IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 12thday of July, 2022
Present: Sri. Manulal V.S. President
Smt. Bindhu R. Member
Sri. K.M. Anto, Member
C C No. 212/2018 (filed on 04-10-2018)
Petitioner : Johnson K. George,
S/o. K.J. George,
Kattappilli House,
Aarakunnam P.O.
Mulanthuruthy village,
Ernakulam – 682313.
(Adv. Githesh J. Babu and
Adv. Nithin Sunny Alex)
Vs.
Opposite Parties : (1) M/s. Eicher / Polarish (P) Ltd.
3rd Floor, Select City Walk.
A-A3 District Centre Saket,
New Delhi – 110017.
Rep. by its Managing Director.
(2) M/s. Kainikkara Motors,
Opposite Government College,
Nattakom P.O. Kottayam- 680566
Rep. by its Manager.
(3) National Insurance Company Ltd.
First Floor, Bathel Buildings,
Door No.21/352/20,21,
Ring Road, Aban Junction,
Pathanamthitta, Kerala – 689645.
(Adv. P.C. Chacko)
O R D E R
Sri. Manulal V.S. President
Case of the complainant is as follows:
Complainant purchased a Multix MX vehicle bearing registration number KL-39-L6221 from the second opposite party, which was manufactured by the first opposite party. The complainant had paid an amount of Rs.3,84,669 to the second opposite party. The second opposite party told the complainant that the said amount comprised of road tax of Rs.21,740/- and Rs.13,929/- as insurance premium. The second opposite party made the complainant believe that they would issue the packaged insurance policy from the third opposite party for the vehicle. The said vehicle met with an accident on 10-4-2018 at Arakkunnam near A.P. Varkey Hospital Ernakulam. The Mulanthuruthy police made general diary entry regarding the accident on 13-4-2018. Thereafter the vehicle was brought to the service centre of the second opposite party. Second opposite party informed the matter to the third opposite party and a claim was lodged. The second opposite party had given an estimate for repair of the vehicle in the tune of Rs.2,95,314.30. The surveyor deputed by the third opposite party inspected the damaged vehicle and prepared a survey report on 12-7-2018 and observed that the amount comes near to insured declared value of the vehicle. Instead of repeated demands, the second opposite party not repaired the vehicle. Thereafter, the complainant issued a lawyers notice to the third opposite party to settle the claim on the total loss basis. The third opposite party in reply to the lawyers notice informed that the policy which has been issued on the strength of a cheque covering premium amount issued by the second opposite party was dishourned and as a consequence of dishounor of cheque, the policy was cancelled from very inception. On receipt of the same complainant on 27-7-2018 issued notices to the first and second opposite party to repair the vehicle but both fell on deaf ears.
According to the complainant the act of the first opposite party in not supplying the parts to vehicle manufactured by the first opposite party amounts to deficient in service. It is further averred in the complaint that the act of second opposite party in not paying the amount which is collected from the complainant, to the third opposite party, and the act of the third opposite party in not intimating the complainant about the dishonor of the cheque given as premium to the insurance policy amounts to imperfection and short coming, inadequacy in the quality of service which is to be maintained by the service provider and amounts to deficiency in service.
It is alleged in the complaint that the complainant had suffered much mental hardship, loss and sufferings and the same is to be compensated by the opposite parties. Hence this complaint is filed by the complainant.
Upon notice from this commission third opposite party appeared before this commission and filed version. Inspite of receipt of notice from this commission first and second opposite parties did not care to appear before the commission and file version. Hence first and second opposite parties are set ex-party.
Version of the third opposite party is as follows:
A policy was issued to the vehicle bearing engine number 705984 and chassis no. 03760FH in the name of the complainant for the period from 31-8-2017 to 30-8-2018 subject to the terms and conditions of the policy. The premium for the said policy was received by way of cheque for Rs.8,930/- from the second
opposite party. However when the cheque was presented for collection it was returned dishonored for the reason “Exceeds arrangements”. Thus the said policy was not supported by any consideration and policy was void-ab-intio. Consequently the said policy was cancelled immediately and it was informed to
the second opposite party and the insured. Therefore the third opposite party has no liability to pay any compensation in this case. The claim was intimated to the third opposite party and on the basis of the same and as a matter of procedure, surveyor was appointed for conducting the survey of the vehicle. The surveyor opined that the said vehicle was in the limit of repair basis settlement though the estimate is close to IDV. Since the policy was cancelled, the said survey was conducted only as a matter of procedure and it has nothing to do with the disposal of claim. The third opposite party timely intimated the dishonor of the cheque to the complainant and the second opposite party.
There is no deficiency in service on the part of the third opposite party.
Evidence of this case consists of deposition of Pw1 and Dw1 and exhibit A1 to A20 and B1 to B3(a).
On evaluation of complaint, version and evidence on record we would like to consider the following points.
- Whether there is any deficiency in service on the part of the opposite parties?
- If so what are the reliefs and costs?
Point number 1 and 2 together.
The specific case of the complainant is that he had purchased the Multix MX vehicle bearing registration number KL-39-L6221 from the second opposite party, which was manufactured by the first opposite party. The complainant had paid an amount of Rs.3,84,669/- to the second opposite party which is inclusive of price of the vehicle , road tax and premium for the insurance policy. When he lodged a claim for own damage the third opposite party rejected his claim on the ground that the policy which has been issued on the strength of a cheque covering premium amount issued by the second opposite party was dishourned and as a consequence of dishounor of cheque, the policy was cancelled from the very inception.
On perusal of exhibit A2 journal voucher which is issued by the second opposite party on 22-8-2017 we can see that the complainant had paid Rs.3,49,000 towards the ex-show room price and Rs.21740 as road tax and Rs.13,929/- in the head of insurance. It is proved by exhibit A7 extract of general diary dated 13-4-2018 of Mulanthuruthy police station that the said vehicle had met with an accident at Arakkunnam near A.P. Varkey Hospital Ernakulam on 10-4-2018 and caused damages to the vehicle . Exhibit A8 is the estimate issued by the second opposite party to complainant. It is proved by exhibit A8 that the second opposite party had estimated the cost of repair works to the tune of Rs.2,95,314.30/-
Pw1 who is the complainant would depose that he had paid the premium amount to the second opposite party for availing insurance policy. It is admitted by the third opposite party that they had issued an insurance policy to the vehicle bearing engine number 705984 and chassis no. 03760FH in the name of the complainant for the period from 31-8-2017 to 30-8-2018. On perusal of exhibit A4 registration certificate we can see that the engine number and chassis number of the vehicle in exhibit A4 and A3 insurance policy are same.
The complaint was resisted by the third opposite party on the ground that though they have issued the insurance policy the cheque which was given by the second opposite party for the premium amount was dishonoured and consequently the policy became void –ab- intio due to non receipt of the premium amount. Exhibit B1 is the cheque ie. for an amount of Rs.8929/- issued by the second opposite party in favour of the third opposite party. Though the cheque dishonor memo issued by the bank is marked as exhibit B2 as subject to proof, the opposite party did not adduce any further evidence to prove the same. Hence we are not inclined to consider exhibit B2 in evidence. Exhibit B3 is the true copy of the policy endorsement showing its cancellation. On perusal of exhibit B3 we can see that the third opposite party has cancelled the policy with effect from 31-8-2017 due to the duisnour of cheque. On perusal of exhibit B3 we cannot see the date on which the said endorsement was made by the third opposite party. Dw1 who is the assistant manager of the national insurance company, Divisional Office, Kottayam would depose that the said endorsement was sent to the complainant through the ordinary post. He further deposed that the details of the said letter would record in the inward –out ward register which is kept in the office. Though the opposite party contended that the said inward-out ward register was misplaced, however Dw1 deposed that details about the registers and the period of such registers were not informed to him from the Pathanamthita office ie. the office from which the policy was issued to the complainant. The specific case of the third opposite party is that the cheque was issued by the second opposite party. But they did not adduce any evidence to prove that third opposite party has intimated the dishounour of the cheque to the second opposite party.
On going through the documents on record, we do not come across any copy of the so-called letter that the third opposite party claimed to have sent to the complainant regarding cancellation of the policy over non-clearance of the premium cheque given by the second opposite party.
It is naïve to believe that the complainant was totally ignorant of such development because, had the same been duly communicated to him, there was no apparent reason for not taking necessary remedial steps to renew the policy by issuing a fresh cheque or paying the premium in cash.
It is also noteworthy that the complainant did not make any correspondence with the third opposite party in the immediate aftermath of dishonor of the cheque in question. It is not at all believable that despite receipt of necessary communiqué from the side of the third opposite party, the complainant did not make even a single correspondence with the 3rd opposite party.
Taking into consideration the fact that the third opposite party miserably failed to put forth any cogent documentary evidence towards issuance and delivery of the disputed letter, no reliance can be placed upon the contention of the third opposite party.
Given that the instant cheque was not dishonoured owing to insufficient balance, in the fitness of things, it would not be proper to suspect any mala fide intention on the part of the complainant. .
As a bona fide consumer, the complainant, to our mind, definitely deserved wholehearted cooperation/assistance from the side of the Insurance Company. Had he been intimated about dishonor of cheque even on phone, he could act upon it to salvage the insurance policy. No cogent documentary proof is furnished by the third opposite party to prove that complainant was duly intimated over phone in this regard. Since the third opposite party did not act in a prudent manner, in our considered opinion, it cannot shrug off its responsibility.
As discussed earlier it is proved by exhibit A8 that the second opposite party had estimated the cost of repair works to the tune of Rs.2,95,314.30. Though the third opposite party submitted that the surveyor appointed by them as matter of procedure has assessed the damages of the vehicle is within the limit of repair basis settlement ,however the third opposite party did not disclose the quantum of the damages assessed by the surveyor. There is no contrary evidence before us to disbelieve Exhibit A8. No doubt , the total loss can be allowed only when the repair cost would exceed 75% of the insured declared value. In this case the IDV of the vehicle was 3,27,038. Thus the estimated cost of the repair exceeds the 75% of the IDV and the complainant is entitled to get declared the vehicle as total loss and to refund the IDV.
The ratio of the judgment, titled as United India Insurance Co. Ltd. Vs. Laxmamma & Ors. (2012) 5 SCC 234 wherein it has been held that the insurance company is liable to satisfy the award if the intimation regarding the dishonour of the cheque and cancellation of policy is communicated to the policy-holder after the date of the accident. Thus, the defense of the insurance company that the policy of insurance was not valid since the cheque had been dishonoured prior to the accident would not exonerate them from making the payment of compensation.
National Insurance Company Ltd., Vs. Balkar Ram and others”
“National Insurance Co. Ltd. Vs. Abhaysing Pratapsing Waghela and others” and “New India Assurance Co.Ltd. Vs. Rula and others”), the Apex Court has considered and determined that in the event of dishonour of cheque of premium, if the intimation of cancellation of policy of insurance was not given to the insured before the date of accident, in that event, the insurer is liable to indemnify the third party and to pay compensation to the claimants/third party.
In this matter, admittedly the accident had taken place on 10-4-2018 and the cheque although had been dishonoured prior to the accident, the intimation to the policy-holder had not given by the insurance company, in view of which the insurance company cannot be allowed to contend that the policy-holder was not
holding a valid policy of insurance in regard to the vehicle which met with an accident. Thus we are of the opinion that the third opposite party has committed deficiency in service by not honoring the claim of the complainant.
It is further evident from records that the second opposite party had collected an amount of Rs. 13,929/- for insurance Exhibit A3 and B1 proves that they had issued a cheque of Rs.8,929/- in favour of the third opposite party for obtaining the insurance policy in the name of the complainant. Thus the second opposite party has collected Rs.5000/- in excess than which was required for the actual premium. The said act of the second opposite party amounts to imperfection short coming and inadequacy in the quality of service which is to be maintained by the service provider and amounts to deficiency in service.
No doubt, the act of the second and third opposite parties caused much mental agony and hardship to the complainant and the second and third opposite parties are liable to compensate the same.
Considering the nature and circumstance of the case we allow the complaint and pass the following order.
- We herby direct the third opposite party to pay Rs. 3,27,038/-which is the IDV of the vehicle to the complainant within 30 days from the date of receipt of this order.
- The complainant shall hand over the damaged vehicle to the third opposite party along with R.C particulars and other relevant documents to the third opposite party.
- We hereby direct the second and third opposite party to pay Rs.50,000/- each to the complainant as compensation for the deficiency in service on the part of the second and third opposite parties.
Order shall be complied within the 30 days from the date of receipt of this Order, failing which the awarded amounts will carry 9% from the date of this order till realization.
Pronounced in the Open Commission on this the 12th day of July, 2022
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R. Member Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Witness from the side of complainant
Pw1 – Johnson K. George
Witness from the side of opposite party
Dw1 -Sita S.
Exhibits marked from the side of complainant
A1 – Copy of order booking form dtd.22-08-2017
A2 – Copy of receipt dtd.22-08-2017 issued by 2nd opposite party
A3 – Copy of certificate of insurance cum policy schedule issued by 3rd opposite party (Subject to objection)
A3(a) - Copy of certificate of insurance cum policy with retun cover
A4 – Copy of RC book (KL-39-L 6221)
A5 – Copy of tax receipt issued by Motor Vehicles Department.
A6 – Copy of driving licence in the name of petitioner
A7 – Copy of certificate dtd.13-04-18 issued by Mulanthuruthy Police Station
A8 –Copy of multix estimate (subject to objection)
A9- True copy of survey report dtd.12-07-18
A10 – Copy of letter issued by 3rd opposite party to petitioner
A11- Copy of legal notice dtd.27-07-18 by Adv. Tom Joseph to 1st opposite party
A12- Copy of legal notice dtd.27-07-18 by Adv. Tom Joseph to 2nd opposite party
A13- Copy of legal notice dtd.27-07-18 by Adv. Tom Joseph to 3rd opposite party
A14 – Copy of reply notice dtd.13-08-18 issued by Adv. Sam Koshy
A15- Postal receipt (journal) 3 nos.
A16-Postal AD card
A17- Certificate dtd.26-08-19 issued by Canara Bank
A18 series – Photos of vehicle
A19- Certificate dtd.16-10-19 issued by Arakkunnam Rubber Ulpadaka Sangam
A20 – Certificate dtd.16-10-19 issued by Swasraya Karshaka Samithi
Exhibits marked from the side of opposite party
B1 – Cheque dtd.31-08-2017 issued by 2nd opposite party
B2- Dishonour memo issued by bank
B3 - Cancellation endorsement (subject to objection)
B3 (a) – Private car package policy issued by National Insurance Co. Ltd.
By Order
Assistant Registrar
