BEFORE THE DISTT. CONSUMER DISPUTES REDRESSAL FORUM; FATEHABAD.
Complaint case No.171 of 2017.
Date of Instt.: 21.07.2017.
Date of Decision: 01.05.2018.
Sunita Rani, daughter of Sh. Krishan Kumar, resident of village Sarwarpur, Tehsil and Distt. Fatehabad, Haryana.
..Complainant.
Versus
United India Insurance Company Limited, Branch Office 75-Anaj Mandi, Fatehabad, Tehsil and District Fatehabad through its Branch Manager.
..Opposite Party/Respondent.
Complaint U/S 12 of the CP Act,1986
Before: Sh.Raghbir Singh, President.
Sh.M.K.Khurana, Member.
Present: Sh.Devi Lal, Advocate for complainant. Sh.N.D.Mittal, Advocate for Op.
ORDER
The present complaint under Section 12 of Consumer Protection Act, 1986 has been filed by the complainant against the opposite party (hereinafter to be referred as OP) with the averments that she is a registered owner of the vehicle make Hyundai Eon DLI bearing Registration No.HR-22K-1826 and the above said vehicle is being used by her for personal purposes. It is further submitted that the complainant got insured the aforesaid vehicle with the OP vide policy no.1119033115P115047081 having validity for the period from 10.03.2016 to 09.03.2017 through agent of OP namely Pawan Kumar. At the time of issuance of the aforesaid policy the agent did not enquire anything from the complainant and only obtained previous insurance policy from HDFC General Insurance Company. Hence, the complainant is consumer of OP.
2. It is further submitted that on 17.06.2016 the aforesaid vehicle of the complainant met with an accident and on account of the accident the vehicle was badly damaged. Thereafter the complainant immediately informed the OP regarding the accident and surveyor of the company visited the spot and inspected the vehicle and thereafter as per instructions of OP and surveyor the complainant brought the vehicle in question to M/s Raja Motors, Fatehabad. The vehicle in question was repaired by M/s Raja Motors, Fatehabad and an amount of Rs.86,898/- was paid by her to M/s Raja Motors, on account of repair of the above said vehicle.
3. It is further submitted that thereafter as per instructions of the OP the complainant submitted all the documents with the OP company and she was assured by the OP that the claim amount of damage shall be paid to the complainant in a short period. Thereafter the complainant visited the office of Op several times with the request to settle the claim of the damage of the vehicle in question. However the OP delayed the matter on one pretext or the other and thereafter the insurance claim of the complainant was repudiated by the OP vide letter dated 01.12.2016 on the ground that at the time of getting insurance of the vehicle the complainant concealed the facts of receiving the no claim bonus in the previous policy whereas the complainant had not suppressed any fact from the OP company while getting the vehicle insured. Therefore the repudiation of genuine claim of the complainant by the OP is wrong, illegal, arbitrary against principle of natural justice and as such the same is liable to be dismissed.
4. It is further submitted that the above said act on the part of OP amounts to deficiency in rendering service to the complainant and as such the present complaint may be accepted and the OP may be directed for making payment of Rs.86,898/- along-with interest and compensation . Hence, the present complaint.
5. On being served, the Op appeared through its counsel and resisted the complaint by filing reply to the complaint wherein various preliminary objections with regard to maintainability, concealment of true and correct facts, estoppal and cause of action etc. have been raised.
6. In reply on merits, it is admitted that the insurance of the car in question was issued by the OP. However the insurance was got by the complainant by concealing the fact of taking claim under the previous policy and by giving wrong declaration and as such all the benefits under the policy were forfeited. It is further submitted that at the time of insurance the complainant wrongly claimed and availed no claim bonus (NCB) to the extent of 20% amounting to Rs.1213/- on the assertion that she has not availed any claim during previous policy. She also gave written declaration to the OP that the NCB claimed by her is correct and that no claim had arisen in the expiring policy period. The complainant also further undertook that in case this declaration was found to be incorrect all the benefits under the policy would stand forfeited. The complainant also gave a copy of previous policy to the OP company as the said vehicle was insured with HDFC ERGO General Insurance Company in the period from 06.01.2015 to 05.01.2016.
7. It is further submitted that thereafter to verify the declaration made by the complainant the OP approached the previous insurer and the previous insurer informed the OP that no claim bonus was received by the complainant. This shows that the complainant had intentionally furnished wrong and false information to avail no claim bonus to which she was not entitled.
8. It is further submitted that the repudiation of insurance claim of the complainant by the Op is perfectly in accordance with the terms and conditions of the policy and sustainable in the eyes of law. There is no deficiency on the part of OP in rendering service to the complainant in the present case as such the present complaint is liable to be dismissed.
9. The learned counsel for the complainant tendered in evidence affidavit of the complainant as Ex.C1 along-with documents as Annexures C-3 and C-4. One Sh. Dinesh Kumar, also tendered in evidence his affidavit as Ex.C-2 in support of the case of the complainant. On the other hand, Sh.K.R.Jain, Senior Divisional Manager placed on record his affidavit as Ex.RW1/A in evidence of Op. The OP also tendered in evidence the documents as Annexures R-1 to R9 and closed the OP evidence.
10. The learned counsel for the complainant in his arguments submitted that it was the duty of the insurance company to verify the averments made by the petitioner before insuring the vehicle and had that been done, it would have come to know that in fact the complainant had taken a claim against the above referred vehicle. He further submitted that the complainant cannot be made to suffer for the negligence on the part of the official of the insurance company, in not verifying the aforesaid fact from the previous insurance company. He placed reliance upon Section 27(f) of the Indian Motor Tariff, which 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 in 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 learned counsel for complainant further argued that in view of the above provision it was obligatory on the part of the insurer to write to the previous insurer, seeking confirmation of the entitlement of NCB. Their failure to write to the previous insurer within 21 days after granting the cover will constitute a breach of policy. In support of his contentions the counsel relied upon the case law cited as law Herald (Supreme Court) 2016(3) Page 2288.
11. The learned counsel for the OP in his arguments submitted that the contract of insurance is a contract of utmost good faith. The learned counsel further contended that while obtaining the policy in question from them, the complainant had made a false declaration in the proposal form regarding No Claim Bonus (NCB). The said declaration reads as under:
“I/We hereby declare that the rate of NCB claimed by me/us is correct and that no claim has 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 stand forfeited:
The learned counsel further pleaded that the vehicle was earlier insured by the HDFC Ergo and the enquiries made from them had revealed that a previous claim had been taken by the complainant under the old policy. He was, therefore, not entitled to be given NCB, while obtaining the new policy. Since, he had made a false declaration, the benefits under the policy stood forfeited and this fact has been stated in the declaration signed by the complainant itself. In support of his contention the learned counsel placed reliance on the decisions rendered by Hon’ble National Commission in case titled as Inder Pal Rana Vs. National Insurance Company decided on 02.01.2015 and case Brij Bhusan Vs. National Insurance Company, decided on 22.08.2012. The learned counsel also place reliance on the case titled as United India Insurance Company Vs. Ranjit Singh decided by Hon’ble High Court of Punjab and Haryana on 08.03.2013.
12. We have duly considered the arguments advanced by learned counsel for both the parties and have also examined the entire material placed on the record of this case. It is not in dispute that the insured had taken advantage of No Claim Bonus in the form as 20% discount in the insurance premium by making false declaration in the proposal form. It is also not in dispute that complainant insurance company notwithstanding the mandate of GR 27 of Indian Motor Tariff did not take steps to verify the correctness of declaration regarding “No Claim Bonus” from the previous Insurance Company within 21 days of the issue of insurance cover. The question which needs answer is as to whether the petitioner opposite party was right in repudiating the claim on the plea of concealment and misrepresentation of facts irrespective of the fact that complainant insurance company has failed to seek verification of declaration given by the insured in support of his plea for No Claim Bonus, within 21 days of the issue of insurance cover as envisaged in GR 27 of Indian Motor Tariff?
The above issue is no more Res intergra. The above question has been answered by the Hon’ble National Commission vide its order dated 2.02.2017 in the matter of United India Insurance Company Ltd. vs. M/s Jindal Poly Buttons Limited & Branch Manager, National Insurance Company Ltd. Vs. Naresh Kumar passed in Revision Petition No.2920 of 2015 and 1836 of 2016, as under:
“(a) The cases in which it is established that the insured by making wrongful declaration has taken benefit of No Claim Bonus and the insurer had means to verify the correctness of the declaration of the insured seeking No Claim Bonus by exercising ordinary diligence of verifying the truthfulness of the claim from the insurer’ own record, Exception to 19 of Indian Contract Act would come into play and the insurer would not be justified in repudiating the insurance claim on the ground of misrepresentation or concealment of fact. However, because the insured had taken benefit of No Claim Bonus and paid less premium, the insurance claim would be reduced proportionately.
(b) In case of the insured taking the insurance policy of the vehicle from new Insurance Company and it is established that the insured by making wrongful declaration has taken benefit of No Claim Bonus and where the insurer had failed to seek confirmation regarding correctness of the declaration submitted by the insured in support of plea of No Claim Bonus within the stipulated period as provided in GR 27 of Indian Motor Tariff, the insurer would not be justified in repudiating the insurance claim. However, because the insured had taken benefit of No Claim Bonus by making false declaration his insurance claim would be reduced proportionately.
13. In view of the above finding by the Hon’ble National Commission, we are of the opinion that repudiation of the insurance claim by the Insurance Company was not justified because insurance company failed to fulfill its obligation under GR 27 of Indian Motor Tariff. Reliance is also placed on the decision rendered by the Hon’ble National Commission in case titled as New India Assurance Company Vs. Shinder Pal Singh cited as III(2017) CPJ559(NC). However as the complainant had paid 20% less premium, equity demands that insurance company should have allowed the insurance claim on pro rata basis i.e. by reducing the entitlement under the claim by 20% . The surveyor vide his survey report has assessed the loss for Rs.84,511/-. Therefore the present complaint is accepted and the OP is directed to make a payment of Rs.84,511/- by reducing 20% to the complainant along-with interest @ 8% per annum from the date of filing the present complaint till its final realization. The OP is also directed to pay a sum of Rs.5000/- as compensation on account of mental agony, physical harassment and litigation charges suffered by her. This order be complied-with within a period of one month from the date of receiving of certified copy of the order, failing which the rate of interest will be charged @ 12% for the default period. A copy of this order be supplied to both the parties free of cost as provided in the rules. File be consigned after due compliance.
ANNOUNCED IN OPEN FORUM. Dt.01.05.2018
(Raghbir Singh)
President
(M.K.Khurana) District Consumer Disputes
Member Redressal Fourm,Fatehabad
