Harish took a fire insurance policy of Rs 20 Lakh for his factory at the annual premium of
Rs 24,000. In order to avoid higher premium, he did not disclose that a highly explosive chemical
is being used in his factory . Due to an accidental fire, his factory gate severely damaged . The
insurance company refused to pay the claim as it came to know about the fact. Is company
justified in doing so? Also state the principle of insurance involved here.
