National Commission upheld decision of insurer since insured wrongly claimed no claim bonus

ASHOK KUMAR VS NATIONAL INSURANCE CO. LTD
DATED: 7TH FEBRUARY, 2020
NATIONAL CONSUMER DISPUTE RESOLUTION COMMISSION
HELD THAT- Hon’ble National Commission upheld decision of the insurer, since insured wrongly claimed No Claim Bonus.
SECTION 21 OF -THE CONSUMER PROTECTION ACT, 1986

Jurisdiction of the National Commission.—Subject to the other provisions of this Act, the National Commission shall have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds 1[rupees one crore]; and
(ii) appeals against the orders of any State Commission; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

BRIEF FACTS

1. This Revision Petition has been filed under Section 21(b) of The Consumer Protection Act, 1986, hereinafter referred to as the 'Act', challenging the Order dated 25.08.2014 of The State Consumer Disputes Redressal Commission, Punjab, hereinafter referred to as the 'State Commission', in F.A. No. 984 of 2013 arising out of the Order dated 16.07.2013 in C.C. No. 74 of 2013 passed by The District Consumer Disputes Redressal Forum, Hoshiarpur, hereinafter referred to as the 'District Forum'.

2. Heard learned Counsel for the Complainant and the Insurance Co., and perused the record including inter alia the Order dated 16.07.2013 of the District Forum, the impugned Order dated 25.08.2014 of the State Commission and the Memorandum of Petition.

3. The dispute relates to repudiation of an accident claim on the insured vehicle.

4. The District Forum, vide its Order dated 16.07.2013, partly allowed the Complaint. However, the State Commission, vide its impugned Order dated 25.08.2014, allowed the Appeal and dismissed the Complaint.

5. It is admitted, and not disputed, that 20% No Claim Bonus (NCB) on the premium was taken by the Complainant while renewing his insurance policy; the Complainant made an explicit and unequivocal declaration to the effect that no claim had arisen in the previous policy year; on inquiry, however, it was subsequently detected by the Insurance Co. that he had taken a claim of Rs.3471/- in the previous policy year and as such he was not entitled for the said 20% No Claim Bonus for the next policy year.

6. The contention raised in arguments that the NCB Declaration was signed by the Complainant on the say-so of the agent is not tenable. An NCB Declaration has pecuniary implications, it has to be signed truthfully, with eyes open.

7. The State Commission has rightly observed in para 9/10 of its Order that:

THE NCDRC DECISION

8. We have heard the counsel for the parties.

9. It is an admitted fact that the complainant had taken the policy for the period from 31.03.2012 to 30.03.2013 and previous year policy was also taken from the appellant company. He had taken the claim during the previous year amounting to Rs.3471/- regarding claim No. of taking the policy he received no claim bonus to which he was not entitled. He had further given wrong declaration in the proposal form which is on record as Ex. OP-6 which reads as under:-

NCB Declaration Declare that Rate of N.C.B. claimed by me/us is correct and that no claim has arisen in the policy period. I/We further undertake that if this Declaration is found to be incorrect, benefits under the policy in respect of Section 1 of the policy will stand forfeited.

This declaration was found to be incorrect and as per section 1 of the policy, it will stand forfeited.(emphasis supplied)

10. Another contention raised in arguments that the Complainant, then, subsequently, paid the requisite amount of Rs. 2,119/- as additional premium to keep his policy valid is also not tenable. On the relevant date, i.e. on the date of the accident, the policy suffered from the infirmities of concealment of the material fact of a claim having been taken in the previous year and of an untruthful NCB Declaration. Moreover, in the letter dated 17.01.2013 from the Insurance Co. it was clearly communicated to the Complainant that "You have further agreed that in the event of declaration having been found false or there is any suppression/concealment of any fact the insurance contract pertaining to the said vehicle shall be void and will no have any effect and all rights to recover there, in respect of past or future claims shall be forfeited" and "Moreover your said policy is valid upto 30-03-2013 and there may be possibility of loss in future. So, deposit NCB being short premium to make contract valid for future. (emphasis supplied)". On payment of the deficit premium, the policy was to be made valid prospectively, "for future".

11. The State Commission has rightly observed in para 10 of its Order that:

A reference has been made to the letter dated 17.01.2013 Ex. OP-1 vide which the complainant was asked to give the explanation why he had given the wrong declaration and claimed 20% no claim bonus and he was further asked that his policy is valid upto 30.03.2013 and that there may be possibility of loss in future. So deposit NCB being short premium to make contract valid in future. In the case the complainant returned the amount of no claim bonus, then his policy has been made valid for the remaining period. His policy from the date of inception was on the basis of wrong declaration by claiming no claim bonus in an illegal manner and accordingly his claim was repudiated. Repudiation is legal one according to the terms and conditions of the policy.- - -(emphasis supplied)

12. The District Forum erred in not appraising the evidence correctly. Specifically, it erred in not appreciating that [a] on the relevant date, i.e. on the date of the accident, the policy suffered from the infirmities of concealment of the material fact of a claim having been taken in the previous year and of an untruthful NCB Declaration, [b] the making good of the deficit premium was made only and only after the untruthful declaration was detected and [c] paying the deficit premium made the insurance policy valid prospectively, "for future", and did not in any way retrospectively condone the untruthful NCB declaration and the short payment of premium made at the time of renewal of the insurance policy.

13. The State Commission has correctly appraised the case, no jurisdictional error, or legal principle ignored, or miscarriage of justice, is visible. Its Order of 25.08.2014 calls for no interference.

14. The Revision Petition is dismissed.