Cannot Burden Insurer To Follow Up An Inadequate Disclosure Of Material Facts By The Insured: Supreme Court

The Supreme Court has observed that it is duty of the insured while making the proposal to make a clear and specific disclosure of material facts and that the insurer cannot be burdened to follow up an inadequate disclosure. As per the relevant policy in this case (Oriental Insurance Company Ltd. vs. Mahendra Construction), the details of claims lodged during the preceding three years were required to be disclosed but were not furnished by the insured. The Insurance Company repudiated the claim.

The National Consumer Commission (NCDRC), in this case, observed that as the previous insurance policy was annexed to the proposal, the insurer could have known of the claims lodged with the previous insurer on making an enquiry. It was held that if there was a nondisclosure of information under paragraph 25(g), the insurer could have returned the proposal. According to NCDRC, the insurer could have discovered the true state of facts with the exercise of ordinary diligence and thus was not justified in repudiating the claim.

The National Consumer Commission (NCDRC), in this case, observed that as the previous insurance policy was annexed to the proposal, the insurer could have known of the claims lodged with the previous insurer on making an enquiry. It was held that if there was a nondisclosure of information under paragraph 25(g), the insurer could have returned the proposal. According to NCDRC, the insurer could have discovered the true state of facts with the exercise of ordinary diligence and thus was not justified in repudiating the claim.

Disagreeing with this approach of the commission, the bench comprising Justice DY Chandrachud and Justice Hemant Gupta, on appeal filed by the insurance company said that the insurance is governed by the principle of utmost good faith, which imposes a duty of disclosure on the insured with regard to material facts. The court said “The burden cannot be cast upon the insurer to follow up on an inadequate disclosure by conducting a line of enquiry with the previous insurer in regard to the nature of the claims, if any, that were made under the earlier insurance policy. On the contrary, it was the plain duty of the respondent while making the proposal to make a clear and specific disclosure. The insurance policy with New India Assurance Company Limited was for the period from 15 November 2004 to 14 November 2005. The excavator remained uninsured from 15 November 2005 until 10 October 2006. The case of the respondent was that during that period, it was under repair. This fact, together with the receipt of the earlier insurance claim, was material to the decision of the insurer on whether to accept the proposal for insurance. The disclosures which were required in paragraph 25(g) of the proposal form were material to assess the risk profile of the vehicle at the time of accepting the proposal for insurance” Allowing the appeal, the bench held that the insured was under an obligation to make a full disclosure of the status of the previous insurance policy.

“Death due to mosquito bite an accident”

"Death due to mosquito bite an accident"
“Death due to mosquito bite an accident”

In a ruling that will benefit many insurance holders, the National Consumer Disputes Redressal Commission has held that death due to mosquito bite causing malaria is an accident.

“It is difficult for us to accept that the death due to a mosquito bite would not be a death due to an accident,” Justice V K Jain said.

“It can hardly be disputed that a mosquito bite is something which no one expects and happens all of a sudden.

“As per the information available on the website of the insurance company, an accident may include events like snake bite, frost bite and dog bite. Hence it would be very difficult to accept the contention that malaria due to mosquito bite is a disease and not an accident,” the commission said.

The order came on a claim filed by Mousami Bhattacharjee whose husband, Debasish, died in January 2012.

He had taken a housing loan from the Bank of Baroda and availed of an insurance policy of the National Insurance Company. The sum insured was payable in the event of his death.

When Mousami approached the insurer to enable them to liquidate the housing loan, the claim was rejected.

She then moved the district consumer forum in West Bengal in February 2014.

The insurer submitted before the forum that Debashish had died due to a mosquito bite and not due to an accident.

The forum had passed an order in Mousami’s favour following which the insurance company approached the West Bengal Consumer Commission, but the appeal was dismissed in February.

Later, the insurance company had moved the National Commission.

( Source – PTI )

Man gets Rs 3.5L compensation for shop gutted in fire

Man gets Rs 3.5L compensation for shop gutted in fire
Man gets Rs 3.5L compensation for shop gutted in fire

Over 20 years after his shop was gutted in a fire, a district resident has been awarded Rs 3.5 lakh compensation by the Thane Motor Accident Claims Tribunal.

Thane district’s Ulhasnagar township resident Vakil Rahadomal Karia, the owner of a studio cum press, informed the MACT that in 1980 he had purchased the shop where some fixtures, furniture, photography material, cameras, typewriters, film printing machine etc. were kept.

He said that on May 28, 1996, at around 5.30 PM, when he was present in his shop cum studio, a truck loaded with match boxes passed by. The goods in the truck came in contact with live electric wires hanging near his shop and caught fire, which spread engulfing his shop.

The applicant said his two-wheeler parked near the shop was also burnt in the incident and he sustained a loss worth Rs 3.50 lakh.

He reported the matter to police, who registered an offence against the truck driver.

MACT member N M Waghmare said some height restrictions are imposed on trucks while passing through the city. In the present matter, the truck was over that height. Also, when the truck was carrying explosive substance, it was required to take more precautions other than the routine ones. But in this case, the truck driver failed to take proper care and caution while driving the vehicle from the city.

He said all the circumstances compelled him to consider that the accident took place due to the fault of the truck driver and caused damage to the applicant’s shop.

“It is evident to say that the opponent insurance company has raised defence that the incident took place because of short-circuit. But there is absolutely no evidence adduced to that effect. I discard this defence,” he said.

“I hold the accident was not an act of god but it was at the fault of offending truck driver. When the said truck was insured with the opponent, then the responsibility of compensation can be saddled on both the opponents,” the tribunal said in its recent order.

Since the truck owner did not appear in the matter, the order was passed ex-parte against him.

Subsequently, the MACT directed the offending truck owner, S Kandaswamy Sellappa Gounder, of Namakkal in Tamil Nadu, and the National Insurance Company to jointly and severally pay the compensation along with 7 per cent interest per annum to Karia.

( Source – PTI )

Rs 13 lakh compensation for kin of mishap victim

Rs 13 lakh compensation for kin of mishap victim
Rs 13 lakh compensation for kin of mishap victim

The motor accident claims tribunal here has awarded a compensation of over Rs 13 lakh to the kin of a 28-year-old man who was killed in a mishap in 2012.

Tribunal member and District Judge K D Vadane recently awarded a compensation of Rs 13.72 lakh with 8 per cent interest to the kin of the deceased Rajesh Koli.

On October 19, 2012, at about 1.30 AM, Rajesh along with his friends were engaged in decoration of a city-based Navarati Pandal when a speeding truck ran over them killing him on the spot, the Tribunal was told.

As per the order, 50 per cent of the compensation amount should be invested in the fixed deposit in the name of Rajesh’s minor son.

The compensation is to be paid by the driver of the truck, Avadheshkumar Jaiswal, involved in the mishap, the owner of the truck, Arjun Wafare, and the insurance company, jointly and severally.

The claimants had sought Rs 14 lakh compensation, but the tribunal awarded Rs 13.72 lakh.

Jaisawal, who fled the accident spot, was chased by some persons near Kasheli bridge and handed over to police.

Jaisawal appeared before tribunal but did not file any written submission. Wafare did not appear and the matter was decided ex-parte against him. The insurance company – The National Insurance Company – appeared before the judge and contested the claim on various grounds which were rejected.

( Source – PTI )

Rs 19.57l compensation for kin of road mishap vic

Rs 19.57l compensation for kin of road mishap vic
Rs 19.57l compensation for kin of road mishap vic

Family members of a 44-year-old woman, who died in a road accident involving a rashly-driven vehicle, have been awarded Rs 19.57 lakh compensation by a Motor Accident Claims Tribunal (MACT) here.

MACT Presiding Officer Raj Paul Singh Teji directed National Insurance Company Ltd, insurer of the offending tractor, to pay a compensation of Rs 19,57,958 to the family members of victim Saroja Bala, who suffered fatal injuries in the December 23, 2013 mishap.

“It is clear that respondent no 1 (driver) was driving the vehicle in rash and negligent manner and caused fatal injury to the deceased,” the tribunal said.

According to the complaint, on December 23, 2013, the victim, a homemaker, lost her life after being hit by the rashly and negligently driven tractor-trolley while she was going to her daughter’s school along with her husband.

The complaint, filed by family members of the deceased, had claimed Rs 30 lakh compensation.

The driver and the owner of the vehicle, however, denied the allegations leveled against them.

( Source – PTI )

MACT Rs 10.17 L to accident victim kin

MACT Rs 10.17 L to accident victim kin
MACT Rs 10.17 L to accident victim kin

The Thane Motor Accident Claims Tribunal (MACT) has awarded a compensation of Rs 10.17 lakh to the kin of a vegetable vendor from Murbad town, who was killed in a road accident in March, 2010.

MACT member and district judge K D Vadane in his order last week directed Lakhbir Singh, a tempo driver, and Bajaj Alliance General Insurance Company to jointly pay Rs 10.17 lakh to the wife and four children of deceased Gangadhar Vitthal Shivade, a vegetable vendor from Tokawade village.

The claimants in the case were the victim’s wife Vijaya Gangadhar Shivade (53), and children Jitendra Gangadhar Shivade (30), Haresh Gangadhar Shivade (26), Arun Gangadhar Shivade (22) and Chitra Gangadhar Shivade (20).

On March 18, 2010, Gangadhar Vitthal Shivade was travelling in a public tempo from Otur to Kalyan, the victim’s family members informed the tribunal.

The tempo driver lost control over the vehicle and the vehicle turned turtle near Malshej Ghat, in which Shivade, who was carrying vegetables with him, sustained multiple injuries and died.

The appellants said the accident occurred due to negligence on the part of tempo driver Lakhbir Singh, and a case was subsequently registered against him at Tokawade police station.

Bajaj Alliance General Insurance Company contested the claim citing that the victim was travelling in the tempo as a passenger and that the tempo was occupied in excess of its permitted capacity.

The insurer argued that it was a case of breach of the insurance policy terms and conditions and requested dismissal of the application.

The judge, however, observed that the FIR stated that Lakhbir Singh oversped and drove rashly, because of which the mishap occurred.

From the accident site panchnama, it was established that the driver failed to exercise caution, as it is required while driving in mountaineous region, the judge said, adding that the accident took place due to sole negligence on his part.

He further stated that the insurance company had not examined any eyewitness of the accident and failed to prove that the tempo was filled beyond its permitted seating capacity at the time of the incident.

In an ex parte judgment, since Lakhbir Singh was absent during the hearing, the judge ordered that the two respondents collectively pay Rs 1 lakh to each of the deceased’s children, deposit Rs 3 lakh in a fixed deposit (FD) on the name of his wife, and pay the remaining sum of compensation to the wife as well, along with an interest of 8 per cent.

( Source – PTI )

Rs 20.25 lakh for family of man killed in road mishap

Rs 20.25 lakh for family of man killed in road mishap
Rs 20.25 lakh for family of man killed in road mishap

Family members of a 43-year-old man, who died in a road accident, have been awarded Rs 20.75 lakh compensation by a Motor Accident Claims Tribunal (MACT) here.

MACT Presiding Officer Naveen Arora directed Bajaj Allianz General Insurance Company Ltd, insurer of the offending car which hit Sanjeev Dutt and injured three others, to pay Rs 20,75,000 as compensation to the wife, father and daughters of the deceased.

The tribunal also awarded compensation of Rs 1.18 lakh to injured Sovindra and Rs 20,000 each to the two other injured -Blessen and Blessey.

The tribunal, while deciding the petitions, relied on the testimonies of police officials, family members of the deceased, post mortem report of the deceased and medical reports of the injured persons.

“On considering the testimony of witnesses and the documents placed on record, it’s established that the accident took place due to rash and negligent driving of vehicle by respondent 1 (driver),” it said.

According to the petitions filed by family members of Dutt and other three injured, the accident took place on April 28, 2013, near Chhatarpur when the offending car, being driven in a rash and negligent manner hit them leading to Dutt’s death and injuring the other three.

During the proceedings, the accused driver did not file any written statement but the insurance company denied the averments of the petitions, contending that driver of the offending vehicle did not have a valid driving licence.

The tribunal accepted the firm’s contention and allowed it to recover the amount from the driver.

( Source – PTI )

Family gets Rs 11.43L compensation for man’s death in accident

Family gets Rs 11.43L compensation for man's death in accident
Family gets Rs 11.43L compensation for man’s death in accident

The family of a 32-year-old man has been awarded Rs 11.43 lakh compensation by Thane Motor Accident Claims Tribunal for his death in a road mishap in 2011.

MACT member and District Judge K D Vadane awarded the compensation of Rs 11.43 lakh to the victim’s family, including his widow, parents and two minor daughters, all residents of Bhiwandi in Thane district.

Ashok Shivaji Pawar (32,) of Adivasi Pada in Bhiwandi, worked at Srikrishna Dairy Farm in Wada as a supervisor and drew a salary of Rs 6,000 per month.

According to the claimants, on November 1, 2011, Ashok was proceeding towards his residence on a motorcycle when a speeding jeep coming from behind hit his two-wheeler near Valshind village of Ganpati Pada in Bhiwandi.

The victim fell from the bike. He sustained multiple injuries in the mishap and died on the spot.

The claimants are Ashok’s parents Shivaji Laxman Pawar (55- age at the time of the accident), Putlabai Pawar (50), wife Sheshu Ashok Pawar (20), and daughters Asawani Pawar (2) and Heera Pawar (5 months).

It was alleged that the accident occurred due to sole negligence on part of the jeep driver, against whom an offence was also registered at Bhiwandi taluka police station.

The applicants filed the claim against jeep owner Satish K Bhanushali and Bajaj Allianz Life Insurance Company.

The counsel for the claimants submitted that the deceased had bright prospects, therefore his prospective income may also be taken into consideration while granting them compensation.

The jeep driver did not appear before the tribunal and hence, the matter was decided ex-parte against him.

The insurance company, however, contested the claim. It said the offending vehicle was used for commercial purpose, i.E. For carrying passengers on hire and reward basis, therefore there is breach of terms and conditions of policy.

After hearing both the parties, the judge observed that as per clause ‘avoidance of certain terms and conditions of recovery’ of the policy, the applicants are entitled to recover the compensation from the insurance company.

“In my view, though there is breach of terms and conditions of the policy, the insurance company is liable to first pay the compensation amount and recover the same from owner of offending jeep,” the judge said in his recent order.

The compensation of Rs 11.43 lakh includes Rs 9.18 lakhs towards future loss of dependency, Rs 1 lakh each towards loss of estate and loss of love and Rs 25,000 towards funeral and last rights.

( Source – PTI )

Court compensates widow for husband killed on duty

Court compensates widow for husband killed on duty
Court compensates widow for husband killed on duty

A labour court here has awarded Rs 5,32,800 as compensation to a 52-year-old widow in connection with the murder of her husband while he was driving a tanker of his employer in 2012.

Labour court Commissioner B Y Phad directed the two respondents — Jagdeep Singh Bakhrawar Singh of Jaideep Transport from Bhiwandi and RelianceGeneral Insurance company — to jointly and severally pay the compensation to Surinder Kaur, with 12 per cent interest per annum from the date of murder on May 7, 2012.

He also ordered Jaideep Transport to pay a penalty of Rs 2.63 lakh to the woman.

Advocate S C Bodulla, appearing for Surinder Kaur, informed the court that her husband Jagjit Singh was employed with Jaideep Transport and earning Rs 8,000 as monthly salary.

On May 1, he started driving the tanker from Mumbaito Punjab to deliver some chemical. On May 7, Jagjit was allegedly killed by some unidentified person, who hit him with a blunt object on his head and his body was left in the tanker’s cabin at Bhiwani in Haryana, Bodulla said.

The deceased’s wife said both the respondents were liable to pay her a compensation of Rs 5,32,800.

However, the two respondents contested the claim saying it was a case of murder and not an accident.

Referring to rulings of various courts, Bodulla said the murder of an employee during the course of employment amounts to accidental death arising out of employment.

The Commissioner, in his order, said as per the facts of the present case, the deceased was found dead in the cabin of the tanker and it transpired that the death was caused by injuries caused by a blunt object. Accordingly, police registered a case under section 302 (murder) of IPC.

“It is clear that it is a case of murder of deceased by some unknown person. Therefore, it cannot be said that the assailant was having dominant intention to kill the deceased.

“Thus I am of opinion that it cannot be ruled out that the murder of deceased was an accidental murder while the deceased was acting in the course of employment of opponent transporter and his death arose out of employment,” he said.

“Hence both the opponents are liable to pay the amount of compensation,” the Commissioner said in a recent order.

The court also observed it was evident that inspite of notice given to the opponents, they failed to deposit the compensation amount.

The opponent no. 1 (transport company) is not justified in causing delay in depositing the compensation amount on the ground that the vehicle was insured with the opponent no. 2 (Reliance General Insurance company).

Therefore, the court ruled that Jaideep Transport was liable to pay a penalty of Rs 2.63 lakh to the widow.

( Source – PTI )

Rs 13.30L awarded to road accident victim

Rs 13.30L awarded to road accident victim
Rs 13.30L awarded to road accident victim

A 28-year-old man, who received grievous injuries after being hit by a rashly-driven truck, has been awarded a compensation of over Rs 13 lakh by a Motor Accident Claims Tribunal (MACT) here.

MACT Presiding Officer Naveen Arora directed Cholamandalam M S General Insurance Company Ltd, insurer of the vehicle, to pay Rs 13.30 lakh to south Delhi resident Shailender Singh who suffered disability in his right lower limb.

“It is established that the petitioner sustained injuries in road accident on September 19, 2013, at about 11 PM near Kalindi Kunj, Noida to Delhi road, due to rash and negligent driving of vehicle… by respondent no. 1 (driver)…

“In view of my findings, I award Rs 13,30,000 to the petitioner (Singh) as compensation,” the presiding officer said.

According to the complaint, on September 19, 2013 while Singh was going out for some work on his motorcycle along with his wife, a truck, being driven in a rash and negligent manner, hit him near Kalindi Kunj from behind.

Due to the impact, he fell down and sustained injuries.

Singh was taken to hospital and later an FIR was registered in this regard.

In his petition, Singh claimed he used to earn Rs 8,528 per month.

Both the driver and the owner of the vehicle, however, had denied the claim made in the petition.

( Source – PTI )