Haryana

StateCommission

A/483/2019

NEW INDIA ASSURANCE COMPANY LTD. - Complainant(s)

Versus

NAVEEN KUMAR - Opp.Party(s)

R.C.GUPTA

17 Mar 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

HARYANA Panchkula

 

 First Appeal No.483 of 2019

        Date of Institution:17.05.2019                               

           Date of decision:17.03.2023

      

                                                                    

 

FIRST APPEAL No.483 of 2019

 

IN THE MATTER OF:                                      

 

The New India Assurance company Ltd, Dr. Sahni Nursing Home Pipli Road, Kurukshetra, Tehsil Thanesar, District Kurukshetra, through its Branch Manager, now through the authorized signatory of Regional Office of New India Assurance Company Limited, SCO 36-37, Sector 17-A, Chandigarh.  

 

                                                                                            .….Appellant

Through counsel Mr. R.C. Gupta, Advocate

 

 

Versus

 

 

Naveen Kumar son of Shri Har Narayan, resident of House No.1302, Gali No.1, Sidharth Nagar, Panipat, Haryana.

…..Respondent

Through counsel Mr. I.S. Pabla, Advocate

 

CORAM:    S.P. Sood, Judicial Member.

                   S.C. Kaushik, Member.

 

Present:-    Mr. R.C. Gupta, Advocate for the appellant.

                   Mr. I.S. Pabla, Advocate for the respondent.

                  

O R D E R

S.P. Sood, Judicial Member:

 

                    The brief facts giving rise for disposal of the present case are that the complainant had purchased an insurance policy for his vehicle Tavera bearing No.HR-06-AG-7093 from the opposite party with IDV of Rs.3,64,000/-. On 20.06.2016, the said vehicle met with an accident due to rash and negligent act of driving another vehicle truck without blowing horn. In fact the said offending truck was turned all of a sudden towards the complainant’s vehicle with the result his vehicle crashed into the said truck and got extensively damaged. Thereafter, the complainant approached OPs and lodged his claim while submitting all the requisite documents with the OPs. But the OPs vide letter dated 31.03.2017 rejected the claim. Faced with this, the complainant requested the OPs several times for settlement of his claim but the OP flatly refused to consider it sympathetically. Further it was submitted that complainant had also filed an application under Section 22 C of the Legal Service Authority Act, 1987 before the Permanent Lok Adalat but still OPs refused to settle the matter amicably and so the application could not be decided on merits so in this view of the matter, complainant withdrew the same. Hence, there being deficieny in service on the part of OP, so this complaint.  

2.                Notice of the complaint was issued to the opposite party, when they appeared and filed written version raising following and raised preliminary objections about jurisdiction of the forum to entertain the present complaint, complaint being not maintainable, lack of locus standi, mis joinder and non joinder for necessary parties etc. On merits, it was submitted that on receipt of intimation regarding the accident of vehicle in question, the surveyor was deputed and the accidental vehicle was inspected. On perusal of documents and FIR, it was revealed that 10 persons were travelling in the vehicle in question at the time of accident whereas the seating capacity of the vehicle as per registration certificate was only seven, which is clear violation of rules and regulations of Motor Vehicle Act and also violation of terms and conditions of the insurance policy. Therefore as the complainant has breached the rules and regulations of Motor Vehicle Act and that of various terms and conditions of the insurance policy, hence the claim of complainant was not payable and was this rejected. Hence, there was no deficiency in service on the part of opposite party complaint deserves dismissal.  

3.               The District Commission, Kurukshetra after taking into consideration all the material available on record allowed the complainant vide order dated 27.03.2019, whereby it held as under:

          “We allow the present complaint and direct the opposite party to pay the insured amount of Rs.3,64,000/- to the complainant within a period of 45 days from the date of receipt of copy of this order, failing which the complainant will be entitled to interest @9% per annum from the date of order till actual realization. We also direct the OP to further pay a sum of Rs.5000/- as compensation for harassment including litigation expenses to the complainant. The complainant will complete all the required formalities for transfer of vehicle in favour of OP.”

 

4.                Feeling aggrieved by the order of learned District Commission, Kurukshetra, OP-appellant has preferred this appeal before the State Commission.

5.                The arguments have been advanced by Mr. R.C. Gupta, Advocate for the appellant and by Mr. I.S. Pabla, Advocate for the respondent. With their kind assistance entire appeal record has been properly perused and examined.

6.                Undisputedly, the vehicle of complainant was insured with the opposite party for a period from 05.08.2015 to 04.08.2016 for a sum insured of Rs.3,64,000/- (Ex.R-6). It is also admitted that the vehicle in question met with an accident on 19.06.2016 and got totally damaged. The claim lodged by the complainant was rejected by OP vide letter dated 31.03.2017 (Ex.C3) on the ground that ten occupants were travelling at the time of accident whereas seating capacity as per R.C. is seven which was clear violation of rules and regulations of Motor Vehicle Act and that of terms and conditions of insurance policy as well. But the opposite party has not produced on record any document/evidence to prove their plea that the accident occurred due to overloading of passengers in the vehicle. In case insurance company would have led any evidence to show that the excess or extra passengers traveling in the vehicle of complainant played any role or the same was in itself responsible for its driver to have lost his control and thus ended up crashing into the offending truck. It is a matter of common experience, insurance companies often repudiate claims on ground of ‘non-disclosure of material information’ by the consumer. However, they conveniently forget that there is an even greater statutory obligation cast on them to give full information to the consumer about the products they sell.

          The responsibilities of the insurer towards full disclosure is even more because (a) the Insurance Regulatory and Development Authority’s (IRDA) Regulation on the protection of Policyholders’ Interests’ specifically mandates this and (b) the contracts of insurance, which are ‘Adhesion Contracts’ or ‘Standard Form Contracts’ are drawn up unilaterally by the dominant party-the insurer. The consumer, being the weaker party has no bargaining power, nor knowledge of the terms of the contract. So, the apex court has often said that these contracts, therefore, demand a very high degree of fairness, good faith and disclousure on the part of the insurer.

          Here are two cases where the Supreme Court has reminded insurers of their obligation in this regard and warned them against violations. The two cases also show-case the kind of unfair practices indulged in by insurers.

          In Texco Marketing Pvt. Ltd. Vs TATA AIG General Insurance (CA No. 8249 of 2022, date of judgment: November, 9, 2022), for example the insurance company insured after due inspection, a shop loacated in a basement under the Standard Fire and Special Perils Policy, despite the fact that the policy specifically excluded basements. Subsequently, following a fire, when the policyholder made a claim, the insurer repudiated it on the basis of the exclusion clause!

          While ruling in favour of the consumer, the apex court observed that first and foremost, the insurer did not bring the exclusion clause to the notice of the consumer. And then, despite having knowledge of the exclusion clause, it insured the basement and received the premium benefits. After this, repudiating the policyholder’s claim on the basis of the exclusion clause was certainly an unfair trade practice. “This view is fortified by the finding that the exclusion clause is an unfair term, going against the very object of the contract, making it otherwise un-executable from its inception,” the apex court said.

          Some of the observations of the court in this case would go a long way in upholding the rights of the policyholders. For example, the court made it clear that an exclusion clause, if not brought to the notice of the consumer by the insurer or agent, would not be binding on the consumer. Similarly, an unfair term in an insurance contact would be un-executable. The Supreme Court also reminded insurers that an exclusion clause “is not a leverage or safeguard for the insurer, but is meant to be pressed into service on a contingency, being a contract of speculation”.

          Said the court: “Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of IRDA Regulation, 2022. Any non-compliance on the part of the insurance companies would take away their right to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder”.

7.                In view of the abovementioned facts and circumstances, we do not find any substance in the pleadings of the appellant. The learned District Commission has rightly allowed the complaint of the complainant. The State Commission finds no reason or grounds to interfere with the order of learned District Commission. Hence, the appeal being devoid of merits, stands dismissed.

8.                Application(s) pending, if any, stand disposed of in terms of the aforesaid Order.

9.                A copy of this order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The Order be uploaded forthwith on the website of the commission for the perusal of the parties.

10.              Statutory amount of Rs.25,000/- deposited at the time of filing of present appeal be released in favour of the complainant/respondent against proper receipt and identification after expiry of the period of filing appeal/revision, if any.

11.              File be consigned to records.

 

Pronounced on 17.03.2023

 

 

                                                                                                S.P.Sood

                                                                                                Judicial Member

                                                                                                Addl. Bench

 

                                                                                               

                                                                                                S.C. Kaushik

                                                                                                Member

Pvt. Secy.                                                                                  Addl. Bench