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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mr. Ajit Bharihoke, Presiding Member
NEW INDIA ASSURANCE CO. LTD. - Appellant
Versus
SHINDER PAL SINGH - Respondent
Revision Petition No. 3761 of 2013 from Order dated 23.7.2013 in Mr. Appeal No. 968 of 2012 of Punjab State Consumer Disputes Redressal Commission, Chandigarh
Decided on : 22-05-2017
Insurance Claim - Consumer Dispute - Indian Motor Tariff - GR-27 - [R.P. No. 3761 of 2013] - The New India Assurance Co. Ltd. v. Shinder Pal Singh & Anr. - GR-27 of Indian Motor Tariff
Fact of the Case:
The complainant's vehicle was insured with the petitioner, and the claim was repudiated on the grounds of falsely claimed No Claim Bonus (NCB) based on a wrong declaration of the previous insurance policy. The District Forum and the State Commission allowed the complaint, directing the petitioner to pay the claim amount. The petitioner filed a revision petition challenging the orders.
Finding of the Court:
The court found that the complainant had falsely claimed NCB based on a wrong declaration of the previous insurance policy, leading to the forfeiture of all benefits under the policy. The court held that the petitioner did not commit any deficiency in repudiating the claim and allowed the revision petition, setting aside the orders of the lower courts and dismissing the complaint.
Issues: The key issue was whether the petitioner was justified in repudiating the claim on the grounds of false declaration regarding NCB, and whether the petitioner fulfilled its obligation under GR-27 of Indian Motor Tariff.
Ratio Decidendi: The court held that the complainant's false declaration regarding NCB led to the forfeiture of all benefits under the policy. The court also emphasized the importance of fulfilling the obligation under GR-27 of Indian Motor Tariff, stating that the failure to seek verification from the previous insurer within the stipulated period constituted a breach of tariff, disentitling the petitioner to repudiate the claim.
Final Decision: The revision petition was allowed, and the orders of the lower courts were set aside, dismissing the complaint. The court directed the parties to bear their own costs.
Key Points: - The insured’s false declaration of NCB led to forfeiture of all benefits under the policy. (!) (!) - GR-27 of the Indian Motor Tariff requires verification of NCB from the previous insurer within specified timelines; failure to do so constitutes a breach of tariff, disentitling the insurer to repudiate the claim. (!) (!) (!) - Larger Bench findings: if insurer fails to seek verification within the stipulated period, repudiation may be unjustified, and NCB-based relief (pro rata) may be due; but if the declaration is false, benefits can be forfeited, and the claim may be reduced proportionately. (!) (!) (!) - Final order modifies to require payment of 75% of the claim due to 25% NCB deduction, acknowledging breach but equitable adjustment. (!) (!) (!) - The case discusses whether repudiation is justified when verification was not conducted in time, and whether the insured is entitled to NCB benefits if the previous policy was cancelled for dishonor of cheque. (!) (!) (!)
ORDER
1. In R.P. No. 3761 of 2013 - The New India Assurance Co. Ltd. v. Shinder Pal Singh & Anr. arguments were heard on 10.8.2016, by the Bench comprising of Hon'ble Mr. Justice K.S. Chaudhari, Presiding Member and Hon'ble Mr. Prem Narain, Member. Judgment was dictated by Hon'ble Mr. Justice K.S. Chaudhari, Presiding Member and sent for approval of Hon'ble Mr. Prem Narain, Member on 12.8.2016. Hon'ble Mr. Prem Narain, Member dictated dissenting judgment. As Members of the Bench differed in their opinion, the matter may be placed before Hon'ble President, NCDRC under Section 20(IA)(iii) of the C.P. Act for appropriate directions. Hon'ble President referred the matter to Hon'ble Mr. Justice Ajit Bharihoke, Member. Hon'ble Mr. Justice Ajit Bharihoke, Member by order dated 1.3.201/observed that Insurance Company should have allowed insurance claim on pro rata basis, i.e., by reducing the entitlement under the claim by 20%, which amounts to Rs. 3,43,200.
In the light of judgment of 3rd Member based on larger Bench, revision petition filed by the petitioner is partly allowed and impugned order dated 23.7.2013 judgment passed by learned State Commission in Appeal No. 968 of 2012 - New India Assurance Co. Ltd. v. Shinder Pal Singh & Anr. is partly modified and OP Nos. 1 & 2 are directed to pay Rs. 3,43,200 to the complainant instead of Rs. 4,29,000 allowed by District Forum and upheld by learned State Commission.
Mr. Justice Ajit Bharihoke, Presiding Member
ORDER
The instant revision petition challenging the order of the State Commission Punjab dated 23.7.2013 came up for consideration before
Bench No. 2 comprising of Hon'ble Mr. Justice K.S. Chaudhary (Presiding Member) and Hon'ble Mr. Prem Narain, Member. The members of the Bench returned contrary findings. Hon'ble Mr. Justice K.S. Chaudhary vide his order dated 21.9.2016 allowed the revision petition and dismissed the consumer complaint. Hon'ble Mr. Prem Narain, Member vide his order dated 21.9.2016 took a contrary view and partly allowed the revision petition with the direction to the petitioner Insurance Company to pay to the complainant a sum of Rs. 2,35,950 as against Rs. 4,29,000 awarded by the Fora below.
2. In view of the contrary findings amongst the Members of Bench No. 2, Hon'ble President vide his order dated 25.9.2016 has referred the matter for third Member opinion on the following questions:
"Whether OP was right in repudiating claim of complainant on account of false declaration regarding claim of NCB in the proposal form for obtaining insurance policy
(Justice K.S. Chaudari)
Member
21.9.2016
(i) Whether in the light of GR-27 (f) of the India Motor Tariff, notwithstanding the declaration, there would be breach of tariff if the Insurance Company does not send letter for verification to the previous Insurance Company within 21 days of the issue of insurance cover.
(ii) Whether the complainant is entitled to get 55% of the insurance claim in the facts and circumstances of the instant case
(Prem Narain)
Member
21.09,2016"
3. I am not recording the facts of the case because the facts are already detailed in the respective orders passed by Hon'ble Mr. Justice K.S. Chaudhary and Hon'ble Member Mr. Prem Narain.
4. I have heard learned Counsel for the petitioner and gone through the record including the judgments delivered by the respective members. So far as respondent is concerned, nobody has appeared on his behalf. Therefore, he is proceeded ex parte.
5. It is not in dispute that the insured had taken advantage of No Claim Bonus in the form as 20% discount in the insurance premium by making false declaration in the proposal form. It is not in dispute that petitioner Insurance Company notwithstanding the mandate of GR 27 of Indian Motor Tariff did not take steps to verify the correctness of declaration regarding "No Claim Bonus" from the previous Insurance Company. The question which needs answer is whether the petitioner opposite party was right in repudiating the claim on
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