- (1.) The petitioner is an Insurance Company. It challenges the award passed by respondent No.2 Insurance Ombudsman, whereby the petitioner-Insurance Company has been held liable to pay Rs.5.92 lacs on account of damage to the vehicle which was insured for Rs.5 lacs.
(2.) Brief facts as narrated in the petition may be noticed. Respondent No.1 purchased a car on 31.5.2008 for an amount of Rs.7,40,518/-. The said vehicle was insured for the period 2008-09 with New India Assurance Company and on expiry of the said insurance, respondent No.1 approached the petitioner-Insurance Company for insuring his vehicle bearing registration No.CH04E 7502 for the next year i.e. from 4.6.2009 to 3.6.2010. The petitioner filled up the proposal form giving all the details of his previous policy and bonus etc. In column-8 of the proposal form, Insured's Declared Value (IDV) was mentioned as Rs.5 lacs by respondent No.1. On 18.7.2009, the vehicle was stolen and respondent No.1 reported the matter to the Insurance Company on 22.7.2009 and asked for increase in the value of the sum assured. After considering the matter, the petitioner-Insurance Company informed respondent No.1 vide letter dated 10.9.2009, Annexure P.6 that the sum insured could not be increased once the claim had occurred. Feeling aggrieved, respondent No.1 approached respondent No.2. Vide order dated 6.11.2009 passed by respondent No.2, the Insurance Ombudsman, Chandigarh directed the Insurance Company-petitioner that IDV of the vehicle should have been fixed at Rs.5.92 lacs and on account of theft of the said vehicle, the Insurance company should pay a sum of Rs.5.92 lacs instead of Rs.5 lacs which is the sum insured in the policy. Hence this petition.
(3.) Learned counsel for the petitioner submitted that under section 64VB (1) of the Insurance Act, 1938, (in short, "the Act"), the Insurance Company was liable to pay only the agreed amount for which insurance had been carried out. Reliance was placed on judgment of the Hon'ble Supreme Court in New India Assurance Company Limited v. C.M.Jaya and others, 2002 AIR(SC) 651 to submit that Insurance Company cannot be made liable to pay any amount unless the terms of the policy or the amount insured covered the same.;