DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Raj Nagpal son Sh. P.D. Nagpal r/o 5838, MHC, Manimaraj, Chandigarh.

                                      ---Complainant.

Versus

1.                 The Oriental Insurance Company Limited, Regd. & Head Office, A-25/27, Asaf Ali Road, New Delhi-110002

2.                 The Oriental Insurance Company Limited, SCO No.99-100, Sector 17-B, Chandigarh.

---Opposite Parties.

BEFORE:  SMT. MADHU MUTNEJA, PRESIDING MEMBER

                   SHRI JASWINDER SINGH SIDHU, MEMBER

Argued by:  Sh. Sandeep Bhardwaj, Counsel for the complainant

                        Sh. J.P. Nahar, Counsel for the OPs.

PER MADHU MUTNEJA, PRESIDING MEMBER.

1.                           The lis between the parties is due to denial of insurance claim by the opposite parties to the complainant by taking the plea of non disclosure of earlier claim and thereby availing No Claim Bonus from the opposite parties.

2.                           Factually speaking vehicle No.CH01 AB 1738 belonging to the complainant was comprehensively insured with the opposite parties vide insurance cover (C-1) effective from 21.1.2012 to 20.01.2013.  The vehicle met with an accident on 31.3.2012.  Intimation was given to the opposite parties. The opposite parties appointed surveyor to assess the loss. Meanwhile the complainant got the vehicle repaired from Berkley Automobiles and paid a sum of Rs.13,505/- vide invoice (C-2) on the assurance of the opposite parties that he would be indemnified for the repair cost later on. The complainant has stated that he has received a letter dated 9.5.2012 from the opposite parties whereby his claim had been repudiated by taking the plea that the complainant had taken a claim from the National Insurance Company, who were the earlier insurers of the vehicle.  The complainant has stated that he has replied back informing the opposite parties that he had specifically informed the agent about the claim, previously taken by him, and the agent had made the calculations of the amount payable at the time of issuance of the policy accordingly.  The complainant has also stated that he had not signed any false declaration in the proposal form.  Thereafter the opposite parties have remained silent.  The complainant has thus filed the instant complaint by stating that the act of the opposite parties is in violation of the IRDA regulations and the same amounts to unfair trade practice.  The complainant has prayed for refund of the amount spent for repair of the vehicle as well as compensation and costs of litigation.

3.                           The opposite parties in their reply have admitted the issuance of the insurance policy to the complainant for the relevant period. It has also been stated that the complainant was initially issued cover note No.529487 but as the cheque given by him was dishonoured, he subsequently gave cash and another cover note no.565547 was issued to him for the period 21.1.2012 to 20.1.2013.  The opposite parties have stated that after the intimation of loss to the vehicle, the surveyor was appointed to assess the loss. The surveyor vide his report dated 9.4.2012 (R-3) assessed the loss at Rs.9,889/- after deducting Rs.500/- as per excess clause.  It has further been stated that on receipt of information from the National Insurance Company it was noticed that a claim had been paid to the complainant under the policy.  As such, he was not entitled to any No Claim Bonus.  Accordingly, the complainant had been informed vide letter dated 9.5.2012.  It was stated that in the letter that he had mentioned in the proposal form that he was entitled to No Claim Bonus but the National Insurance Company has confirmed that they had paid a claim under the policy.  Since no reply was received from the complainant, the claim was filed as No Claim on 22.5.2012.  Correspondence/emails exchanged between the National Insurance Company and the opposite parties is at R-5.  The opposites parties have also placed on record the affidavit (R-6) of the agent wherein the allegations of the complainant regarding disclosure of details regarding No Claim Bonus have been denied.  The previous insurance policy of National Insurance Company and the proposal form have also been placed on record as Annexure R-7 and R-8. The opposite parties have also placed on record Annexure R-9 which is a copy of GR.27 relating to No Claim Bonus. Relying upon all the aforesaid submissions, the opposite parties have prayed for dismissal of the complaint by stating that the complainant is not entitled to the amount paid for repair as he has made a false declaration to get undue and wrong NCB from the opposite parties. 

4.                           We have heard the learned counsel for the parties and have gone through the documents on record.

5.                           The case of the complainant is that the opposite parties have not paid his insurance claim for repair of his accidental vehicle by taking the plea of non entitlement of the complainant to No Claim Bonus.  Annexure C-3 is the letter received by the complainant from the opposite parties wherein it is held that on going through the claim papers and, NCB confirmation received from the National Insurance Company, it was noticed that a claim had been paid against the policy to the complainant.  The complainant has placed on record Annexure C-4 in which he has written to the opposite parties that he had specifically told the agent that he had taken claim from the previous company and the amount calculated by the agent had been paid by him.

6.                           The opposite parties have placed on record Annexure R-8 which is a copy of the proposal form relating to cover note already cancelled by them and not against the cover note subsequently issued against the existing policy. Annexure R-6 placed on record by the opposite parties is the affidavit of Prem Sethi, the agent, who has stated that the complainant had been specifically asked whether he had taken any claim under the policy from the previous insurance company.  The complainant had denied the same.  GR 27 placed on record by the opposite parties relates to no claim bonus and clause (f) of the same reads as under :-

 “(f)      In the event of the insured, transferring his insurance from one insurer to another insurer, the transferee insurer may allow the same rate of NCB which the insured would have received from the previous insurer. Evidence of the insured's NCB entitlement either in the form of a renewal notice or a letter confirming the NCB entitlement from the previous insurer will be required for this purpose.

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 I 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.”

7.                           The Hon'ble National Consumer Disputes Redressal Commission in Revision Petition No.1026 of 2012 titled as Bharti AXA General Insurance Ltd. Vs. Pinky Kaushal, in para 7, held as under :-

“7.       ……….No Claim Bonus in itself amounts to a disclosure of the fact of previous insurance with others.  Therefore, due diligence was required of the revision petitioners to go into details of insurance of previous two years and satisfy themselves before accepting the proposal.  Having failed to perform such diligence, it is not open to the revision petitioners to lay the blame at the door of the complainant………” 

The Hon'ble National Commission, in para 8, further held as under :-

“8.       The revision petition also states that the complainant herself has accepted the fact of previous insurance and claim thereunder in her complaint and affidavit evidence.  But, there is nothing to show how exactly this can disentitle the complainant to demand ‘No Claim Bonus….” 

However, the opposite parties have not placed on record any document to show whether it had taken steps to write to the previous insurers to clarify about the No Claim Bonus being issued by them to the complainant.  If it had been so, they would have had the privilege to ask for the amount of No Claim Bonus reduced from the premium amount taken from the complainant and if the complainant did not make this payment, they could have cancelled the policy.  None of this has been done by the opposite parties and now the claim is being repudiated by taking the plea of wrong disclosure about the No Claim Bonus. 

8.                           Relying upon the above cited judgment, and the requirement of GR 27, we deem it appropriate to accept the contentions of the complainant and allow the complaint. The complainant has claimed an amount of Rs.13,505/- but the opposite parties have stated that the surveyor has assessed the amount at Rs.9,889/-.  The Hon'ble Supreme Court in Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777 has held as under :-

“Insurance Act, 1938 – S.64-UM – Surveyor/ Loss assessor’s report – Weightage to be given – Held, though not the last word, yet there must be legitimate reason for departing from report – No infirmity found in Surveyor’s report and therefore held, Insurance Company rightly admitted claim as per the report.”

The Hon’ble National Consumer Disputes Redressal Commission in case New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC) has held:-

“….Surveyor’s report being important piece of evidence, to be given weight and relied upon, unless proved unreliable.”

In case Dabirudin Cold Storage Vs. New India Assurance Company Ltd. & Ors., I (2010) CPJ 141 (NC), the Hon’ble National Consumer Disputes Redressal Commission has held that:-

“…….Surveyor’s report being important document, cannot be easily brushed aside.”

9.                           It is thus clear that the Surveyor’s report is final, unless challenged by either the Complainant or the Opposite Party with specific contentions and averments. The Complainant, in the present case, has not filed any written objections to the surveyor’s report, hence, the report is final and binding. So, the complainant will be entitled to Rs.9,889/- in terms of the surveyor’s report. The opposite parties shall also pay Rs.5,000/- as compensation for mental agony and harassment and Rs.5,000/- as costs of litigation.  However, the amount of No Claim Bonus, which was actually due to the opposite parties from the complainant shall be deducted from the final payable amount, while making  payment to the complainant.

10.                       This order be complied with by the opposite parties, within 45 days from the date of receipt of its certified copy, failing which the amounts of Rs.9,889/- (less NCB amount) + Rs.5,000/- shall carry interest @12% per annum from the date of this order till actual payment besides payment of litigation costs.

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

Announced

08.01.2013.

 Sd/-

(MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER