DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION (CENTRAL)ISBT KASHMERE GATE DELHI

COMPLAINT CASE NO. 87/2015

No. DC/ Central/

vs.

Coram:       Ms. Rekha Rani, President

                    Shri Vyas Muni Rai, Member

                   Ms. Shahina, Member (Female)

ORDER

Ms. Rekha Rani, President

1. Sh. Sunil Kumar (in short the complainant) filed the instant complaint under section 12 of the Consumer Protection Act, 1986 against The Oriental Insurance Co. Ltd. (in short OP) pleading therein that OP insured his new truck bearing no. DL-1GC-0739 vide insurance policy bearing no. 271500/31/2013/6754 for the period 30.01.2013 to 29.01.2014.

On 14.03.2013 said vehicle met with accident in Rajasthan. OP appointed Mr. P.S. Bhatia as surveyor who surveyed the vehicle and the vehicle was got repaired. Bills pertaining to repair and change of the parts of the vehicle amounting to Rs. 1,95,011/- were sent to the OP.

On 04.06.2013 the said vehicle again met with an accident at Meerut, UP and again it was got repaired. OP was informed. Claim form with bills were sent to OP for an amount of Rs. 53,200/-.

Complainant received a letter dated 07.08.2013 from the OP for which his claim was repudiated on the ground that he was granted 45% NCB on his policy no. 271500/31/2013/6754 which was renewal of a policy no. 271500/21/2012/6597. OP further stated that complainant was not entitled for any NCB under the current Policy.

On 24.08.2013, Complainant wrote to OP expressing his innocence in availing 45% of NCB. OP vide its another letter dated 09.09.2013 repudiated subsequent claim of the complainant pertaining to accident dated 04.06.2013 on the same ground of claiming NCB wrongfully.

Meanwhile on 13.09.2013, complainant deposited 45% of NCB which was claimed by him mistakenly amounting to Rs. 18,206/- against NCB discount of Rs. 16,337/-. Complainant wrote a letter dated 30.10.2013 to the OP with a request to indemnify the loss by expressing his innocence in mistakenly claiming NCB of 45%. OP did not agree to it. Hence, the instant complaint was filed with a prayer for direction to OP to pay to the complainant Rs. 2,48,211/- towards his claim, Rs. 50,000/- towards compensation and Rs. 11,000/- towards litigation expenses.

2. Notice of complaint was issued to OP who filed WS. It is pleaded that complainant approached OP seeking coverage of his new vehicle for the period 30.01.2013 to 29.01.2014. He submitted an insurance coverage in respect of his earlier vehicle and declared that he had not obtained any claim in respect of his earlier vehicle. The OP believing declaration of the complainant to be correct extended the policy and also provided NCB to the extent of 45%. Further it is pleaded that on verification it was revealed that complainant was not entitled to any NCB under the policy in terms of GR 27 of the Motor Tariff. Further, it is pleaded that after repudiation of his claim, Complainant approached the OP seeking regularization of the policy. It is further stated that OP “agreed to accept the difference in premium and the policy become regularize from the date when the complainant paid the difference in premium. Since the claims have arisen prior to the said date accordingly the same were not admissible and were not paid.”
3. Both sides filed evidence by way of affidavits. They also filed Written Submissions. We have heard both sides.

4. Claim of the Complainant regarding accident which occurred on 14.03.2013 and accident which occurred on 04.06.2013 were repudiated by the OP on the ground that complainant had wrongfully availed NCB.

5.  Relevant part of the repudiation letters dated 07.08.2013 regarding the first claim and 09.09.2013 regarding the second claim are as under:-

“In this regard, we would like to inform you that you have been granted 45% NCB on your Policy No. 271500/31/2013/6754 which is renewal of a Policy No. 271500/21/2012/6597. On confirmation of No Claim Bonus, it has been observed that you are not entitled for any NCB under the Current Policy.

This tantamount to non-disclosure of material facts and violation of Section 64 VB of Insurance Act, 1938. Further it is a violation of GR-27 of Motor Tariff Provision. Based on these your claim is REPUDIAED. We hope you will bear with us.”

6. The question, therefore, arises whether a wrongful declaration made in the insurance policy regarding no claim bonus entitles the insurer to repudiate the claim of the insured.
7. GR-27 of Indian Motor Tariff, casts an obligation on the insurer to verify the genuiness of declaration pertaining to entitlement of claim of No-Claim Bonus within 21 days from the date of issue of insurance cover. Had the insurer followed mandate of GR-27, it would have come to know that no claim bonus was claimed wrongfully and then it could have either cancelled the insurance policy or called upon the insured to make good the insurance premium.
8. Complainant in Para 9 Page 7 of his complaint has stated that he was asked to deposit Rs. 18,206/- against NCB discount of Rs. 16,337/- on 13.09.2013 and the same was deposited. The said plea has not been specifically denied by the OP in its Written Statement/Reply. OP in Para 1 Page 2 of its Written Statement has stated that it was not bound to regularize the policy as the complainant had made a misrepresentation which made the contract void. It is further pleaded that on repeated requests of the complainant, OP agreed to accept the difference in premium to regularize the policy from the date complainant paid but since claims had arisen prior to the said date policy could not be regularized.
9. It is settled law that it is the duty of the insurer to ascertain/ obtain information as to whether any claim had been obtained by the complainant in respect of the policy of the previous insurer.
10. In the case of National Insurance Co. Ltd. Vs Harpreet Singh, Revision Petition No. 3216 of 2012 decided on 08.02.2016 and Anjani Gupta Vs Future Generally India Insurance Company, Revision Petition No. 1051 of 2017 decided on 12.12.2017. when getting insurance policy in dispute, the owner had not disclosed the fact of getting claim from the previous insurer and obtained ‘no claim bonus’. By making reference to the provisions of GR-27 of Indian Motor Tariff, it was observed as under by National Consumer Disputes Redressal Commission:-

“On reading of the above, it is clear that where the insured is unable to produce the evidence pertaining to his No Claim Bonus entitlement, he may be permitted to give a declaration in support of his No Claim Bonus. It is further provided in the tariff that notwithstanding the above declaration, the insurer allowing the No Claim Bonus shall be under obligation to write to the policy issuing office of the previous insurer seeking confirmation of entitlement of the insured and the rate of No Claim Bonus and previous insurer shall be under obligation to respond to said query within 30 days. It is further provided that failure of the insured granting No Claim Bonus to write to the previous insurer within 21 days shall constitute the breach of tariff. In the instant case, admittedly no communication was sent by the petitioner to the previous insurer within 21 days after granting the insurance cover to the insured. This obviously amounts to breach of tariff on the part of the petitioner insurance company and disentitle the insurance company to take shelter of the plea of misrepresentation of facts on the part of the petitioner. However, the fact remains that respondent complainant on the basis of false declaration given to the petitioner paid 25% less premium. Therefore, the equity demands that bonus payable to the complainant in respect of his insurance claim should be decreased by 25%.”

Taking note of less amount paid, the insurance claim was reduced by 25%.

11. On similar facts, in Anjani Gupta’s case (supra), another bench of Hon’ble National Consumer Disputes Redressal Commission observed as under:-

“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 reduce in the same proportion.”

The amount of claim was reduced by 25%.

12. National Commission in United India Insurance Co. Ltd. v. M/s. Jindal Poly Buttons Ltd. in Revision Petition No. 2920 of 2015, wherein the insurer had repudiated the claim of the insured on the ground that a wrongful representation was made by the insured to the insurer with regard to the no claim bonus, held:-

“4. In the matter of Inderpal Rana Vs. National Insurance Co. Ltd. (supra), Tata AIG General Insurance Co. Ltd. Vs. Gulzari Singhe (supra) and National Insurance Co. Ltd. Vs. Harpreet Singh (supra), the Coordinate Benches of this Commission have taken a view that if the insurer has taken an insurance policy with the advantage of No Claim Bonus by fraud/ concealment of facts, it would render the insurance contract voidable and repudiation of insurance claim by the concerned insurance company would be justified. However, in the matter of Harpreet Singh (supra), the Division Bench of this Commission relying upon Motor Tariff Rule GR 27 took the view that failure of the insurer to seek confirmation about the genuineness of information furnished by the insured regarding No Claim Bonus from the previous insurer within 21 days constitute the breach of tariff and would disentitle the insurer to take shelter of plea of misrepresentation of fact by the petitioner. Thus, in the said case, the Division Bench directed reimbursement of insurance claim proportionate to the extent of less premium paid by claim of the No Claim Bonus.”

13. In the instant case since the complainant had made misrepresentation about no-claim bonus he is not entitled to the entire claim. OP can also not benefit from its own default of ascertaining whether NCB claim was genuine or not. We are, therefore, of the view that claim of the complainant should be reduced proportionately by 45% of the coverage amount as NCB 45% was claimed wrongfully. Complaint is therefore partly allowed to the extent of liability of the insurer being reduced to 55% of the original claim amount i.e. Rs. 1,36,516/- , with litigation cost of Rs. 10,000/-. The ordered amount be paid within 30 days from the date of receipt of copy of this order failing which the said amount shall be paid with interest at the rate of 6% p.a. from the date of the order to the date of payment.
14. Copy of this order be sent to the parties as per rules. File be consigned to record room.

Announced on this 12^th September of 2022.