Direction issued for paying Rs 13.60 lakh to claimant
Excelsior Correspondent
JAMMU, Aug 16: A Division Bench of Jammu & Kashmir and Ladakh High Court comprising Justice Tashi Rabstan and Justice Wasim Sadiq Nargal has held that insurance agents are liable for errors and omissions in the policy and they are expected to act with care and diligence in properly completing insurance applications.
The DB was dealing with an appeal filed against the judgment dated September 1, 2015 delivered by J&K State Consumer Disputes Redressal Commission whereby the Commission dismissed the complaint of one Inderjeet Singh for want of a valid and actionable policy on the date of accident to claim indemnity for the damaged excavator.
The facts as per the appeal file were that the Hydraulic Excavator of appellant-Inderjeet Singh suffered accident at Jhajjar Kotli on 28.01.2009 when a rock fell on it as a result of which the excavator got damaged. At the time of accident the excavator was insured with National Insurance Company.
Before that, the excavator was insured with ICICI Lombard and claimant-Inderjeet Singh raised an indemnity claim with National Insurance Company. However, the National Insurance Company declined the claim on the ground that the engine and chassis numbers of the Hydraulic Excavator did not match with the numbers in the insurance policy.
The claimant submitted before the High Court that ICICI Lombard had entered wrong chassis number and engine number when he purchased Hydraulic Excavator purchased from Larsen and Toubro and the same was copied by the insurance agent of National Insurance Company where he got the insurance cover with effect from March 30, 2008 to March 29, 2009.
After hearing both the sides, the DB observed, “once the ICICI Lombard included the correct engine number and chassis number in the insurance policy vide endorsement dated 04.06.2009, the same shall be deemed to be included in the policy certificate of National Insurance Company, because as per the own stand of National Insurance Company the policy-in-question was in continuation of the previous policy with the ICICI Lombard. Therefore, after the issuance of endorsement, there was no reason to deny the claim of claimant-Inderjeet Singh”.
“Every insured buy insurance only for one reason—- protection. An insured pay premium in exchange for the promise that the insurance company will protect him. In the present case, the National Insurance Company has refused to pay claim to the claimant-Inderjeet Singh without conducting a reasonable investigation”, the DB said.
Stating that insurance agents represent insurance companies and they are liable for errors and omissions, the DB said, “these are the insurance agents who are responsible for complying with legal and contractual duties. An insurance agent must meet the standard expectations and must have full knowledge of the process”, adding “every insurance agent is expected to act with care and diligence and to assist customers in properly completing insurance applications in order to act as an intermediary between the customer and the insurance company”.
“It is the National Insurance Company who has failed to acknowledge and act reasonably with respect to the claim of claimant-Inderjeet Singh when the liability has become reasonably clear. It is nothing but an unfair insurance practice”, the DB said and accordingly quashed and set-aside the judgment/order dated 01.09.2015 of J&K State Consumer Disputes Redressal Commission.
The DB directed the National Insurance Company to pay an amount of Rs 13,60,000 to the claimant-Inderjeet Singh as the loss assessed by it caused due to the accident of Hydraulic Excavator along with interest at the rate of seven percent from the date of filing of the complaint before the Commission till its actual realization.
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