advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Tuesday, August 20, 2013

Vehicle theft - premium paid through cheque for renewal of policy was bounced due to bank fault - Refusal of granting insurance claim - not tenable = In the meanwhile, the vehicle, in question, was stolen on the mid-night of 09.07.2004. The complainant lodged an FIR with the Police and also informed OP No. 2 Insurance Company regarding the theft and requested for payment of insurance claim. However, the said claim was rejected by OP No. 2 and they informed the complainant that his cheque bearing number 282302 dated 16.06.2004 for Rs.9,623/- had been dishonoured by OP No.1 and hence the insurance policy could not be renewed. The complainant then contacted OP No. 1 bank, where it was found that there was sufficient balance in the account of the complainant. The bank authorities vide their letter dated 13.07.2004 sent to the OP No. 2 insurance company stated that their counter clerk / officer had inadvertently returned the cheque issued by the complainant by oversight on 18.06.2004 and there was sufficient balance in savings account no. 6148 of the complainant. They also issued a banker’s cheque dated 13.07.2004 for Rs.9623/- in favour of OP No. 2 but the OP No. 2 rejected the said request and also rejected the claim filed by the complainant as the vehicle had already been stolen by that time. It is further borne out from record that after receiving the cheque of Rs.9,623/-, the Insurance Company did issue policy in favour of the complainant which was valid for a period of one year till 15.06.2005 but the said policy was cancelled by the Company after the cheque was dishonoured by the Bank. In the said insurance policy the total Insured Declared Value (IDV) of the vehicle has been shown to be Rs.2,62,000/-. The complainant in his complaint and further in written submissions has stated that since the vehicle was purchased for a sum of Rs.3,45,959.40 and it was only 16 months old, when it was stolen. The complainant has demanded a sum of Rs.4 lakh as compensation for the value of the vehicle. However, from the IDV mentioned in the Policy issued by the insurance company, it can be safely presumed that the complainant is not entitled to get more than Rs.2,62,000/- for loss of the vehicle. However, looking at the negligence shown by the complainant in not pursuing this case after submitting cheque for the premium amount he needs to be penalised also to some extent. It is felt, therefore, that a sum of Rs.1,50,000/- as already allowed by the State Commission seems to be a reasonable amount for awarding compensation to the complainant for loss of the vehicle.

published in http://164.100.72.12/ncdrcrep/judgement/00130808105104311RP462109204810.htm
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI

REVISION PETITION NO. 4621 OF 2009
(From the order dated 29.10.2009 in First Appeal No. 106/2007
of Andhra Pradesh State Consumer Disputes Redressal Commission)
B. Shankar
s/o B. Bhadru
c/o B. Parasuram
IInd Floor,
H. No. 1-9-285/3A,
Lalitha Nagar
Ramnagar Gundu
Hyderabad – 500 044.                              ...  Petitioner

Versus

1.   Union Bank of India
Chikkadapally Branch,
1-8-563/2 Opp. Sandhya Theare,
Charminar X Roads,
Chikkadapally
Hyderabad – 20
Rep. by its Manager

2.   M/s Tata AIG General Insurance Co. Ltd.,
Life Style Building, Begumpet
Secunderabad,
Rep. by its Branch Manager,
Srikakulam Town and District                 … Respondent(s)

REVISION PETITION NO. 2048 OF 2010
(From the order dated 29.10.2009 in First Appeal No. 106/2007
of Andhra Pradesh State Consumer Disputes Redressal Commission)

Union Bank of India
Regional Office at New Delhi
Shaheed Bhagat Singh Place
New Delhi                                                        ...  Petitioner

Versus


1.   B. Shankar
s/o B. Bhadru
H. No. 1-2-375/1, Street No. 6,
Nagaiah, Old Building
Near Gagan Mahal Hospital
Domalguda, Hyderabad

2.   M/s Tata AIG General Insurance Co. Ltd.,
Life Style Building, Begumpet
Secunderabad                                          … Respondent(s)


BEFORE
HON’BLE MR. JUSTICE K.S. CHAUDHARI,
PRESIDING MEMBER
HON’BLE DR. B.C. GUPTA, MEMBER

APPEARED AT THE TIME OF ARGUMENTS

RP No. 4621 of 2009
For the Petitioner(s)

NEMO
For the Respondent-1

Mr. Gautam Gupta, Advocate
For the Respondent-2

Ms. Anjalli Bansall, Advocate

RP No. 2048 of 2010
For the Petitioner(s)

Mr. Gautam Gupta, Advocate
For the Respondent-1

NEMO
For the Respondent-2

Ms. Anjalli Bansall, Advocate

PRONOUNCED ON : 8th AUGUST 2013

O R D E R


PER DR. B.C. GUPTA, MEMBER

        These two revision petitions have been filed under section 21(b) of the Consumer Protection Act, 1986, against the impugned order dated 29.10.2009 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission (for short ‘the State Commission’) in FA No. 106/2007, “B. Shankar versus Union Bank of India & Anr.”, vide which while allowing the appeal, order passed by the District Forum, Hyderabad in consumer complaint no. 42/2006 dated 20.12.2006, dismissing the complaint, was set aside.

2.     Brief facts of the case are that the complainant, B. Shankar purchased a vehicle Tata Indica for Rs.3,45,959.42/- by raising finance from OP No. 1, Union Bank of India for the purpose of earning his livelihood.  He spent a sum of Rs.23,062/- towards extra fittings to the vehicle.  The said vehicle was insured with OP No. 2, M/s. Tata AIG General Insurance Co.  It has been stated in the complaint that the complainant is holder of savings bank account bearing no. 6148 with the OP No. 1, Union Bank of India and he is regularly using this bank account and maintaining sufficient balance in the same. The complainant issued cheque bearing number 282302 dated 16.6.2004 for Rs.9,623/- drawn on OP No.1, Union Bank of India in favour of OP No. 2, Tata AIG General Insurance Co., towards payment of insurance premium for the vehicle and he also paid a cash amount of Rs.449/- to OP No. 2 in order to get the insurance policy of the vehicle renewed for a period of one year from 16.6.2004.  The complainant was always under this impression that the insurance policy had been renewed with effect from 16.6.2004.  In the meanwhile, the vehicle, in question, was stolen on the mid-night of 09.07.2004.  The complainant lodged an FIR with the Police and also informed OP No. 2 Insurance Company regarding the theft and requested for payment of insurance claim. However, the said claim was rejected by OP No. 2 and they informed the complainant that his cheque bearing number 282302 dated 16.06.2004 for Rs.9,623/- had been dishonoured by OP No.1 and hence the insurance policy could not be renewed.  The complainant then contacted OP No. 1 bank, where it was found that there was sufficient balance in the account of the complainant.  The bank authorities vide their letter dated 13.07.2004 sent to the OP No. 2 insurance company stated that their counter clerk / officer had inadvertently returned the cheque issued by the complainant by oversight on 18.06.2004 and there was sufficient balance in savings account no. 6148 of the complainant.  They also issued a banker’s cheque dated 13.07.2004 for Rs.9623/- in favour of OP No. 2 but the OP No. 2 rejected the said request and also rejected the claim filed by the complainant as the vehicle had already been stolen by that time.  The complainant thereafter filed the consumer complaint in question, seeking relief that the OP should be directed to pay Rs.4 lakh towards the cost of the vehicle, Rs.1 lakh as compensation for mental agony and loss and a cost of Rs.3,000/-.  The District Forum dismissed the complaint and observed that the complainant was at liberty to approach the civil court for appropriate relief.  An appeal filed against this order by the complainant was allowed as per the impugned order and the OPs were directed to pay a sum of Rs.1,50,000/- towards compensation and a cost of Rs.5,000/- to the complainant within four weeks, failing which the said amount shall attract interest @ 9% p.a.  It was observed by the State Commission that although the value of the vehicle was
Rs.4 lakh, they were allowing only Rs.1.5 lakh as vehicle had already run for a period of 6 years.  Against this impugned order, the complainant has filed Revision Petition No. 4621/2009 for enhancement of the compensation and Union Bank of India has filed Revision Petition No. 2048/2010 challenging the said order.

7.     The petitioner, B. Shankar, last appeared before this Commission on 21.02.2013, during hearing before circuit bench at Hyderabad and submitted that he is a poor person and he could not come to Delhi to argue his case.  He filed his written arguments which were taken on record as requested by him and his presence was exempted for subsequent hearings.  In his written arguments the complainant, B. Shankar, has stated that he had purchased the said vehicle on 13.02.2003, but inadvertently, the date of purchase was mentioned as 1.08.1998 instead of 13.2.2003; hence the vehicle was only 16 months old, when it was stolen on 09.07.2004.  The petitioner has attached copies of the invoice and the registration certificate of the vehicle in support of his contention that the vehicle was purchased on 13.2.2003.  These documents are also attached with the RP No. 2048/2010 filed by the Union Bank of India.  Further, the petitioner has stated that after the payment of cheque of Rs.9,623/- drawn on OP No. 1 Bank, in favour of OP No.2 insurance company and after paying Rs.449/- in cash to the insurance company, he was under the impression that the insurance policy had been renewed for a period of one year with effect from 16.6.2004.  He further states that when he went to the office of OP No. 2 for informing them about the theft of the vehicle and requesting for the insurance claim, he was astonished to hear from OP No.2 that cheque, in question had not been honoured by the Bank and the insurance policy had not been renewed.  Thereafter, he went to the bank to enquire into the matter.  The bank issued letter dated 13.07.2004 saying that the cheque was returned inadvertently on 18.06.2004, although there was sufficient balance in the savings account of the petitioner.  The Bank itself issued a banker’s cheque of Rs.9,623/- and requested the insurance company to renew the policy, but they refused to do so.  The Petitioner, B. Shankar, requested in his written arguments that the OP should be asked to pay him a sum of Rs.4 lakh along with interest @12% from the date of purchase of vehicle and compensation of Rs.1 lakh and cost of Rs.3,000/-.

8.     At the time of arguments before us, the learned counsel for the petitioner Union Bank of India, stated categorically that the cheque, in question, was never produced before the Bank.  He also stated that the letter dated 13.07.2004 purported to have been issued by the Bank is a false and forged document and such a document was never issued by the Bank. 

9.     Learned counsel for the insurance company stated that they never received the premium, in question, and hence the policy was not renewed by them.  The cheque presented by them to the Bank was dishonoured.  The amount of Rs.449/- paid in cash by the complainant B. Shankar was returned to him after the cheque was dishonoured.  A registered letter was sent by the insurance company on 30.06.2004 about the cancellation of the policy with effect from 16.6.2004.  The complainant was advised to make fresh remittance of premium in cash, so that the policy could be renewed.  Learned counsel, however, stated that at this juncture, they could not produce the said dishonoured cheque before this Commission.

10.   We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

11.   The main point involved in the present case is that the insurance policy for the vehicle in question was valid up to 16.6.2004 and it was not renewed thereafter, because the insurance company was not able to get the premium for renewal of the same.  It is the case of the complainant as well as the insurance company that cheque number 282302 dated 16.6.2004 for Rs.9,623/- was issued by him and was presented before OP No. 1 by the OP No.2 but the same was not honoured and returned to the insurance company.  The Bank admitted vide letter dated 13.07.2004 that said cheque was dishonoured inadvertently, due to the mistake of their counter clerk.  They also enclosed a banker’s cheque dated 13.07.2004 for Rs.9,623/- in favour of the OP No.2 to renew the insurance policy.  During the course of the arguments, learned counsel for the Bank stated that the said cheque was never presented before the Bank and the letter dated 13.07.2004 was a forged document.  However, a perusal of revision petition no. 2048/2010 filed by the bank itself reveals that such a plea has not been taken by the Union Bank of India in the grounds of revision petition.  Ground ‘C’ in the revision petition is reproduced as under:-
“For that the Ld. State Commission has grossly erred in placing undue weight to the Ex.9 and observe that because of the dishonour of the cheque the insurance policy was cancelled and thereby the complainant could not obtain the insurance claim.  That it is material to mention here that even if the subject cheque could have cleared and policy had been in existence, the complainant could not have obtained the insurance claim for his vehicle run for commercial purpose under the policy issued for private vehicle.  Because on account of having put the subject vehicle to commercial use there has been apparent breach of the policy terms as appearing on the subject policy to the effect that – “no claim would be admissible if the insured vehicle is used for hire or reward.”

12.   It is quite clear from the above that the Bank, in their own revision petition, have not stated anywhere that the letter dated 13.07.2004 was a forged document.  They have also not denied that they issued a banker’s cheque for the amount of Rs.9,623/- to the insurance company and requested them to renew the insurance policy. 

13.   It may be observed here that the complainant filed a complaint before the Banking Ombudsman also on 12.08.2004.  In proceedings before the Banking Ombudsman, the Union Bank of India filed reply to the complaint vide their letter dated 20.09.2004, in which they clearly admitted that, “due to inadvertent error on the part of the official, the said cheque was returned unpaid on 18.06.2004 despite availability of balance in the account” The Bank also admitted that they issued a pay order of equal amount on 13.07.2004 to rectify the error.  It is clear, therefore, that the Bank should not have stated the facts wrongly in proceedings before this Commission and their act amounts to a sheer misconduct on their part.  The letter dated 13.07.2004 has been issued on the letter-head of the Bank, there is a seal of the Bank on the said letter and also it is signed by Deputy Manager, Chikkadapally, Hyderabad Branch of the Bank. 

14.   It is clear from the above facts that due to fault of the Bank in dishonouring the cheque for premium amount, the insurance policy could not be renewed.  The consumer cannot be allowed to suffer because of the wrong-doing of the Bank.  Had the Bank not dishonoured the cheque, the policy would have been renewed and there would have been no controversy regarding the payment of the claim.

15.   It may also be mentioned here that as per the version of the complainant that after sending cheque for insurance premium and depositing a sum of Rs.449/- in cash with the Insurance Company, he was under this impression that the policy had been renewed. However, when the vehicle was stolen, the complainant went to the police station to lodge an FIR and then went to the office of the Insurancecompany requesting for payment of insurance claim.  However, he learnt from Insurance Company that the cheque, in question, had not been honoured by the Bank and as such the policy had not been renewed.  It cannot be stated, therefore, that the complainant had the opportunity to pay the premium amount again and get a new insurance policy.  However, in the reply filed by the Insurance Company before the District Forum, it has been stated that after knowing the report of unpaid cheque by the Bank they informed the complainant by registered letter dated 30.06.2004 about the dishonour of the cheque and the cancellation of insurance policy.  The Insurance Company have also taken the plea that the complainant was well-aware about the dishonour of the cheque not only by his banker but also from the insurance company much prior to the alleged theft of the vehicle but he contended, suppressing all these facts, that he was astonished to know from the Insurance Company about dishonour of cheque when he made insurance claim for payment of sum assured.  From the facts on record, it is made out that although there is no documentary evidence to show as to when the complainant received the letter dated 30.06.2004 from the Insurance Company yet it can be stated that after depositing the cheque dated 16.6.2004 with the Insurance Company the complainant did not bother to know about the issuing of insurance policy after getting money from the Bank.  The complainant is, therefore, guilty of showing negligence in the matter if he slept over the issue till the theft of the vehicle took place. 

16.   It is further borne out from record that after receiving the cheque of Rs.9,623/-, the Insurance Company did issue policy in favour of the complainant which was valid for a period of one year till 15.06.2005 but the said policy was cancelled by the Company after the cheque was dishonoured by the Bank.  
In the said insurance policy the total Insured Declared Value (IDV) of the vehicle has been shown to be Rs.2,62,000/-.  
The complainant in his complaint and further in written submissions has stated that since the vehicle was purchased for a sum of Rs.3,45,959.40 and it was only 16 months old, when it was stolen.  
The complainant has demanded a sum of Rs.4 lakh as compensation for the value of the vehicle.  
However, from the IDV mentioned in the Policy issued by the insurance company, it can be safely presumed that the complainant is not entitled to get more than Rs.2,62,000/- for loss of the vehicle. 
However, looking at the negligence shown by the complainant in not pursuing this case after submitting cheque for the premium amount he needs to be penalised also to some extent.  
It is felt, therefore, that a sum of Rs.1,50,000/- as already allowed by the State Commission seems to be a reasonable amount for awarding compensation to the complainant for loss of the vehicle.

17.   In the facts and circumstances of the case, Revision Petition No. 2048/2010, filed by the Union Bank of India, is ordered to be dismissed.  Revision Petition No. 4621/2009 filed by the complainant, i.e., B. Shankar, is also dismissed. There shall be no order as to costs.
Sd/-
(K.S. CHAUDHARI J.)
PRESIDING MEMBER


Sd/-
(DR. B.C. GUPTA)
MEMBER
RS/

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.