Delhi

North East

CC/321/2017

M/s I Q Enterprises India Pvt. Ltd. - Complainant(s)

Versus

United Inidia Insurance Co. Ltd. - Opp.Party(s)

10 Oct 2019

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No. 321/17

 

In the matter of:

 

	M/s I Q Enterprises India Pvt. Ltd.  Reg. Office: LD-135, Pitampura Delhi-110034 Through: Its Director/Manager	Complainant
	Versus
	United India Insurance Co. Limited D-8, Azad Marg, Vikash Marg Delhi-110095	Opposite Party

 

DATE OF INSTITUTION:    JUDGMENT RESERVED ON:               DATE OF DECISION      :

08.11.2017 10.10.2019 10.10.2019

 

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

 

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. Concise facts as culled out in the present case are that the complainant being a Private Limited Company on request of one of its Director Mr. Vivek Chanana decided to purchase a car for day to day personal use in October 2014 and accordingly a Maruti Suzuki Ciaz automatic car bearing registration no. DL-8C-AF-9237 was purchased and the complainant company got the said car insured with OP vide Private Car Package Policy no. 2215823116P108963731 w.e.f. 19.10.2016 to 18.10.2017 on payment of premium of Rs. 14,210/- for a total IDV of  Rs. 6,75,000/-. The said car met with an accident on 10.04.2017 about which the intimation was given to OP vide intimation letter dated 12.04.2017 and was parked at M/s Rana Motors Pvt Ltd., authorized service centre located at GT Karnal Road, Delhi and Claim Intimation Form was also duly filled and submitted by complainant with OP in this regard. The complainant got the subject vehicle repaired with Rana Motors on the assurance of OP to reimburse the repair charges and complainant paid Rs. 25,954/- to Rana Motors which amount was raised by it vide invoice no. BR1700123 dated 19.04.2017. However, when the complainant claimed reimbursement of the same from OP, OP vide letter dated 02.05.2017 repudiated the accident claim on grounds “No Claim Bonus availed in the Current Policy is invalid as there is Claim in Previous Policy” and absolved itself from any further liability. The complainant lodged an online complaint with the grievance cell of OP on 05.06.2017 vide complaint no. PG0006052017 but got no satisfactory response therefrom. The complainant, therefore, feeling aggrieved at OP’s failure to process his claim and failure to act with due diligence before issuing policy documents to check and verify facts rather than reject genuine claim by Unilateral acts of inclusion, articulation and rejection of claim as an afterthought, was compelled to file present complaint alleging gross deficiency in service and unfair trade practice on the part of OP praying for issuance of directions by this Forum to pay the amount of  Rs. 25,954/- incurred account of repair of the car alongwith interest thereon @ 24% p.a. from the date of payment i.e. 19.04.2017 till realization and compensation of Rs. 1,00,000/- for mental harassment and agony faced by the complainant due to repudiation of claim and cost of complaint.
2. Complainant has attached copy of Board Resolution for purchase of the car and to file the present complaint for repudiation of claim by OP, copy of policy insurance certificate alongwith schedule, copy of accident intimation letter dated 12.04.2017 alongwith Motor Claim Form, copy of repair estimate no. 560 dated 12.04.2017 issued by Rana Motors alongwith job card retail invoice dated 19.04.2017 issued by Rana Motors Rs. 25,954/- and copy of repudiation letter dated 02.05.2017 by OP.
3. Notice was issued to the OP on 27.11.2017. OP entered appearance and filed written statement on 30.01.2018 in which, while admitting the factum of insurance coverage granted to complainant with respect to the subject vehicle, took the preliminary objection that the complainant had since concealed the facts of having taken claim on the previous policy from Liberty Videocon General Insurance Co. Ltd. with which its vehicle was previously insured from 19.10.2015 to 18.10.2016 vide policy no. 2011-200101-15-1009207-11-000, its claim was repudiated for the said reason as invalid as per repudiation letter dated 02.05.2017. In this regard OP further submitted the complainant had lodged an accidental loss claim on 20.06.2016 with its aforementioned previous insurer for accidental loss which occurred on 18.06.2017 but the complainant concealed this fact at the time of filling the Motor Insurance Proposal Form with OP in 2016 where it filled “YES” for entitlement of No Claim Bonus section in history of vehicle and OP, in utmost good faith, gave No Claim Bonus to the complainant believing the information provided by him. OP denied having given any assurance of approval of claim since No Claim Bonus availed in the policy was invalid rendering the claim non maintainable. Lastly, OP submitted that premium was calculated on the basis of information provided by the complainant who misrepresented the facts at the time of taking Policy and since the claim was not genuine, its repudiation was proper as per terms and conditions of the policy. OP therefore prayed for dismissal of the complaint urging no deficiency of service or unfair trade practice on its part.
4. OP has attached copy of cover note with respect to the subject vehicle insured with Liberty Videcon w.e.f 19.10.2015 to 18.10.2016, copy of claim history report retrieve from Insurance Information Bureau of India website with respect to subject vehicle highlighting accident loss date as 18.06.2016 and total OD claim paid Rs. 5,550/-, copy of Motor Insurance Proposal Form filled by complainant with OP for the period 2016-2017, copy of email correspondence dated 01.02.2017 and 02.02.2017 exchanged between No Claim Bonus and OP regarding information on previous claim paid and copy of repudiation letter dated 02.05.2017.
5. Rejoinder in rebuttal to the defence taken by the OP filed by the complainant vide which complainant submitted to have supplied all factual information to the agent of OP at the time of taking the insurance cover and paid the premium as quoted by the agent . However, no cover note or policy document was issued by the OP. complainant denied concealment of No Claim Bonus and submitted that the proposal form was neither filled nor signed by him. Complainant further submitted that it was OP’s duty to act with due diligence before issuing policy documents to check and verify the facts rather than rejecting the genuine claim after granting policy cover against receipt of payment of premium. Lastly, complainant stated that it was erroneous on part of the OP to repudiate the claim of policy in operation and not cancelled without according opportunity to complainant to be heard since he neither concealed the aspects of No Claim Bonus nor misrepresented in any manner at the time of taking policy.
6. Evidence by way of affidavit filed by the complainant exhibiting by the Board Resolution, copy of policy, claim form, invoice receipt and repudiation letter.
7. Evidence by way of affidavit was filed by the OP exhibiting the terms and conditions of policy, documents pertaining to claim under previous policy and proposal form.
8. Written arguments were filed by both parties in reassertion/ reiteration of their respective grievance / defence.
9. Complainant relied upon judgment of Hon'ble NCDRC in Anjani Gupta Vs Future Generali India Insurance Co. Ltd. in RP no. 1051/2017 passed on 12.12.2017 in which Hon'ble National Commission directed payment on non standard basis in case No Claim Bonus was wrongfully taken by insured subject to proportionate deduction.
10. We have heard the rival contentions of both the parties and have bestowed our anxious consideration to the documentary evidence placed on record / relied upon by both sides.
11. To succinctly bring the rival contentions into focus, it is ascertainable that the insured had availed of OD claim from its previous insurer Liberty Videocon in June 2016 with respect to the subject vehicle and had taken advantage of No Claim Bonus in the form of 25% discount in the insurance premium to the tune of         Rs. 3,289.69/- by making a false declaration in the Motor Insurance Proposal Form submitted by the OP in the Column of Entitlement of No Claim Bonus by stating “YES”. In this regard, the mandate of GR 27 of Indian Motor Tariff (IMT) assume importance / relevance which provision is reproduced as under:

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 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 inquiry 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.”

12.  From the fact of the case, we observe that the OP did not take step as per the GR 27 of IMT to verify the correctness of declaration regarding “No Claim Bonus” from the previous insurance company. The question which needs answer and issue for adjudication before us is therefore whether OP was right in repudiating the claim on the plea of concealment and misrepresentation of facts irrespective of it having failed to seek verification from previous insurer of the complainant within 21 days of issuance of insurance cover as envisaged in GR 27 of IMT.

The above issue is no more Res integra, having been answered by the Larger Bench of Hon'ble NCDRC in orders dated 20.02.2017 passed in the matters of United India Insurance Co. Ltd. Vs M/s Jindal Poly Buttons Ltd. in RP no. 2920 / 2015 and Branch Manager National Insurance Co. Ltd. Vs Naresh Kumar in RP no. 1836 / 2016 in which the Hon'ble National Commission held as under:

1. 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 exercise ordinary diligence of verifying the truthfulness of the claim from the insurer’s own record, Exception to 19 of Indian Contract Act* would come into play and the insure 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.
2. In cases 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 for 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.

*Exception to Section 19 of Indian Contract Act stipulates that if such consent was caused by misrepresentation or by silence, fraudulent within the meaning of Section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.

Therefore, on reading of the Exception to Section 19, it is clear that even in the case in which consent was caused by misrepresentation or by silence fraudulently, the contract would not be voidable if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.

13.  It would therefore be seen that where the insured is unable to produce evidence pertaining to his NCB entitlement, he may be permitted to give a declaration to that effect as per the Tariff. Notwithstanding, the insurer allowing the NCB shall be under obligation to write to the previous insurer seeking confirmation of entitlement of insured and rate of NCB and previous insurer shall be bound to respond to the said query within 30 days. Failure on the part of insured granting NCB to write to previous insurer within 21 days shall constitute breach of Tariff.
14. In the present case, on appreciation of facts before us, both complainant as well as OP are in breach of the Tariff conditions which qua OP disentitles it to take shelter of the plea of misrepresentation of facts on the part of complainant but the fact remain that the complainant, on the basis of false declaration given to the OP paid 25% less premium. Therefore, the equity demand that bonus payable to the complainant in respect of his insurance  claim should be decreased proportionately as per the settled law on non standard basis but would still be payable as OP had opportunity to verify the veracity of statement made by complainant regarding NCB status but the same was not done. The Hon'ble National Commission in National Insurance Co. Ltd. Vs Harpreet Singh III (2016) CPJ 58 (NC), New India Assurance Co. Ltd. Vs Shinder Pal Singh III (2017) CPJ 559 (NC), Oriental Insurance Co. Ltd. Vs Mahendra Construction IV (2018) CPJ 387 (NC) and Bharti Axa General Insurance Co. Ltd. Vs Satya Narayn I (2019) CPJ 414 (NC) has consistently upheld the settled law on NCB as laid down in Jindal Poly Button Vs Naresh Kumar (supra).
15. In view of the above finding and settled law laid down by Hon'ble National Commission, we are of the consider opinion that repudiation of insurance claim by OP of complainant was unjustified because OP failed to fulfill its obligation under GR 27 of IMT. However, as complainant paid 25% less premium, equity demands that OP should have allowed / approved the claim on pro rata basis that is by reducing entitlement of Rs. 25,954/- to Rs. 19,465.50/- (75%) of the bill amount. Accordingly, we dispose of the present complaint with directions to the OP to pay Rs. 19,465/- alongwith interest @ 6% from the date of filing of the complainant till realization to the complainant. We also direct the OP to pay a sum of Rs. 4,000/- as compensation for mental harassment and agony for wrongful repudiation of claim in entirety. Let the order be complied with by OP within 30 days from the date of receipt of copy of this order.
16.  Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
17.  File be consigned to record room.
18.   Announced on  10.10.2019

 

(N.K. Sharma)     President

(Sonica Mehrotra)  Member