PER SHRI.ATUL D.ALSI, HON’BLE PRESIDENT

The complainant has filed this complaint alleging arbitrary and illegal repudiation of his insurance claim for own damageamounting to Rs.6,38,084/- sustained to his accidented truck and thereby praying for the claim amount with interest besides claiming compensation of Rs.1,00,000/- and notice charges. Facts in nutshell are as under..

2.               The truck bearing No.MH-34, AV 0820 which is owned by thecomplainant was insured with the OP Insurance company under policy bearing No.16130031160100010703 for the period between 27/02/2017 to 26/02/2018. On 10/10/2017 the said truck met with an accident under the jurisdiction of Police Station, Asifabad, Telangana State, as an outcome of which, an offence U/s 304A coupled with Sec.337 of IPC came to be registered against the driver of Truck No.MH-34, AV 0820. Accordingly, the complainant filed insurance claim claiming repair charges of Rs.6,38,084/- with the OP insurance company along with all relevant documents,but,in spite of repeated demands and service of notice through adv.Manish Sharma , the claim was not settled by the OP. Therefore the petition is filed ..

3.                The OP filed reply to the complaint and admitted issuance of insurance policy but it denied rest of the allegations. It submitted that the complainant had earlier obtained insurance policy for the same truck for the period from 15/12/2015 to 14/12/2016 from Bajaj Allianz Insurance Co. and had received insurance claim amounting to Rs.1,65,385/. After the insurance period was over, the complainant’s vehicle remained uninsured for the period from 14/12/2016 to 26/2/2017. Thereafter the complainant insured the same vehicle with the OP Insurance company under policy in question for the period  27/2/2017 to 26/2/2018. However, while obtaining the said policy, it was obligatory on the part of complainant to disclose the claim amount he received from the earlier policy obtained from Bajaj Allianz, but he deliberately avoided to do the same. On the contrary, the complainant claimed “No claim Benefit of 20% rebate in the premium amount of the new policy” by suppressing the information of earlier claim.  This act on the part of complainant amounts to suppression of material fact and breach of trust under Insurance Act, and, therefore, his claim was rightly repudiated for the reason of suppression of material fact and it was duly communicated to the complainant by issuing a registered letter to that effect. Hence there is no deficiency in service on the part of Insurance company and the complaint is liable to be dismissedwith cost. 

5.                 Counsel for the complainant argued that the OP Insurance company failed to submit survey report and investigation report eventhough repeatedly requested by the complainant in writing. The earlier policy issued by Allianz Insurance for the period between 15/12/2015 to 14/12/2016 has no connection with the present claim. The policy issued by the OP has not been cancelled till today and is still in existence. The amount of 20% no claim bonus may be deducted from the compensation amount payable to the complainant. The breach is not a fundamental breach of policy and it is the duty of the Insurance company to verify the status of previous policy and whether compensation is received or not and whether the benefit of 20% no claim bonus is applicable or not. The complainant, relying on the judgment of Hon’ble Delhi State Consumer Commission, in A/16/226 L&T General Insurance Co.Ltd. Vs. Shadilal Kapoor decided on 06/10/2020, submitted that, it is the duty of Insurer to check the status of earlier policy and applicability of no claim benefit to the insured. The complainant also relied upon another case of State Consumer Disputes Redressal Commission, Chandigarh in A/17/248 National Insurance Co.Ltd. Vs. Mohinderkumar wherein it is held that as per GR No.27 of Motor Tariff Rules, the insurer is duty-bound to write to earlier insurer as to whether any claim had been obtained by the claimant, but the same was not done in the present case. Hence the petition deserves to be allowed.

6.             The counsel for the OP Insurance company argued that the complainant suppressed material fact about receipt of insurance claim under the previous policy and on the contrary, claimed 20% no claim bonus while obtaining new policy from the OP Insurance company. Hence the act of complainant is a breach of trust and utmost good faith amounting to breach of terms and conditions of the policy and, therefore, the repudiation of the claim is fully justified and it does not amount to deficiency in service.

7.             We have perused the complaint, written version, affidavits and supporting documents filed by the parties and also have heard the arguments. After careful scrutiny thereof, the core issues in the matter, that needs to be adverted to, is whether the non-disclosure of insurance claim under earlier policy is a fundamental breach of policy conditions as would be fatal to the settlement of insurance claim under the subsequent policy. We record our findings to the issue as under,

REASONING
8.            It is an admitted position that the complainant had earlier obtained insurance policy for the truck in question for the period from 15/12/2015 to 14/12/2016 from Bajaj Allianz Insurance Co. and had received insurance claim amounting to Rs.1,65,385/-. After the insurance period of that policy was over, the complainant’s vehicle remained uninsured for the period from 14/12/2016 to 26/2/2017. Thereafter the complainant insured the same vehicle with the OP Insurance company under policy in question for the period of 27/2/2017 to 26/2/2018 under which, the claim of the complainant for the repairs of the accidented vehicle came to be repudiated for the reason of suppression of fact of previous claim under earlier policy issued by Bajaj Allianz and, on the contrary, by suppressing the same, claiming no claim benefit under the new policy.

9.              In the judgment of Hon’ble State Consumer Commission, Delhiin A/16/226 L&T General Insurance Co.Ltd. Vs. Shadilal Kapoor(supra), Hon’ble State Commission has referred to the dictum in the case of Harpreetsingh wherein the Hon’ble Division Bench,considering the Motor Vehicle Rules, GR -27, has held that the failure of insurer to seek confirmation about the genuineness of information furnished by the insured regarding no claim bonus, from previous insurer within 21 days, would constitute breach of tariff, but would disentitle the insurer to take shelter of plea of misrepresentation of fact. Relying on the said dictum, Hon’ble State Commission, Delhi held that it is the duty of the insurer to call for the status of earlier insurance with regard to no claim bonus and for noncompliance of tariff as per Indian Motor Tariff GR 27the insurer cannotraise the plea of breach of trust. However, the Commission considering the breach of tariff, was pleased to award compensation by reducing 25% amount from the total claim amount. In another case National Insurance Co.Ltd. Vs. Mohinderkumarrelied upon by the complainant, Hon’ble SCDRC, Chandigarh was pleased to hold that, as per GR No.27 of Motor Tariff Rules, the insurer is dutybound to write to previous insurer as to whether any claim had been obtained by the claimant, and if it is found to have been obtained, the insurer has a right to cancel the policy.

10.In the case in hand, admittedly the policy is in existence and it has not been cancelled by the OP Insurance company till today. It was obligatory on the part of OP Insurer to obtain status of the earlier policy from the earlier insurer within 21 days and it was also obligatory on the part of earlier insurer to provide the information sought for. If the information received revealed that the complainant has obtained insurance claim, then it was open for the OP insurer to cancel the policy.  However, in the instant case, no such course of action is taken by the OP. Hence non-disclosure of receipt of claim under the earlier policy and on the contrary, claiming ‘no claim benefit under the new policy, though is breach of rules, is not fatal to such an extent, which would entitle the OP to forfeit the full claim.  Under these circumstances, the repudiation of complainant’s insurance claim amounts to deficiency in service.

11.          The complainant, vide list of documents dated 13/7/2020, has filed on record bills of repairs of vehicle at Exh.4/17 amounting to Rs.6,38,084/- issued by Provincial Trucking Service Pvt.Ltd. dated 21/11/2018 who is the authorized dealer of Bharat Benz, Chandrapur. Therefore, the complainant is entitled to claim compensation on nonstandard basis i.e. 70% of insured value Rs.6,38,084/- which comes to Rs.4,46,659/- excluding interest or compensation.

12.             In furtherance of our observations as above, we proceed to pass the following order..  

ORDER

1.      The complaint No.CC/20/7 is partly allowed.

2.      The OP shall pay to the complainant an amount of Rs.4,46,659/-  as   

     Compensation towards settlement of claim on non standard basis. This  

     amount shall notcarry any interest.

3.   Copy of the order be furnished to the parties free of cost.