Date of filing : 25-01-2012
Date of Disposal : 22-02-2013
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ANANTAPUR.
PRESENT: - Sri S.Niranjan Babu, B.A., B.L., President (FAC).
Smt. M.Sreelatha, B.A., B.L., Lady Member
Friday, the 22nd day of February, 2013
C.C.NO.06/2012
Between:
A.Jayaprakash
S/o Pothanna
D.No.21/367,
Yadava Street,
Dharmavaram
Anantapur District. …Complainant.
Vs.
1. BajajAllianz General Insurance Company Ltd.,
rep. by its Branch Manager, Thakai Towers,
1st floor, R.F. Road, Anantapur.
- Bajaj Allianz General Insurance Company Ltd.,
rep. by its Manager, 31, Ground floor, T.B.R. Towers,
1st cross, New Mission Road, Next to Bangalore
Stock Exchange, Bangalore – 27.
3. The Divisional Manager,
Bajaj Allianz General Insurance Company Ltd.,
Regd. & Head Office, GE Plaza, Airport Road
Yerwada, Pune – 411 006. …. Opposite parties
This case coming on this day for final hearing before us in the presence of Sri N.P.Sreenivasulu, advocate for the complainant and Sri T.Ramakrishna, Advocate for the Opposite Parties 1 to 3 and after perusing the material papers on record and after hearing the arguments of both sides, the Forum delivered the following:
O R D E R
Smt.M.Sreelatha,Lady Member: - This complaint has been filed by the complainant under section 12 of Consumer Protection Act, 1986 against the opposite parties 1 to 3 to direct them to pay total sum of Rs.98,327/- with interest @ 24% p.a. and grant such other relief or reliefs.
2. The brief facts of the complaint are that: -The complainant is the permanent resident of Dharmavaram Town and he is running vehicle for his livelihood. He has taken the policy for his vehicle from the opposite parties-company. The 1st opposite party is situated at Anantapur and the opposite parties 2 & 3 are Head Office of the 1st opposite party. The complainant approached the 1st opposite party to take insurance policy for the vehicle bearing No.AP-02-AC-1782. The complainant paid insurance amount of Rs.15,727/- in which the 3rd party liability Rs.2,500/-, legal liability of each person Rs.25/- collected for four passengers personal accident cover collected Rs.200/- for coverage of Rs.1,00,000/- each owner-cum-driver coverage for Rs.100/- for liability of Rs.2,00,000/- for all the purposes collected by the 1st opposite party from the complainant for Rs.15,727/- including service tax. The 1st opposite party issued policy for the vehicle bearing No.AP-02-AC-1782 policy bearing No.OG-11-1807-1801-00000221 dt.26-02-2011 valid from 27-02-2011 to 26-02-2012 midnight. The complainant vehicle turned turtle on 16-05-2011 and vehicle was damaged and the same was intimated to the 1st opposite party by phone Nos.9704890393, 18002095858 & 08554-241355. The 1st opposite party reply intimation to the complainant stating that shift the damaged vehicle to Sireesh Auto Pvt. Ltd., Authorized Dealer of Mahindra and Mahindra Company Limited situated at 6th Block, Koramangala, Bangalore – 95. As per the instructions of the 1st opposite party, the complainant shifted the damaged vehicle at great difficulty to the service centre. The opposite parties surveyor surveyed the damaged vehicle at service centre and assessed the loss of damage value and the surveyor discussed with the authorized dealer/proprietor of the service centre to repair the damaged vehicle. As per the opposite parties surveyor instructions the dealer repaired the vehicle and gave the bill for Rs.51,327/- to the complainant. The complainant informed bill amount to the 1st opposite party for payment of the bill amount to the dealer. At that time the 1st opposite party refused to pay the bill amount instead of payment. Atlast, the complainant paid the bill amount and the vehicle taken from the service centre. On 01-06-2011 the 1st opposite party issued a letter to the complainant stating that the Insurance Company has no liability to pay the bill and also given wrong information stating that the policy was issued based on the proposal form and no claim declaration submitted by the complainant. The complainant got issued legal notice on 10-10-2011 to the opposite parties stating that the payment of the bill amount alongwith interest. Notice was served to the opposite parties 1 & 2. The 2nd opposite party issued reply notice with false allegations. Due to non-payment of bill amount, the complainant suffered lot of mental agony and claiming Rs.20,000/- . There is a clear deficiency of service on the part of the opposite parties 1 to 3 for non-payment bill amount. Hence, the complainant claimed a sum of Rs.51,327/- towards bill amount, Rs.5,000/- towards interest @ 24%p.a. on Rs.51,327/- from 26-05-2011 to 08-12-2011, Rs.20,000/- towards mental agony, Rs.20,000/- towards deficiency of service, Rs.2,000/- towards cost of the complaint in total Rs.98,327/- with interest @ 24% p.a.
3. The opposite parties 1 to 3 filed counter stating that the complainant is not a consumer as defined under section 2(d) of Consumer Protection Act and the complaint filed by the complainant does not come under the purview of Consumer Disputes envisaged in section 2(e) of the Act. Hence, this Forum has no jurisdiction to entertain the complaint and the contract of insurance does not at all under the purview of Sale of Goods Act as defined under section 2(i). Hence the complaint is liable to be dismissed. The opposite party Branch Office had issued Policy No.OG-11-1807-1801-0000221 valid from 27-02-0211 to 26-02-2012 for his vehicle Mahendra Xylo, subject to terms, conditions, exceptions and limitations thereof and the confirmation of the compliance of section 64-VB of the Insurance Act, 1938. A policy of insurance issued by the opposite parties is in utmost good faith believing the information or declaration given by the insured is true and basing on the said information given by the insured, the proposal will be taken and bonus and discount will be given to the insured in the premium amount of the vehicle. This opposite party is relying on the declaration given by the complainant. The opposite parties issued policy with no claim bonus but it was wrong and false information given by the complainant in order to get wrongful gain and which amounts to breach of terms and conditions of insurance policy condition No.8 and it amounts to suppression of material facts in order to get wrongful gains under such circumstances insured is not entitled for any relief or compensation from the insurance company. When a vehicle is insured with one insurance company and if no claim is made by the insured in the previous year, in the continuation policy as there was no claim from the insured, in the last year vehicle insurance policy, the insurance company will give bonus in the premium amount. Even if the insurance company is changed the same rule will apply. It is the duty of the insured to intimate to the new insurer that whether he had made any claim with his previous insurer or not and basing on the declaration given by the insured the new insurance company will also give the said bonus/discount in the vehicle premium amount and if the insured gives information that he made a claim with previous insurer, the insured is not eligible for the bonus/discount from the new insurance company and the total amount of premium as per the company rules will be collected by the new insurer. At the time of making the proposal the complainant has informed that he has not made any claim with his previous insurer and believing the said information furnished by the complainant in the proposal, this opposite party has given bonus/discount of 25% in the premium amount and has collected only Rs.15,727/- and subsequently it has come to light from the information given by M/s Reliance General Insurance Company that the complainant had made a claim with them in the previous year and it has come to light that the complainant has given wrong declaration in the proposal form that he has not made any claim with this previous insurer and thereby the complainant breached the good faith and trust on him. The non-furnishing of the said information by the complainant amounts to suppression of material facts as such the complainant is not entitled for any relief before the Forum and the complaint is not maintainable and the same is liable to be dismissed on this ground. The opposite parties denied that on 16-05-2011 the complainant’s vehicle turned turtle and vehicle was damaged and the same was intimated to the 1st opposite party by phone and the 1st opposite party reply intimation to the complainant stating that shift the damaged vehicle to Sireesh Auto Private Ltd., Authorized Dealer of Mahindra and Mahindra Company Ltd., Bangalore and as per the instructions of the 1st opposite party the complainant shifted the damaged vehicle at great difficulty to the Service Centre and the opposite party surveyor survey the damages vehicle at service centre and assess the loss of damaged value and the surveyor discussed with the authorized dealer/proprietor of the service centre to repair the damaged vehicle and as per the opposite parties surveyor instructions, the dealer repair the vehicle, gave the bill for Rs.51,327/- to the complainant. After coming to information that there was previous claim of the complainant with the previous insurer has repudiated the claim vide letter dt.01-06-2011 and made clear the factual and legal position of the complainant. This opposite party has thereafter recovered the no claim bonus which was wrongfully given to the complainant from the complainant dt.07-06-2011 and issued policy on 07-06-2011 and from that date of issuance of the policy for any claim , this opposite party would be liable subject to terms and conditions of the policy and there shall be no liability from the retrospective effect as there was clear violation and suppression of the facts. Hence, this opposite party is not liable to pay any compensation to the complainant. On receipt of the claim, the opposite party appointed IRDA approved Surveyor and he assed the damages to the tune of Rs.34,168/- and the amount claimed by the complainant is highly excessive and liable to be dismissed on this ground. The complainant got issued legal notice dt.10-10-2011 to the opposite parties and the opposite party has given reply dt.28-10-2011 and also made clear that factual and legal position of the complainant as such there is no deficiency of service and the opposite party is not liable to pay any compensation to the complainant. Hence the opposite parties pray this Forum to dismiss the complaint with costs.
4. Basing on the above pleadings, the points that arise for consideration are:
1. Whether there is deficiency of service on the part of the opposite parties 1 to 3?
2. To what relief?
5. To prove the case of the complainant, the evidence on affidavit of the complainant has been filed and marked Ex.A1 to A5 documents. On behalf of the opposite parties, evidence on affidavit of opposite party No.3 has been filed and marked Ex.B1 to B8 documents.
6. Heard both sides.
7. POINT NO.1 – As per the arguments of the complainant it is clear that the complainant has taken policy for his vehicle with 1st opposite party and paid total sum of Rs.15,727/- and the policy valid from 27-02-2011 to 26-02-2012 midnight. The insured vehicle met with accident on 16-05-2011. Immediately shifted the vehicle to Mahindra Service Centre Ltd., Bangalore and they estimated the repair costs for the vehicle under Ex.A2. When the claim made by the complainant with the opposite parties, they denied to pay the claim. The complainant issued legal notice under Ex.A4 and reply issued by the opposite parties under Ex.A6.
8. At the time of accident, the policy is in force. The main dispute is suppression of fact by the complainant with the opposite parties. The counsel for the opposite parties argued that at the time of taking policy, it is the duty of the insured to disclose all the facts i.e. whether the insurer has taken any policy previously and that vehicle was met with an accident or not etc., facts. The complainant disclosed the fact that he was having policy with Reliance General Insurance Company and he has taken no claim bonus @ 25% as per Ex.B1. About Ex.B1 the complainant’s counsel argued that the complainant is entitled bonus as there is no condition in the policy to disclose about previous policy and not entitled any claim if the complainant received any amount towards claim. For this the opposite parties filed Ex.B2 document in which is clearly mentioned that “ I/we declare that the rate on NCB claimed by me/us is correct and that no claim has arisen in the expiring policy period. I/We further undertake that if this declaration is found to be incorrect, all the benefits, under the policy in respect of section-I of the policy will stand forfeited. “ For this there is no reply from the complainant. The counsel for the complainant argued that it is the duty of the Insurance Company to verify whether the policy-holder claimed any amount with other insurance companies or not as everyone may not remember about the previous accidents and claims. When the complainant mentioned the details of previous policy No. and name of the Insurance company in application, it is easy to know further details about policy and no claim was taken with previous company, for this argument the opposite parties filed Ex.B7 and Ex.B8 which clearly shows that the complainant has taken claim amount with Reliance General Insurance Company.
9. The opposite parties mentioned in their written arguments that NCB only given to those when a vehicle is insured with one insurance company and if no claim is made by the insured in the previous year, in the continuation policy, as there was no claim from the insured, in the last year vehicle insurance policy, the insurance company will give bonus in the premium amount. Even if the insurance company is changed the same rule will apply. It is the duty of the insured to intimate to the new insurer, that whether he had made any claim with his previous insurer or not, if the insured gives correct information that, no claim is made with the previous insurer, the new insurance company will also give the said bonus/discount in the vehicle premium amount, and if the insured gives information that he made a claim with previous insurer, the insured is not eligible for the bonus/discount from the new insurance company and the total amount of premium as per the company rules will be collected by the new insurer.
10. The complainant has taken NCB by suppressing material facts and the complainant is not entitled any claim under condition No.8 of the policy. For this opposite parties submitted number of authorities.
(i) Order of National Consumer Disputes Redressal Commission, New Delhi passed in Revision Petition No.33/2012 decided on 22-08-2012:
This is a case of wrong declaration in proposal form about No claim Bonus and the National Commission held that, in case of wrong declaration by the complainant in the proposal form about no claim bonus, the insured is not entitled for any amount and dismissed the revision petition filed by the complainant. (In this case the District Forum allowed the complaint and State Commission reversed the order of District Forum and upon which the complainant preferred appeal to National Commission and National Commission confirmed the order of State Forum and dismissed the revision petition filed by the complainant).
(ii) National Consumer Disputes Redressal Commission, New Delhi (Revision Petition No.1255 of 2009) “ 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. 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, can not be sustained. “
(iii) National Consumer Disputes Redressal Commisison, New Delhi (Revised Petition No.164 of 2006) “ The National Commission held that since contract of insurance is based on the principle of Uberrima Fides, it was the duty of the respondent/complainant to disclose the true facts with regard to state of his health, which obviously he has failed to do, there indeed has been suppression of material fact, there is no escape from holding that the petitioner/New India Assurance Company Ltd., would not be liable.” The law by now is well settled by a catena of decisions that the insurer would be fully justified in repudiating the insurance contract for suppression of material fact. Insurance is a contract based on complete good faith and any suppression of material fact would be a breach of such contract and the insurer would be justified in repudiating the claim once such suppression is established.
(iv) National Commission & State Commission on Consumer cases at page No.1178 – National Consumer Disputes Redressal Commission that “ Consumer Protection Act, 1986 – section 2(1)(g) deficiency in service-Insurer had repudiated its liability on the ground that the insured had made incorrect statement once it is found that insurer had considered all the relevant facts and circumstances, it can not be said that there is any deficiency in service. “
11. We are relying on all the above citations held by the Hon’ble courts and it shows that the complainant suppressed material facts with the opposite party and the opposite party rightly repudiated the claim of the complainant and there is no deficiency of service on the part of the opposite parties. This point is answered accordingly in favour of the opposite parties and against the complainant.
12. The counsel for the complainant argued that the complainant is entitled a sum of Rs.51,327/- with interest towards vehicle damage i.e. Repair charges and a sum of Rs.20,000/- for mental agony and a sum of Rs.20,000/- towards deficiency of service and Rs.2,000/- towards costs. The counsel argued that after accident, he contacted the opposite parties and shifted the damaged vehicle to Mahindra Repair Centre, Bangalore with great difficulty and the dealer gave bill for Rs.51,327/- for repair charges and the complainant paid that amount to the dealer, when the opposite party refused to pay the claim without reasonable ground hence the complainant entitled the claim amount. The counsel for the opposite parties stated that the complainant suppressed material facts and it amounts to breach of terms and conditions. It is the duty of the insured to intimate to the Insurance Company about previous insurance, whether he made any claim with previous insurer, then the new insurer will give NCB. In the present case the complainant filled proposal form that he has not made any claim with previous insurer and he has received 25% discount. But the complainant has made claim with previous insurer as per Ex.B7 and B8. It clearly shows that he suppressed the fact with the opposite parties. The complainant suppressed the fact to gain unlawfully. It is a clear case of violation of terms and conditions.
13. The complainant suppressed the fact that he has already gained with previous insurer. After accident, he approached the opposite party and paid the entire premium of Rs.18,779/- on 07-06-2011 under Ex.B3 i.e. the original premium amount without NCB. It shows the conduct of the complainant that he has already taken claim with previous insurer and suppressed that fact with this opposite party to gain NCB bonus @ 25% and again he paid entire policy amount to the opposite parties on 07-06-2011 to claim after the vehicle met with an accident.
14. The counsel for the complainant argued that the surveyor appointed after accident and he estimated the repair charges as Rs.51,327/- and the complainant paid the entire amount to dealer, when the opposite parties refused to pay. The opposite parties argued that it is clear from Ex.B7 and B8 that the complainant has received claim with previous insurer again paying of damages does not arise. For this he contended the previous, again we are lying the citations submitted by the opposite parties. This point is answered accordingly in favour of the opposite parties and against the complainant.
15. POINT NO.2 - In the result, the complaint is dismissed with costs of Rs.1,000/- payable by the complainant to the opposite parties within one month from the date of this order.
Dictated to the Steno, transcribed by him, corrected and pronounced by us in open Forum, this the 22nd day of February, 2013
Sd/- Sd/-
LADY MEMBER PRESIDENT (FAC)
DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM
ANANTAPUR ANANTAPUR.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
ON BEHALF OF THE COMPLAINANT: ON BEHALF OF THE OPPOISITE PARTIES
-NIL- - NIL-
EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT
1. Ex.A1 – Photo copy of policy bearing No.OG-11-1807-1801-00000221 issued by the
1st opposite party in favour of the complainant.
2. Ex.A2 - Photo copy of Tax Invoice dt.26-05-0211 issued by Sireesh Auto Pvt. Ltd.,
Bangalore.
3. Ex.A3 – Photo copy of repudiation letter dt.01-06-201 issued by the 2nd opposite
party to the complainant.
4. Ex.A4 – Office copy of legal notice dt.10-10-2011 got issued by the complainant to
the opposite parties 1 to 3
5. Ex.A5 - Postal acknowledgements signed by the opposite parties 1 & 2
EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTIES
1. Ex.B1 - Original policy bearing No.OG-11-1807-1801-00000221 issued by the
1st opposite party in favour of the complainant alongwith terms & conditions.
2.Ex.B2 - Original Proposal form dt.08-02-2011 submitted by the complainant to the 1st
opposite Party.
3. Ex.B3 - Duplicate copy of policy bearing No.OG-11-1807-1801-00000221 issued by the
1st opposite party in favour of the complainant alongwith terms & conditions.
4. Ex.B4 - Final Survey Report dt.29-05-2011 submitted by the surveyor to the opposite
parties.
5. Ex.B5 - Original repudiation letter dt.01-06-201 issued by the 2nd opposite
party to the complainant.
6. Ex.B6 - Original letter dt.28-10-2011 issued by the 2nd opposite party to the
Counsel for the complainant.
7. Ex.B7 - Photo copy of Insurance Policy No.1810792311002957 issued by Reliance
General Insurance Company.
8. Ex.B8 - Email letter dt.29-01-2013 sent by the Claims Processor to Sanjeev Firan
Sd/- Sd/-
MEMBER, PRESIDENT (FAC),
DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM
ANANTAPUR ANANTAPUR.
Typed by JPNN
