Order by:

Sh.Amrinder Singh Sidhu, President

1.       The complainant  has filed the instant complaint under section 35 of  the Consumer Protection Act, 2019 on the allegations that complainant is owner of vehicle bearing registration No. PB29AC-5703. At the time of purchase of the said vehicle firstly the complainant got insured the said vehicle from Bajaj Allianz general Insurance Co. Ltd, at Bathinda. After the elapse of said insured period the complainant got insured the above said vehicle from the opposite parties, vide policy no.401700312010000462 for the period w.e.f. 11.11.2020 to 10.11.2021. At that time the opposite parties No.2 and 3 approached me for getting insured the above said vehicle from opposite party No.1 their company and also assured the complainant that maximum service will be given to him and the complainant get insured his above said vehicle from them and also lured the complainant that they will get minimum premium amount from the complainant and on their assurance the complainant purchase the above said policy from opposite parties by paying Rs.8863/-. At that time the complainant also told them that earlier his said vehicle was met with an accident and he has got some insurance amount from the earlier Company and this fact should be mentioned in this new policy and they assured the complainant that it is their legal duty to mentioned the same and moreover they will complete the insurance papers after checking, verifying/on-line against the said vehicle. At that time the father of complainant was also present and all this facts were done in his presence. The complainant was under pressure that this fact has been mentioned by the opposite party No.2 and 3 in the said policy. On 23.08.2021 at about 9:00 pm the complainant along with his above said vehicle was waiting at near D.C. Residence Camp at G.T. Road, Moga to collect his relatives who were coming from Patiala to Moga. At that time all of sudden a Swift car driven by a person negligently and rashly and crashed into rear end of the car of the complainant and by doing this illegal act and accident the driver of the above said vehicle fled away from the spot. On 24.08.2021 the complainant approached the opposites parties and narrated the whole accident and they sent their surveyor who took the photographs at the assurance of opposite parties, the complainant got repaired the above said car by spending Rs.34,960/- as follow: (i) Rs.7100/- vide Bill No.101 dt: 06.09.2021, from Friends Old Car Parts, Ludhiana, (ii) Rs.7800/- vide 'Invoice No.2849 dt: 25/09/2021, from M/s Makkar Enterprises, Dutt Road, Moga, (iii) Rs.20,060/-, vide Bill No.56 dt: 30.09.2021 from A.G. Car World, G.T. Road, Moga. All these expenses borne by the complainant at the insurance of the opposite parties that his claim will be paid to him within a short period after completing all the formalities. However, inspite of paying the above said claim to complainant, the opposite parties has firstly issued letter dated. 05.10.2021 and then letter dt. 25.10.2021 by virtue of which they have repudiated the claim of the complainant by saying that the complainant has not disclosed the 'No Claim Bonus' received by him from the first insurance Company, regarding which there is no fault of the complainant as he has already disclosed the same to the opposite party No.2 and 3 and if the opposite party No.2 and 3 has not mentioned the same, there is no fault on behalf of the complainant. There is deficiency in services on the part of the opposite parties. The opposite parties were asked many times to admit the rightful claim of the complainant but they have refused to do so. Vide this complaint, complainant has sought the following relief:-

a)       Opposite parties may be directed to pay an amount of Rs.34,960/- on account of repair charges of vehicle bearing registration no.PB29AC-5703, which was insured with opposite parties vide policy no.401700312010000462.

b)      To pay Rs.50,000/- as compensation account of compensation, damages, mental tension and deficient services.

c)       To pay Rs.10,000/- as litigation expenses to complainant.

d)      And any other relief which this Commission deem fit and proper be granted to complainant.

2.       Opposite parties appeared through counsel and contested the complaint taking preliminary objection inter alia that the complaint being not maintainable, false, self-contradictory, frivolous, vague and vexatious is liable to be dismissed with compensatory costs. The complainant has not come with clean hands. He has not disclosed the true facts. The complainant has suppressed the material information from the answering opposite party with regard to "No Claim Bonus" and as such has given wrong declaration at the time of purchasing insurance policy from the answering Insurance Company. The contract of Insurance is a contract of "Uberrima fides" and there must be complete good faith on the part of insured and the insured is under a solemn obligation to make full discloser of material facts which may be relevant for insurer to take into an account at the time of accepting the offer made by the person for purchase of insurance policy. In the present case the complainant has managed to have insurance policy for his vehicle on the basis of misrepresentations made by him before issuance of the policy and even during the processing of claim in question. Accordingly as per terms and conditions of the insurance policy and under the provisions of Indian Contract Act, the claim in question has been resulted into "No Claim" after giving numerous opportunities to the complainant to give his explanations about such deliberate misrepresentations and wrong declarations which constitutes a "fraud" within the meaning of Section 17 of Indian Contract Act. No deficient services have been rendered to the complainant as alleged in the complaint. The claim of the complainant was duly entertained, surveyed and investigated. The independent Surveyor was appointed to investigate and Survey the extent and genuineness of alleged loss. During inquiries made by opposite party no.1 while processing the claim in question it has been found that the complainant has made a wrong declaration in the proposal form before issuance of the policy. The complainant had signed the proposal form in English and it cannot be said that the complainant is an illiterate person and he could not understand the technicalities of rules and regulations of insurance policy while signing the above said proposal form. The complainant cannot claim or avail no claim bonus benefit from the opposite party no.1 Insurance Company. "THE COMPLAINANT HAD AVAILED 20% NO CLAIM BONUS(NCB) AT THE TIME OF INCEPTION OF THE POLICY BUT WHEN THE OPPOSITE PARTY NO 1 HAS CONFIRMED THE SAME FROM THE PREVIOUS INSURER I.E. BAJAJ ALLIANZE GENERAL INSURANCE CO. LTD. IT CAME TO THE NOTICE THAT THERE WAS A CLAIM REPORTED IN PREVIOUS POLICY NO HBA/00749947, WHICH IS THE CLEAR CUT VIOLATION OF GR-27 MOTOR VEHICLE ACT, WHICH STATES THAT IN CASE OF CLAIM IS REPORTED IN A POLICY WITH WRONG NCB BEFORE THERE WAS AN OPPORTUNITY TO RECOVER THE NCB, ALL BENEFITS UNDER THE POLICY IN RESPECT OF SECTION-1 OF THE POLICY WILL STAND FORFIETED." As such after due application of mind and after giving opportunity of being heard, the alleged claim was repudiated finally vide letter dated 11.11.2021 and put reliance on judgement of Hon’ble NCDRC in Tata AIG General Ins. Co. Vs Gulzari Singh, 2010 RCR (civil) 947. Remaining facts mentioned in the complaint have been denied and a prayer for dismissal of the complaint has been made.

3.       Complainant has filed replication to the written reply of opposite parties, vide which he has denied all the objections raised by opposite parties in their written reply.

4.       In support of his contentions, complainant tendered in evidence his affidavit Ex.C1, additional affidavit Ex.C2 along with copies of documents Ex.C3 to Ex.C14.

5.       To rebut the evidence of complainant ld. counsel for the opposite parties tendered in evidence affidavit of Sh.S.C.Goyal, Senior Divisional Manager, National Insurance Co. Ex.OPs1 along with copies of documents Ex.OPs2 to Ex.OPs10.

6.       The case of the complainant is that complainant got insured the said vehicle from Bajaj Allianz General Insurance Co. Ltd. and after the elapse of said period, the complainant  got his vehicle bearing registration no.PB-29AC-5703 insured from opposite party no.1 vide insurance policy no.401700312010000462 for a period 11.11.2020 to 10.11.2021. Thereafter on 23.08.2021, the above mentioned insured vehicle of the complainant met with an accident and due to such accident the insured vehicle of the complainant got damaged and the complainant informed about the said accident to opposite parties. Thereafter opposite parties appointed the surveyor to verify about the loss caused to the insured vehicle. The said surveyor visited the spot and verify about such loss. Thereafter the complainant got repaired his vehicle by spending Rs.7100/- vide bill no.101 dated 06.09.2021 from Friends Old Car Parts, Ludhiana, (ii) Rs.7800/- vide 'Invoice No.2849 dt: 25/09/2021, from M/s Makkar Enterprises, Dutt Road, Moga, (iii) Rs.20,060/-, vide Bill No.56 dt: 30.09.2021 from A.G. Car World, G.T. Road, Moga in total Rs.34,960/-. The complainant informed about the said payment to opposite parties, who assured the complainant that his claim will be paid within a short period, but they did not pay any amount, rather repudiated the claim of the complainant on the ground that complainant has not disclosed about ‘No Claim Bonus’ received by him from the previous Insurance Company. On the other hand, the contention of ld. counsel for the opposite parties is that the claim of the complainant was duly entertained, surveyed and investigated and during inquiries made by opposite parties while processing the claim in question it has been found that the complainant had made a wrong declaration in the proposal form before issuance of policy. The complainant had availed 20% No Claim Bonus at the time of inception of the policy, but when the opposite party confirmed the same from the previous insurer i.e. Bajaj Allianz General Insurance Company, it came to the notice that there was a claim reported in previous policy no.HBA/00749947, which is clear cut violation of GR-27 Motor Vehicle Act, which states that in case of claim is reported in a policy with wrong NCB before there was an opportunity to recover the NCB, all benefits under the policy in respect of section-1 of the policy will stand forfeited. But however, for proper appreciation of the matter the GR No.27 is reproduced below:-

“ 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 require 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 working:-

‘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. 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 be stand forfeited.’ Notwithstanding the above declaration the insurer allowing NCB will be obliged to write to the policy issuing office of the previous insurer by the recorded delivery calling of confirmation of the entitlement and rate of NCB for 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 previous insurer. Failure of the insurer granting NCB to write to the previous insurer within 21 days after granting the cover will also constitute breach of Tariff.”

Even Hon’ble State Consumer Disputes Redressal Commission, Punjab Chandigarh in appeal title as The New India Assurance Co. Versus Shinderpal Singh vide its decision dated 23.07.2013 has held the similar view about the procedure contained in GR-27 of Indian Motor Tariff and held that if Opposite Parties have failed to comply with the provision of GR-27 of the Indian Motor Tariff, they are  not competent to repudiate the claim of the complainant on the ground mentioned in the repudiation letter and they are liable to pay claim as assessed by the Surveyor.

7.     From the above, it is clear that Opposite Party/Company was bound to enquire from the previous insurance company regarding the status of ‘No Claim Bonus’, within 21 days after granting the cover, but they have failed to produce any evidence that they had enquired from the previous insurance company about the exact position within stipulated period of 21 days. Thus, Opposite Parties have clearly violated GR-27 of the Indian Motor Tariff. Opposite Parties   were   required to confirm the status of the ‘No Claim Bonus'  within stipulated period and in case of false declaration, the policy could have been cancelled. But the Opposite Parties kept mum and enquired from the previous insurer only when the present claim was lodged. Since Opposite Parties have clearly failed to comply with the provisions of GR-27 of the Indian Motor Tariff, they were not competent to repudiate the claim of the complainant on the ground mentioned in the repudiation letter. In such a situation, the repudiation made by Opposite Parties regarding genuine claim of the complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pesters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seams that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.        The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

8.     Consequently, the instant complaint  is partly allowed  and Opposite Parties jointly and severally are directed to pay a sum of Rs.22,500/- as net assessed loss to the complainant on the basis of report of surveyor Ex.OPs4 alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 27.10.2021 till its realization. The compliance of this order be made by Opposite Parties  within 60 days from the date of receipt of copy of this order, failing which the Complainant shall be at liberty to get the order enforced through the indulgence of this Commission. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.

14.     Reason for delay in deciding the complaint.

This complaint could not be decided within the prescribed period because the government has not appointed any of the Whole Time Members in this Commission for about 3 years i.e. w.e.f. 15.09.2018 till 27.08.2021 as well as due to pandemic of COVID-19.

Announced in Open Commission