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Supreme Court - Insurance - Good Faith - Uberrima Fides - Disclosure

Supreme Court of India
United India Insurance Co. Ltd vs M.K.J. Corporation on 21 August, 1996
Bench: K. Ramaswamy, G.B. Pattanaik
           CASE NO.:
Appeal (civil)  6075-6076 of 1995

PETITIONER:
UNITED INDIA INSURANCE CO. LTD.

RESPONDENT:
M.K.J. CORPORATION

DATE OF JUDGMENT: 21/08/1996

BENCH:
K. RAMASWAMY & G.B. PATTANAIK

...............
It is a fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, "similarly, it is the duty of the insurers and their agents to disclose all material facts within their Knowledge, since obligation of good faith applies to them equally with the assured.

The duty of good faith is of a continuing nature. After the completion of the contract, no material alteration can be made in its terms except by mutual consent. The materiality of a fact is judge by the circumstances existing at the time when the contract is concluded.
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