DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Birinder Singh son of Mohinder Singh c/o SCO No.179-180, Second Floor, Sector 8-C, Madya Marg, Chandigarh.

                                      ---Complainant.

Versus

1.                 HDFC ERGO, General Insurance Company Limited, SCO No.124-125, Sector 8-C, Chandigarh through its Assistant Claims Manager.

2.                 HDFC ERGO General Insurance Company Limited, 6^th Floor, Leela Business Park, Andheri Kurla Road, Andheri (E), Mumbai 400059, through its Managing Director.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by:  Sh. R.S. Randhawa, Adv. for the complainant

                        Sh. Rajesh Sharma, Adv. proxy for Sh. Paras Money Goyal, Adv. for the OPs.

PER LAKSHMAN SHARMA, PRESIDENT

1.                           Sh. Birinder Singh has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act only) praying for the following reliefs against the opposite parties :-

(i)                to pay the claim of Rs.1,64,532/- as assessed by the surveyor alongwith penal interest @ 18% per annum.

(ii)             to pay Rs.1.00 lac as compensation and damages.

2.                           In brief, the case of the complainant is that he got his Chevrolet Cruze car insured with the opposite parties for the period 15.4.2011 to 14.4.2012 and paid premium of Rs.15,582/-.  It has been averred that at the time of insurance, the complainant informed the representative of the opposite parties that earlier the car was insured with ICICI.

                   According to the complainant, on 19.5.2011 his car met with an accident at about 9:45 a.m near Furniture Market, Chandigarh. The car was taken to M/s Dynamic Motors, Chandigarh for repair.  It has been averred that Er. Mohit Sharma surveyed the vehicle and vide his report dated 27.6.2011 assessed the loss at Rs.1,64,532/-.  However, vide letter dated 29.6.2011 the opposite parties rejected the claim of the complainant on the ground that he had taken claim in the previous insurance policy dated 29.6.2011.  The complainant sent a legal notice dated 91.7.2011 asking the opposite parties to honour the claim, but they failed to do so.

                   In these circumstances, the present complaint has been filed seeking the reliefs mentioned above.  

3.                           In their written statement the opposite parties admitted that the car was insured with them but it has been stated that the same was subject to its terms and conditions.  It has been averred that the policy was issued on the basis of the representation made by the complainant in the proposal form.  However, it has been pleaded that the complainant, in order to claim no claim bonus, gave wrong declaration that he had not taken any claim from the previous insurer.   It has further been pleaded that the claim was rightly rejected as the complainant had furnished wrong information and had given wrong declaration. 

                   According to the opposite parties, there is no deficiency in service on their part and the complaint deserves dismissal.

4.                           We have heard the learned counsel for the parties and have gone through the documents on record.

5.                           Annexure C-4 is the letter of repudiation dated 29.6.2011 whereby the claim of the complainant was repudiated by the opposite parties.  The relevant portion of the letter reads as under :-

“Kindly note at the time of inception of the policy, you declared that there has been no claim taken by you in respect of the above mention vehicle on the previous policy, we in terms of the Motor Tariff had extended a no claim bonus on the premium became due.  Kindly note since you did not produce the no claim bonus conformation from the previous insurer in support of you claim, we on the basis of the declaration form signed by you have extended the no claim bonus on the terms and conditions as find mention in the declaration.

Kindly note that under the terms and condition of the declaration given by you at the time of No claim bonus, it is categorically stated by you that the in case the declaration found to be incorrect, all benefits under the policy in respect of Section 1 of the policy would stand forfeited. 

In view of the above it is understood that you have intentionally misrepresented regarding the previous policy in order to take the benefit of NCB (No Claim Bonus)

In the light of the above, we regret to inform you that we would not be able to honor our liability for said loss and are constrained to close the claim as no claim in our record.”

6.                           From the bare perusal of this letter it is apparent that the claim of the complainant has been repudiated on the ground that the complainant did not disclose that he had availed claim from the previous insurer and had also appended his signatures to this effect on the relevant declaration.

7.                           Annexure C-1 is the Proposal Form cum Cover Note for Motor Insurance.  From a bare reading of this form it is apparent that there is no mention of any previous policy subscribed by the complainant before his subscription of the policy form the opposite party.  Meaning thereby, the opposite party offered the NCB of 20% without noting down the details of the previous policy  in the cover note (C-1)  and have also failed to take on record the copy of previous policy through which the opposite party claims that the complainant had availed the claim, disqualifying him from the NCB offered by the opposite party.  As we find that the opposite parties themselves have failed in discharging their responsibility before offering the NCB claimed by the complainant, hence, they cannot lay blame at the doorstep of the complainant for the acts of omission committed by them. 

8.                           It is also pertinent to mention here that the required column of declaration, as mandated by clause (f) of G.R. 27 of Indian Motor Tariff, is not there in the proposal form cum cover note (C-1) signed by the complainant.   Clause (f) of G.R.27 which reads as under:-

“(f)       In the event of the insured, transferring his insurance from one insurer to another insurer, the transferee insurer may allow the same rate of NCB which the insured would have received from the previous insurer. Evidence of the insured's NCB entitlement either in the form of a renewal notice or a letter confirming the NCB entitlement from the previous insurer will be required for this purpose.

                                                Where the insured is unable to produce such evidence of NCB entitlement from the previous insurer, the claimed NCB may be permitted after obtaining from the insured a declaration as per the following wording:

“I / We declare that the rate of NCB claimed by me/us is correct and that no claim as arisen in the expiring policy period (copy of the policy enclosed). I/We further undertake that if this declaration is found to be incorrect, all benefits under the policy in respect of Section I of the Policy will stand forfeited.”

Notwithstanding the above declaration, the insurer allowing the NCB will be obliged to write to the policy issuing office of the previous insurer by recorded delivery calling for confirmation of the entitlement and rate of NCB for the particular insured and the previous insurer shall be obliged to provide the information sought within 30 days of receipt of the letter of enquiry failing which the matter will be treated as a breach of Tariff on the part of the previous insurer. Failure of the insurer granting the NCB to write to the previous insurer within 21 days after granting the cover will also constitute a breach of the tariff.”

From a bare reading of the above clause, it is apparent that the opposite parties were required to obtain declaration from the complainant regarding non-availing of any claim from the previous insurer in the form mentioned above alongwith the copy of the previous expiring policy.  However, the opposite parties have failed to produce on record any such declaration.  In these circumstances, the plea taken by the opposite parties to the effect that the complainant gave a false declaration is an absolute farce played by the opposite party with the complainant.

9.                           Faced with this situation, it was argued by the ld. Counsel for the opposite parties that even the surveyor verified the fact and has stated that the complainant had availed claim form the previous insurer.  Therefore, he is not entitled to the claim.  However, no documentary evidence has been placed on record to this effect.  The opposite parties have failed to adduce on record any letter/document which they wrote to the previous insurer to ascertain the particulars of the previous claim nor is there any reply by the previous insurer to the opposite parties.  Hence, the contention of the opposite parties, in this regard are hollow and cannot be accepted.

10.                       Hence, the claim has been wrongly repudiated which amounts to deficiency in service and the opposite parties are liable to indemnify the complainant

11.                       In view of the above discussion, the present complaint is allowed and the opposite parties are directed as under :-

(i)                to pay the assessed claim of Rs.1,64,532/-.

(ii)             to pay Rs.30,000/- as compensation for mental agony and harassment suffered by the complainant

(iii)           to pay Rs.10,000/- as costs of litigation.

12.                       This order be complied with by the opposite parties, within 45 days from the date of receipt of its certified copy, failing which the amounts at Sr.No.(i) & (ii) shall carry interest @ 18% from the date of letter of repudiation (i.e. 29.6.2011), till actual payment besides payment of litigation costs.

13.                       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

19.10.2012.

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER