DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD
Dated this the 28th day of November, 2022
Present : Sri.Vinay Menon V., President
: Smt.Vidya A., Member
: Sri.Krishnankutty N.K., Member Date of Filing: 28/11/2018
CC/156/2018
Deepak Kumar P.K.,
S/o.Krishnan,
120D, Railway Quarters,
Hemambika Nagar, Kallekulangara,
Akathethara, Palakkad – 678 009 - Complainant
(By Adv.A.P.Udayakumar)
Vs
- M/s.Royal Sundaram General Insurance Co.Ltd.
Corporate Claims Department,
Vishranthi Melaram Towers,
No.2/319, Rajiv Gandhi Salai (OMR),
Karappakkam, Chennai – 600 097
Rep.by its Managing Director
- The Branch Manager,
M/s.Royal Sundaram General Insurance Co.Ltd.
1st Floor, Akshaya Foundation,
Stadium Byepass Road, Palakkad - Opposite parties
(O.Ps.1 & 2 by Adv.P.Prasad)
O R D E R
By Sri. Vinay Menon V., President
- Essentially, the complainant is aggrieved by the repudiation of his accident claim by the opposite parties.
Complainant, owner of a Hyundai i10 car insured with the opposite party insurance company, met with an accident while there was a valid subsisting policy coverage. But his claim for Own Damage, for damages sustained by the car, was repudiated by the opposite party for reasons unsustainable in the eye of law. This is a deficiency in service on the part of the complainant. Aggrieved thereby, this complaint is filed seeking a claim of Rs. 92,896/- along with other incidental reliefs, totaling Rs. 1,42,896/-.
2. Opposite parties filed version refuting the complaint pleadings. They admitted to having issued a policy for TP as well as OD claims covering 01/10/2017 till 30/09/2018. Premium for the policy, less “No-claim Bonus”, was collected relying on the entries in the proposal form that the complainant had made no claims before the earlier Insurer, New India Assurance Company Limited. However, it came to light that contrary to submissions in proposal form, the complainant had raised a claim while the car was under the cover granted by New India Assurance Company Limited. Hence the complainant was not entitled to No claim Bonus. The opposite party communicated the facts to the complainant and directed the complainant to remit the amount reduced by way of ‘No claim Bonus’ granted to the complainant. Since the complainant failed to remit the said amount, the opposite party was constrained, with notice to the complainant, to restrict the period of coverage of OD cover to the complainant to a lesser period, while retaining the TP cover. The factum of restraining the OD cover is within the knowledge of the complainant. Accident occurred after this restricted period and the complainant is not entitled to claim for cover. It was under these circumstances that the claim of complainant was repudiated. Therefore the opposite party sought for dismissal of the complaint.
3. The following issues are to be answered to arrive at a conclusion.
1. Whether there was a concluded and valid varied agreement between the complainant and the opposite party?
2. Whether there is any deficiency in service/unfair trade practice on the part of opposite parties?
3. Whether the complainant is entitled to any of the reliefs sought for?
4. Reliefs, if any?
4. Since the complainant was trying to protract the matter without adducing any evidence, evidence of complainant was closed on 07/01/2022. Thereafter, it was reopened and Exhibits A1 to A8 were marked. Evidence of opposite parties comprised of proof affidavit and Exhibits B1 to B5. Eventhough permission was sought to cross examine opposite party, leave was not granted as the answers to the questions to be considered could be availed from the documents produced.
Issue No. 1
5. Complainant pleads that there was a valid and subsisting policy for the period covering 01/10/2017 till 30/09/2018. Both OD and TP claims were covered. Conversely, opposite party refutes the said pleading stating that once having come to know of the non-disclosure of earlier claims, the opposite party demanded remittance of “No-claim Bonus” granted by the opposite party. Since the complainant failed to remit the said benefit granted as No-Claim bonus, the opposite parties were constrained to limit the OD coverage pro rata the premium paid by reducing the period of coverage (rather than repudiating the coverage as a whole for violation of the principle of uberrimae fidae).
Considering the pleadings and counter-pleadings, this Commission is to ascertain whether there was a concluded contract after unilateral variance by the opposite party.
6. In the facts and circumstances of the case, the original contract stands substituted with a new one, wherein the OD cover is restricted. Insofar as the parties are concerned, it is a unilateral novation. The question is whether both the parties were ad idem when the novation was carried out. In order to see whether the complainant had notice of novation of contract, we refer to S. 4 of the Indian Contract Act, 1872. With respect to completion of communication S.4 of this Act is as follows:
“S. 4: Communication when complete.- The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
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The communication of a revocation is complete,-
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as against the person to whom it is made, when it comes to his knowledge”.
The law is very clear insofar as the impact of communication of revocation is concerned. Revocation or novation is complete as against the complainant only when the complainant receives notice of the fact of novation or revocation.
7. Facts relevant to be noted to come to a decision in this case are as follows:
i. A contract was entered into between the complainant and the opposite party.
ii. It came to light that the complainant had suppressed material facts.
iii. Opposite party chose not to void the entire contract, but varied the terms and conditions, ie. effected novation.
iv. Notices were issued to the complainant regarding the factum of novation.
8. In order to come to a conclusion, it is to be proved that the complainant had notice of the novation in terms of S. 4 supra. Off the above 4 facts , we are concerned with the notices alleged to have been issued to the complainant. The opposite party claims to have issued Exts. B2 and B3 notices to the complainant regarding the insufficiency of premium and their intention to effect novation of policy document by reducing the period of coverage. But the question is whether the complainant had received Exts. B2 and B3.
9. The opposite parties has not produced any documents to prove that they had issued the said notices to the complainant or that the same was received by the complainant. Mere heading of “Regd/AD” in the letter would not prove that the same was issued in registered acknowledgment due mode, if at all issued. There is no postal receipt, acknowledgment card or dispatch register kept by the opposite party in the daily course of business.
It would be pertinent, at this juncture to make a note of the fact that Ext. B5 is accompanied by an “RPAD – Receipt” showing details of the claim. Postal receipt forms part of this document. This document will only strengthen the suspicion that Exts. B3 and B3 were not issued to the complainant.
Resultantly we hold that the opposite party has failed to prove that Exts. B2 and B3 notices were issued to the complainant or that he had notice of the novation or variance of the terms and conditions of the policy schedule and that compliannt had notice of the revocation of earlier policy or the variance with regard to the reduction of the period of coverage.
10. We are, therefore, unable to hold that there was a valid and concluded varied contract between the complainant and the opposite party as the complainant had no knowledge of novation.
Issue No. 2
11. As a result of the discussion above, we hold that as on the date of accident, ie. 15/08/2018, the car was having a valid O.D. cover in terms of Ext. A1 policy. Repudiation of a claim thereunder is a deficiency in service on the part of opposite parties.
Issue No. 3 & 4
12. Even after finding that there is deficiency in service on the part of the opposite parties we are unable to grant the principal relief, ie. the claim for the works carried out. The complainant has produced Ext. A4 to show that he had expended an amount of Rs. 94,327/-. But, as rightly objected to by the counsel for the opposite party at the time of marking of the said document, Ext. A4 is only an estimate and is not an evidence of the amount actually paid by the complainant to the workshop. Further we cannot direct the opposite parties to pay the entire amounts as evidenced by the said document for the works carried out as invoices would involve exempted items as well.
13. In view of the discussion above we hold as follows:
1. The opposite parties shall accept the claim of the complainant, if proper invoices are produced by the complainant before it within 30 days from receipt of this Order and shall dispose off the claim within 15 days from the receipt of the claim.
2. If the opposite parties are in custody of the relevant documents (invoices), they are to dispose off the claim within 15 days from receipt of this order.
3. Opposite parties are directed to pay an amount of Rs. 10,000/- to the complainant as compensation for deficiency in service.
2. An amount of Rs. 5,000/- is directed to be paid as cost of these proceedings.
Pronounced in open court on this the 28th day of November, 2022. Sd/-
Vinay Menon V
President
Sd/-
Vidya.A
Member
Sd/-
Krishnankutty N.K.
Member
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1 - Copy of Communication dated 28/9/2017.
Ext.A2 - Copy of registration certificate of car bearing No.KL-09-AH-737
Ext.A3 – Copy of driving license bearing No.9/4480/2008
Ext.A4 – Copy of estimate for accident repair
Ext.A5 - Copy of unclear letter issued to OP2
Ext.A6 series – Copy of letter dated 20/10/18 along with postal receipt and
acknowledgment card.
Ext.A7 series – Copy of communication dated 31/10/2018 along with postal receipt and
acknowledgment card
Ext.A8 – Original of repudiation letter dated 10/10/2018
Exhibits marked on the side of the opposite party:
Ext.B1 – Copy of certificate of insurance and policy schedule.
Ext.B2 – Copy of communication dated 17/10/2017
Ext.B3 – Copy of communication dated 13/12/2017
Ext.B4 – Copy of claim form dated 20/08/2018
Ext.B5 – Copy of ext.A8
Court Exhibit: Nil
Third party documents: Nil
Witness examined on the side of the complainant: Nil
Witness examined on the side of the opposite party: Nil
Court Witness: Nil
NB : Parties are directed to take back all extra set of documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.
