Dalbir Singh aged 40 took a policy on 5th August, 2014 for a sum insured of ₹10 lakh from a private Indian Insurer on the basis of the solicitation made by an agent of the insurer. The agent had indicated to Dalbir Singh

Dalbir Singh aged 40 took a policy on 5th August, 2014 for a sum insured of ₹10 lakh from a private Indian Insurer on the basis of the solicitation made by an agent of the insurer. The agent had indicated to Dalbir Singh that in the event of death, twice the amount of the sum insured will be paid under the policy by the insurer on the payment of a small additional premium at the inception of the policy. Dalbir signed the proposal form on the strength of the advice of the insurance agent who guided the proposer in answering the questions in the proposal form and getting it completed. One of the specific questions in the proposal form was on the subject of recent health condition of the proposer, viz, "whether the proposer had within six months of the date of the proposal had any disease or disorder of the respiratory system like asthma, tuberculosis, fever etc. To this question the proposer had indicated "No" as the answer. The proposal was put through the normal process in the insurer's office and after a medical examination of the proposal and on the payment of the first annual premium and the additional payment of the sum assured, the policy was issued. Dalbir Singh nominated his wife Smt Pushpa to secure the benefits under the policy. On 28th December, 2014 the insurer received an intimation from the beneficiary through the insurance agent that Dalbir Singh had died on 20th December, 2014- apparently by natural causes. A medical report from a doctor was filed along with the claim. The beneficiary asked for the double payment under the conditions of the policy. Since the claim by death arose within six months of the inception of the policy the insurer was surprised by the shortness of the time lapse between the dates of issue of the policy and the death claim. It instituted an investigation into the claim. The investigator went through the proposal form etc. and made enquiries in the neighbourhood where Dalbir had lived. He found out that hardly a fortnight before the proposal, Dalbir had been hospitalised for about a week in the end of July, 2014. He then proceeded to check with the hospital where Dalbir had received the treatment and found that around 20th July, 2014 Dalbir had vomited blood and had suffered from a stomach ailment probably caused by an infected liver. Dalbir had stayed in the hospital for a week and had been discharged on 31st July, 2014. On the strength of the investigation report the insurance company repudiated the claim for non-disclosure of material facts and purposely giving a wrong and misleading information in the proposal form viz that he had not suffered from any disease during the period of six months prior to issue of the policy. The beneficiary appealed to the Dispute Resolution Board of the insurance company but was not successful. She then proceeded against the insurer in the District Consumer's Forum which decided in her favour considering the fact that Dalbir had suffered from a minor stomach upset and the answer contained in the proposal form was not incorrect. The insurer then took up the matter to the State's Consumers' Council which confirmed the view of the District Forum. On this, the insurance company filed an appeal in the Supreme Court of India contending that there was a material non-disclosure of the facts and the proposal form did not indicate the real state of health of the proposer. There was breach of contract terms and the insurer wanted the Supreme Court to set aside the decision of the Council. In the given case the Proposal form was signed by the proposer under the guidance and help from the insurance company's own agent. Can this be questioned by the insurance Company? What are the agent's liabilities to an insured in such a case?