Haryana

Fatehabad

CC/339/2020

Rani Devi - Complainant(s)

Versus

National Insurance Company Ltd. - Opp.Party(s)

Ramesh Sharma

21 Nov 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION; FATEHABAD.

                                                          Complaint case No.339 of 2020.

                                                         Date of Instt.: 14.12.2020.                                                                 Date of Decision: 21.11.2023.

 

Rani Rani wife of Sh.Rajesh Kumar resident of village Bhodi Tehsil Tohana District Fatehabad.

                                                                   ..Complainant.

                              Versus

1.National Insurance Company Limited Business Centre Hisar Chadnigarh, Road, near RMC Hospital, Kainchi Chowk Tohana District Fatehabad through its authorized signatory/person.

2.Branch Manager, National Insurance Company Limited, DS86, HUDA Market, Near Oriental Bank, Narwana District Jind.

3.National Insurance Company Limited registered office 3, Middleton Street Kokata.

4.Raja Motors Hyundai Automobiles, Now Majestic Hyundai, Sirsa Road, Fatehabad through authorized signatory & Proprietor.

 

                                                                   ..Opposite Parties.

          Complaint U/S 35 of the CP Act,2019       

         

Before:                  Sh.Rajbir Singh, President.

                             Dr.K.S.Nirania, Member.                                                         Smt.Harisha Mehta, Member.  

                                                                  

 

Present:                 Sh.Ramesh Sharma, Advocate for complainant.                                         Sh.Kaushal Mehta, Advocate for Ops No.1 to 3.                               Sh.V.K.Mehta, Advocate for OP No.4.

 

 

 

 

 

                            

ORDER

SH.RAJBIR SINGH, PRESIDENT

                              Brief facts of the present compliant are that the complainant purchased a vehicle Grand I10 bearing registration No.HR23H-3186 from Op No.4 in the year 2017 and the same was got insured by it vide policy No.3901023176100046436 for the period from 03.10.2017 to 02.10.2018; that during the validity period of the insurance policy, the complainant had not taken any claim on the insured vehicle; that thereafter the complainant again got the vehicle insured through No.1 vide policy No.426005311810002926 for the period 12.11.2018 to 11.11.2019; that the said policy was issued without any objection and query; that on 17.03.2019, the vehicle in question met with an accident; that the complainant intimated the Ops  besides submitting all the relevant documents with them; that surveyor was appointed by the Ops and thereafter the complainant came to know that claim had already been received claim of Rs.54400/- on the insured vehicle on 09.05.2018 through claim No. 39010231186390801710; that the insurance company refused to honour the claim of the complainant wrongly and illegally despite the fact that there was no misrepresentation of facts on the part of the complainant. The act and conduct of the Ops clearly amounts to deficiency in service on their part.   

2.                          On notice Ops appeared and file their separate replies. Ops No.1 to 3 in their joint reply have taken preliminary objections such as cause of action, maintainability, locus standi and estoppal etc.  It has been further submitted that the complainant got vehicle bearing registration No.HR23H-3186 insured vide policy No.426005311810002926 for the period 12.11.2018 to 11.11.2019 by submitting a proposal whereby he had declared that No Claim was lodged by him under the previous policy; that   claim of Rs.54400/- had already been received on insured vehicle on 09.05.2018 through claim No. 39010231186390801710 but despite that the complainant has claimed No Claim Bonus by way of mis-representation which is clear cut violation of terms and conditions of the policy, therefore,  the claim of the complainant was closed as No Claim and the complainant is not entitled for any claim; that there is no deficiency in service and unfair trade practice on the part of Ops. Other contentions of the complaint were controverted and prayer for dismissal of the complaint has been made.

3.                          OP No.4 in its separate reply has taken preliminary objections such as estoppal, locus standi and cause of action etc. It has been further submitted that the vehicle was not purchased from the replying Op as the firm of the replying Op was not in existence on 03.10.2017 and it came into existence only on 01.09.2018, therefore, there is deficiency in service and unfair trade practice on the part of replying OP. Other contentions have been controverted and prayer for dismissal of the complaint has been made.

4.                          In evidence, the complainant has tendered affidavit Ex.CW1/A with documents Annexure A to Annexure J. On the other hand the Ops have tendered affidavits Ex.RW1/A, Ex.RW4/A with documents Annexure R1/1 to Annexure R1/13 and Annexure RW4/1.

5.                          The fact regarding purchasing of insurance policy (Annexure A), damage to the insured vehicle during the subsistence of the policy and lodging of claim on account of damaged insured vehicle Annexure R1/13 is not disputed. It is also not disputed the surveyor was also appointed by the Ops No.1 to 4 to assess the loss to the damaged who in his report (Annexure R-1/11) has assessed the net payable loss to the tune of Rs.230100/- (in round figure).

6.                          The claim of the complainant was repudiated by the Ops No.1 to 3 vide Annexure R1/2. The relevant portion of this letter is as under:

It has been observed that at the time of taking the captioned policy you had declared that NO CLAIM has been ldoged in the previous insurance on policy No. 3901023176100046436 consequently NO CLAIM discount of 20 % was allowed to you while renewing the policy.

Consequent to your lodging the claim on us we have verified the claim status for the period 03.10.2017 to 02.10.2018 it has been observed that you have lodged the claim on 09.05.2018 for the said vehicle under claim No. 39010231186390801710.

7.                          The learned counsel for the complainant in his arguments submitted that it was the duty of the insurance company to verify the averments made by the complainant before insuring the vehicle and had that been done, it would have come to know that in fact the complainant had taken a claim against the above referred vehicle. He further submitted that the complainant cannot be made to suffer for the negligence on the part of the official of the insurance company, in not verifying the aforesaid fact from the previous insurance company. He placed reliance upon Section 27(f) of the Indian Motor Tariff, 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 in 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 1 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.

                            The learned counsel for complainant further argued that in view of the above provision it was obligatory on the part of the insurer to write to the previous insurer, seeking confirmation of the entitlement of NCB. Their failure to write to the previous insurer within 21 days after granting the cover will constitute a breach of policy. However perusal of the case file reveals that the previous policy (Annexure R1/8) having validity from 03.10.2017 to 02.10.2018 as well as the policy in question having validity from 12.11.2018 to 11.11.2019 was also issued by the National Insurance Company i.e. OP No.1 but it is not understandable as to why the Op No.1 has not checked its own record before issuance of policy in question.

8.                         The learned counsel for the Ops No.1 to 3 in his arguments submitted that the contract of insurance is a contract of utmost good faith. The learned counsel further contended that while obtaining the policy in question from them, the complainant had made a false declaration in the proposal form regarding No Claim Bonus (NCB).  Since, she had made a false declaration, the benefits under the policy stood forfeited and this fact has been stated in the declaration signed by the complainant herself.

9.                         We have duly considered the arguments advanced by learned counsel for both the parties and have also examined the entire material placed on the record of this case. It is not in dispute that the insured had taken advantage of No Claim Bonus in the form as 20% discount in the insurance premium by making false declaration in the proposal form. It is also not in dispute that complainant insurance company notwithstanding the mandate of GR 27 of Indian Motor Tariff did not take steps to verify the correctness of declaration regarding “No Claim Bonus” from the previous Insurance Company within 21 days of the issue of insurance cover. The question which needs answer is as to whether the Ops No.1 to 3/insurance company was right in repudiating the claim on the plea of concealment and misrepresentation of facts irrespective of the fact that complainant insurance company has failed to seek verification of declaration given by the insured in support of his plea for No Claim Bonus, within 21 days of the issue of insurance cover as envisaged in GR 27 of Indian Motor Tariff?

10.                       The above issue is no more Res intergra. The above question  has been answered by the Hon’ble National Commission vide its order dated 2.02.2017 in the matter of United India Insurance Company Ltd. vs. M/s Jindal Poly Buttons Limited & Branch Manager, National Insurance Company Ltd. Vs. Naresh Kumar  passed in Revision Petition No.2920 of 2015 and 1836 of 2016, as under:

“(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’ 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 case 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 of 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.

 

11.                        Hon’ble State Commission of Haryana while disposing of First Appeal No. A/827/2018 on 19.10.2023 in case titled as New India Insurance Company Vs. Jasbir Singh has relied upon the judgment titled as United India Insurance Company Ltd. vs. M/s Jindal Poly Buttons Limited & Branch Manager and held that “because insured has taken benefit of no claim bonus by making false declaration his insurance claim would be reduced proportionately. In that case, surveyor accessed the loss at Rs.1,74,955/-. Complainant’s claim was repudiated on the ground that he had obtained a false no claim bonus of 20% while taking insurance policy in question. Revision Petition was allowed partly. It has been further held that Accordingly, on aspect of quantum of compensation as awarded through impugned order dated 17.05.2018; interference in present appeal is warranted. Accordingly, while relying upon above cited judgment on Hon’ble National Consumer Commission; it is now held that complainant-Jasbir Singh is entitled to 50% of Rs.50,100/- (amount accessed by surveyor) which comes to Rs.25,050/-. This amount (Rs.25,050/-) will also carry interest @8% per annum, from date of filing of complaint (02.02.2018) till realization. Impugned order dated 17.05.2018 stands modified in above terms. Present appeal is disposed off accordingly being partly allowed.

12.                        In view of the above findings made by the Hon’ble National Commission as well as Hon’ble State Commission, we are of the opinion that repudiation of the insurance claim by the Insurance Company was not justified and the end of justice would be met if we direct the Ops No.1 to 3 to pay 50 % of the amount of Rs.230176.87/-(amount assessed by the surveyor in report Annexure R1/11 which comes to Rs.1,15,088/- (in round figure).  Accordingly, the present compliant is partly allowed and the Ops No.1 to 3 are directed to pay a sum of Rs.1,15,088/- to the complainant i.e. 50 % of the amount assessed by the surveyor in report Annexure R1/11alongwith interest @ 6% per annum from the date of filing of present complaint till actual realization. We also direct the Ops No.1 to 3/insurance company to further pay a sum of Rs.11,000/- for mental agony and harassment including litigation expenses to the complainant.  The order be complied within a period of 45 days from today.  The complaint against Op No.4 stands dismissed.

13.                        In default of compliance of this order, proceedings against respondents shall be initiated under Section 72 of Consumer Protection Act, 2019 as non-compliance of court order shall be punishable with imprisonment for a term which shall not be less than one month, but which may extend to three years, or with fine, which shall not be less than twenty five thousand rupees, but which may extend to one lakh rupees, or with both. A copy of this order be sent to the parties free of cost. This order be also uploaded forthwith on website of this Commission, as per rules, for perusal of parties herein. File be consigned to the record room after due compliance.     

Announced in open Commission.                                                            Dated: 21.11.2023

 

                                                                                                        

(K.S.Nirania)                      (Harisha Mehta)                (Rajbir Singh)                    Member                                Member                                           President