BEFORE THE DISTRICT CONSUMER DISPTUES REDRESSAL FORUM, FATEHABAD.
Complaint no.53/2018.
Date of instt.15.2.2018.
Date of Decision:28.08.2019.
Ajay Garg son of Chhaju Ram, caste Mahajan (Garg), aged 29 years, resident of Officer Colony, Fatehabad.
..Complainant.
Versus
- United India Insurance Company Limited through its Divisional Manager, Divisional Office, Sirsa.
- United India Insurance Company Limited through its Branch Manager, Branch Office Anaj Mandi, Fatehabad.
..Respondents/OPs.
Complaint under Section 12 of Consumer Protection Act, 1986.
Before: Sh.Raghbir Singh, President.
Sh. Jasvinder Singh, Member.
Argued by: Sh. R.K. Tayal, Advocate for complainant.
Sh. N.D. Mittal, Advocate for the Ops.
ORDER
The present complaint under Section 12 of Consumer Protection Act, 1986 has been filed by the complainant against the Opposite Parties (hereinafter to be referred as OPs) with the averments that he got his car make Maruti Ritz VDI bearing registration no. HR-22J/3012 insured from Ops through its Branch Office Anaj Mandi, Fatehabad on 28.7.2015 vide policy no.1119033115P104751699. The said policy was valid from 29.7.2015 to midnight on 28.7.2016.
2. It is further submitted that the abovesaid insured vehicle met with an accident on 8.9.2015 and the vehicle was badly damaged. Intimation regarding the accident was sent verbally through telephone to the Ops in their office at Fatehabad and it was also requested to depute the loss assessor to assess the loss of the car, but the matter was lingered on. It is further submitted that the insured vehicle was lying in accidental condition with the authorized showroom of Maruti i.e. Unique Motors Private Limited, Hisar. It was asked by the insurance company to send the intimation to the Divisional Office, Hisar. Thereafter, the complainant sent a written intimation to the Divisional Office of the Ops at Hisar and the same was received after a period of 6/7 days.
3. It is further submitted that thereafter the Investigator-cum-loss Assessor was deputed to assess the loss by the insurance company, who after getting the photographs and completing other requirements to assess the loss i.e. in estimate, driving license of the complainant etc. prepared the preliminary loss report. However, the matter was lingered on by the company on one pretext or the other. Thereafter, the complainant was asked to get the vehicle repaired and to submit the bill with job card for repair and purchase of spare parts. A bill of loss amounting to Rs.2,36,659/- was submitted by the complainant with the insurance company in the month of November 2015.
4. It is further submitted that thereafter the insurance company was requested by the complainant to settle the claim and to make payment as per job card/retail invoice bill. However, vide letter dated 17.2.2016 the insurance company repudiated the insurance claim of the complainant with the remarks “It is noted that at the time of insurance from this office you had made a declaration that ‘I/We, declare that rate NCB claimed by me/us is correct and that no claim has arisen in the expiring policy period’ ‘I/We, further undertake that if this declaration is found to be incorrect, all the benefits under the policy in respect of Section-1 of the policy stands forfeited.’ Now, it has been found that you had concealed this fact from our company that you had got received the claim from the abovesaid previous insurer and made the false declaration as above mentioned which is a violation of GR-27, therefore, your claim is not payable and stands repudiated.”
5. It is further submitted that the decision dated 17.2.2016 taken by the insurance company is against law and facts, incorrect, void, non-set and unsustainable in the eyes of law. It is further submitted that the Ops had violated the proviso of GR-27. It is also submitted that by repudiating the genuine insurance claim of the complainant the insurance company has acted arbitrarily and in a monopolistic manner. The abovesaid act on the part of Ops amounts to deficiency in rendering service to the complainant. The complainant has further prayed that the Ops may be directed for making a payment of Rs.2,36,659/- as insurance claim to the complainant alongwith interest at the rate of 18% per annum and compensation of Rs.50,000/-. Hence, the present complaint.
6. On being served, the OPs appeared through its counsel and resisted the complaint by filing a joint written statement wherein various preliminary objections with regard to maintainability, estoppel, cause of action and concealment of true and correct facts etc. have been raised.
7. In reply on merits, it is submitted that the complainant has given false and fabricated facts. The complainant got the car in question insured from the Ops for the period from 29.7.2015 to 28.7.2016. At the time of said insurance the complainant wrongly claimed and availed no claim bonus to the extent of 25% amounting to Rs.2317/- on the assertion that he has not availed any claim during the previous policy. The complainant also gave a written declaration to the OP company that the NCB claimed by him is correct and no claim had arisen in the expiring policy period. It is further submitted that the insured vehicle was earlier insured with New India Assurance Company Ltd. for the period from 6.6.2014 to 5.6.2015 vide policy no.31260031140101680421. The complainant also undertook that if the declaration was found to be incorrect all benefits under the policy in respect of Section 1 of the policy would stand forfeited. It is further submitted that to verify the declaration made by the complainant, the OP approached the previous insurer who informed the respondent that one claim has been reported on the abovesaid policy during their policy period. This fact shows that the complainant had intentionally furnished the wrong and false information only to avail NCB to which he was not entitled. Therefore, the insurance claim of the complainant has been repudiated by the Ops. The repudiation of the insurance claim of the complainant by the Ops is perfectly in accordance with the terms and conditions of the insurance policy and the same is sustainable in the eyes of law. It is also submitted that the loss in the vehicle in question was assessed by the Ops from an independent surveyor and the surveyor vide his survey report has assessed the net payable amount by the Ops as Rs.1,90,500/-. However, the said amount was not paid on account of submitting of false declaration by the complainant for wrogly availing no claim bonus. The present complaint filed by the complainant is without any merits and the same is liable to be dismissed.
8. The learned counsel for the complainant tendered in evidence affidavit of the complainant as Exhibit CW1/A alongwith documents as Exhibit C-1 to Exhibit C-3 and closed the evidence of the complainant. On the other hand, Shri K.R. Jain Senior Divisional Manager tendered in evidence his affidavit as Exhibit R-1 on behalf of the Ops alongwith the documents as Annexure R-1 to Annexure R-6 and closed the evidence of the Ops.
9. 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 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 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, 2016 (3) CLT Page 603 titled as United India Insurance Company Vs.Et. Trav Aids Pvt. Ltd. (National Commission) decided on 29.6.2016, 2018 (3) CLT Page 388 titled as M/s Prem Trading Company Vs. United India Insurance Company (State Commission, Haryana) decided on 18.5.2018 and the judgment cited as 2017 (1) CLT Page 158 titled as Reliance General Insurance Company Vs. Dalbir Singh decided on 5.12.2016 (State Commission, Haryana).
10. 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 dated 09.11.2015 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 New India Assurance Company Ltd. 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 placed 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.
11. 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 25% 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 Integra. 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”.
12. 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 25% 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 25% . The surveyor vide his survey report has assessed the loss to the tune of Rs.1,90,500/- on NET Off salvage basis. Therefore the present complaint is accepted and the OP is directed to make a payment of Rs.1,90,500/- by reducing 25% to the complainant along-with interest at the rate of 8% per annum from 17.2.2016 till realization and compensation of Rs.10,000/- on account of mental agony, physical harassment and litigation charges suffered by her. The judgment titled as United India Insurance Company Limited Vs. Et. Trav Aids Pvt. Ltd. And cited as 2016 (3) CLT (National Commission) relied upon by the learned counsel for the complainant is not applicable in the present case and as such the complainant is not entitled the total insurance claim. The order be complied within a period of 45 days from the date of passing of this order. 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.
Dated: 28.08.2019.
(Jasvinder Singh) (Raghbir Singh)
Member President
