Suppressing Illness Voids Insurance: Punjab & Haryana HC Upholds LIC’s Claim Rejection and Bars Re-litigation After Full Settlement
Case Name: Pargan Singh v. Life Insurance Corporation of India & Others
Date of Judgment: 24.03.2026
Citation: RSA-653-2001
Bench: Hon’ble Mr. Justice Amarinder Singh Grewal
Held: The High Court held that suppression of material facts regarding pre-existing illness vitiates an insurance contract. Further, acceptance of an ex gratia amount in full and final settlement bars subsequent claims by virtue of estoppel and accord and satisfaction.
Summary: The appellant challenged concurrent findings of the trial Court and first appellate Court, which had dismissed his suit seeking declaration against repudiation of an insurance claim by LIC.
The case arose from a life insurance policy taken by the appellant’s wife, who later died. LIC repudiated the claim on the ground that she had been suffering from serious ailments, including Hodgkin’s Lymphoma, prior to obtaining the policy, and had failed to disclose the same .
The appellant argued that there was no intentional suppression and that acceptance of ₹15,434/- as ex gratia payment did not amount to waiver of his rights. He further contended that the insured had undergone medical examination by LIC’s doctors, and therefore, repudiation was unjustified.
The Court, however, found from medical records and evidence that the insured had been suffering from chronic illness well before issuance of the policy. It held that non-disclosure of such material facts directly impacted the risk assessment and justified repudiation.
A significant aspect noted by the Court was that the appellant himself had sought refund of premium on ex gratia basis and accepted the amount in full and final settlement. The record, including receipts and admissions during cross-examination, established that the amount was accepted voluntarily without protest.
The Court held that this amounted to accord and satisfaction, thereby extinguishing any further cause of action. It further observed that the appellant could not be permitted to approbate and reprobate by accepting settlement and later challenging repudiation.
Decision: The High Court dismissed the appeal and upheld the concurrent findings of the courts below. It affirmed that the insurance contract stood vitiated due to suppression of material facts and that the appellant, having accepted the ex gratia payment in full and final settlement, was estopped from re-agitating the claim.