Law:

Section:

(a) Insurance----Liability of insured to inform insurer-Every circumstance relevant to risk must be communicated to insurer ----Insurer entitled to repudiate liability under insurance contract if such circumstances kept back by insured - Uberrima fides, requirement of. The assured is under an obligation to inform the insurer of every circumstance relevant to the risk with regard to which he seeks insurance, and if he keeps back such information from the insurer, the insurer is entitled to repudiate all liability under the contract of insurance. In the instant case the insurance sought by the plaintiff included insurance of factory and goods stored in godowns against storm risks. The godowns were, however not built so as to prevent entry of rain water and the ventilators and windows of the building were not fitted with glass panes etc. Such defects were not disclosed by the plaintiff to the `defendants-Insurers. The insurer repudiated its liability on the grounds of such defects. Held: The plaintiff was under a duty to inform the defendants about the said defects because it was obvious that, in the event of a storm or perhaps even a passing shower, water was likely to enter the godown on account of the said defects. The plaintiff's failure to inform the defendants of the said defects therefore amounted to concealment of material facts. Prima facie therefore, the defendants are entitled to repudiate their contract with the plaintiff. Halsbury's Laws of England, 3rd Edn., Vol. 22, para. 355 ; MacGillivray on "Insurance Law", 4th Edn., para. 827 Carter v. Boehm 97 E R 1162 ; Green Hill v. Federal Insurance (1927) 1 K B 65 and Imperial Pressing Company v. British Crown Assurance Corporation Ltd. I L R 41 Cal. 581 rel. National Indian Life Assurance Company v. Mahadevan and others A I R 1933 Mad. 680 and Co-operative Assurance Company Ltd., Lahore v. Sachdev and another A I R 1936 Lah. 885 held not applicable. Thomson v. Weems (1884) 9 A C 671 and Farr v. Motor Traders Mutual Insurance (1920) 3 K B 669 ref. (b) Insurance-Interim receipt or cover note issued by insurer- Govern liabilities of parties pending issue of proper insurance policy. The…