DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Rajeev Sharma, H.No.3427, Sector 23-D, Chandigarh.

                                                 ---Complainant.

V E R S U S

The Division Manager, United India Insurance Co. Ltd., DO: MVO, SCO No.149-150, Sector 8-C, Madhya Marg, Chandigarh (Branch Code No. 112200).

Regd. & Office: 24, Whites Road, Chennai – 600014.

---Opposite Party.

BEFORE:          MRS.MADHU MUTNEJA                        PRESIDING MEMBER

                    SH.JASWINDER SINGH SIDHU                   MEMBER

Argued By:  None for Complainant.

                                Sh. G.D. Gupta, Adv. for the Opposite Parties.

PER JASWINDER SINGH SIDHU, MEMBER

1]           Complainant has filed the present complaint against the Opposite Party, on the ground that the Complainant is the owner of Maruti Alto LX car bearing Regn. No. CH-04-J-5880 of 2009 Model. The Complainant approached Opposite Party through their Agent for comprehensive insurance of the said vehicle and paid Rs.4846/- by cash and also submitted a copy of previous insurance policy. The Opposite Party issued a Cover Note bearing no. CHR/2KQ 727894 on 4.4.2010. The same was valid upto 4.4.2011.  After waiting for nearly two months the Complainant approached the office of Opposite Party which disclosed that the Complainant was denied the comprehensive policy on the ground that the Complainant had not submitted the copy of the previous insurance policy. The Complainant also made a representation to the Head Office of the Opposite Party by e-mail to intervene into the matter, but failed to elicit any response from that quarter also.

              The Complainant also visited the office of the insurance ombudsman through a complaint dated 25.6.2010, but after a passage of nearly 1½ year has not received anything concrete from there too. In the meanwhile, the Opposite Party issued a Third Party Insurance Policy on 25.7.2010, valid upto 24.7.2010, without the consent of the Complainant. This policy attracted a premium of Rs.850/- only whereas the remaining amount out of Rs.4846/- was forfeited and no communication to that effect was conveyed to the Complainant. The Complainant thus alleging deficiency in service on the part of the Opposite Party prayed:-

(i)        A direction for the refund of amount paid by the Complainant for insurance policy.

(ii)      For compensation to the tune of Rs.25000/- for harassment caused to the Complainant in the due course.      

2]           On notice, Opposite Parties have filed their joint reply/ version contesting the claim of the Complainant and have taken preliminary objections to the effect that the Complainant has not come to this Forum with clean hands and has suppressed the material facts and information of No Claim Bonus (for brevity ‘NCB’) on his previous insurance policy and did not supply the same till the filing of the present complaint. As the Complainant had failed to produce any NCB confirmation from the previous insurance company, in such circumstances, no insurance could be issued. Hence, the present complaint deserves to be dismissed on these grounds alone. 

              The Opposite Parties have also categorically stated that the Complainant had actually assured that he would submit NCB confirmation from the previous insurer in the due course of time and on his assurance the 20% NCB discount in premium was allowed. As the Complainant had failed to supply the NCB confirmation, the policy could not be issued. Therefore, under these circumstances, no case of deficiency in service is made out against the Opposite Parties.

              The Opposite Parties have also admitted to the fact that certain information under RTI Act was demanded by the Complainant through his application dated 31.8.2010 and the same was supplied to him by the Opposite Parties through their communication dated 27.9.2010. In their reply with this application, the Opposite Parties have once again cited the fact that as the Complainant failed to furnish insurance particulars of his previous insurance policy, therefore, the Opposite Parties were not in a position to issue the comprehensive insurance policy, as demanded by the Complainant. The Opposite Parties have also refuted the NCB certificate issued by the ICICI Lombard dated 3.9.2010 and the insurance policy submitted along with the present complaint and claimed that the authenticity of these documents is doubtful and the same deserves to be subjected to strict verification. It is also mentioned that had the Complainant submitted these documents in the very beginning, such a situation would not have arisen and it is the Complainant himself who is responsible for the present state of affairs. As such, no cause of action arises against the Opposite Parties.

              The Opposite Parties have also cited the provision of Arbitration Clause as given in the policy, as the proper remedy that the Complainant was supposed to avail. It is also mentioned that as the facts and circumstances of the present complaint attracts voluminous and thorough evidence. The actual remedy to such a dispute lies with the civil court and the same does not attract the provisions of the Consumer Protection Act, 1986. Hence, the present complaint deserves to be dismissed on these grounds too.

              On merits, Opposite Parties have filed its para- wise reply to all the averments of the present complaint and the same is a repetition of the version of the Opposite Parties as mentioned in their preliminary objections.

              While replying to Para 5 of the present complaint, the contents of the same are cited to be incorrect and vehemently denied. The Opposite Parties say that there is no question of any refund as till the time of issuance of the Act Only Policy (mentioned at Page 12-13 of complaint) as the Complainant could not provide previous insurance particulars therefore, the provisions of G.R. 27 of the Tariff Rules are applicable to such insurance and all benefits under the policy in respect of Section 1 of the policy stands forfeited. A copy of GR-27 is annexed at Annexure R-6. The Opposite Parties in Para 6 of their reply on merits have categorically stated that the content of the prayer clause are incorrect and denied, because the Complainant has never supplied any copy of the insurance policy/ cover note of ICICI Lombard General Insurance Company Limited nor any letter of confirmation dated 3.9.2010 was supplied to the answering Opposite Parties. As the Complainant has filed these documents with the present complaint only to lodge a false claim of deficiency in service against the Opposite Parties. Hence, the Complainant is not entitled to refund or compensation and the present complaint deserves to be dismissed on the aforementioned grounds.    

3]           Parties led their respective evidences.

4]           It is also important to mention that on the concluding day, when the case was fixed for arguments, none appeared on behalf of the Complainant. Hence, the present complaint was proceeded to be disposed off on merits under Rule 4(8) of the Chandigarh Consumer Protection rules, 1987 read with Section 13[2] of the Consumer Protection Act, 1986 (as amended up to date).

5]           Having gone through the entire complaint, version of the Opposite Parties, the evidence of the parties and with the able assistance of the ld. Counsel for the parties, we have come to the following conclusions.

6]           The fact that the Complainant had paid Rs.4846/- on 4.4.2010 while subscribing for a comprehensive insurance cover for his car Maruti Alto LX bearing Regn. No. CH-04-J-5880 is established from the copy of the Cover Note bearing No. CHR/2K9 727894 submitted by the Complainant along with the present complaint. This fact is not at all refuted by the Opposite Parties, who have produced a carbon copy of the same document which is annexed at Page 11 of their version.

7]           The Opposite Parties have taken the stand that as the Complainant had failed to submit the previous insurance policy, as well as NCB Certificate issued by the previous insurer. In the absence of these documents the answering Opposite Parties could not issue the comprehensive policy, as demanded by the Complainant. The Opposite Parties have also stated that it was the case of non-cooperation on the part of the Complainant which has led to this situation, and the Opposite Parties have issued ACT ONLY POLICY which is annexed at Page 20-21 of their version/ reply.  The Opposite Parties are however silent about as to what has happened to the remaining amount of Rs.3,997/- and why this amount of money has not been refunded as it is evident that the opposite parties had no intention of issuing a comprehensive policy to the complainant . There is no document on record, no rule/ regulation or clause of Insurance Act is produced by the Opposite Parties, which empowered them to usurp this amount of the complainant.

8]           As the amount of Rs.4846/- was received by the Opposite Parties on 4.4.2010, the Opposite Parties have also failed to assign any reason as to why the “Third Party Policy” was raised on 25.7.2010 and is valid upto 24.7.2011 though the complainant had not subscribed for it . The Opposite Parties though have received the money for a comprehensive insurance which covered the own damage of the vehicle in question, the third party losses (in case of any eventuality) and also other benefits that would have flowed out of such a policy, but failed to issue the same. We feel that in absence of any written communication by the Opposite Parties to the Complainant the Opposite Parties have actually failed to adhere to Clause 4(4) which is incorporated under the clause of “PROPOSAL FOR INSURANCE” enshrined in “Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002”, which is reproduced below:-

“4. Proposal for insurance

xxxx     xxxx    xxx 

(4) Where a proposal form is not used, the insurer shall record the information obtained orally or in writing, and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof shall rest with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover.”

In the light of this provision, the Opposite Parties are found deficient in rendering proper services to the Complainant as opposite parties have failed to confirm the same within 15 days time. It is further noticed that even though the Opposite Parties were in possession of money since 4.4.2010, their act of leaving the vehicle in question without cover nearly for two months is an act of criminal negligence on their part.  

9]           The Opposite Parties have taken a stand that the Complainant was not cooperating with them so as to help them in raising a proper policy incorporated with NCB. However, the Opposite Parties have failed to bring on record any communication demanding such requirements from the Complainant. As the Complainant had already submitted the two documents annexed at Page 4-5 of the present complaint, we do not find any reason as to why the Complainant could not produce them had the Opposite Parties demanded the same from him. It is also noticed that the deafening silence maintained by the Opposite Parties had actually compelled the Complainant to knock first at the doors of the Insurance Ombudsman and on being re-directed from thereon, visited the Grievance Redressal Office of the Opposite Parties and further more even filed an application under RTI to know the status of his Insurance Policy. The case of the Complainant is fortified from the production of documents mentioned at Page 7-11 of the complaint, proving that he has knocked at the every possible door to get a proper insurance policy issued for which he had paid his hard earned money.

10]          The Opposite Parties had though tried to shield themselves behind the provision of G.R. 27 of “No Claim Bonus” and that too goes against them. While perusing the document annexed at Annexure R-6 in para (f) of the sunset clause specifically mentions that while issuing NCB a declaration is to be furnished by the claimant which should read as follows:-

“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 1 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.”

              The above mentioned provisions of G.R. 27(e) are very clear and specific in terms of the duties of the insurer in case the insured fails to produce the NCB Certificate from the previous insurer. The opposite parties have failed to procure the required “Declaration” from the complainant at the time of issuance of the cover note dated 04.04.2010.  Hence, the Opposite Parties have themselves failed to adhere to the clauses of G.R.27 and have as such acted in a deficient manner.

11]          In the light of the above observations, we feel that the present complaint succeeds against the opposite parties and we direct the UNITED INDIA INSURANCE COMPANY LIMITED (Opposite Parties) to refund Rs.3,997/- illegally retained by them. Opposite Parties are further saddled with Rs.15,000/- for unfair trade practice as well as deficiency in service, along with Rs.5,000/- as litigation costs.

12]          The above said order shall be complied within 30 days of its receipt; thereafter, the Opposite Parties shall be liable for an interest @18% per annum on the aforesaid amount of Rs.18,997/-, besides  the cost of litigation.

13]            Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

20^th January, 2012.                                                                   

Sd/-

(MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER