AI Structured Summary
Not yet generated for this judgment
Judgment
Aggrieved by the order dated 19-03-2015 of the Maharashtra State Consumer Disputes Redressal Commission, Circuit Bench at Aurangabad (for short, the State Commission) the petitioner-insurance company has filed this revision petition.
Brief facts are that the petitioner had insured the truck No.MH-26H-7426 of the respondent for Rs.10,37,400/- valid from 10-05-2010 to 09-05-2011. On 15-05-2010 cotton was loaded on the truck and the driver found that the truck had got fire and was totally burnt. Surveyor was appointed by the insurance company. The insurance company repudiated the claim on 13-07-2010 on the ground that the complainant had given wrong information in connection with No Claim Bonus (NCB). The complainant lodged a consumer complaint before the Nanded District Consumer Disputes Redressal Forum (for short, the District Forum) which allowed the complaint vide its order dated 16-05-2012 as under: "1. Complaint of the applicant is partly allowed.
The non-applicant No.1 shall pay amount of compensation as per policy risk of the burnt truck of Rs.10,37,400/- within 30 days from the date of this order from denial of claim i.e. from 31-07-2010 @ 9% per annum.
The non-applicant No.1 shall also pay Rs.15,000/- to the complainant towards mental harassment and for providing defective services as well as Rs.3,000/- towards cost of application, within time limit.
Copies of the order be made available to the parties, free of cost."
Aggrieved with the order dated 16-05-2012 of the District Forum the petitioner preferred an appeal before the State Commission which was dismissed vide its order dated 19-03-2015.
Hence, this revision petition.
Heard the learned counsel for both the parties and perused the records carefully.
The learned counsel for the petitioner points out that in the proposal form while replying to point No.25(G) the complainant has given no information and has left this column blank and cut by two lines. This information relates to claims lodged during preceding three years. Similarly at point No.18 of this proposal form the insured had not clearly ticked either ''yes'' or ''no'' purposely creating an ambiguity. The insured has also signed a declaration which reads as under: "I/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."
The learned counsel stated that signing of this declaration means that he has not claimed any amount of insurance within the validity of the previous policy. The previous insurer has confirmed that the complainant is not entitled to NCB and that he has lodged a claim with the previous insurer. Thus, he has given a wrong declaration. Based on this declaration only, the insurance company has given a rebate of 25% in the premium. This declaration clearly states that if the declaration is found to be incorrect, no benefit under Section 1 of the policy shall accrue to the insured. Thus, the repudiation was totally in order. However, both the fora below have not critically examined this issue and have given wrong findings. The learned counsel also states that a policy is a contract based on trust and in the present case the trust was not sustainable as the insured had given wrong information and declaration. The learned counsel also stated that a show cause notice was issued to the complainant on 31-07-2010 wherein all the details of his previous claim were given and he was asked to explain why this information was not shared in the proposal form. The complainant did not reply to this letter whereas the reply was sought within three days. Because the insurance company did not receive any reply or explanation from the complainant, there was no alternative but to issue a final letter of repudiation which was issued on 06-09-2010.
The learned counsel for the respondent stated that the proposal form was filled by the agent and it was only signed by the insured/complainant. The agent get signature on all the papers and accordingly the complainant also signed all the papers presented to him by the agent. He argued that the State Commission has relied on this aspect that the proposal forms are mostly filled by the agents and therefore the complainant cannot be allowed to suffer on this account. Coming to the proposal form, the learned counsel mentioned that there was a tick mark below the ''No'' column against the item No.18 which asked entitlement for NCB. Thus, the complainant has never said that he was entitled for NCB. Accordingly he has kept the column 25(G) also blank. In respect of declaration regarding NCB, the learned counsel stated that the complainant has only signed the papers given by the agent treating it as some kind of a necessary form. It was not sure whether he understood the meaning. Both the fora below have given concurrent findings based on the facts and circumstances of the case. The claim has been rightly allowed.
I have carefully considered the arguments advanced by both the learned counsel and have gone through the records. It is seen from the proposal form that no clear answer has been given for point No.18 which seeks information about entitlement of NCB. If I treat this information as claimed by the learned counsel for the respondent, then it goes against the facts as mentioned in the show cause notice which was not replied by the complainant. Even during the arguments before this Commission, the learned counsel did not counter the arguments advanced by the learned counsel for the petitioner in this regard. There is no denying the fact that the declaration in respect of NCB has been signed by the complainant which clearly states that no claim was arisen in the expiring policy period. Moreover there is no force in the argument of the learned counsel for the respondent that the proposal form was filled up by the agent and the complainant has only signed it. It is not clear whether the complainant has filed any case against the agent also for deficiency in service or any other case. The complainant has left column 25(G) blank and did not supply the information in respect of his previous claim that was preferred under the previous policy. The declaration in respect of NCB signed by the complainant clearly states that if the information is found to be incorrect, no benefit under Section 1 of the policy shall accrue to the insured.
The Hon''ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd., 2010 4 SCC 536 has given a guideline to the insurance companies that if there is some lacuna in the proposal form the insurance claim relating to motor vehicles should be settled on non-standard basis after deducting a percentage of the insured amount. In most of the cases, such percentage has been 25%. In the present case it is clear that the vehicle was insured and a premium was also paid which was 25% less than the normal premium because the insurance company had given the benefit of NCB to the insured. There is also no dispute that the vehicle got damaged due to fire during the currency of the policy. To nullify the effect of the misinformation given in the proposal form and following guideline given by the Hon''ble Supreme Court in Amalendu Sahoo''s case , I am of the view that the insurance company should allow the claim by first reducing it by 25% and then by further reducing it by another 25% because of 25% less premium paid by the insured/complainant. Thus, in the present case interest of justice would be served if insurance company indemnifies the complainant with 50% of the insured amount.
Based on the above discussion, I partly allow the revision petition and direct the petitioner-insurance company to pay Rs.5,00,000/- to the complainant as insurance claim for the vehicle along with interest at the rate of 8% per annum from the date of order of the District Forum i.e. 16-05-2012 till the date of actual payment. Order dated 19-03-2015 of the State Commission and order dated 16-05-2012 of the District Forum stand modified accordingly. This order be complied within a period of 45 days failing which the petitioner/insurance company shall be liable to pay interest on the awarded amount at the rate of 12% per annum from the date of this order till actual payment.
No order as to cost for this revision petition.