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| DB denies compensation to insured | | Fails to disclose occupation of premises by terrorists | | Early Times Report
JAMMU, June 22 : In a landmark judgment, a Division Bench of J&K High Court comprising Justice Ali Mohammad Magrey and Justice Vinod Chatterji Koul today denied insurance compensation to insured as he failed to disclose the occupation of the premises by the terrorists.
Division Bench observed that looking at the case on hand in the above settled legal perspective, what requires to be stated is that the Insurance Companies had, among others, sought information with respect to the use of the premises as well as about any previous insurance policy(ies) obtained by the complainant/ insured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued an insurance cover despite the occupation of the premises by the terrorists and there being simultaneous cover of insurance is a decision which was required to be taken by the insurer after duly considering all relevant facts and circumstances. Both; occupation of the premises in question by the terrorists prior to the relevant date as well as the simultaneous insurance cover with the other Insurance Company, were material to the assessment of the risk which was being undertaken by the insurer.
Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured had, in such a short span of time, chosen to obtain two different insurance policies with regard to the same premises. Such a fact is sufficient to put the insurer to enquiry.
DB further observed that counsel, appearing on behalf of the insured/ complainant, submitted that all the material and relevant information, as sought by the insurer, was furnished by the proposer in the proposal form. However, having gone through the entire material evidence on record, it is sufficient for us to hold that the information which was sought by the insurer, in the shape of occupation of the premises at the time of insurance and simultaneous insurance cover with other Insurance Company, was indeed material to its decision as to whether or not to undertake a risk. The proposer, while making a declaration, was aware of the fact that if any of the statements so made by him was untrue; or inaccurate; or if any information material to the proposal was not disclosed, the insurer may cancel the contract and forfeit the premium.
DB further observed that this Court also, not impressed with the submission of the counsel for the insured/ complainant that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. Accordingly, we are of the view that the failure of the insured/ complainant to disclose the occupation of the premises by the terrorists as well as the existence of the simultaneous policy of insurance obtained from the other Insurance Company with regard to the same premises entitled the insurer to repudiate the claim under the policy.
DB further observed that the Commission was in error in allowing the complaint filed by the complainant. We, accordingly, set aside the impugned order dated 31st of May, 2013, passed by the Commission, as a necessary corollary whereof, the appeals filed by the National Insurance Company Ltd., being MA No. 140/2013, and the Oriental Insurance Company Ltd., being MA No. 139/2013, shall stand allowed; whileas the one filed by the complainant, being MA No. 120/2013, shall stand dismissed. The consumer complaint filed by the complainant before the Commission shall also stand dismissed, accordingly.
Award amount, if any deposited, before this Court be returned to the concerned Insurance Company through cheque(s). JNF
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