UNITED INDIA INSURANCE COMPANY LTD Vs. RANJIT SINGH

JUDGEMENT

(1.) This judgment shall dispose of Civil Revision Nos.5786 and 6980 of 2011 and Civil Writ Petition No.18045 of 2011, as common questions of law and facts are involved in all the cases.

(2.) Briefly stated, the facts of the case are that respondent No.1- Ranjit Singh got his Indica car bearing registration No.PB-10-BW-4700, insured from the Branch Office of the petitioner company located at G.T. Road, Near Vishwakarma Chowk, Ludhiana, vide package policy bearing No.201401/31/09/01/000002576 valid from 28.10.2009 to 27.10.2010, for a sum of Rs.2,50,000/-. At the time of obtaining the aforesaid policy, respondent No.1 availed a discount i.e. 'No Claim Bonus (NCB) @ 20%, amounting to Rs.1196.70 by making a false declaration that he did not receive any claim on the aforesaid vehicle from his previous insurer during the previous policy year. But on enquiry by the insurer from the previous insurer i.e. Oriental Insurance Company Limited, seeking confirmation regarding the status of the vehicle during previous policy period, the previous insurer of respondent No.1 vide endorsement dated 21.12.2009, confirmed that one claim was reported under the previous policy period. Thus, on receipt of the aforesaid report, the petitioner company came to know that no claim bonus was received by respondent No.1 on misrepresentation. In the meantime, the insured vehicle, owned by respondent No.1 had met with an accident, qua which he again set up a claim for Rs.99,500/-, but the company rejected the claim on the ground that respondent No.1 was guilty of suppression of material facts at the time of obtaining the insurance policy in as much as, he has suppressed the fact of having received a claim during the expiring policy period, so as to secure a false 'No Claim Bonus' from the petitioner company. Having left irritated, respondent No.1 initiated proceedings before the Permanent Lok Adalat (Public Utility Services), Ludhiana-respondent No.2, seeking a direction to the petitioner company to pay a claim of Rs.2,50,000/- on account of damage to the car along with damages of Rs.1,00,000/- and interest at the rate of 18% per annum from the date of loss till payment.

(3.) Upon notice, the petitioner-company, in its reply, disputed the claim and never agreed for compromise and had contested the petition. Since the company had vehemently contested the claim set up by respondent No.1, therefore, the Permanent Lok Adalat could not proceed further and should have referred the matter to the Civil Court for adjudication, but the Court, instead of doing so, proceeded to decide the dispute and passed the order in favour of respondent No.1 on 22.03.2011 awarding a sum of Rs.74,625/- along with interest at the rate of 9% per annum from the date of accident till realization.