New India Assurance Held Guilty of Deficiency in Service

The Consumer Disputes Redressal Forum, Ahmedabad City, held New India Assurance Co. Ltd. guilty of deficiency in service and ordered it to pay complainant Hashmukh N. Mody Rs. 63,315 with 7 per cent interest from the date of complaint until payment, Rs. 3,000 for mental agony and harassment, and Rs. 1,500 for cost.

Mody took from New India a householder insurance policy for Rs. 4 lakh for building, and Rs. 50,000 for household goods. He regularly renewed the policy, the last time being for 27 September 2005 – 26 September 2006.

On 30 September 2005, the building collapsed in heavy rain. The insurance company appointed a surveyor and assessor who carried out a survey on 1 October 2005. The surveyor wrote to Mody that the building had collapsed as it had weakened after the heavy rain. The building was stated to be about 60 years old and, as reported, in a dilapidated condition. Besides, a part of its wall had also collapsed and was being repaired, the surveyor added in his letter.

The company informed Mody that the policy issued to him did not cover the nature of the damage, i.e. collapse due to rainfall. Hence the company requested him not to pursue his claim.

On 27 March 2006 the company again informed Mody that his claim had been rejected as it did not fall under the scope of the policy. Hence the company could not entertain the claim.

Mody, through a government-registered valuer, took out an estimated replacement cost of the collapsed building amounting to Rs. 3,35,900. He submitted the claim form for Rs. 3,90,900 (Rs. 3,35,900 + Rs. 55,000). The company’s stand remained unchanged.

Mody approached CERS and, when their appeals to New India Assurance for a settlement failed, they filed a complaint with the Forum.

The company contended before the Forum that the complaint was not maintainable and that there had been no deficiency in service. It pleaded for the dismissal of the complaint.

The Forum concluded that the complainant had established his case well. It held the company guilty of deficiency in service. It ordered New India Assurance to pay Mody Rs. 63,315 with 7 per cent interest from the date of the complaint until payment, Rs. 3,000 for mental agony and harassment, and Rs. 1,500 for cost.

Consumer Education And Research Society, Ahmedabad