NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
R.K. Agrawal, President and Dr. S.M. Kantikar, Member
M/s. Anjaneya Jewellery – Complainant
versus
New India Assurance Co. Ltd. and Ors. – Opp. Parties
Consumer Case No.1094 of 2018
Decided on 21.9.2021

IMPORTANT POINTS
1) Fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know.
2) No material on Record to establish that the Opp. Party Insurance Co. had given Terms and Conditions of the Special Package Insurance Policy at any point of time or ever informed the Complainant.
3) Exclusion Clause on the basis of which the Opp. Party Insurance Co. had repudiated the Insurance Claim cannot be sustained.

Headnote:

Consumer Protection Act, 1986 – Section 12(1)(a) [Section 35(1)(a) – Consumer Protection Act, 2019] – Complaint before NCDRC – Complainant approached Opp. Party Insurance Company for obtaining Insurance Cover for protection of the Jewellery Articles during the US tour period - Insurance Officials filled the Proposal Form for ‘the Special Contingency Insurance Policy’ and obtained the Complainant’s signature, received the premium of Rs.2,49,159/- for issuing Insurance Policy having a sum assured of Rs.8,74,24,110/- - Complainant kept the jewellery in 4 suitcases, put suitcases in a self-driven Rented Car, locked it and parked the Car - Alleged that 3 suitcases out of 4 were stolen from the car by breaking car’s rear glass - Incident reported to the local Police at Irving TX, USA, FIR registered - Opp. Party also informed - Alleging Deficiency in Service and Unfair Trade Practice on part of the Opp. Party, Complainant filed consumer complaint before this Commission – Arguments heard – Findings of this Commission: No difference between a contract of Insurance and any other Contract, and that it should be construed strictly without adding or deleting anything from the terms thereof -Fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know - No material on Record to establish that the Opp. Party Insurance Co. had given Terms and Conditions of the Special Package Insurance Policy at any point of time or ever informed the Complainant - Exclusion Clause on the basis of which the Opp. Party Insurance Co. had repudiated the Insurance Claim cannot be sustained - Repudiation letter is set aside - Deficiency in Service by Opp. Party Insurance Co. in repudiating genuine claim of the Complainant and also not providing the Surveyor’s Report within stipulated time.

Held: From the aforesaid decisions of the Hon’ble Supreme Court, the following two Principles emerge:-

(i) There is no difference between a contract of Insurance and any other Contract, and that it should be construed strictly without adding or deleting anything from the terms thereof.

(ii) It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since the obligation of good faith applies to both equally. If the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the Contract of insurance nor disclosed to the Insured, the Insurance Company cannot claim benefit of the said Exclusion Clause.

Applying the Principles laid down by the Hon’ble Supreme Court referred to above, to the facts of the present case, we find that there is no material on Record to establish that the Opposite Party Insurance Company had given the Terms and Conditions of the Special Package Insurance Policy or at any point of time or ever informed the Complainant about the same. Thus, the Exclusion Clause on the basis of which the Opposite Party Insurance Company had repudiated the Insurance Claim of the Complainant, cannot be sustained as the Opposite Party Insurance Company could not rely upon the same. The Repudiation letter is, therefore, set aside. There had been Deficient in Service by the Opposite Party Insurance Company in repudiating the genuine claim of the Complainant and also not providing the Surveyor’s Report within the stipulated time. In view of the foregoing discussions we are of the considered view that the Complainant is entitled to the full Claim of Insurance made for the theft of the Jewellery items. Therefore, the Opposite Party Insurance Company is directed to pay the Claim amount of Rs.5,30,80,617/- to the Complainant alongwith interest @12% p.a. from the date of filing of the Claim till the date of payment. (Paras 25 & 26)

Result: Complaint allowed with costs of Rs.5 lakhs, which the Opp. Party Insurance Co. shall pay to the Complainant. Complainant is entitled to full Claim of Insurance made for the theft of the Jewellery items. Opp. Party Insurance Co. is directed to pay the Claim amt. of Rs.5,30,80,617/- to the Complainant alongwith interest @12% p.a.