of the governing pre-amendment Section 45 regime, that the insured had suppressed a material fact and that such suppression was fraudulent and known to be false at the time of making the proposal. The alleged prior policies were not proved by reliable documentary or oral evidence. The tabulation relied upon by the insurer was incomplete and uncorroborated, and it did not clearly establish that the policies were in the insured's name.

Conclusion: The repudiation was not justified and is against the insurer.

Issue (ii): Whether the insurer discharged the burden of proving material suppression and fraud.

Analysis: The burden lay on the insurer to prove the affirmative fact of suppression. Mere assertions in affidavits, unsupported by policy documents or testimony from the issuing insurers, were insufficient. The consumer fora could not shift the onus to the complainant to disprove an allegation that had not been proved by the insurer. On the evidence on record, the insurer failed to establish fraudulent non-disclosure.

Conclusion: The insurer did not discharge the burden of proof, and this issue is in favour of the appellant.

Issue (iii): Whether the proposal form questions were so clear as to sustain repudiation on non-disclosure.

Analysis: The questions in the proposal form were held to be unclear when read as a whole, particularly in the context of the insured's category and the information sought. Applying the contra proferentem rule, any ambiguity in the insurer-drafted form had to be construed against the insurer. In those circumstances, the negative answers given by the insured could not, by themselves, justify forfeiture of the policy benefit.

Conclusion: The proposal form ambiguity cannot sustain repudiation, and this issue is in favour of the appellant.

Final Conclusion: The insurer's repudiation was set aside and the claim under both policies was directed to be paid with interest, because the alleged suppression was not proved and the proposal form could not be used against the claimant on the basis of ambiguity.

Ratio Decidendi: In a life insurance dispute governed by Section 45, the insurer must strictly prove by cogent evidence that the insured suppressed a material fact fraudulently, and any ambiguity in insurer-drafted proposal questions is construed against the insurer.

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