This is an application u/s.12 of the C.P. Act, 1986.

          Complainant by filing this complaint has submitted that complainant obtained a policy under name and style “Medical Establishment – Professional Negligence Errors & Omissions Insurance Policy” vide policy no.10170/96/94/873/00001.

          It is further submitted that one Saroj Kumar Sinha Roy filed a com plaint before the Hon’ble State Commission West Bengal vide complaint NO.453/0/96 against the Administrator,  Calcutta Medical Research Institutes and three other doctors regarding medical negligence and Hon’ble State Commission pleased to pass necessary order directing the OP to pay compensation of Rs.3 lakhs to the complainant vide order dated 05-10-2011 thereafter against that order the present complainant as OP of that case filed an appeal before National Commission challenging the said order passed by the Hon’ble State Commission vide First Appeal No.360 of 2001.

          Further Dr. Subrata Das Gupta filed an appeal before the Hon’ble National Commission challenging the said order passed by the Hon’ble State Commission, West Bengal vide 1^st Appeal No.362/2001.

          After hearing of both the appeals Hon’ble National Commission was pleased to dismiss the said two appeals.

          Under such circumstances for compliance of the order complainant vide cheque no.531159 dated 01-02-2008 for Rs.2,67,786/- drawn on State Bank of India, Dhakuria Branch and in favour of the said complainant Shyama Prasad Sinha Roy.

          Accordingly, as per terms and condition of the present policy name and style under  “Medical Establishment – Professional Negligence Errors & Omissions Insurance Policy” the OP is under obligation to reimburse amount incurred in respect of the legal proceedings and compensation as paid by the complainant of this case by the insured.

          On 16-06-2011 the OP issued a letter in the name of the complainant stating inter alia that the claim of the complainant is under process and would revert on the matter soon but thereafter more than one year has elapsed but nothing has been done on the part of the OP regarding settlement of the claim, complainant was seriously prejudiced and suffered loss and suffering for which complainant issued a legal notice on 19-09-2012 through their Ld. Advocate but in spite of receipt of said letter OP did not act and the matter has not been disposed of.  In the above circumstances, complainant has prayed for redressal and further submitted for release of the entire claimed amount of Rs.5,62,611/-.

          On the other hand, insurance company by filing written version submitted in response to the letter of the complainant as claimed OP by wrote letter on 16-06-2011 to the complainant stating that the claim of the complainant is under process and it would revert soon but on several occasion communicated to the complainant it would revert soon after discussion with the CRO-I and higher authority.  Unfortunately, complainant served a legal notice and, thereafter, filed this complaint against the OP before this Forum for redressal but the allegation is completely false and further it has been stated that with regard to payment of legal expense OP says and states that it is specifically enumerated in Clause 4 under the heading “Defence Clause of the policy” that the company will pay all costs, fees and expenses incurred with their prior consent in the investigation, defence or settlement of any claim but in the instant case the complainant has neither took any prior consent from the OP with regard to engagement of the advocates nor took prior consent or approval from the OP for the payment of legal expenses incurred by them.  Further OP strongly denies each and every allegation made therein, save and expect what are matter of records and further submitted that OP being a public sector organization, has not any personal grudge upon the complainant and there was no negligence or deficiency in service or causing prejudice and suffering loss to the complainant.

          Lastly, it is submitted that the OP is a government organization and compelled to follow and settle the claims strictly as per agreed terms and conditions stated in the Insurance Policy documents and cannot be asked to settle the claims beyond the terms and conditions of the said policy and in the above circumstances, the present complaint should be dismissed when it is under progress.

Decision with Reasons

On hearing the argument of Ld. Lawyers of both the parties and also considering the written version including the complaint and particularly the terms and condition of the policy we have gathered that no doubt OPs are under obligation to reimburse Rs.2,67,786/- which has been awarded by the State Commission, confirmed by the National Commission for payment by the complainant to one Shyama Prasad Sinha Roy vide cheque no.267786 and regarding that amount OP has no objection for disbursement.  But entire dispute is related to payment cost of the legal proceedings as claimed by complainant to the Rs.2,94,825/-.

          In this regard OP submitted that, in fact, complainant deputed Khaitan & Company as their lawyer to defend the case without permission of the insurance company but as per rules of the National Insurance Company Ltd. regarding Advocate fees with effect from 01-01-2009 which is reduced fees as approved by governing body of the company and at per such rate highest fee before State Commission is Rs.10,000/- + 10% clerkage and in case of appeal before National Commission it is Rs.20,000/- + 20% clerkage but no day to day fee can be assessed and practically it is the submission of the Ld. Lawyer for the OP that awarded amount of the State Commission or National Commission was Rs.2,67,786/- whereas complainant has claimed cost of legal proceedings for Rs.2,94,825/- which is highly inflated in view of the provision of the Advocate fees as already circulated by the governing body of the present insurance company and for which when the claim was submitted by the complainant to the OP, OP referred it to CRO-I, and fact remains the OP further submitted that from the very beginning it is found that complainant during contesting the case before State Commission did not report for any help of the OP for engagement of the lawyer and complainant is well aware of the fact that cost for repayment of the lawyer etc. shall be guided by the rules as framed by the Insurance Company but without getting such consent of the OP complainant appointed Khaitan and Company to defend the case and Khaitan and Company charged fees for 32 days before State Commission and before the National Commission once it was charged but before National Commission the OP appointed their lawyer to defend the case on behalf of the complainant even then complainant appointed their lawyer without consent of the OP.  So, under any circumstances, even after it is found that the complainant appointed a legal consultancy and spent huge money for that reason OP shall not have to pay the said cost of litigation because as per provision of the Insurance Company, Insurance Company shall not have to pay the same but shall have to pay as per their terms and Advocate fees as per their chart.

          Ld. Lawyer for the complainant submitted that there is no such clause in the agreement that in all respects the lawyer of the OP Company shall be engaged by the Insurance Company but in this regard we have gathered that there is a very specific Clause 4 wherefrom it is found that said clause reveals to the extent “the company will pay all costs, fees and expenses incurred with their prior consent in the investigation, defence or settlement of any claim made against the insured and the costs of representation at any inquest, enquiry or other proceedings in respect of matters which have a direct relevance to any claim made or which might be made against the insured, provided such claim or claims are the subject of indemnity by the policy.  Such costs, fees and expenses are called ‘Defence Costs’.”  So, considering that clause we have gathered that complainant did not get any prior consent for defending his case before the State Commission from the OP but everything was done as per their own will and they appointed very renowned legal consultancy firm Khaitan and Company but fact remains before such appointment the complainant did not get any consent and it is also fact even in case of a Government case where lawyers are not permitted to get any excess fees than that of the fees as already decided by the L.R., State Government of West Bengal and in the present case the fees as fixed by the National Insurance Company Ltd. by their governing body is the fees what complainant is entitled to and before State Commission in respect of appeal or original compliant fees are fixed to the extent of Rs.10,000/- + 10% clerkage and before Supreme Court also is same.  so, under any circumstances complainant is not entitled to total claim as claimed by the complainant from the OP and OP is not liable to pay Rs.2,94,825/- and as per condition of the policy name and style “Medical Establishment – Professional Negligence Errors & Omissions Insurance Policy” and including the clause 4 we are confirmed that complainant acted and engaged Khaitan and Company as per their wish violating the terms and condition of the policy but at best they are entitled to Rs.40,000/- as legal proceedings so in total complainant get refund in respect of Rs.2,67,786/- which is awarded amount made by the State Commission confirmed by the National Commission and which has been paid to one Shyama Prasad Sinha Roy and OP is also bound to pay another amount of Rs.40,000/- as legal proceedings fee to the complainant.  But no other amount the complainant is entitled to because there is clause for payment of lawyer fees to the complainant as insured becaue it is the liability of the company the insurer to give lawyer to the insured to defend but in the present case from very beginning complainant did not seek instruction or consent of the OP before appointment of Khaitan and Company so, invariably he violated the terms and condition of the policy and in view of the above findings we are convinced to hold that complainant is finally entitled to Rs.3,07,786/- from the OP and OP is legally bound to pay the sum to the complainant but not more than that and accordingly, after payment of the same the claim should be treated as finally settled. 

Hence,  

Ordered

That the case be and the same is allowed in part on contest against the OPs but without any cost.

          OP is directed to pay and refund of Rs.2,67,786/- (Rupees Two lakh Sixty seven thousand seven hundred and eighty six only) the amount as awarded by the State Commission confirmed by the National Commission in complaint no.453/O/96 and First Appeal No.360/2001 and 362/2001 and for defending the case OP is liable to pay Rs.40,000/- (Rupees Forty thousand only) as legal proceedings and accordingly, OP is liable to pay Rs.3,07,786/- (Rupees Three lakhs seven thousand seven hundred and eighty six only)  to the complainant but no question for awarding any compensation in view of the fact complainant claimed excess amount and violating the terms and condition of the policy and it is also proved that during settlement of the claim the complaint was filed intentionally by the complainant so, no further compensation is awarded.  OPs Insurance Company are directed to comply the order within 2(two) months from the date of this order failing which penal action shall be started against them for which OP shall be responsible.