Claim not binding on insurance company upon suppression of facts

LEGAL DIGEST

Where there has been a suppression of fact, acceptance of a marine insurance policy by an officer of the insurance company would not be binding on it, the Supreme Court held last week in the judgment, Sea Lark Fisheries vs United India Insurance Co.

In this case, the owners of the sea vessel 'Sea Lark' took a loan from Canara Bank which insured the vessel with the insurance company. It sank.

The company repudiated the claim of the vessel owners and the bank on the ground that the vessel was not seaworthy and the Master of the ship had no requisite qualification.

The agent of the insurer had left the queries regarding these blank in the form. Since there were serious omissions and an insurance policy requires utmost faith, the court upheld the repudiation of the claim by the bank and the vessel owners.

SC: Courts must be on guard while dealing with cheque bouncing case

In a cheque bouncing case, the Supreme Court last week stated that the courts must be on guard while sentencing a person under Section 138 of the Negotiable Instruments Act as the presumption of innocence is a human right.

Though the burden of proof has been reversed in the Act to increase business confidence, the courts must "delicately balance" the principles on the facts of each case.

In this cases, Krishna Bhat vs Dattraya Hegde, two partners of a firm turned rivals and one of them issued a cheque which was not honoured for want of balance. The other partner was sentenced to six months jail. The Karnataka High Court also upheld the conviction. However, the Supreme Court acquitted him on appeal.