SMT. RAVI SUSHA: PRESIDENT
Complainant filed this complaint under U/s 35 Consumer Protection Act 2019 seeking to get an order directing the opposite parties to pay the amount of Rs.25,000/- for repairing the vehicle or to sanction the claim as per the policy to cover the repair charges of the complainant vehicle together with Rs.2,00,000/- as compensation for the mental agony and Rs.1,00,000/- for other inconvenience caused to the complainant and also to pay cost of the proceedings to the complainant.
The facts of the case according to the complainant are that the complainant is the owner of Renaut Kwid RXT petrol BS IV car, manufactured by Renault Nissan Automative which is having registered No. KL-59/N4991. He purchased vehicle on 30/07/2016, there after he validly insuring the vehicle by the terms of bumper policy. When he had gone for the service of his vehicle in the month of July 2019 at Renault service station, Kakkad he was induced by the staff of OP NO.1to take insurance policy of OP NO.2. Before taking policy of OP No.2 complainant had disclosed all the material facts regarding the vehicle and its previous policy coverage. Moreover complainant had explained the previous claim history also. Meanwhile complainant asked the representative of OP No.1 regarding his advantage by taking OP NO.2 policy, then the representative replied that, they will be availing cheapest policy by ensuring best claim terms for bumper to bumper policy than anybody else. By believing the words of the representative, complainant had paid the amount of Rs.7,367/- for the bumper to bumper policy and the same was issued on 27/07/2019 up to one year from the date of issue. Policy Number is VPCII68030000100. Thereafter on 12/01/2020 Complainant vehicle met with an accident and he approached the Renault service center of Kakkad for repairing the vehicle by the compliance of the policy coverage. But unfortunately, OP NO.1 had informed the complainant OP No.2 had rejected the claim due to misrepresentation regarding the No claim Bonus while taking the insurance policy. OP NO.2 had sent a notice dated 03/02/2020 stating the rejection of claim. Complainant never made such misrepresentation regarding the previous history of claim and policies. He disclosed every details to the OP No.1 representative regarding the previous claim before taking insurance policy. The conduct on the part of OPs are sheer deceptive unfair trade practice amounting to willful deficiency of service. Hence the OPs are liable to pay the amount of Rs.25,000/- for repairing the vehicle with compensation. Hence this complaint.
OPs opposed the above contentions and stated that the claim was rightly repudiated because in violation of the terms and conditions of the insurance policy which is a contract made in utmost good faith, insurer suppressed material information regarding the previous claim. The complainant has falsely stated that there was no earlier claim and has availed a no-claim bonus from the OP while underwriting the claim. It is submitted that the complainant had proposed a vehicle bearing Regn. No.KL 59 N 4991 for insurance cover with effect from 29/07/2019 to 28/07/2020. However while submitting the proposal form the complainant had deliberately suppressed details regarding previous accident repairs to the said vehicle in spite of specific questions in the proposal form. The averment that the complainant had explained the previous claim to the OP 1 is a lie. The complainant has not given any details of the earlier accidental damage and repairs to the OP 1 while taking the policy. The idea of the complainant was to gain 20% of the premium reduction proposing the vehicle as one not involved in any accidental damage or claim. It is evident from policy that the complainant has obtained a reduction of Rs.607.80/- in premium as no claim bonus. The OP had later ascertained from the oriental insurance company Ltd. that the above said vehicle was involved in an accident on 03/03/2019 and the complainant had made a claim in respect of that accidental damage and obtained a portion of the sum assured. If the said fact been disclosed by the complainant in the proposal form at the time of taking the policy the OPs would have taken a considered decision whether to underwrite the risk and in any case the OPs would not have allowed the no claim bonus to the complainant in policy. As per the estimate from the authorized service centre the repair was estimated at Rs.34,302/- Though the complainant seek a payment of Rs.25,000/- as repair charges, he has not produce d any documents showing any details of a payment made by him to the repairer. The complainant is therefore put to proof on the actual repair charges. It is true that the claim was repudiated vide letter dated 03/02/2020, The repudiation is legal and valid. It is submitted that the misrepresentation amounts to cancellation of policy and also makes the claim to be invalid as per the policy terms and conditions. After suppressing the material facts in the proposal the complainant cannot be heard to say that he suffered injury. The complainant has no locus standi to make such a claim after practicing nondisclosure and suppression of material facts and the contract of insurance itself became void ab initio. Hence prayed for dismissal of complaint.
Complainant has filed his proof affidavit and documents. He has been examined as Pw1 and the exhibits were marked as Ext.A1 to A10. Pw1 was subjected to cross-examination by the OPs. From the side of OPs Ext.B1 to B6 were marked.
After that the learned counsels of both parties filed their respective argument notes. We have gone through the evidence on record and submission of both learned counsels of the parties.
In the instant case there is ample evidence on record that the insured Sri.Suresh P signed the proposal form and had categorically answered ‘No’ to the question about any bonus to any previous insurer. This fact is evident from Ext.B1 proposal form. Ext.B6 clearly show that on 03/03/2019 the vehicle in subject met with an accident and the complainant submitted claim form before the previous Insurer oriental Insurance and claim was approved and the complainant received the claim amount. The facts stated in Ext.B6 is not disputed by the complainant.
The counsel for the complainant stated that during the initial stage of policy itself he has disclosed every fact about the previous policy. Complainant further alleged that till the accident, and submitted claim form OP didn’t state anything regarding the repudiation of the policy. Further only after the complainant’s vehicle met with an accident on 12/01/2020, he came to know about the issue of no claim bonus.
OP submitted that as regards non-disclosure of material facts regarding the previous clam it could be seen from the Ext.A1 that in claim 15. Deduct :20% No claim Bonus’ and paid Rs.607.80 as premium. Hence from Ext.A1, the complainant’s version that he had disclosed about previous accident and receipt of claim amount at the time of filing the form and came to know about non eligibility of no claim bonus after repudiating the claim by the OP, cannot be believed. Therefore it is clear that the complainant has suppressed the material facts regarding the previous claim while taking the policy and hence the repudiation done is legal and proper and the complainant has suppressed the material facts.
On perusal of terms and condition of policy in Ext.B1, Declaration. No claim bonus states that “I/we declare that the rate of NCB of 20% claimed by me/us is corret and that no claim has arisen in the expiry policy period, I/we further undertakes 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”. Here as per Ext.B6, there was previous claim with regard to the same vehicle. So it is clear that there was misrepresentation of the material facts from the side of complainant in the proposal form. So as per the declaration, complainant is not entitled to get the benefits under the policy.
The learned counsel of OP submitted a judgment of Hon’ble Apex court PC Chacko and another Vs.Chairman and LIC of India and others (2007) 7 supreme 311 in which the Hon’ble court held that policy should not be obtained with a fraudulent act by the insured.
Here the complainant has taken a contention that even though complainant has disclosed every material facts regarding the previous claim history, the real misrepresentation was made by the OP. Further contended complainant has produced all the related photographs of damaged car. It is also contended that the OP did not state anything regarding the repudiation of the policy till the accident. Only after the complainant’s vehicle met with an accident on 12/01/2020 (which is 6 months after taking policy) he came to know about the issue of no claim bonus. Till that period the complainant was using the vehicle by believing that he is covered by insurance policy.
Here the complainant’s counsel submitted two judgments which are squarely applicable to the instant case. In united India Insurance company Vs.M/s Jindal policy Buttons Ltd. on 18/04/2017 and in L&T General Insurance Co.Ltd. Vs.Shadi Lal Kapoor on 6th October 2020. The Hon’ble Appellate commissions held that insurance company had the means to verify the correctness of declaration of the insured – respondent seeking the No claim Bonus. The appellant could have easily determined the truthfulness of the facts which the respondent had mentioned in the insurance form while purchasing the insurance for his vehicle. However, the appellant failed to exercise such diligence which was required from their end. Moreover, as per GR 27 of Indian Motor Tariff there lies an explicit obligation on the new insurer to write to the previous insurer and confirm the entitlement of the insure with regard to the no claim bonus. The same has to be done within a span of 21 days from the date of granting cover by the new insurer to the insured. The relevant portion of GR 27 o Indian Motor Tariff is mentioned below. “Notwithstanding the above declaration, reinsurer allowing he 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 sough within 30days of receipt of the letter of enquiry failing which the matter will be treated as breach of Tariff on the part of the previous insurer. Failure of the insurer granting the NCB to write to the previous insurer within21 days after granting the cover will also constitute a breach of the Tariff.” Keeping in mind the facts and circumstances of the present case, it is clear that the appellant did not comply with the requirements under GR 278 of the Indian Motor Tariff, else the issue related to misrepresentation of No claim bonus would have been raised and settled earlier. In fact, the onus was on the appellant to check from the previous insurer about the status of the no claim bonus of the insured respondent, which the appellant failed to do. Therefore, the appellant is not justified in repudiating the claim of the respondent. At the same time, since, the respondent had also misrepresented about the No claim bonus to the appellant, we are of the view that he should not be entitled to the entire claim. The respondent should not benefit from his own default. We are therefore of the view that the claim of the respondent should be reduced proportionately by 25 percent of the coverage amount.”
In view the referred decision of Appellate commission, the complainant is entitled to the payment of the repairing expense (since it is a meager amount deduction of 20% is not suggested) of the vehicle to the complainant as the policy benefit as per Ext. A12.
Therefore complaint is allowed in part by directing the opposite party to pay Rs.25,000/- to complainant within one month after receiving the copy of this order. opposite party is also directed to pay Rs.10,000/- as compensation and Rs.5,000/- as cost to the proceedings of this case. In default in complying the order within one month, the amount Rs.25,000/- carries interest @ 12% per annum from the date of this order till realization. Complainant is at liberty to execute the order by filing execution application against opposite party as per Provisions envisaged in Consumer Protection Act 2019.
Exts.
A1-Policy
A2-Licence copy
A3- RC book 21/09/2016
A4-GST Invoice 29/07/2019
A5-Lawyer notice
A6(series)- Postal receipt
A7(series)-Acknowledgment
A8-Coninued policy
A9-Letter dated 03/02/2020
A10-Receipt
A11- Pre-job slip
A12- Estimation report
A13- Photographs
A14- Stand alone motor on standard
Pw1-complainant
B1-Proposal form
B2-Certificate of insurance and policy schedule
B3- Motor insurance- claim form
B4- Letter issued by OP to complainant
B5-Carshield Pvt.Car Package policy
B6-Claim search Result
Sd/ Sd/ Sd/
PRESIDENT MEMBER MEMBER
Ravi Susha Molykutty Mathew Sajeesh K.P
(mnp)
/Forward by order/
Assistant Registrar
