Skip to main content

Insurance policy not voidable for misrepresentation if insurer had means of finding truth

In Oriental Insurance Company vs Mahendra Construction, the respondent / complainant obtained an insurance policy from the appellant in respect of a hydraulic excavator machine. The said machine having been set on fire by Naxalites, a claim was preferred before the appellant. The claim was rejected as the vehicle was earlier insured with M/s New India Assurance Co. Ltd., prior to obtaining insurance from Oriental Insurance, after the gap of approx. eleven months since the expiry of previous policy.

The State Forum allowed the complain and awarded compensation. Appeal was filed before NCDRC against said order.

The NCDRC partly allowed the appeal and referring to various judgments including the judgement of the NCDRC in United India Insurance Co. Ltd. Vs. M/s Jindal Poly Buttons Ltd., held that as per Section 18 & 19 of the Contract Act, particularly the exception under Section 19, even if the insurance policy is obtained by misrepresentation or silence, the contract of insurance is not voidable if the insurer had the means of discovering the truth with ordinary diligence.  Since admittedly the previous insurance policy had been annexed to the proposal submitted by the complainant, the appellant, on exercise of due diligence, could easily have verified from New India Assurance Co. Ltd.  that the complainant had submitted a claim with it under the previous policy which it had taken from the said insurer. Therefore, considering the exception to the Section 19 of the Indian Contract Act, the appellant cannot deny the benefit of insurance to the complainant on account of the information with respect to the previous claim lodged by the complainant having not been disclosed in the proposal form.

However, following the decision rendered by the Larger Bench and considering the fact that the complainant / respondent did not expressly disclose the previous claim lodged with New India Assurance Co. Ltd.  while responding to Clause 25(g) of the proposal form, the complainant, should be paid on non-standard basis by deducting 25% of the amount otherwise payable to it under the contract of insurance.

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Vanishing promoters and languishing shareholders

Over Rs 60,000 crore of shareholders’ wealth is stuck in 1,450 companies suspended by the stock exchanges. More importantly, near 100 per cent pledging of promoter holding appears to be common in many of these companies. This, almost rules out any chance of the companies bouncing back. The suspension is for non-compliance of the listing norms. Vanishing Companies - Definition As per the definition stipulated by SEBI, any listed company, which raised moneythrough initial public offer and, thereafter, stopped operations, did not file returnseither with the RoC or SEBI and did not exist on the registered premises wastermed as vanishing.There are provisions under Companies Act under which companies are termedvanishing companies on satisfying certain conditions. it is provided a companywould be deemed to be a vanishing company, if it satisfies all the conditions given below : a) Failed to file returns with Registrar of Companies (ROC) for a period of two years; b) Failed to fil...
3 comments
Read more

Property can be sold on power of attorney - Delhi High Court

As reported in the Hindusthan Times on 5th May:-  http://www.hindustantimes.com/India-news/NewDelhi/Property-can-be-sold-on-power-of-attorney/Article1-1054964.aspx In a judgment that will benefit lakhs of Delhi residents living in co-operative housing societies and DDA flats, the Delhi High Court has quashed a Delhi government circular banning property sale in the Capital through general power of attorney (GPA). The court found that the directions in the circular, issued by the revenue department on April 27 last year, were contrary to the Supreme Court judgment dated October 11, 2011. The HC order will increase the number of saleable properties in Delhi and could bring down the value of freehold properties. According to realty watchers, on an average, around 20% of properties are registered through GPA transfers — a common way of selling leasehold properties and those that don’t have a clear title. The judgment came on a petition filed by a company, Pace Developers and ...
5 comments
Read more