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Issues Involved:
1. Whether the policy was vitiated by fraudulent suppression of material facts by Mahajan Deolal? 2. Whether the present appellant had no insurable interest in the life of the insured, and if so, can he sue on the policy? 3. Whether the respondent company had issued the policy with full knowledge of the facts relating to the health of the insured and if so, is it estopped from contesting the validity of the policy? 4. Whether in any event the appellant is entitled to refund of the money he had paid to the respondent company? Detailed Analysis: Issue 1: Fraudulent Suppression of Material Facts The primary question was whether Mahajan Deolal fraudulently suppressed material facts about his health when applying for the life insurance policy. The trial court initially found that although Deolal's answers to certain questions were not strictly accurate, they did not amount to fraudulent suppression under Section 45 of the Insurance Act, 1938. However, the High Court reversed this decision, concluding that Deolal was guilty of fraudulent suppression of material facts. The Supreme Court agreed with the High Court, emphasizing that Deolal's ailments were serious and not trivial. Dr. Lakshmanan's evidence confirmed that Deolal was suffering from serious conditions like anaemia and cardiac asthma, which Deolal failed to disclose. This suppression was deliberate and fraudulent, thus vitiating the policy. Issue 2: Insurable Interest The second issue was whether the appellant had an insurable interest in Deolal's life and if he could sue on the policy. The High Court suggested that the policy was taken out as a gamble on Deolal's life, implying that the appellant had no insurable interest. However, the Supreme Court found it unnecessary to decide on this issue. Since the policy was vitiated by Deolal's fraudulent suppression of material facts, the appellant, as the assignee of the policy, could not stand on a better footing than Deolal himself. Issue 3: Estoppel Due to Knowledge of Health Facts The third issue was whether the respondent company, having issued the policy with full knowledge of Deolal's health, was estopped from contesting its validity. The appellant argued that the respondent company had full knowledge of Deolal's health through examinations by multiple doctors. However, the Supreme Court rejected this argument, stating that the respondent company had no means of knowing about Deolal's treatment for serious ailments by Dr. Lakshmanan. The false statements made by Deolal had a significant bearing on obtaining the policy, and thus, the company was not estopped from contesting its validity. Issue 4: Refund of Money Paid The final issue was whether the appellant was entitled to a refund of the money paid to the respondent company. The policy stipulated that all money paid would belong to the company if the policy was vitiated by fraudulent suppression of material facts. The Supreme Court agreed with the High Court that a party guilty of fraud could not seek a refund. Sections 64 and 65 of the Indian Contract Act were deemed inapplicable in cases involving fraud. Conclusion: The Supreme Court dismissed the appeal, upholding the High Court's decision that the policy was vitiated by fraudulent suppression of material facts by Mahajan Deolal. Consequently, the appellant could not claim the benefit of the policy or a refund of the money paid. The appeal was dismissed with costs.
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