CONSUMER DISPUTES REDRESSAL COMMISSION – X
GOVERNMENT OF N.C.T. OF DELHI
Udyog Sadan, C – 22 & 23, Institutional Area
(Behind Qutub Hotel)
New Delhi – 110016
Case No.132/2016
SH. SURENDER SINGH
S/O SH. HARI SINGH
R/O VILLAGE GARHI VINODA,
TEHSIL HATHIN, DISTT. PALWAL,
HAVING OFFICE/ WORKS IN THE NAME AND STYLE
M/S. NEW RAWAT TEMPO SERVICE JAJROO MOUR
G.T. ROAD JHARSENTIL FARIDABAD,
DISTT. FARIDABAD …..COMPLAINANT
Vs.
- M/S. TATA AIG GENERAL INSURANCE COMPANY LTD.,
LOTUS TOWERS, 1ST FLOOR, COMMUNITY CENTRE,
NEW FRIENDS COLONY, NEW DELHI – 110025
THROUGH ITS AUTHORIZED REPRESENTATIVE.
- M/S LANDMARK INSURANCE BROKERS PVT. LTD.
B-53, LGF, NEW DELHI KRISHNA PARK,
VIKASPURI, NEW DELHI - 110018
THROUGH ITS AUTHORIZED REPRESENTATIVE ..…..OP
Date of Institution-26.04.2016
Date of Order- 27.03.2023
O R D E R
RITU GARODIA-MEMBER
The complaint pertains to deficiency in service on part of OP in non-payment of claim on grounds of no claim bonus taken by complainant.
The brief facts as stated in complaint are that the complainant being the owner of Mahendra Scorpio M Hawk SLC (7 STR) bearing registration No. HR-52/C-0220 had his vehicle insured from M/s Bharti Axa Insurance Company until 27.2.2014. In February 2014, the complainant alleges that he was contacted by office bearers of OP2, an insurance broker, to get his vehicle insured from OP1, the insurance company. The complainant paid an amount of Rs. 22,486/- as premium.
The said vehicle met with an accident on 19.10.2014. A complaint was made at PS, Sadar, Palwal, on 20.10.2014. The complainant informed OP1 and OP2. He found out that OP1 had deducted NCB (No claim Bonus) at the time of taking the premium. Complainant alleges that office bearer of OP2, Miss Preeti, asked the complainant to send the cheque of NCB amount. Consequently, the complainant sent a cheque dated 05.11.2014 for Rs. 3,579/- to OP2. The said cheque was returned by OP2. It is alleged that a cheque dated 24.11.2014 for Rs. 3,525.62/- was sent in the name of complainant as refund against the said policy. The complainant has not encashed the cheque. The complainant was assured by OP2 that the vehicle was comprehensively insured and all type of risks are covered.
The complainant followed up with OPs after repudiation of the claim. He also sent a legal notice dated 19.10.2015. The complainant prays for the claim amount of Rs. 7,56,160/- along with interest @ 36% per annum and Rs. 5,00,000/- towards compensation.
OP1, the insurance company, in its reply has prayed for dismissal of complaint. OP states that it has issued a policy bearing no. 015290164000 for sum insured of Rs. 7,56,160/- from 28.2.2014 to 27.2.2015. It is submitted that the complainant lodged a complaint on 19.10.2014. A surveyor was appointed and assessed the loss to the tune of Rs. 2,35,006/-.
The policy No. 0152901640 was issued to complainant with discount of 20% of NCB on the basis of declaration made by him that he has not preferred any claim in his previous policy. OP verified with the earlier insurer Bharti Axa about the veracity of the earlier claim. The said insurance company vide email dated 11.3.2014 informed OP that complainant had preferred one claim during the policy period. It is alleged that complainant has violated the policy condition No. 8 and declaration made in the proposal form. It is further alleged that the policy was cancelled vide letter dated 29.3.2014. The refund of the payment of Rs. 3525.62/- was made vide cheque dated 11.3.2014 and was sent on 25.11.2014.
It is emphasized that complainant has not denied that he has availed a claim under previous insurance policy. OP has also denied that the said vehicle was totally damaged in the accident. OP had repudiated the claim vide its letter dated 10.11.2014. OP submits that the policy was cancelled much before the registration of the complaint and the refund of premium amount has been sent to the complainant.
OP2, the insurance broker, has not filed any reply.
Complainant has filed his evidence by way of affidavit and has exhibited the following documents:-
- Original photograph is exhibited as Ex. CW-1/1.
- Copy of RC is exhibited as Ex. CW-1/2.
- Copy of Insurance Policy is exhibited as Ex. CW-1/3.
- Copy of receipt is exhibited as Ex. CW-1/4.
- Copy of Accident Claim is exhibited as Ex. CW-1/5.
- Copy of envelope is exhibited as Ex. CW-1/6.
- .Copy of Cheque is exhibited as Ex. CW-1/7.
- Copy of DD/ Cheque with envelop is exhibited as Ex. CW-1/8.
- Copy of Legal Notice and Postal receipt are exhibited as Ex. CW-1/9.
10. Copy of vehicle insurance proposal and cover note is exhibited as Ex. CW-1/10.
11.Copy of relevant documents is exhibited as Ex. CW-1/11.
The complainant in his rejoinder has specifically denied that the policy was cancelled before the registration of claim.
OP1 has filed his evidence by way of affidavit and has exhibited the following documents:-
- Surveyor Report is exhibited as Exhibit RW-1/1.
- Policy schedule is exhibited as Exhibit RW-1/2.
- E/mail dated 11.03.2014 is exhibited as Exhibit RW-1/3.
- Office copy of letter dated 29.03.2014 is exhibited as Exhibit RW-1/4.
- Office copy of letter dated 10.11.2014 of OP is exhibited as Exhibit RW-1/5.
- The terms and conditions of the insurance policy is exhibited as Exhibit RW-1/6.
The Commission has considered the rival submissions and contentions of the parties. It is admitted that complainant has got his vehicle insured by OP1 from 28.2.2014 to 27.2.2015 for IDV of Rs.7,56,160/-. Admittedly the vehicle met with an accident on 19.10.2014. Intimation was given to OP who appointed a surveyor. OP had annexed surveyor report dated 15.11.2014. The relevant portion as follows:-
As per the instructions received from the insurers, the above accidental/ damaged vehicle was carefully inspected / examined and photographed by the undersigned. The damages caused to it were minutely checked and the nature of accident was noted down. The damages allowed are fresh and in accordance with the cause & nature of accident.
OP has also annexed a letter dated 29.3.2014 that is as follows:-
With reference to the above policy we wish to inform you that the policy was issued by allowing 20% NO CLAIM BONUS based on your declaration in the proposal form/ telephonic call that you had not taken any claim in your previous policy. We have however received confirmation from the previous Insurance Company that you are not entitled for any bonus as you had lodged claim in your previous policy.
Thereafter, as per OPs own admission the refund cheque for the premium was sent on 24.11.2014 and claim was repudiated vide letter dated 10.11.2014.
Chronology of events as stated by OP are as follows:-
- Policy covered incepted on 28.2.2014.
- Cancellation of policy was vide letter dated 29.3.2014.
- Accident took place on 19.10.2014.
- Repudiation letter is dated 10.11.2014.
- Surveyor’s report on 15.11.2014.
- Cheque for refund of premium is dated 11.03.2014 but sent on 25.11.2014..
As per OPs own chronology, policy was cancelled on 29.3.2014. A claim was filed for accident dated 19.10.2014. OP immediately appointed a surveyor. If the policy was cancelled on 29.3.2014, the need to appoint a surveyor should not have arisen. Even the cheque for the refund of premium is dated 11.03.2014 which was sent vide a cover letter dated 25.11.2014 which was after date of replication i.e. 10.11.2014. It is not clear as to why this effort was made by OP on a policy which was cancelled way back in March, 2014. Moreover, no proof of service of the letter dated 29.3.2014 informing the complainant of cancellation of policy has been placed on record. It can be inferred that the policy was allegedly cancelled belatedly and premium was refunded only after claim was filed.
The Hon’ble Supreme Court of India in Gokul Chand (D) Thr. Lrs. Vs. Axis Bank Ltd. & Anr. I(2023) CPJ 5 (SC) has observed that “Thus, premium was accepted and retained for the life insurance and no change of this position was found necessary even after the tread mill test result of the insured This entire procedure would suggest, at least from the insurer’s perspective, that the insurance process was complete & all mandatory requirements were met. Significantly, there was no contrary communication by the respondent No. 2 indicating otherwise as well. Moreover, when the death information was conveyed to the respondents, most surprisingly, that was the trigger that led to the insurance company to issue a back dated letter deferring the insurance process, which was followed by refund of the premium a few days later, and then the repudiation after that. ”
Even if the complainant has concealed the fact of having taken claim from previous insurance and has paid lesser premium to OP, the issue for determination is whether the insurance is liable to pay the claim of the Complainant despite the fact that complainant has concealed the fact of having taken claim from the previous insurance or whether the OP was justified in repudiating the claim in toto.
Hon’ble National Commission in Anjani Gupta V/s Future General Insurance decided on 12.12.2017 has observed as under:
“4. The legal issue involved in this petition is no more res-integra the same having already been decided by a Three-Members Bench of this Commission in RP No.1836 of 2016, Branch Manager, National Insurance Company Ltd. Vs. Naresh Kumar decided on 20.02.2017. The Three-Members Bench took the following view in the above referred matter:
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's 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 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."
Thus, it is clear that if no claim bonus is wrongfully/fraudulently taken by the insured, the Complainant is entitled to reimbursement of the loss subject to the proportional reduction in the claim. Since, ‘no claim bonus’ was availed by the Complainant @ of 20%, the amount payable is also reduced by 20%.
The photographs annexed with the complaint shows the vehicle is totally damaged. OP has not made any statement to contrary regarding the damage caused to the vehicle or denied the photographs filed by the complainant. Accordingly the Commission is of the opinion that there is deficiency of service on the part of OP in rejecting the claim in toto, and accordingly OP is directed to pay:
- IDV of Rs. 7,56,160/- after deducting 20%.
- To pay interest @9 p.a. on the reduced amount from the date of filing claim till realization.
- To pay an amount of Rs.25,000/- as compensation for mental harassment, physical inconveniences including of litigation expenses.
This order be complied with within 30 days from the date of uploading of order failing which it will carry an interest of @12% p.a. from the date of order to till payment.
File be consigned to Record Room.
