Lakshman De Fonseka vs. Eagle Insurance Co Ltd – SC CHC APPEAL 25/2011-2024

In the case between Lakshman De Fonseka (Plaintiff-Appellant) and Eagle Insurance Co Ltd (now A I A Insurance Lanka PLC) (Defendant-Respondent), the court addressed whether an insured party misrepresented material facts pertaining to income and financial status, thereby breaching the duty of utmost good faith (uberrimae fidei) in an insurance contract. It was held that the insured’s statements constituted a breach of duty by materially misstating essential facts, thereby justifying the insurer’s refusal to honor the policy. The court reaffirmed the principle that the burden of proving fraud or misrepresentation lies with the party alleging it, and that the duty of utmost good faith is foundational to insurance contracts. Reliance was placed on common law and legislative principles governin