Punjab

Ludhiana

CC/21/506

M/s R.K.Satyam Dyes & Chemicals - Complainant(s)

Versus

Shriram Gen.Insurance Co.Ltd - Opp.Party(s)

Gurjit Singh

01 Aug 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No:506 dated 01.11.2021.                               Date of decision: 01.08.2024.

M/s. R.K. Satyam Dyes and Chemicals, HIG 954, Chandigarh Road,          Jamalpur Colony, Focal Point, Ludhiana through its Proprietor Sh. Ramnik Kumar son of Sh. Kewal Krishan.                                                                                                                                                                        ..…Complainant

                                                Versus

1. Shriram General Insurance Co. Ltd., Jhandu Tower, 3^rd Floor, Miller Ganj, Near Manju Cinema, G.T. Road, Ludhiana through Manager. 
2. M/s. Novelty Wheels Pvt. Ltd., B-30-114/3/1, Adjacent Bharat Petrol Pump, Opposite GS Auto, Dhandari Khurd, G.T. Road, Ludhiana through its Manager.                                                                                                                                                                       …..Opposite parties 

Complaint Under section 35 of the Consumer Protection Act, 2019.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. G.S. Kalyan, Advocate.

For OP1                         :         Sh. Vyom Bansal, Advocate.

For OP2                         :         Complaint against OP2 not admitted vide order                                           dated 08.11.2021.

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that the complainant is a Proprietorship concern and Sh. Ramnik Kumar is its Proprietor. The complainant purchased Bolero Pick-Up bearing registration No.PB-10-HB-8521 for personal use through driver. Earlier the vehicle was insured with Future Generali India Insurance Company Ltd. And later on the vehicle was got insured from OP1 vide insurance policy No.105029/31/21/000141 w.e.f. 07.04.2020 to 06.04.2021 on premium of Rs.11,863/- having IDV of Rs.5,83,300/-. The complainant stated that OP1 of his own granted 20% of NCB. The complainant has not filed any proposal form, declaration form and any type of other documents to get benefit of NCB from OP1 nor the complainant concealed any fact from OP1 at the time of taking insurance policy. The said car met with an accident on 16.10.2020 in the area Gharshankar being driven by Dalwinder Singh son of Sandhu Singh, R/o. Village Rayan, PO Hiran, District Ludhiana and it got badly damaged for which the complainant lodged claim with the OPs. The vehicle was taken to OP2 the authorized dealer as per advise of OP1 where the complainant spent Rs.50,000/- as towing charges from his own pocket. OP1 registered the claim vide claim No.10000/31/21/N/0013630 on submission of required documents by the complainant. The complainant further stated that he many times required OP1 to settle and pay the claim to get released the vehicle from OP2 after paying the repair charges. However, OP1 lingered on the matter on one pretext or the other. The complainant paid Rs.3,77,359/- to OP2 from his own pocket and then the vehicle was released. OP1 rejected the claim of the complainant vide letter dated 24.11.2020 on the ground of No Claim Bonus without any justification or reason. The complainant further stated that he never requested OP1 for any type of No Claim Bonus at the time of insurance and even he deposited Rs.574/- to OP1 on 19.01.2021.  As per GR 27 of Indian Motor Tariff, OP1 was required to verify from the previous insurer about the history of claims already availed during the last policy within 21 days of the issue of the cover note but OP failed to verify the same as per Indian Motor Tariff cover note dated 26.05.2015.  The loss has been occurred after more than 7 months but OP1 illegally closed the claim. Even the complainant has not received any deficiency of premium notice prior to the loss. However, after the accident, OP1 recovered Rs.574/- on 19.01.2021 from the complainant after pointing out the deficiency in premium. According to the complainant, it never concealed any facts from OP1 at the time of taking insurance cover neither misstated any fact nor filled any proposal form/declaration to this effect. The complainant has not violated any terms and conditions of insurance policy. OP1 is duty bound to pay the claim to the complainant after recovery of premium on 19.01.2021 during period policy 07.04.2020 to 06.04.2021 due to no deficiency in premium. OP1 has illegally refused to settle and pay the genuine claim of the complainant and even OP2 has charged Rs.3,77,359/- in excess from the complainant which amounts to deficiency in service on the part of the OPs. In the end, the complainant has prayed for issuing directions to OP1 to pay the claim amount of Rs.3,77,359/- and to pay towing charges of Rs.50,000/- along with interest and to issue directions to OP2 to refund excess amount charged. The complainant also prayed for issuing directions to the OPs to pay compensation of Rs.2,00,000/- besides litigation expenses of Rs.55,000/-.

2.                The complaint as against OP2 was not admitted vide order dated 08.11.2021.

3.                Upon notice, OP1 appeared and filed written statement. Under the column Factual Submission, OP1 stated that the vehicle of the complainant i.e. Mahindra & Mahindra Bolero Pick-Up bearing registration No.PB-10HB-8521 was insured with it vide policy No.105029/31/21/000141 under GCCV-Private Carriers Other Than Three Wheelers-Zone C plan having validity from 07.04.2020 to 06.04.2021. The complainant got renewed the policy from the previous insurer i.e. Future Generali India Insurance Company and No-Claim Bonus of 20% was availed by the complainant. After issuance of the policy, OP1 verified the NCB status from the previous insurer and it was found that the insured had concealed his claim in previous policy and availed 20% deduction towards NCB in the present policy from OP1. According to OP1, as per IRDA guidelines, the insured was not eligible for any deduction towards NCB as it had made a claim in the previous policy and as such, a letter dated 11.06.2020 was sent to the Insured Firm for paying 20% NCB availed in the current policy but the insured failed to make good the said NCB. OP1 further stated that it received intimation for claim towards damaged to the insured vehicle on 16.10.2020, which was registered vide claim No.10000/31/21/N/0013630. Mr. Vikrant Sharma, Surveyors and Loss Assessors was deputed for assessment of the loss to the insured vehicle who inspected the damaged vehicle and collected the required documents and prepared survey report amounting to Rs.2,72,000/-. OP1 sent an Email dated 12.11.2020 to previous insurer i.e. Future Generali India Insurance Company who vide their reply Email dated 13.11.2020 confirmed that one Own Damage claim was paid by them and the NCB as per their policy was 0%. OP1 further stated that that thereafter, their authorized officials applied their mind and after considering all the documents, repudiated the claim of the complainant vide letter dated 24.11.2020 on the ground of concealment the fact of availing  NCB from the previous insurer. Further the complainant got an endorsement in the policy on 19.01.2021 where by the NCB discount of Rs.574/- was paid and same was valid for the period 19.01.2021 to 06.04.2021 i.e. for remaining period of the policy. As such, the damages to the insured vehicle before 19.01.2021 were not covered under the policy and not payable accordingly.

                   OP1 by taking preliminary objections, assailed the complaint on the ground of its maintainability;  the complainant has not approached this Commission with clean hands; suppression of material facts; the complainant being not a consumer under Consumer Protection Act; lack of jurisdiction as we as cause of action; the complaint being premature etc. OP1 stated that the complainant has not made Kotak Mahindra Bank a party to the present complaint as the vehicle in question was hypothecated by the said company. Further the complaint has been filed to extort illegal and unjust money from OP1. Moreover, complicated questions of law and facts are involved in the present complaint which cannot be tried and decided in summary jurisdiction of this Commission as same required leading of voluminous evidence and expert opinions which can be led only before the Civil Court. OP1 further stated that the complainant has failed to disclose any deficiency in service on its part.

                   On merits, OP1 reiterated the crux of averments made in the factual submission and preliminary objections. OP1 has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

4.                The complainant filed rejoinder to the written statement of OP1 reiterating the facts mentioned in the complaint and controverted those mentioned in the written statement of OP1.

5.                In support of his claim, Proprietor of complainant firm Sh. Ramnik Kumar tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of his Aadhar Card, Ex. C2 is the copy of Form GST REG-06 of the complainant firm, Ex. C3 is the copy of certificate cum policy schedule, Ex. C4 is the copy of invoice of Novelty Wheels Pvt. Ltd., Ex. C5 is the copy of driving license of Dalwinder Singh, Ex. C6 is the copy of PAN Card of Ramnik Kumar, Ex. C7 is the copy of RC No.PB10-HB-8521, Ex. C8 is the copy of repudiation letter dated 24.11.2020, Ex. C9 is the copy of receipt of Rs.3,77,359/- of Novelty Wheels Pvt. Ltd., Ex. C10 is the copy of ledger account of Novelty Wheels Private Limited regarding complainant firm and closed the evidence.

6.                On the other hand, counsel for OP1 tendered affidavit Ex. RA of Sh. Shailesh Vindal, Assistant Manager (Legal) of OP1 along with documents Ex. R1 is the copy of policy schedule, Ex. R2 is the copy of letter dated 11.06.2020, Ex. R3 is the copy of survey report, Ex. R4 is the copy of Email dated 13.11.2020 and 13.11.2020, Ex. R5 is the copy of repudiation letter dated 24.11.2020, Ex. R6 is the copy of Package Policy-Endorsement Schedule and closed the evidence.

7.                We have heard the arguments of the counsel for the parties and also gone through the complaint, rejoinder, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.

8.                Admittedly, the vehicle of the complainant firm, a Bolero Pick-Up bearing registration No.PB-10-HB-8521 was insured with OP1 having a GCCV Private Carriers Other Than Three Wheelers Package Policy-Zone C bearing No.105029/31/21/000141 having validity from 07.04.2020 to 06.04.2021. Ex. C3 = Ex. R1 is the Certificate cum Policy Schedule which shows that a premium of Rs.11,863/- was paid for vehicle having IDV value of Rs.5,83,300/- A No Claim Bonus was also availed by the complainant. The vehicle was previously insured by Future Generali India Insurance Co. Ltd. and on its renewal OP1 had extended 20% of No Claim Bonus. Unfortunately, on 16.10.2020, the vehicle met with an accident in the area of Garhshankar for which the complainant firm lodged a claim with OP1. On receipt of intimation, OP1 appointed Mr. Vikrant Sharma, Surveyors and Loss Assessors who after inspecting the vehicle prepared survey report Ex. R3 and assessed the loss of Rs.2,72,000/-. During the course of settlement, OP1 sent an Email dated 13.11.2020 Ex. R4 with regard to No Claim Bonus to the previous insurer who vide Email dated 13.11.2020 Ex. R4 confirm the availing of one Own Damage Claim by the complainant. Thereafter, OP1 vide repudiation letter dated 24.11.2020 Ex. R5 expressing its inability to consider the claim. The operative part of Ex. R5 reads as under:-

“At the time of issuance of the policy, a declaration on No Claim Bonus was submitted by you wherein it was specifically stated that no claim had arisen under the previous policy and further you agreed and undertook to waive all the benefits under the policy if the declaration was found to be incorrect. On enquiry it is found that a claim was lodged by you under the previous policy, rendering your declaration false, which amounts to serious breach of the policy conditions as well as the principle of utmost good faith. The relevant policy conditions are reproduced below for your immediate reference:

Conditions

This Policy and the Schedule shall be read together and any word or expression to which a specific meaning has been attached in any part of this Policy or of the Schedule shall bear the same meaning wherever it may appear.

9. The due observance and fulfillment of the terms, conditions and endorsements of this Policy in so far as they relate to anything to be done or complied with by the insured and the truth of the statements and answers in the said proposal shall be conditions precedent to any liability of the Company to make any payment under this Policy.

In view of the above, the contract of insurance has been vitiated by false declaration thereby disentitling you from claiming the benefits under the policy. We therefore express our inability to consider the claim.”

9.                Now the point of consideration arises whether OP1 was justified in repudiating the claim on the complainant?

10.              The counsel for the complainant has referred to GR27 of Indian Motor Tariff wherein it is stipulated that OP1 was legally bound to verify the history of claims from the previous insurer within 21 days from the date of issuance of the cover note. The counsel for the complainant contended that the claim of the complainant can be settled on non-standard basis. In support of his arguments, the counsel for the complainant has relied upon IV (2015) CPJ 10B (CN) in Meena Kanwar Vs National Insurance Co. Ltd. and others whereby it has been held by the Hon’ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur that if the insurance company had not written to previous insurer within 21 days of granting of cover and previous insurer was obliged to furnish information within 30 days of receipt of letter and the insurance company is bound to confirm the declaration of insured within 21 days under GR27, the repudiation was not justified and the claim was allowed to be settled on nonstandard basis. The counsel for the complainant has further relied upon II (2016) CPJ 459 (NC) in National Insurance Company Ltd. Vs Jagir Kaur whereby it has been held by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi that if as per the proposal form, the complainant had claimed no claim bonus while renewing the policy, the insurance company was provided to pay the complainant 75% of amount assessed by surveyor on non-standard basis. The counsel for the complainant has further relied upon III (2017) CPJ 559 (NC) in New India Assurance Co. Ltd. Vs Shinder Pal Singh and another whereby it has been held by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi that the repudiation of the claim was not justified as the insurance company failed to fulfill its obligation under GR27 of Indian Motor Tariff. It was further held that since the complainant had paid 20% less premium, equity demands that the insurance company should allow the insurance claim on proportionate basis i.e. by reducing entitlement under the claim by 20%. Further, the counsel for the complainant has placed reliance on 2016(1) C.P.R. 910 in National Insurance Co. Ltd. Vs Harpreet Singh passed by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi. On the other hand, the counsel for OP1 placed reliance on 2022(3) C.P.R. 158 in Saurav Bhatti Vs United India Insurance Company Limited whereby the Hon’ble National Consumer Disputes Redressal Commission, New Delhi has held that when the complainant himself declared under his own hand and signatures that no claim was made in previous year, such admission amounts to concealment of claim of previous year and it is a good ground for repudiation of claim.

11.              Perusal of letter Ex. R2 dated 11.06.2020 shows that the complainant was informed about the verification of his own damage claim from the previous insurer and the complainant is not eligible for No Claim Bonus for the current policy and he was further asked to deposit 20% of No Claim Bonus within 7 days failing which OP shall not be liable to indemnify any loss of the vehicle on account of wrong declaration of No Claim Bonus. Admittedly, the accident took place on 16.10.2020  i.e. about 7 months after the inception of the policy and by that time, the premium of Rs.574/- as demanded by OP1 was not deposited by the complainant and it was only got recovered on 19.01.2021 vide Package Policy-Endorsement Schedule Ex. R6. It is apparent that neither of them had complied with GR27 of Indian Motor Tariff. Further the complainant has very categorically asserted that at the time of renewal of the policy he did not sign any declaration, proposal form etc. wherein he has claimed the No Claim Bonus. In the repudiation letter, a reference of declaration has been made but no such declaration has been produced on record to substantiate the factum of concealment of renewal of current existing policy in question. Even after the expiry of period for deposit of Rs.574/-, OP1 did not suspend, cancel or kept the policy in abeyance. Consequently, the policy in question remained operational. Further on the payment of said amount of Rs.574/-, additional benefits were restored prospectively. Therefore, assuming it a breach of condition, same cannot be construed as a fundamental breach of policy. In these peculiar facts and circumstances, OP1 could not have repudiated the claim in toto and it could have been settled on non-standard basis.

12.              Recently, the Hon’ble Supreme Court of India in Civil Appeal No.4758 of 2023 title as Ashok Kumar Vs New India Assurance Co. Ltd. decided on July 31, 2023 while relying the judgments in National Insurance Company Limited Vs Nitin Khandelwal (2008) 11 SCC 259 and Amalendu Sahoo Vs Oriental Insurance Company Limited (2010) 4 SCC (536) has held that even if there was breach of any clause in the insurance policy, the claim could not have been repudiated in toto and the claim should have been settled on non-standard basis. The Hon’ble Supreme Court made the following observations in Para No.15, 18 and 19 of the said Civil Appeal No.4758 of 2023:-

18) In Amalendu Sahoo (supra), this Court noticed the guidelines issued by the New India Assurance Co. Ltd. in settling claims on non-standard basis. The guidelines read as under:-

Sl. No.	Description	Percentage of settlement
(i)	Under declaration of licensed carrying capacity.	Deduct 3 years' difference in premium from the amount of claim or deduct 25% of claim amount, whichever is higher.
(ii)	Overloading of vehicles beyond licensed carrying capacity.	Pay claims not exceeding 75% of admissible claim.
(iii)	Any other breach of warranty/condition of policy including limitation as to use.	Pay up to 75% of admissible claim."

The above guidelines were followed by this Court in Amalendu Sahoo (supra) as is clear from para 14 of the said judgment. The District Forum and the State Commission have rightly applied Amalendu Sahoo (supra) to the facts of the present case and awarded 75% on non-standard basis.

19) Nitin Khandelwal (supra) and Amalendu Sahoo (supra) lay down the correct formula that where there is some contributory factor, a proportionate deduction from the assured amount would be all that the Insurance Company can aspire to deduct.

We are inclined to accept the plea of the appellant that in the case at hand, on the facts governing the scenario, Clause (iii) of the table set out in para 14 of Amalendu Sahoo (supra) is attracted and the District Forum and the State Commission were justified in awarding the entire 75% of the admissible claim.”

It is not disputed that in this case after the receipt of the claim, a surveyor Sh. Vikrant Sharma was appointed by the OPs who vide his survey report Ex. R3 assessed the loss at Rs.2,72,000/-. The report Ex. R3 has not been challenged by the complainant on any ground nor any evidence has been led by the complainant to prove that the report is faulty for some reason or the other. So by applying the ratio of the above cited cases, it would be just and appropriate if the claim of the complainant is allowed to the extent of 75% of the amount of Rs.2,72,000/- as assessed by the surveyor in survey report Ex. R3 on non-standard basis.

13.              As a result of above discussion, the complaint is partly allowed with direction to OP1 to reimburse the insurance claim of the complainant to the extent of 75% of the of Rs.2,72,000/- as assessed by the surveyor in survey report Ex. R3 on non-standard basis, within 30 days from the date of receipt of copy of order, failing which the complainant shall be held entitled to interest @8% per annum from the date of order till date of its actual payment. However, there shall be no order as to costs. Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.

14.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)                                (Sanjeev Batra)

Member                                                President         

 

Announced in Open Commission.

Dated:01.08.2024.

Gobind Ram.