DISTRICT CONSUMER DISPUTES REDRESSAL FORUM (CENTRAL)

                                        ISBT KASHMERE GATE DELHI

CC/06/2016

No. DF/ Central/                                                                      Date

M/s. Parvati Pvt. Ltd.

Through its Director

Sh. Vinod Gupta

S/o Shri Surender Pal Gupta

27, Rajasthani Udyog Nagar,

G.T. Karnal Road, Delhi 110033.                                             …..COMPLAINANT  

 VERSUS

Tata AIG General Insurance Co. Ltd.

First Floor, Lotus Tower

New Friends Colony

New Delhi

Alankit Insurance Broker Ltd.

Alankit House, 4E/2

Jhandewalan Extension

New Delhi.                                                                         …..OPPOSITE PARTIES

Quorum  : Ms. Rekha Rani, President

                 Ms. Manju Bala Sharma, Member

                 Mr. R.S. Nagar, Member

ORDER

Ms. Rekha Rani, President

1.       Instant complaint has been filed by M/s. Parvati Pvt. Ltd. (in short the complainant) under Section 12 of the Consumer Protection Act as amended alleging the following facts.  Complainant is a Private Limited company which was the owner of vehicle bearing number DL ICS 3700 (Innova) which was insured with Tata AIG (in short OP1) vide policy bearing number 015548670200 for the period of 29.08.2015 to 28.08.2016.  The IDV of the vehicle was Rs. 12,30,470/-.  Vehicle was stolen on 06.09.2015.  An FIR was lodged with police.  Police has filed untraced report.  Complainant informed Alankit Insurance Broker Ltd. (in short OP2) who in turn informed OP1 about the theft of the vehicle.  Complainant filed claim before OP1.  The complainant was shocked and surprised when it received a letter dated 02.09.2015 wherein it was stated that “since the said policy was issued with 20% No Claim Bonus and less premium was charged because of the declaration as made in the proposal form, though the complainant was not entitled for No Claim Bonus as there was a claim made by the complainant in the previous year as confirmed by previous insurer upon investigation.”  Complainant was again shocked to receive another letter dated 09.10.2015 from OP1 repudiating its claim on the ground that complainant availed 20% NCB on the basis of false declaration.  Thereafter complainant issued a letter dated 21.10.2015 to OP1 calling upon OP1 to provide a copy of the proposal form which it received from OP1 vide e-mail dated 21.10.2015.  It transpired that the said proposal form was signed by someone in the office of OP2 and not by the complainant at all.  Hence, the instant complaint seeking direction to OP to pay to the complainant IDV of the vehicle i.e. Rs. 12,30,470/- with interest @ 24% per annum from the date of theft till realization along with compensation of Rs. 2,00,000/- for causing mental agony and deficiency in service. 

2.       Notice of the complaint was issued to the OP who contested the claim.  We have heard Sh. Rakesh Patiyal counsel for complainant, Sh. Kunal Sharma counsel for OP1 and Ms. Kirti counsel for OP2.

3.       Complainant’s claim was repudiated by OP1 for furnishing false information in the declaration form and thereby claiming 20% NCB from the OP illegally and fraudulently. 

4.       Learned counsel for the complainant submitted that the proposal form was not signed by the complainant and therefore there was no question of furnishing any false declaration as alleged by the OP.  It is stated that the proposal form was filled in and signed by some employee of OP2 without any knowledge of the complainant and therefore complainant cannot be held liable for the same and OP cannot be exonerated from the liability to pay the IDV to the complainant which amounts to Rs. 12,30,470/-.

5.       Here it is relevant to reproduce what complainant stated in Para 8 of his complaint.

“8. That to the shock and surprise of the complainant, a letter dated 02.09.2015 was received by the complainant in which it was stated that since the said policy was issued with 20% No Claim Bonus and less premium was charged because of said declaration as made in the proposal form, though the complainant was not entitled for No Claim Bonus as there was a claim made by the complainant in the previous year as confirmed by previous insurer upon investigation, the complainant was called upon to provide renewal notice of the previous insurer so as to enable them to process the claim of the complainant and since the insurance need of the complainant was looked after by OP-2, therefore, no such renewal notice was received, thus no reply to the said letter was given by the complainant.”

In Para 11 of the complaint complainant further stated that:

“….The complainant got a copy of the proposal form from the OP No.1 vide email dated 21.10.2015, wherein it transpired that the said proposal form was signed by someone  in the office of OP-2 and was not signed by Complainant at all.”

6.       Learned counsel for the complainant submitted that complainant came to know for the first time on 02.09.2015 that some declaration was made in the proposal form which was neither filled in nor signed by the complainant at all.  It is submitted that it was the duty of the OPs to verify and satisfy themselves that the complainant is a company and therefore signatures of any personnel on behalf of the company has to be after due authorization and stamp of the company has to be affixed on the same.  It is further submitted that OP1 did not bother to check as to who signed the proposal form.

7.       Per contra learned counsel for the OP argued that complainant deliberately and fraudulently availed 20% NCB on the basis of providing false information and now when unfortunate incident has happened complainant has turned back and alleged that it was not aware of any such declaration and that the proposal form was filed in and signed by some employee of OP2 without complainant’s knowledge or information.

8.       It is complainant’s own case as per Para 8 of the complaint as reproduced above that it came to know from the letter of OP dated 02.09.2015 that instant policy was issued with 20% NCB and less premium was charged because of the said declaration as made in the proposal form to which complainant was not entitled.

If complainant had not filled in the proposal form nor signed the same as allegedly the same was filled in or signed by some employee of OP2 complainant should have protested immediately and should have written to OP1 that it never gave any such declaration on the basis of which it was given 20% NCB.  It is rather strange that complainant in Para 8 of the complaint has pleaded that it did not send any reply to the said letter.  Keeping silent means that the complainant was aware of the declaration and was aware that it had claimed 20% NCB on the basis of the said declaration to which it was not entitled.      

Now coming to Para 11 of the complaint it is stated therein that complainant issued letter dated 21.10.2015 to OP1 calling on OP1 to provide it a copy of the proposal form which complainant got vide e-mail on the same date i.e. 21.10.2015.

It is strange that on receipt of letter dated 02.09.2015of OP1 wherein it was alleged that complainant had availed 20% NCB on the basis of false declaration the complainant kept silent and did not ask OP1 to send copy of the proposal form immediately.  Complainant has specifically pleaded that it did not even reply to the letter dated 02.09.2015.

It is relevant to reproduce letter dated 02.09.2015 of OP1.  It is as under:

“We are pleased to inform you that as our valued Policyholder of the Auto Secure Motor Insurance, you are eligible for the 20% Bonus.  This is on the basis of your declaration in the Proposal Form that you have not lodged any claim on the abovementioned vehicle in the previous policy period.

….

Kindly treat this document with great importance as it validates the No Claim Bonus claimed by you and would help us in expeditious processing of claim in case of an unfortunate incident during the policy period”

It is strange that despite OP1 advising the complainant to “treat this document with great importance as it validates the No Claim Bonus” the complainant conveniently ignored the same and woke up to protest only after the unfortunate incident had taken place about which OP1 had cautioned the complainant in the letter itself.

9.         Learned counsel for complainant argued that OP cannot be permitted to challenge the validity of the policy on the ground of rebate of premium and such action would amount to deficiency of service on the part of the insurer.  He further argued that any verification of NCB claim should have been made immediately after the issue of policy and not several months later.  

            Same contention was raised on behalf of the complainant on similar facts in Brij Bhushan vs. National Insurance Company Limited & Ors. Revision Petition No.33 of 2012 before the National Commission.  In the said case the truck owned by the complainant was insured which met with an accident.  The claim was repudiated on the ground that “complainant had deliberately and fraudulently misrepresented and misled the insurer, while getting benefit of 55% NCB, transferred on his new truck no.PB-13-I-5375, and thereby he had breached the principle of utmost good faith and that as per the Indian Motor Tariff 2002, framed by the Tariff Advisory Committee, a statutory body under the Insurance Act, 1938, he was not entitled to any own damage claim, since in the light of General Regulation no.27, all the benefits under Section-I of the policy of insurance, stood forfeited”.  The State Commission held that although the insurer granting no claim bonus has right to write to the previous insurer within 21 days after grating the cover note, yet complainant cannot take any benefit of the same having fraudulently mis-represented the facts and obtained the cover note which was in the name of Balwinder Singh. It was further observed that principle of equity is that who seeks equity must do the equity but complainant had not done so. It was held that complainant tried to cheat insurance company and claimed no claim bonus although he was not entitled for the same. As such no benefit of this lapse of the insurance company was extended to the complainant.  National Commission upheld the order of the State Commission.

          Similar question arose before the National Commission in Tata AIG General Insurance vs. Gulzari Singh R. P. No. 1255 of 2009.  Facts of the case were that during the validity of the insurance, vehicle met with an accident which got repaired. A claim for reimbursement of the repair charges was lodged with the insurer which was repudiated on the ground that complainant had suppressed material fact with regard to having received claim from the previous insurance company.  When the matter was cross checked from the previous insurer it came to light that the complainant had filed claims and availed reimbursement under their policy.  District Forum dismissed the complaint.  However the State Commission taking note that the surveyor had assessed the loss at Rs. 97,960/- passed the following order:

“However, so far as the no claim bonus is concerned, the appellant was given discount of Rs.1120/- and, therefore, the respondent could not have denied that claim against the instant policy as the insurance company was bound to pay the claim for the insured period. However, in view of the assessment of the loss as assessed by the surveyor, we allow the appeal by directing the respondent to pay an amount of Rs.97,960/- less the discount of Rs.1,120/- to the appellant besides Rs.25,000/- as compensation which shall include cost of litigation.”

National Commission did not agree with the State Commission and observed that:

“State Commission while allowing the appeal could direct the petitioner to pay an amount of Rs.97,960/- less the discount of Rs.1,120/- given on account of No Claim Bonus as the State Commission, thereby altered the terms of the policy which it had no authority to do. Clearly it had no such jurisdiction. In case of LIC of India Vs. Smt. G.M. Channabasamma (1991) 1 SCC 357, the Hon’ble Supreme Court has held that a contract of insurance is a contract of uberrima fides and there must be complete good faith on the part of the assured. The assured thus is under a solemn obligation to make full disclosure of material fact which may be relevant for insurer to take into an account. Further in the case of General Assurance Society Ltd. Vs. Chandumull Jain & Anr. (1966) 3 SCR 500, the Hon’ble Apex Court has observed that the duty of the Court is to interpret the words in which the contract is expressed by the parties, because it is not for the Court to make a new contract, however, reasonable, if the parties have not made it themselves. The direction to adjust the No Claim Bonus against the amount of damage assessed passed by the State Commission, clearly violates this settled principle of law and, therefore, cannot be sustained.”

10.     In the instant case complainant has stated that it never signed the declaration form on the basis of which it was given NCB of 20% by the OP on the instant insurance policy.  As discussed above complainant admittedly received a letter of OP dated 02.09.2015intimating it that complainant was given NCB of 20% on the basis of declaration made in the proposal form and with a request to validate the NCB given to it under the policy.  Complainant conveniently ignored the said letter and did not reply to the same.  Complainant did not protest immediately that no such declaration was given by it.

It clearly indicates that having failed to raise objection at the relevant time complainant cannot take this objection after the incident of theft had taken place Therefore repudiation of his claim is justified for want of good faith in terms of the judgment in Smt. G.M. Channabasamma (Supra) as discussed above, the complaint is therefore dismissed. Copy of this order be sent to the parties as statutorily required.  File be consigned to record room.

Announced on           Day of                       2019.