Per Justice Sham Sunder , President This appeal is directed against the order dated 17.6.2010, rendered by the District Consumer Disputes Redressal Forum-I, U.T.Chandigarh (hereinafter to be referred as the District Forum only), vide which it dismissed the complaint of the complainant (now appellant). 2. The complainant obtained an insurance policy effective from 16.3.2008 to 15.3.2009, in respect of his Tata Indica car, bearing registration No.CH03-R-0863. On 13.3.2008, he approached OP-2 (agent of OP-1), who after verification of the earlier cover note and records, issued the cover note mentioning that ‘No Claim Bonus’ (hereinafter to be referred as NCB) @ 35% was payable to the complainant. On 20.1.2009, the vehicle of the complainant met with an accident. The information regarding the said accident was given by the complainant, to OP-1 (now respondent No.1) which instead of settling the claim, rejected the same vide letter dated 16.4.2009, on the ground, that he (complainant) had taken the claim on the previous policy, and had availed of 35% NCB in respect of the policy, in question, by suppressing the material facts, and thus, he was not entitled to any benefit under the policy. It was further stated that the aforesaid acts of the OPs, amounted to deficiency, in rendering service and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act,1986(hereinafter to be called as the Act only) was filed by him. 3. In the written reply, OP No.1, admitted that the insurance policy, in question, was issued to the complainant. It was, however, stated that at the time of obtaining/renewal of the said policy, the complainant had given a declaration that he had not made any claim previously and, therefore, 35% NCB was granted to him on the policy, in question. It was further stated that after the receipt of intimation, with regard to the accident claim, on investigation, it came to the notice of the OP that the complainant had fraudulently claimed NCB on the policy, in question, and granted the same, though he was not entitled to the same, for the reason that he had already obtained NCB on the policy of the previous year. The complainant also admitted vide letter dated 20.2.2009 that he had earlier taken the claim of Rs.4,540/-. It was further stated that the complainant made a clear-cut mis-representation of material facts, at the time of obtaining/renewal of the insurance policy, in question. It was further stated that, under these circumstances, the policy stood vitiated. It was further stated that, thus, the claim of the complainant was rightly repudiated vide letter dated 12.3.2009. It was denied that there was any deficiency, in service, on the part of OP No.1, or it indulged into unfair trade practice. The remaining allegations were denied, being wrong. 4. In its short reply, OP-2, admitted that the insurance policy of the vehicle in question, was renewed by it, for the period from 16.3.2008 to 15.3.2009. It was stated that the complainant submitted his claim in respect of the accident with OP NO.1, which was to settle the same. It was further stated that OP No.2 had no role to play in the settlement of claim and disbursement of the amount, if any, to the complainant. 5. The parties led evidence, in support of their case. 6. After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the District Forum, dismissed the complaint, on the ground, that the complainant concealed the material facts and gave false declaration regarding non-availing of NCB on the basis of previous insurance policy, and thus, fraudulently got NCB, on the policy, in question also. It was further held, thus, there was violation of the terms and conditions of the policy. It was held that the contract of insurance stood vitiated, and the complainant, was not entitled to get any claim under the policy, in question. 7. Feeling aggrieved, the instant appeal was filed, by the appellant/complainant. 8. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 9. The Counsel for the appellant, submitted that, the appellant was getting insured the aforesaid vehicle, alongwith other vehicles, from respondent No.1, for the last so many years continuously. He further submitted that the policy, in question, was issued by respondent No.2 on behalf of OP No.1, after verifying its record, and the earlier policies. It was further submitted that, under these circumstances, there was no duty cast upon the appellant, to disclose the factum of receipt of NCB, on the previous policy. It was further submitted that, as such, there was negligence on the part of OP Nos.1 &2, at the time of issuing the Policy in question, for which the appellant could be penalized. He further submitted that the fact of taking the claim against the aforesaid vehicle, on the basis of the policy of the previous year, was not in the knowledge of the appellant at the time of taking the Policy, in question, and as such, he got 35% NCB in respect of the said policy also. He further submitted that, under these circumstances, respondent No.1 could have deducted the amount of NCB from the claim amount, payable to the appellant. It was further submitted that there was no misrepresentation, on the part of the appellant/complainant. It was further submitted that only, on the ground that NCB was obtained by the appellant/complainant, on the previous policy, while obtaining the renewed policy, in question, in respect of the vehicle, referred to above, his claim could not be validly repudiated. He further submitted that there was certainly deficiency in service, on the part of the OPs and also they indulged into unfair trade practice, but the District Forum committed a grave error, in dismissing the complaint. 10. On the other hand, the Counsel for respondent No.1, submitted that the appellant while obtaining the insurance policy had given a false declaration R3, that he had not taken/reported any claim in the past, on the same vehicle and therefore NCB claim @ 35% on the Policy in question was granted to him. He further submitted that when the surveyor was deputed by OP NO.1 for the assessment of loss, it came to light that he (appellant/complainant) had fraudulently obtained NCB on the policy, in question, as he had already taken the claim of Rs.4540/- on his previous policy No. 35020431030100006487. It was further submitted that even the appellant/complainant, admitted this fact, in his reply annexure P3/R6 to the letter written by OP No.1. It was further submitted that, as such, at the time of renewal of the policy, in question, the appellant/complainant made a false representation, gave a false declaration, and also played a fraud on OP No.1, resulting into violation of the terms and conditions of the insurance policy, leading to the vitiation of contract of insurance. He further submitted that the claim of the appellant was, rightly rejected. He further submitted that the order of the District Forum, being legal and valid, does not call for any interference. 11. After giving our thoughtful consideration, to the rival contentions, raised by the Counsel for the parties, in our considered opinion, the appeal is liable to be dismissed, for the reasons, to be recorded hereinafter. It has been repeatedly held that the contract of insurance falls, in the category of contract of UBERRIMAE FIDEI, meaning thereby a contract of utmost good faith, between the parties. When information on a specific aspect, is asked for, in the proposal form, the insured is under a solemn obligation, to make a true and full disclosure of the information, on the subject, which is within his knowledge. Of course, obligation to disclose, extends only to the facts, which are known to the applicant, and not to what he ought to have known. The Hon`ble Supreme Court of India in United Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)= (1996) 6 SCC 428, laid down the principle of law, that it is a fundamental principle of Insurance Law, that utmost faith must be observed by the contracting parties. Good faith forbids either party from non-disclosure of the facts, which the party privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing to the contrary. To the similar effect, the principle of law, was laid down in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000) SLT 323 = I (2000) CPJ 1 (SC)=(2000) 2 SCC 734. In C.A.No.5322 of 2007, P.C. Chakko & Anr. Vs. Chairman, L.I.C. & Others, IX (2007) S.L.T. 533 = IV (2007) ACC 773 (SC) = VII(2007) CLT 229 (SC), the Apex Court observed in Para 16 as under:- “the purpose of taking policy of insurance is not, in our opinion, very material. It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated if a fraudulent act is discovered. The proposer must show that his intention was bonafide. It must appear from the face of the record. In a case of this nature, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer which has a bearing, on the contract of Insurance, if discovered may lead to the policy being vitiated in law.” 12. There is, no dispute, between the parties that the Policy in question (R1) effective from 16.3.2008 to 15.3.2009, in respect of the vehicle, referred to above, was obtained/ got renewed by the complainant, from OP No.1, through OP No.2. According to condition No.9 of R1 under the heading “No claim bonus” it is made clear that the insured is entitled to no claim bonus, on the own damage section of the policy,if no claim is made or pending during the preceding year(s). R3 is a copy of the proposal form bearing the signatures of the complainant. Clause 11(a) of the proposal relates to past claims. A specific question was put to the complainant ‘was any claim reported in past on the same vehicle during the current policy, if so the details thereof be supplied.’ On the left side of clause a line was drawn, meaning thereby that no claim bonus was reported or received in the past. This declaration made by the complainant was totally false. In P-3/R-6 letter dated 20.2.2009 written by the appellant/complainant to the Branch Manager, New India Assurance Co. Ltd., it was admitted by him that while renewal of the policy in March,2008, when the agent of the insurer asked him of any claim of the last year, he forgot to tell him, that a small claim of Rs.4000/- was made by him. It was further stated by him, in this letter, that he was under the impression that he had made such claim, on the other car, which was also of the same make. The aforesaid letter, contains a clear admission, on the part of the appellant/complainant, that he had received NCB in the past, on the same vehicle at the time of renewal of the policy in March,2008. He intentionally and deliberately made a false representation to the agent of OP NO.1 and also played a fraud upon him by stating that he had not obtained NCB, in the previous year, in respect of the car, in question, on the basis of the policy. He also fraudulently obtained NCB on the policy in question, at the time of renewal thereof, despite the fact that he had already taken the claim in the sum of Rs.4540/- on the same policy in the previous year. The explanation furnished by the appellant/complainant in P3/R6, that he forgot to tell the agent that a small claim of Rs.4000/- was made to him, and he was under the impression that the same was made in respect of some other car, which was also of the same make, is nothing, but a tissue of lies. Such an explanation was furnished just with a view to wriggle out of the situation, in which he was placed. The mere fact that the appellant/complainant was getting his vehicle insured from OP NO.1, for the last so many years, and the record of the previous policies was with it, he could not absolve himself of the liability of disclosing the material fact at the time of renewal of the policy in question. He could not shift his own blame on to the shoulders of the agent of OP No.1. Even if, the official of OP No.1, did not properly go through the record of the previous policy, obtained by the complainant, that did not mean that he (complainant) was not, guilty of making misrepresentation and playing fraud by giving false information/declaration regarding not availing of NCB on the previous policy, which vitiated the contract and, as such, Insurance Company could not be made liable to pay the claim, submitted by the complainant, on this ground only. On account of such misrepresentation and fraud, the terms and conditions of the policy stood violated. In Tata AIG General Insurance Company Ltd., and another Vs. Gulzari Singh, 2010 CTJ 497 (CP)(NCDRC) the complainant sought reimbursement of the amount spent by him, on the repair of his vehicle, which was damaged in an accident, and was insured with the Insurance Company. The claim was repudiated by the Insurance Company, taking a stand, that the complainant did not disclose that he had filed a claim, with the previous insurer, and received NCB under their Policy. The complaint was dismissed by the District Forum. An appeal preferred against the order of the District Forum was accepted by the State Commission. A revision petition was filed against the order of the State Commission, in the National Commission, which was accepted, on the ground, that the complainant suppressed material facts, referred to above, at the time of obtaining the Policy and, thus, there was violation of the conditions of the same which led to the vitiation of the same. The principle of law, laid down in Tata AIG General Insurance Company Ltd.’s case (supra) is, thus, fully applicable to the facts of the instant case. The District Forum was, thus, right in holding that vide R7 the repudiation of claim made by the Insurance Company, was legal and valid. The District Forum was also right in holding that there was no deficiency, in service, on the part of the Insurance Company. The findings of the District Forum, in this regard, being correct, are affirmed. 13. The order, rendered by the District Forum, does not suffer from any illegality or perversity, warranting the interference of this Commission . 14. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed with costs, quantified at Rs.3000/- . 15. Certified Copies of this order be sent to the parties, free of charge. 16. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
