Question

Consists of legal proposition(s)/  principle(s) (hereinafter referred to as 'principle') and facts. Such principles may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.  
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in study of law, research aptitude, and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.  
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option. 

Principle: It is a case of fraud where a party to a contract knows or believes a fact to be true, but conceals it actively from the other party with a view to inducing that person to enter into the contract.

Facts: While taking a life insurance policy, in reply to questions by the insurance company during the inquiry into his proposal, Zameer deliberately concealed the fact of his medical treatment for a serious ailment, which he had undergone only a few weeks ago.

विकल्प

• The concealment of a fact by Zameer amounted to fraud.

• The act of Zameer did not amount to fraud, as disclosing the fact would have resulted in the exposure of his privacy.

• The act of Zameer did not amount to any misrepresentation. 

• The act of Zameer amounted to innocent misrepresentation.

Answer 1

The concealment of a fact by Zameer amounted to fraud.

Explanation:

The concealment of a fact by Zameer amounted to fraud. According to Section 17 of the Contract Act, it is required for every party to disclose all facts to the opposite party before entering into a contract and there should be no active concealment of facts or knowledge by one. Not disclosing of facts to dishonestly induce the other person to deliver property or alter/ destroy the whole/ part of a valuable security or anything which is signed or sealed and is capable of being converted into valuable security will be held guilty under Section 420 of the Indian Penal Code. Zameer had a duty to disclose details about his medical treatment to the insurance agency. Deliberate concealment of facts from an insurance company with dishonest intentions about past medical treatment amounts to Fraud.