The duty of the assured to make full disclosure of material facts in an insurance contract and the consequences of concealment or misstatement in obtaining insurance benefits.

Judgment

Mr. Karamjit Singh, J.

The present civil revision petition has been filed by petitioner Insurance Company against the impugned award dated 06.05.2016 passed by the Permanent Lok Adalat (Public Utility Services), Rohtak (in short, the Permanent Lok Adalat).

2. The brief facts of the case are that respondent was registered owner of Vokswagon Polo Car No. DL-8CV-0560. On 06.11.2012 the said car met with an accident in the area of Gharaunda, District Karnal. The car being insured with the petitioner-insurance Company, it processed the case of respondent and repudiated the claim since the respondent-insured had wrongfully obtained a no claim bonus of 20% from the petitioner-insurer, whereas in fact he had already taken a claim in the previous year from another insurer and thus, respondent-insured concealed the said facts at the time of renewal of the insurance policy with the petitioner-insurer and therefore, committed breach of insurance contract.

3. The respondent being aggrieved filed petition before the Permanent Lok Adalat. The petition was contested by the insurance Company and it filed written reply wherein preliminary objection was raised that the previously the vehicle in question was insured with M/s Bajaj Allianz Insurance Company and at that time the owner lodged claim on the basis of previous insurance policy. The insured enjoyed the said claim but at the time of renewal of insurance policy with the petitioner-insurance Company, he concealed the said fact and obtained 20% ‘No Claim Bonus’ (in short, NCB), which resulted in breach of insurance policy and thus, the claim of the respondent was rightly rejected.

4. The Permanent Lok Adalat made sincere efforts for amicable settlement of the dispute between the parties but the efforts did not materialize. Then both the parties were directed to submit documents in support of their contentions. The respondent furnished photo copy of letter dated 04.03.2013, copy of report of Surveyor dated 24.01.2013, as per which the total damage was assessed as Rs.4,59,000/- and copy of insurance form. On the other hand, insurance Company placed on record copy of claim form.

5. After hearing counsel for both the parties, Permanent Lok Adalat came to the conclusion that respondent concealed fact regarding availing of claim under the previous insurance policy and the petitioner-insurance Company was negligent in verifying the said fact. Consequently, Permanent Lok Adalat directed the petitioner-insurance Company to pay Rs.2,29,500/- to the respondent to satisfy his claim and further if the respondent kept the salvage, Rs.1,00,000/- more be deducted and if salvage is given to the petitioner-insurance Company, then total amount of Rs.2,29,500/- is to be paid to the insured.

6. Being aggrieved, the petitioner-insurance Company has filed the present revision petition.

7. I have heard the counsel for the parties.

8. The counsel for the insurance Company while assailing the impugned order has argued that there is no doubt that previously the vehicle in question was insured with Bajaj Allianze Insurance Company and at that time respondent took claim under the said previous policy. It has further been contended that factum of availing claim under the previous policy was not disclosed when the policy in question was obtained by the respondent-insured. Thus, the respondent/his father made false statement in the proposal form for availing NCB and resultantly committed breach of the terms and conditions of insurance policy in question. The counsel for the petitioner has further contended that in the given circumstances the claim of the respondent was rightly repudiated by the petitioner insurance Company. It has been further contended that the impugned award is not sustainable in the eye of law. In support of his contentions, the counsel for the petitioner has placed reliance upon the decision of Hon’ble Supreme Court in Oriental Insurance Company Limited Vs. Mahendra Constructions 2019(3) RCR (Civil) 85