Kerala

Malappuram

CC/06/74

M.P AHAMMAD KUTTY, S/O UNNI MAMMAD - Complainant(s)

Versus

MANAGER, NATIONAL INSURANCE CO. Ltd. - Opp.Party(s)

22 Jul 2008

ORDER


DISTRICT CONSUMER DISPUTES REDRESSAL FORUM
MALAPPURAM
consumer case(CC) No. CC/06/74

M.P AHAMMAD KUTTY, S/O UNNI MAMMAD
...........Appellant(s)

Vs.

MANAGER, NATIONAL INSURENCE CO. Ltd.
MANAGER, NATIONAL INSURENCE COMPANY Ltd.
...........Respondent(s)


BEFORE:
1. AYISHAKUTTY. E 2. C.S. SULEKHA BEEVI

Complainant(s)/Appellant(s):


OppositeParty/Respondent(s):


OppositeParty/Respondent(s):


OppositeParty/Respondent(s):




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ORDER

By Smt. C.S. Sulekha Beevi, President, 1. Complainant has purchased a bus KL 10P-7177 for earning his livelihood. The vehicle was purchased with the finance availed from Tata Finance. From 2002 onwards the vehicle was insured with opposite party company under a Package policy. Till date complainant has not preferred any claim under the policy. When the policy was due to expire on 15-11-2006 complainant approached second opposite party and requested for renewal of the policy. Second opposite party refused to renew the policy and directed him to approach first opposite party. Although complainant approached first opposite party he too refused to renew the policy. When complainant asked opposite party to give the refusal in writing, opposite parties behaved in a rude manner. That complainant intended to renew the policy with opposite parties itself, in order to avail the No Claim Bonus (NCB). Due to the refusal to renew the policy by opposite parties complainant had to take fresh policy from another company and thereby had to forego the No Claim Bonus amounting to Rs.7,500/-. Complainant alleges deficiency in service and claims for refund of Rs.7,500/- along with compensation of Rs.50,000/-. 2. Bereft of the unnecessary details in the version, the fact that complainant approached opposite party requesting for renewal of the policy is admitted. It is submitted that there was no total refusal to renew the policy. That opposite party had refused to renew the own damage cover section of the policy only and that opposite party had offered to issue third party insurance coverage for the vehicle. That issuance of own damage risk is a matter of contract and cannot be extracted from or imposed upon the other. That the existing policy of the vehicle was issued from the Bangalore, office of the company. The allegation that complainant had to forego the No Claim Bonus is denied as false. That any company issuing a policy is bound to give the No Claim Bonus that the party has earned. There is no deficiency in service and the claim of compensation is baseless. Complaint is liable to be dismissed. 3. Evidence consists of the affidavit filed by complainant and opposite party. Ext.A1 and A2 marked on the side of complainant. Ext.B1 marked for opposite party. Either side has not adduced any oral evidence. 4. Points for consideration:- (i) Whether opposite parties are deficient in service? (ii) If so, reliefs and costs. 5. Point (i):- It is the say of complainant that opposite parties refused to renew the Package policy issued in respect of his vehicle KL-10 P/7177. Ext.A1 and Ext.B1 are the same document produced by either sides. It is evident from Ext.A1 that opposite party refused to issue policy for the cover of own damage risk. It is specifically stated in Ext.A1 that policy covering third party liability only can be issued for the vehicle. Ext.A1 also proves that the policy is due to expire on 15-11-06. The vital question that poses for consideration is that whether the refusal to renew the policy covering own damage risk would amount to deficiency in service. The vehicle was having a Package policy which was issued by Bangalore office of opposite party company. Package policy contains two sections of cover. One section covering the third party risks and the other section covering own damage risk. Separate premiums are collected by insurance companies for these two types of cover. Complainant first approached the Manjeri office of opposite party company for renewal of the policy. On refusal and as per their direction he approached the Kozhikkode office. Ext.A1 is issued by the Kozhikkode office of opposite party company. Counsel for opposite party fortifies that it is mandatory to take/issue third party insurance policy for a vehicle under the Motor Vehicles Act. Whereas, there is no such statutory requirement in the case of own damage cover. It was argued by counsel for opposite party that the issuance of own damage policy was fully upon the contract between the parties and therefore depended upon the consent to enter into the contract. We are unable to accept this argument. In the present case opposite parties have refused to renew the own damage policy that has already been issued. It was not a request for fresh issuance of policy. In Ext.A1 opposite party has failed to adhere to any reasons for refusal. Complainant affirms that he has not raised any claims upon the policy till date. This is not specifically denied by opposite party. It was contended by counsel for opposite party that own damage policy could be issued only after inspecting the vehicle and verifying the documents. Opposite party has no case that complainant failed to co-operate with the request of opposite party to inspect the vehicle or verify the documents. The refusal in Ext.A1 is a blanket refusal. Counsel for complainant Sri.P.C. Girish relied upon the decision rendered by the Apex Court in 2001(2)CPR III (SC) Biman Krishna Bose Vs. United India Insurance Co. and another decided on 02-8-01. The said decision pertains to the fact of refusal of a mediclaim policy on ground of part litigation. The issuance of mediclaim policy is nevertheless, a policy founded upon contract between parties. It does not emanate upon any statutory requirement. The ratio in the said decision is as under: “Where an insurance company under the provisions of the Act having assumed monopoly in the business of general insurance in the country and thus acquired the trappings of the 'State' being other authorities under Article 12 of the Constituion it requires to satisfy the requirement of reasonableness and fairness while dealing with customers. Even, in an area of contractual relations, the State and it's instrumentalities are enjoined with the obligations to act with fairness and in doing so, can taken into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving to a decision. Arbitrariness should not appear in their actions or decisions. In the present case what we find is that arbitrariness is writ large in the actions of the respondent company when it refused to renew the mediclaim policy of the insured on the ground of his past conduct i.e. having gone into litigation for payment of his claim against the respondent company. We are, therefore, in agreement with the view taken by the High Court that the order of the respondent company refusing to renew the mediclaim policy of the appellant was unfair and arbitrary.” In our view the above principle laid is absolutely applicable to the facts of this case. The refusal to renew the policy ought to have been supported by reasons which the consumer must be made aware of . We find opposite parties deficient in service. 6. Point (ii):- Complainant alleges that by the refusal to renew the policy he incurred loss of Rs.7,500/- as No Claim Bonus, while taking new policy for his vehicle. Ext.A2 is the new policy issued by Oriental Insurance Company for the vehicle for the period 16-11-2006 to 15-11-2007. Ext.A2 is a package policy covering third party risk as well as own damage risk. The claim of Rs.7,500/- by the complainant alleging that the new insurance company did not give discount on No Claim Bonus is denied as false and incorrect by opposite party. According to opposite party No Claim Bonus can be earned only on own damage section of the policy and not on the Third party risk section. As per GR 27 of India Motor Tariff an insured becomes entitled to No Claim Bonus at the renewal of a policy after the expiry of the full duration of 12 months. GR 27(d) provides that the entitlement of No Claim Bonus shall follow the fortune of the original insurer and not the vehicle or the policy. GR 27(f) provides that when the insured transfers the insurance from one insurer to another, the transferee may allow the same rate of No Claim Bonus which the insured would have reeived from the previous insurer. To prove that there was no claim the insured has to produce a letter from the previous insurer or furnish a declaration to that effect. On receiving the declaration the transferee insurer can make enquiries with previous insurer if there was any claim or not. Thus it is clear that complainant could have earned his No Claim Bonus from the new insurer/Oriental insurance company on furnishing a declaration. Complainant has no case that he had furnished such declaration. Thus there has been latches on the part of complainant to furnish sufficient documents to earn No Claim Bonus at the time of taking fresh policy. We therefore hold that opposite party cannot be shouldered with the liability to refund/pay the No Claim Bonus which the complainant claims to be a sum of Rs.7,500/-. We find that complainant is not entitled to Rs.7,500/- as claimed in the complaint. Complainant has to be definitely compensated for the deficiency meted out by him. His request for renewal was refused consecutively by Manjeri Office and Kozhikkode office of opposite party company. He had to move to another company for getting his vehicle insured. Service rendered by such monopoly agencies should not be curtailed by the whims and fancies of the officers who man such offices. We consider that such oppressive and arbitrary actions by service providers has to be viewed seriously. An ordinary citizen or a common man is hardly equipped to match the might of the State or it's instrumentalities. It is necessary to put a halt to such arbitrary and capricious exercise of power. We hold that a sum of Rs.10,000/- as compensation to the complainant would not only be a remedy to redress his grievance, but will also serve to better the quality of service rendered by opposite parties. 7 . In the result, we allow this complaint and order opposite parties to jointly and severally pay a sum of Rs.10,000/- (Rupees Ten thousand only) to the complainant as compensation along with costs of Rs.1,000/- (Rupees One thousand only) within one month from the date of receipt of copy of this order. Dated this 22nd day of July, 2008. Sd/- C.S. SULEKHA BEEVI, PRESIDENT Sd/- E. AYISHAKUTTY, MEMBER APPENDIX Witness examined on the side of the complainant : Nil Documents marked on the side of the complainant : Ext.A1 and A2 Ext.A1 : Letter dated, 15-11-2006 send by 1st opposite party to complainant. Ext.A2 : Photo copy of the Certificate-cum-Policy schedule. Witness examined on the side of the opposite parties : Nil Documents marked on the side of the opposite parties : Ext.B1 Ext.B1 : Photo copy of the letter dated, 15-11-2006 send by 1st opposite party to complainant. Sd/- C.S. SULEKHA BEEVI, PRESIDENT Sd/- E. AYISHAKUTTY, MEMBER




......................AYISHAKUTTY. E
......................C.S. SULEKHA BEEVI