| Final Order / Judgement | CONSUMER DISPUTES REDRESSAL COMMISSION-VII DISTRICT: SOUTH-WEST GOVERNMENT OF NCT OF DELHI FIRST FLOOR, PANDIT DEEP CHAND SHARMA SAHKAR BHAWAN SECTOR-20, DWARKA, NEW DELHI-110077 CASE NO.CC/407/18 Date of Institution:- 19.09.2018 Order Reserved on:- 05.02.2024 Date of Decision:- 27.06.2024 IN THE MATTER OF: Surender Kumar Tanwar S/o Late Sh. Mangat Ram R/o 118, HarijanBasti Rajokri, Pahari, Delhi - 110038 .….. Complainant VERSUS National Insurance Company Having its Branch Office:- Division No.18, First Floor, PalikaBhawan, Ring Road, R. K. Puram, Delhi – 110066 Opposite Hyatt Hotel, South Delhi ……Opposite Party Per Dr. HarshaliKaur, Member - The complainant purchased a Maruti Desire in 2015 and usedthe vehicle as a taxi. The complainant had duly insured the vehicle with the OP for the period of 31.07.2015 to 30.07.2016. The complainant has annexed a copy of the insurance policy Annexure-A. On the expiry of his policy on 30.07.2016, the complainant, on the advice of the OP agent, renewed his insurance policy and was issued policy no. 426021311610000340 for the period 31.07.16 to 30.07.017 (Annexure B).
- The complainant alleges that at the time of renewal, the OP agent apprised the complainant that he was eligible for a no-claim bonus of 20%. He, therefore, deposited the sum of Rs.21653/- towards the premium for the comprehensive policy of his vehicle.
- On 19.04.17, the complainant's car was badly burnt and damagedentirely while he was driving it.He informed the fire brigade (Annexure D is the fire service report) and registered an FIR bearing no. 42/2017 (Annexure C) on the same date. Subsequently, the complainant submitted his claim with all the necessary documents to the OP.
- On 09.01.2018, he was surprised to receive a letter from the OP asking him why his claim should not be repudiated as he had already received the no-claim bonus of 20% despite having madea claim under the previous policy (Annexure E). The complainant duly replied to the OP, but instead of processing his claim, the OP repudiated the same vide letter dated02.02.2018 (Annexure F) under Condition No. 7 of the Policy Terms and Conditions.
- The complainant stated that he was given a 20% no-claim bonus under the previous policy only after due scrutiny of his documents, which were already with the OP. Having no other recourse,the complainant filed the present complaint under Section 12 of the Consumer Protection Act, 1986, alleging deficiency in service. He prays for payment of
Rs.4,34,648/- alongwith interest @ 18% p.a. from the date of withdrawal of the cheques and Rs.2 lakh as compensation towards mental agony faced by the complainant.
- Notice was issued to the OP who filed their Reply. In theirReply, the OP states that they are bound by the Terms and Conditionsof the insurance policy, a copy which had been supplied to the complaint (Annexure A Colly). The OP allege that while obtaining the policy for his vehicle, the complainant made a false declaration that he had not made any claim during his previous policy in the proposal form and obtained the NCB (No claim bonus) of 20% in the policy in question whereas he had received, a claim during his earlier policy period as well.
- Condition no. 7 of the Terms and Conditionsof his policy clarifies that making false and fraudulent statements while obtaining the insurance policy would lead to the rejection of the claim. Since the complainant had clearly breached condition no.7 of the insurance policy (Annexure B), his claim was legitimately repudiated. The OP did their due diligence and sent a query to the complainant to clarify if a claim had been settled in the previous policy vide letter dated 09.01.18 (Annexure C).
- To this letter, the complainant sent a reply (Annexure D), which was not found to be satisfactory and justified. Hence, the complainant's claim was repudiated viaa letter dated 02.01.2018 (Annexure E). Therefore, the complaint deserves to be dismissed.
- Thereafter, the complainant filed a rejoinder and affidavit in evidence, reiterating the averments as made in the complaint. The OP filed an affidavit of Sh. Pratap Singh, Manager of OP, echoed the statements made in the reply. Both parties filed written arguments, and we have heard the complainant giving the OP the liberty to address arguments within 7 days. The OP did not utilise the opportunity, and hence, the case was reserved for orders.
- We have gone through the facts of the present complaint and perused the documents filed bythe contesting parties.
- We find that the complainant, who is the owner of a vehicle Maruti Dezire Car purchased in 2015, had insured the vehicle with the OP vide insurance policy no.35101031156337089302 for the period from 31.07.2015 to 30.07.2016 (Annexure A). At the time of renewal of this policy, the complainant, on the alleged advice of the OP agent, sought a no-claim bonus of 20%, which was duly paid to him after all his documents were scrutinized. The complainant thereafter renewed his policy and paid the requisite premium amount for the comprehensive policy, policy no. 426021311610000340 of his vehicle issued by the OP from 31.07.2016 to 30.07.2017 (Annexure B).
- During thepolicy period, i.e. on 19.04.17, the complainant's taxi/ car got burnt, leading to the total loss of his vehicle. The complainant immediately called the fire brigade (Annexure D).He also registered FIR no. 42/2017 towards the incident (Annexure C) with the Police. The complainant, who had obtained the comprehensive policy for this vehicle,lodged a claim with the OP, but instead of his claim being processed, the complainant received a letter dated 09.01.18 (Annexure E) asking him to clarify regarding the no-claim bonus of 20% claimed by him under the previous policy. The complainant sent a reply to the OP, a copy of which the complainant has not filed on record for reasons best known to him. Dissatisfiedwith the complainant's reasons, the OP repudiated his claim on 02.02.2018 (Annexure F), hence the complaint.
- On the other hand, the OP,in their testimony,stated that the complainant made a false declaration while obtaining the policy of his vehicle in the proposal form and, therefore, obtained the NCB of 20% in the policy in question, claiming that he had not made any claim with the OP in his previous policy which is a blatant lie. The complainant had obtained a claim in the last policy as well. Therefore,he breached condition no by making false and fraudulent statements while renewing the insurance policy. 7 of the terms and conditions of the insurance policy.
- A bare perusal of the Reply dated 09.01.2018 (Ex. OP-1/D) sent by the complainant to the OP to their letter dated09.01.2018 asking the complainant to explain the claim of his vehicle lodged with the OP(Ex. OP-1/C) in his earlier policy, the complainant admitted that there may have been a communication gap regarding the NCB when the agent asked him the necessary questions. Further, he was ready to pay back Rs.2000/3000 towards the NCB, or the OP could deduct the same from the claim amount.
- This document annexed by the OP with their affidavit in evidence is sufficient to prove thatthe complainant was aware that he was giving false information to the OP agent while taking policy no. 426021311610000340, which was valid from 31.07.2016 to 30.07.2017, and willfully gave false statements on the proposal form. Hence, we believe the complainant's claim was justifiably repudiated under Condition No. 7 of the terms and conditions applicable to the policy opted for by the complainant.
- However, this issue of repudiation of an insurance claim based on the ground of misrepresentation or concealment of fact was dealt with and decided by a Three-Members Bench of the Hon'ble National Consumer Dispute Redressal Commission in RP No.1836 of 2016, in Branch Manager, National Insurance Company Ltd. Vs. Naresh Kumar decided on 20.02.2017. The Three-Members Bench took the following view in the above referred matter:
"a. The cases in which it is established that the insured by making wrongful declaration has taken benefit of No Claim Bonus and the insurer had means to verify the correctness of the declaration of the insured seeking No Claim Bonus by exercising ordinary diligence of verifying the truthfulness of theclaim from the insurer's own record, Exception to 19 of Indian Contract Act would come into play and the insurer would not be justified in repudiating the insurance claim on the ground of misrepresentation or concealment of fact. However, because the insured had taken benefit of No Claim Bonus and paid less premium, the insurance claim would be reduced proportionately. - "a. The cases in which it is established that the insured by making wrongful declaration has taken benefit of No Claim Bonus and the insurer had means to verify the correctness of the declaration of the insured seeking No Claim Bonus by exercising ordinary diligence of verifying the truthfulness of the claim from the insurer's own record, Exception to 19 of Indian Contract Act would come into play and the insurer would not be justified in repudiating the insurance claim on the ground of misrepresentation or concealment of fact. However, because the insured had taken benefit of No Claim Bonus and paid less premium, the insurance claim would be reduced proportionately
- b. In cases of the insured taking the insurance policy of the vehicle from new insurance company and it is established that the insured by making wrongful declaration has taken benefit of No Claim Bonus and where the insurer had failed to seek confirmation regarding correctness of the declaration submitted by the insured in support of plea for No Claim Bonus within the stipulated period as provided in GR 27 of Indian Motor Tariff, the insurer would not be justified in repudiating the insurance claim. However, because the insured had taken benefit of No Claim Bonus by making false declaration his insurance claim would be reduced proportionately." It would therefore be seen that if No Claim Bonus is wrongfully taken by the insured, the claim would still be payable on a non-standard basis, if the insurer had the means to verify the correctness of the declaration made by the insured, while claiming the No Claim Bonus. In the present case also, the respondent had an opportunity to verify the correctness or otherwise of the declaration made by the petitioner/complainant by making necessary enquiry from the concerned insurer. That having not been done, the complainant is entitled to reimbursement of the loss sustained by him, subject of course to proportionate deduction. Since the No Claim Bonus was availed by the complainant @ 25%, the amount payable to the complainant/petitioner has to be reduced in the same proportion.
- In light of the aforementioned judgement (supra),we direct the OP to pay the complainant's claim after making proportionate deductions of 20% as availed by the complainant in the No Claim Bonushe received. No other order as to cost.
- A copy of this order is to be sent to all the parties as per rule.
- File be consigned to record room.
- Announced in the open court on 27.06.2024.
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