Sham Sunder (Retd.), President:
1. This appeal is directed against the order dated 07.10.2013, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant).
2. The facts, in brief, are that the complainant purchased Ford Fiesta (Diesel) car bearing No.CH-03-Y-9156 in 2006. It was stated that since 2009, the said car had been got insured continuously, from the Opposite Party, vide Policies, copies whereof are Annexures P-1 to P-4, for the period from 20.10.2009 to 19.10.2010, 20.10.2010 to 19.10.2011, 20.10.2011 to 19.10.2012 and 20.10.2012 to 19.10.2013, respectively. All the aforesaid Insurance Policies were taken through M/s Saluja Motors Pvt. Ltd., a Ford cars dealer, Chandigarh, which was in tie-up with the Opposite Party, for the purpose of making insurance of vehicles.
3. It was further stated that, on 30.04.2013, the complainant was on way to his house, in the aforesaid car, and when he reached near the railway crossing, in Manimajra, he saw smoke coming out of the same. The complainant stopped the car and came out of it. By that time, the whole car was on fire. He called the fire brigade, but by that time the said car was extensively burnt. Copy of the Fire Occurrence Report No.CFO/2013/215 dated 07.05.2013 Annexure P-5, was issued by the Chief Fire Officer, Fire and Emergency Services, of the Municipal Corporation, Chandigarh. Report of the said incident was also given to the Police Station, Manimajra, as a result whereof, DDR No.45 dated 30.04.2013“Annexure P-6, was lodged. Intimation with regard to the incident was also given to the Opposite Party, on the same day. The Opposite Party, deputed Sh.K.K.Taneja, Automobile Engineer, Surveyor and Loss Assessor, to conduct the spot survey of the damaged/burnt car. Sh.K.K.Taneja, Automobile Engineer, Surveyor and Loss Assessor, visited the site and took photographs. He also checked registration of the car and driving licence of the complainant. On the basis of survey carried out by the said Surveyor and Loss Assessor, Motor Spot Survey Report No.KKT. 0060513 dated 08.05.2013, was issued by him. Sh.K.K.Taneja, Automobile Engineer, Surveyor and Loss Assessor, confirmed the cause of fire, as short circuit of wiring. After the spot survey, the complainant shifted/towed the car to the workshop of M/s Saluja Motors Pvt. Ltd., Phase II, Industrial Area, Chandigarh, for repairs.
4. It was further stated that an estimate for the repair of car prepared by the dealer, copy of the DDR and report of the fire brigade were submitted to M/s Indemnity Consultancy Bureau, Surveyor and Loss Assessor (Motor, MBD, Fire), appointed by the Opposite Party, to assess the loss. The said Surveyor and Loss Assessor (Motor, MBD, Fire), made assessment for the repair of car, to the tune of Rs.2,29,205/-, after deducting the applicable depreciation, and excess Clause, in its report dated 10.05.2013. However, the said Surveyor and Loss Assessor (Motor, MBD, Fire), had recommended for settlement, on total loss basis, to the tune of Rs.2,04,150/- (i.e. Rs.2,54,150/- minus (-) Rs.50,000/- on account of salvage). The Senior Divisional Manager of the Opposite Party, vide registered letter dated 05.06.2013, copy whereof is Annexure P-11, repudiated the claim of the complainant. After receipt of the repudiation letter, the complainant met the Senior Divisional Manager of the Opposite Party, at NAC Manimajra and explained him that all the four Policies had been issued by the Opposite Party, which were renewed without any break, and the renewal notices were required to be issued, as per the India Motor Tariff, as well as Insurance Regulatory and Development Authority (IRDA), confirming the no claim bonus, and the premium chargeable, for the renewal of the Policy, which were not issued by it (Opposite Party). He was also explained that the complainant could not be penalized for any act done by the Opposite Party, in mentioning the rate of no claim bonus, in the alleged proposal form. The complainant also gave representation dated 13.06.2012 “ Annexure P-12, to the Senior Divisional Manager, in that regard, but to no avail.
5. It was further stated that repudiation of the genuine claim of the complainant, on the ground, that he had made a wrong declaration to the effect that the rate of no claim bonus, claimed by him, was correct, and that no claim had arisen, in the expiring policy period, was illegal and arbitrary. It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Party, to pay the claim amount, to the tune of Rs.2,54,150/-, assessed by the Surveyor and Loss Assessor (Motor, MBD, Fire), on total loss basis, of the vehicle, in question, alongwith interest @12% p.a., from the date of incident, till realization; and compensation, to the tune of Rs.50,000/- for mental agony, physical harassment, deficiency, in rendering service, and adopting unfair trade practices.
6. The Opposite Party, in its written version, pleaded that the complaint was bad for jon-joinder of necessary parties i.e. M/s Saluja Motors Pvt. Ltd., 149, Industrial Area II, Chandigarh and East Coast Chambers, 92, Gn Chetty Road, Chennai, Tamil Nadu-600017. It was further pleaded that the Opposite Party only provided service to the complainant, being a local office, on behalf of its Chennai Office. It was admitted that the vehicle of the complainant, was insured with the Opposite Party, for the period from 20.10.2009 to 19.10.2010, 20.10.2010 to 19.10.2011, 20.10.2011 to 19.10.2012. It was stated that the Policy, in dispute, for the period from 20.10.2012 to 19.10.2013, for the Insured Declared Value Rs.2,55,150/-, was not got renewed, from the Opposite Party, whereas, on the other hand, the same was taken from different office. It was admitted that the vehicle, in question, was insured with the Opposite Party, continuously from 20.10.2009. It was also admitted that the Surveyor and Loss Assessor, assessed the loss, on repair basis, to the tune of Rs.2,29,205/-, and, on total loss basis, to the tune of Rs.2,04,150/-. It was further stated the complainant was very well aware of the internal system of the Opposite Party, and that was why, to avoid the correct premium amount, and to take undue benefit of no claim bonus, took the Policy, in dispute, from a different office. It was further stated that the complainant knew that if the Policy was renewed, there was no necessity of completing the proposal form, but still he did the same, and gave a declaration that he was entitled to 25% no claim bonus, knowing fully well that he was not entitled to the same, because in the previous year, he had taken a claim. It was further stated that the complainant signed the proposal form, in English, and it was simply not acceptable that he did the same, without understanding its contents. It was further stated that, as per the Broker Regulations, issued by the IRDA, the broker was considered to be the Agent of the insured and not of the insurer. It was further stated that the complainant had wrongly declared that he had not taken any claim, in the previous policy, whereas, he had taken the claim of Rs.21,009/-, vide claim payment voucher Annexure R-4. It was further stated that, thus, the complainant had approached the Forum with unclean hands, and, as such, was not entitled to any relief. It was further stated that the claim of the complainant was legally and validly repudiated by the Opposite Party. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
7. In the rejoinder, filed by the complainant, he reasserted all the averments, contained in the complaint, and repudiated those, contained in the written version of the Opposite Party. The complainant also stated that he was told by an official of the Opposite Party that no declaration with regard to no claim bonus was required, as per the General Regulation 27 of India Motor Tariff.
8. The Parties led evidence, in support of their case.
9. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, dismissed the complaint, as stated above.
10. Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.
11. We have heard the Counsel for the parties, and, have gone through the evidence, and record of the case, carefully.
12. The Counsel for the appellant/complainant, submitted that since the Policies had been continuously obtained, from the Opposite Party, it was for it, to confirm, as per GR 27 of India Motor Tariff, from the office, which had issued the same, as to whether, the complainant had obtained any claim, in respect of any previous Policy, or not. He further submitted that since the Opposite Party, failed to comply with the provisions of Clause 2(f) of GR 27 of the India Motor Tariff, it could not repudiate the claim of the complainant, legally and validly, on the ground, that he (complainant) claimed no claim bonus, by making a wrong declaration, in the proposal form, in respect of the Policy, for the period from 20.10.2012 to 19.10.2013. He further submitted that, in the alternative, if the District Forum came to the conclusion, that there was fault, on the part of the complainant, as also the Opposite Party, then the claim could be settled on non-standard basis, but the complaint could not be dismissed, as a whole. He further submitted that the order of the District Forum, being illegal and invalid, is liable to be set aside.
13. On the other hand, the Counsel for the respondent/Opposite Party, submitted that the complainant, at the time of signing the proposal form, copy whereof is Annexure R-3, in clear-cut terms declared that the rate of 25% no claim bonus claimed by him, was correct, and no claim had arisen, in the expiring Policy. He further submitted that such declaration, which was made by the complainant, in the proposal form was false to his knowledge, as he had already obtained claim, during the period of previous Policy. He further submitted that, under these circumstances, the complainant breached the terms and conditions of the Policy, and, as such, he was not entitled to any relief. He further submitted that the respondent/Opposite Party was legally right, in repudiating the claim of the complainant. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.
14. Annexure P-1, is a copy of the Policy bearing No.35300031090100200742, issued by the New India Assurance Company Limited/Opposite Party, DO-Manimajra (353000), SCO-804, NAC, Manimajra, Chandigarh, for the period from 20.10.2009 to 19.10.2010, in respect of the vehicle, in question. Annexure P-2, is another copy of the Policy bearing No. 35300031100100006688, for the period from 20.10.2010 to 19.10.2011, issued by the Opposite Party, with address as DO-Manimajra (353000), SCO-804, NAC, Manimajra, Chandigarh, as the stamp of this office is affixed, in photo-impression, on this document. Annexure P-3 is another copy of the Policy bearing No. 35300031110100006797, for the period from 20.10.2011 to 19.10.2012, issued by the Opposite Party. The address of the issuing office, on this document is also written as DO-Manimajra (353000), SCO-804, NAC, Manimajra, Chandigarh, Manimajra, Chandigarh-160101. Annexure P-4 is a copy of another Policy No.71050131120100005561 (i.e. the Policy, in dispute), for the period from 20.10.2012 to 19.10.2013, obtained from M/s Saluja Motors Pvt. Ltd. an Agent of the insurer. On this Policy, stamp of the issuing office, as Divisional Office-353000 (Manimajra), SCO-804, N.A.C., Manimajra, Chandigarh, (U.T.)-160101, was affixed. From the aforesaid Policies, it is evident, that the same were obtained by the complainant, in respect of the vehicle, in question, for different periods, from the Opposite Party. It is, therefore, held that all the Policies were issued by the Opposite Party, with address as DO-Manimajra (353000), SCO-804, NAC, Manimajra, Chandigarh.
15. No doubt, according to the proposal form Annexure R-3, which was signed by the complainant, he stated that the rate of NCB of 25% claimed by him, was correct, and no claim had arisen, in the expiring Policy period. This declaration, was certainly wrong, as in the Policy of the previous year, the complainant had obtained the claim. To this extent, the complainant made a wrong statement. However, at the same time, it was the duty of the Opposite Party, according to Clause (f) of GR 27 of India Motor Tariff, which is extracted hereunder, to confirm from the Policy issuing Office, in respect of the previous Policies, as to whether, any claim had been obtained by the complainant or not:-
œ(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 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:
œI/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 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.?
16. It is evident from the afore-extracted Clause (f) of G.R.27 of India Motor Tariff that the insurer was also duty bound to write to the previous insurer, within 21 days, after granting the cover for confirmation of the entitlement and rate of NCB. Since all the Policies had been issued by the Opposite Party, in respect of the vehicle, in question, in favour of the complainant, it was its duty to obtain the information, as to whether, any claim had been obtained by the complainant, in respect of the Policy, of the previous years, within 21 days, but it failed to do so. Under these circumstances, the fault also lay, on the shoulders of the Opposite Party, in not confirming about this factum, within the specified time, stipulated in the aforesaid Clause (f) of GR 27 of India Motor Tariff. Thus, both the complainant and the Opposite Party, were at fault. As stated above, in these circumstances, by no stretch of imagination, it could be said that by repudiating the claim of the complainant, as a whole, especially when the Opposite Party was also at fault, on account of contravention of Clause (f) of GR 27 of India Motor Tariff, it was not deficient, in rendering service, to some extent
17. The next question, that falls for consideration, is, as to whether, there was breach of fundamental condition of the Policy, by the complainant. In our considered opinion, when both the complainant and the Opposite Party were at fault, to the extent, referred to above, breach of condition of the Policy, by making declaration, by the complainant, that the rate of 25% claimed by him, was correct, and no claim had arisen, in the expiring Policy period, could neither be said to be fundamental nor germane to the incident. In United India Insurance Co. Ltd. Vs. Bhupinder Singh, III 2013 CPJ 333 NC, in which reliance was placed on National Insurance Company Limited Vs. Nitin Khandelwal 2008 (3) Recent Apex judgments (R.A.J.) 581 (SC)=2008 CPJ 1 (SC)=2008 CTJ 680 (Supreme Court( (CP), the vehicle was insured. The same was stolen. The complainant wrongly claimed no claim bonus, at the time of renewal of Policy. The claim of the complainant was repudiated by the Insurance Company, as a whole. In these circumstances, in India Insurance Co. Ltd. Vs. Bhupinder Singh`s case (supra), the National Consumer Disputes Redressal Commission, New Delhi, held that the breach of condition was not germane to the theft, and hence the claim was required to be settled on non-standard basis. The principle of law, laid down, in the aforesaid cases, is fully applicable to the facts of the instant case. The Insurance Company, therefore, was required to settle the claim of the complainant, on non-standard basis. By not settling the claim of the complainant, on non-standard basis, the Opposite Party was deficient, in rendering service.
18. The Surveyor and Loss Assessor vide report Annexure R-2, assessed the loss, to the tune of Rs.2,04,150/- on total loss basis. Report of the Surveyor and Loss Assessor, is based on the cogent and convincing material and data. No evidence was produced, on the record, to rebut the report of the Surveyor and Loss Assessor. It is, no doubt, true that the report of the Surveyor is neither binding, on the parties, nor the Consumer Fora, yet it being a very significant document, cannot be discarded lightly. The appellant/ complainant, is, thus, held entitled to a sum of Rs.1,53,112.50Ps. i.e. 75% of Rs.2,04,150/- on non-standard basis.
19. The complainant has also claimed compensation, to the tune of Rs.50,000/-, in the complaint, for mental agony and physical harassment. It may be stated here, that the claim of the complainant was repudiated, on the ground, that he had made a wrong statement, to the effect, that the rate of NCB of 25% claimed by him, was correct, and no claim had arisen, in the expiring Policy period. Since, this statement was incorrect, the Opposite Party relied on the principle that the contract of insurance being based, on utmost good faith, the complainant was not entitled to any relief. There was, thus, a dispute between the parties, as to whether, the breach of such condition, by the complainant, was germane to the incident or not. Such disputed question, could only be finally decided by the Consumer Fora. Under these circumstances, the question of undergoing any mental agony and physical harassment, by the complainant, did not at all arise. The complainant/appellant is, thus, not entitled to compensation, for the alleged mental agony and physical harassment.
20. No other point, was urged, by the Counsel for the parties.
21. For the reasons recorded above, the appeal is accepted, with no order as to costs. The complaint is partly accepted, with no order as to costs, in the following manner:-
i. The respondent/Opposite Party is directed to pay a sum of Rs. Rs.1,53,112.50Ps. i.e. 75% of Rs.2,04,150/- referred to above, on non-standard basis, to the appellant/complainant,
ii. The amount mentioned in Clause (i) of paragraph 21 above, shall be paid by the respondent/Opposite Party, to the appellant/complainant, within 30 days, from the date of receipt of a certified copy of this order, failing which the said amount shall carry interest @9% P.A., from the date of filing the Consumer Complaint, till realization.
22. Certified copies of this order, be sent to the parties, free of charge.
23. The file be consigned to Record Room, after completion.