Chandigarh

DF-I

CC/460/2020

Mr. Ram Murti Saini - Complainant(s)

Versus

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

Yogesh Saini

03 Jul 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/460/2020
Date of Institution	:	19/10/2020
Date of Decision	:	03/07/2023

Mr. Ram Murti Saini s/o Sh. Puran Chand Saini, aged about 65 years, r/o 2372 Sector 20-C, Chandigarh.

… Complainant

V E R S U S

1. Shriram General Insurance Company Ltd., Head Office at E-8, EPIP, RIICO, Sitapura, Jaipur (Rajasthan) 302022.
2. Shriram General Insurance Company Ltd., Regional Office at SCO 178, 1^st Floor, Sector 38-C, Chandigarh 160038.
3. Coverfox Insurance Broking Pvt. Ltd., Unit B2-601, Boomerang, Chandivali Farm Road, New Chandivali Studio, Andheri East, Mubami-400072.

… Opposite Parties

4. Maruti Suzuki Arena (Auto Vogue, Panchkula), Industrial Area, Phase-1, Panchkula, Haryana 134113.

… Proforma Opposite Party

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

 

ARGUED BY	:	Sh. Yogesh Saini, Counsel for complainant
	:	Sh. Vishal Sharma, Counsel for OPs 1 & 2
	:	OP-3 ex-parte
	:	None for OP-4

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Ram Murti Saini, complainant against the opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the complainant is the registered owner of a Maruti Suzuki Swift white (LXI-O) car bearing registration No.CH-01-BJ-6306 (hereinafter referred to as “subject car”) which was purchased by him from one Pardeep Kumar vide sale agreement dated 5.6.2019 (Annexure C-1). Before purchasing the subject car, it was insured with Oriental Insurance Company Ltd. in the name of the previous owner for the period w.e.f. 26.10.2018 to 25.10.2019. The complainant got the registration as well as insurance certificate of the subject car transferred in his name vide Annexure C-2 (Colly.) and Annexure C-3. Before expiration of the previous policy, complainant got the same duly insured with OPs 1 & 2 vide policy (Annexure C-4 hereinafter referred to as “subject policy”) for the period from 26.10.2019 to 25.10.2020 through the web portal of OP-3 (online broker of OP-1) and 35% NCB was also given to him at that time. On the morning of 18.5.2020 at about 9:30 a.m. on the light of Halo Majra, Chandigarh due to huge inflow of traffic towards Chandigarh, the subject car met with an accident with one Innova car and got badly damaged.  As there was no third party loss, FIR was not lodged and the subject car was taken to OP-4 for repair.  Intimation was given to the OP/insurance company about the accident and surveyor namely Gurkirat Singh Brar was appointed, who visited the premises of OP-4 on 19.5.2020 and assured that the complainant would get all his money refunded after completion of certain formalities.  The repairer raised bill of ₹43,420/- vide job card retail – tax invoice dated 31.5.2020 (Annexure C-7) which was paid by the complainant from his own pocket. The complainant thereafter lodged claim with all the documents, but, the same was repudiated by the OP Insurance Company vide letter dated 4.6.2020 (Annexure C-8) on the ground of deliberate and wilful misrepresentations to take benefit of higher slab of NCB. The aforesaid act amounts to deficiency in service and unfair trade practice on the part of OPs. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs 1 & 2 (insurer) resisted the consumer complaint and filed their written version, inter alia, taking preliminary objections of maintainability, cause of action, barred by law of limitation, suppression of material facts, jurisdiction, non-joinder and mis-joinder of necessary parties etc. It has been admitted that the complainant purchased the subject policy.  However, it has been alleged that as the complainant himself had misrepresented facts just to claim higher slab (35%) of NCB, the claim was rightly and validly repudiated.  It has been further alleged that though the surveyor had assessed the damage to the tune of ₹39,955.53, but, the claim is not payable due to breach of terms and conditions of the policy. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. OP-3 was properly served and when none turned up on its behalf before this Commission, despite proper service, it was proceeded against ex-parte vide order dated 25.1.2021.
4. OP-4 in its separate written version resisted the consumer complaint on the ground that the same is not maintainable against it as it had only repaired the subject car which had come for accidental repairs.  It has been admitted that the complainant had made the payment towards the accidental repairs. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
5. In rejoinder, complainant re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, contesting parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsels for complainant as well as OPs 1 & 2 and gone through the record, including the written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that subject car was purchased by complainant from one Pardeep Kumar vide agreement dated 5.6.2019 (Annexure C-1) and at that time the same was already insured with the previous insurer namely Oriental Insurance Co. Ltd., as is also evident from Annexure C-2 and thereafter the same was got insured by the complainant from OPs 1 & 2 vide the subject insurance policy (Annexure C-4) w.e.f 26.10.2019 to 25.10.2020 and the complainant had availed NCB discount of 35%, which the previous owner had been availing, and the subject car met with an accident on 18.5.2020 and was badly damaged, the case is reduced to a narrow compass as it is to be determined if OPs 1 & 2 are unjustified in repudiating the claim of the complainant on the ground that the complainant had misrepresented facts before obtaining the subject policy and the complainant is entitled for the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if OPs 1 & 2 are justified in repudiating the claim of the complainant on the ground of misrepresentation, as is the defence of the OPs.
   2. Perusal of Annexure C-4 clearly reveals that the subject policy was purchased by the complainant for the first time from the OPs 1 & 2 which was valid w.e.f. 26.10.2019 to 25.10.2020 and the complainant had availed NCB discount of 35%, which is now resisted by OPs 1 & 2 on the ground that the complainant was not entitled for the said discount and he had misrepresented the facts before obtaining the subject policy. It is also clear from the insurance policy (Annexure C-2) that prior to the subject policy (Annexure C-4) the subject car was insured w.e.f. 26.10.2018 to 25.10.2019 in the name of the previous owner namely Pardeep Kumar and as it is an admitted case of the parties that the complainant is the subsequent purchaser of the subject car vide agreement dated 5.6.2019 (Annexure C-1), he was not entitled for the No Claim Bonus, which the previous owner was availing from the previous insurance company and the complainant had obtained the NCB discount of 35% against the terms and conditions of the policy.
   3. The contention of the complainant is that it was for the insurer to get the factum of NCB verified by writing to the previous insurer calling for the confirmation of the entitlement of rate of NCB for the particular insured and the previous insurer shall be obliged to provide information sought within 30 days of the receipt of the letter of enquiry, failing which the matter will be treated as breach of tariff on the part of the previous insurer and at the same time 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 and the complainant cannot be held liable for the wrong done by the OP.  In support of this, complainant has relied upon GR-27(f) of the Indian Motor Tariff and the relevant portion of the same is reproduced 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 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 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 I 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.”

4. However, the law is well settled on this point that in case a person has obtained NCB from the insurer for which he/she was not entitled as per the terms and conditions of the policy, the entire claim of the insured cannot be repudiated, rather the same is to be settled by the insurer/insurance company subject of course to proportionate deductions to the extent of such NCB availed by the insured.  In this regard, reliance can be placed on the order of the Hon’ble State Commission, UT, Chandigarh in case titled National Insurance Company & Anr. Vs. Mohinder Kumar, Appeal No.248 of 2017 in which the Hon’ble State Commission has decided the matter by relying upon two orders of Hon’ble National Commission in the case of National Insurance Co. Ltd. Vs Harpreet Singh, Revision Petition No.3216 of 2012 decided on 8.2.2016 and Anjani Gupta Vs Future Generally India Insurance Company, Revision Petition No.1051 of 2017 decided on 12.12.2017.  In the first order of Harpreet Singh’s case (supra) the Hon’ble National Commission observed as under :-

       “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 6 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%.”

 

5. On similar facts, another Bench of Hon’ble National Commission in Anjani Gupta’s case (supra), 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 inquiry 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.”

 

6. Similar proposition of law was also laid down by the Hon’ble National Commission in the cases of National Insurance Company Ltd. Vs. Jagir Kaur, 2016 (2) CPJ 459 and United India Insurance Company Ltd. Vs. M/s Jindal Poly Buttons Limited, 2017 (2) CPR 553.
7. Thus, in view of above, it is safe to hold that OPs 1 & 2 are unjustified in repudiating the entire claim of the complainant and the complainant has successfully proved deficiency in service on the part of OPs 1 & 2 and the present consumer complaint partly deserves to be allowed against them. 
8. So far as the question of quantum of compensation is concerned, no doubt the surveyor vide his report (Annexure R-5) had assessed the insurance company’s liability of ₹39,955.53 (rounded off to ₹39,956/-) out of the total bill amount of ₹43,420/-, but, it is clarified that in view of the ratio of law laid down in the aforecited judgments, complainant is only entitled for the amount assessed by the surveyor after deducting the proportionate NCB from the same i.e. ₹39,956 – 35% = 25,971/-.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs 1 & 2 are directed as under :-

1. to pay ₹25,971/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 4.6.2020 till realization of the same.
2. to pay an amount of ₹7,000/- to the complainant as compensation for causing mental agony and harassment to him;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by the OPs 1 & 2 within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Since no deficiency in service or unfair trade practice has been proved against OPs 3 & 4, the consumer complaint against them stands dismissed with no order as to costs.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 03/07/2023 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Suresh Kumar Sardana] Member