IMPORTANT POINT
Plea of fraud has to be proved by Insurance Company by impartial evidence.

Vineeta Rai, Member—New India Assurance Co. Ltd. (Appellant herein) has filed this First Appeal, being aggrieved by the order of the State Commission, which had allowed the complaint of Ganesh Prassad Singh (Respondent herein) and original complainant before the State Commission.

2. In this complaint before the State Commission, Respondent/complainant has stated that he had insured bus No. BHF-9913 of which he was the owner, with the appellant insurance company under a comprehensive scheme, in the forenoon of 04-10-1990 and had paid premium for the same on 03-10-1990 through an Agent of the appellant insurance company. The said vehicle while returning from Patna was burnt by some anti-social elements near Village Jarua at about 1.00 P.M. after the passengers had been asked to get down. He immediately lodged a complaint with the Police Station and an FIR was registered. An insurance claim was also filed with the insurance company. However, the insurance company took a view that the cover note insuring the vehicle was issued after the vehicle had already been damaged and burnt and therefore, the claim was not valid. Being aggrieved by the deficiency in service in wrongly repudiating the respondent’s/complainant’s genuine claim on the incorrect assumption that the insurance policy and cover note was obtained by misrepresenting facts after the vehicle was burnt, Respondent filed a complaint before the State Commission and requested that appellants be directed to pay him Rs. 3 lakhs along with damages.

3. Insurance company, on being served, filed a written rejoinder denying the above allegations. It was reiterated that an enquiry conducted into the matter clearly established that the cover note was fraudulently obtained by the respondent with the connivance of the Agent and some staff of the appellant insurance company after the Bus had been burnt. In this connection, it was contended that the complainant’s brother took out a copy of the cover note from the briefcase of Shri M. M. Alam, who was an officer of the insurance company without his knowledge and got it signed by the Probationary Development Officer by misrepresenting that the Development Officer was not available. In view of this fact, the claim was rightly repudiated since there was clear breach of trust by the Respondent. Apart from this, respondent has also suppressed the fact that he had earlier got this vehicle insured with the Oriental Insurance Company, which policy had also lapsed in August, 1990.

4. The State Commission, after hearing the parties and on the basis of evidence produced before it, partly allowed the complaint, observing as follows:—

“We have considered the facts stated above on behalf of both the parties and also critically analyzed their submissions and the papers on record filed by them. As stated above there is little dispute with respect to fact of the case. The only point arises for decision is whether the policy dated 04-10-90 has been obtained by the complainant by playing fraud and suppressing the material fact. Whether the occurrence of burnt of the vehicle took place earlier and the policy was obtained on the same day later, are to be scrutinized on the materials available on record. There is no dispute that cover note was issued on the same day of accident by the Insurance Company. In several decisions the Hon’ble Apex Court and the National Commission have held that when a policy is taken on a particular date its effectiveness is from the commencement of the day, therefore it should not be doubted that since any accident to the vehicle took place on the same day, therefore, the policy appears to be void and obtained by suppression of material fact, is not a valid contention to be accepted as raised on behalf of the Insurance Company. The liability to prove fraudulent act of the policy holder or suppression of the material fact lies heavily on the Insurance Company. Only circumstances that accident and insurance of the policy cover