Chandigarh

StateCommission

CC/350/2018

Shivam Dua - Complainant(s)

Versus

Reliance General Insurance Company Limited - Opp.Party(s)

Gaurav Chopra, Adv.

15 Feb 2022

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

               UNION TERRITORY, CHANDIGARH

 

 

Consumer Complaint  No.	350 of 2018
Date of Institution	13.09.2018
Date of Decision	15.02.2022

 

 

Shivam Dua son of Sh. Raj Kumar Dua resident of H.No.1715, Sector-33C, Chandigarh.

                     ....Complainant

Versus

 

1.    Reliance General Insurance Company Limited,
SCO-147-148, 2^nd floor, Madhya Marg, Sector 9-C, Chandigarh-160017 through its Authorized Representative.

2.    Reliance General Insurance Company Limited having its Registered Office at H block, 1^st floor, Dhirubai Ambani Knowledge City, Navi Mumbai-400055 through its Authorized Representative.

3.    Federal Bank Ltd. Having its Branch Office at SCO 310, Sector-38D, Chandigarh through its Authorized Representative.

4.    Panjab Motors (Bhagat Automative Pvt. Ltd.) Authorized Dealer of Mercedes Benz India Pvt. Ltd., C-19 Industrial Area, Phase-1, Mohali, Punjab through its Authorized Representative.

                                                ....Opposite Parties

 

 

BEFORE: MRS. PADMA PANDEY, PRESIDING MEMBER

MR. RAJESH K. ARYA, MEMBER

 

 

Argued by:  Sh. Rishabh Bajaj, Advocate, proxy for Sh. Gaurav Chopra, Advocate for the complainant.

                   Sh. Satpal Dhamija, Advocate for Opposite Parties No.1 & 2.

                     Sh. Nitin Grover, Advocate for Opposite Party No.3.

                     Sh. H.S. Bedi, Advocate for Opposite Party No.4.

                 

 

PER PADMA PANDEY, PRESIDING MEMBER

 

In brief, the facts of the case are that the complainant purchased a new Mercedes Benz in the year 2015 from Opposite Party No.4. The said vehicle was hypothecated with Opposite Party No.3. The vehicle was duly insured with Opposite Party No.1 for an amount of Rs.1,03,408/- vide Insurance Policy No.9909962311000703 (Annexure C-2) which was valid from 06.11.2016 to 05.11.2017 and the Insured Declared Value (IDV) of Rs.38,40,000/- was assessed. The complainant renewed the policy before expiry of the earlier insurance from 06.11.2017 to 05.11.2018 to the tune of Rs.1,01,962/- through Cheque of the Federal Bank i.e. Opposite Party No.3 and the Insured Declared Value of the vehicle was Rs.34,56,600/- and the aforesaid cheque was handed over to the authorized representative of Opposite Party No.4. The cover note dated 03.11.2014 was issued to the complainant in the office of Opposite Party No.4. According to the complainant, unfortunately the vehicle met with an accident on 14.01.2018 and was badly damaged. The cause of accident was due to a stray animal running on the road and with a view to save it, preventive action was taken and the vehicle crashed into a road side ditch. Report was made with P.S. Sohana Mohali vide DDR No.14 dated 15.01.2018. The complainant has contended that the car was removed from the accident site by recovery van and was brought to the workshop of Opposite Party No.4 and his younger brother Sh. Kushagar Dua was asked to fill the Motor Claim Form. The complainant has handed over the documents which were asked by the Opposite Party No.4 for forwarding the Motor Claim Form to Opposite Parties No.1 & 2. Opposite Party No.3 prepared the estimate to the tune of Rs.66,67,993.48/- vide Annexure C-8. The total cost assessed by the Opposite Party No.4 was on higher side than the IDV of the vehicle in question, thus, the vehicle falls under the Total Loss category and the Opposite Parties No.1 & 2 were liable to pay the entire insured amount of Rs.34,56,600/- to the complainant and till the time the damaged vehicle remained parked in the workshop of Opposite Party No.4 for which the complainant paid parking charges of Rs.500/- per day.  Subsequently, the complainant enquires about the claim form from the Opposite Party No.4 and he was informed by the Opposite Party No.4 that the Insurance Policy did not exist in the records of the Opposite Parties No.1 & 2 and therefore, the Medical Claim Form could not entertain by the Opposite Parties No.1 & 2.

2. The complainant himself contacted the Opposite Parties No.1 & 2 and he was informed that the Insurance Policy did not exist as the cheque furnished by the complainant had been dishonoured after which the complainant approached the Opposite Party No.3 and they informed him that the aforesaid cheque had never been presented to them. When the complainant repeatedly followed-up his case with Opposite Party No.4, the Opposite Party sent an e-mail to Opposite Parties No.1 & 2 regarding the same. Copy of e-mail dated 10.04.2018 is at Annexure C-10. Further, the complainant had contested that the Opposite Parties No.1 & 2 allegedly issued letter dated 13.11.2017 for cancelling the Insurance Policy due to
   non-realization of the premium amount, which was antedated and concocted just to wriggle out of their liability of settling the Motor Accident Claim. Thereafter, on 16.04.2018 the complainant filed a complaint before the Ombudsman, but on 18.04.2018 vide Annexure C-13, he was informed by their office that in the absence of any Professional Expert to deal with complaints against non-life insurance companies, the aforesaid complaint had been kept in abeyance which would be scrutinized once an expert joined. Legal notice was sent to Opposite Parties
   No.1 & 2 on 16.07.2018, but to no avail. It was stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint was filed.
3. In their joint written statement, Opposite Parties No.1 & 2 admitted the factual matrix of the case. It has submitted that the cheque submitted by the complainant was presented in their Bank i.e. H.S.B.C. which was returned with the remarks “Amount in words and figures differ” and accordingly the answering Opposite Parties due to dishonour of cheque immediately sent letter to the complainant, but the complainant did not bother about it. It has further been contended that as per the provision of Section 64VB of Insurance Act, 1938, the policy stands cancelled in the absence of any premium. Pleading that there is no deficiency in service or unfair trade practice on their part, Opposite Parties No.1 & 2 have prayed for dismissal of the complaint.
4. In its separate written reply, Opposite Party No.3 has averred that the cheque No.51009681 was never presented for clearance, the cheque in question has not been used and therefore, the question of rejection/return does not arise. It has been pleaded that there is no allegation and prayer sought against the Opposite Party No.3 by the complainant. Thus, the answering Opposite Party prayed for dismissal of the complaint against them.
5. In its separate written reply, the Opposite Party No.4 submits that they are only the dealer of the car and never recommended the complainant to migrate his insurance policy from Bharti AXA General Insurance Company to Reliance General Insurance Company. It has been pleaded that neither the Opposite Party No.4 is an agent of Opposite Parties No.1 & 2 nor the cheque was received by any of the authorized representative of answering Opposite Party. It has also been pleaded that having a customer friendly approach, the Opposite Party No.4 raised the concern of the complainant with Opposite Parties No.1 & 2. Therefore, the Opposite Party No.4 prayed that the complaint being devoid of merit against them be dismissed.
6. The parties led evidence in support of their case.
7. We have heard the Counsel for the Parties, and, have gone through the evidence of the record of the case, carefully.
8. The main question to decide as to whether the Opposite Party rightly repudiated the claim of the complainant, the answer to this question in negative, forcing this Commission accept the complaint partially for the following reasons.
9. The first and foremost document to be relied upon is the cover note issued by the Opposite Parties at C-3, which clearly states that the said vehicle has been insured from 06.01.2017 to 05.11.2018. The accident of the said vehicle took place on 14.01.2018, after a period of more than two months the date of commencement of the aforesaid insurance policy.
10. The main contention of the Opposite Party is that the complainant has submitted cheque No.51009681 dated 03.11.2017 amounting to Rs.1,11,962 drawn on the Federal Bank towards the premium against the insurance policy No.990991723110005183 commencing from 06.11.2017 to 05.11.2018 for which the aforesaid cover note was issued by the Opposite Parties to the complainant. The Opposite Parties has further stated that the policy in question was issued subject to the realization of the above said premium. It is the contention of the Opposite Parties that the said cheque was presented in the Bank of answering Opposite Party i.e. HSBC which was returned with the remarks “Amount in words and figures differ”, and the further contention of the Opposite Party was that a letter was served to the complainant as well as Registering Authority through Registered Post intimating the same alongwith the notice of the cancellation of the said insurance policy due to non-realization of premium and therefore, the opposite Party is right in terms of Section 64VB of Insurance Act, 1938 taking such an action of not paying the insured amount to the complainant.
11. At this stage, this Commission chose to differ with the contention of the Opposite Parties. The complainant by way of an affidavit has categorically affirmed that he never received the speed post consignment sent by the Opposite Party intimating the non-receipt of premium and also serving him the notice of cancellation. The complainant further affirmed that no consignment details of the consignment No.RM-984804168IN could be found in the record of the Indian Postal Services. Further, the complainant stated that there was sufficient balance in his bank account and the said cheque was never presented in order to be dishonoured and had there been any discrepancy between the words and the figures in the cheque, it should be brought to the notice of the complainant which the Opposite Parties miserably failed to do so. The IDV of the vehicle is Rs.34,56,000/- and the estimate to repair the loss of the vehicle is Rs.66,67,993.48 which means that it is a case of total loss and the Opposite Parties No.1 and 2 are liable to make the payment of Rs.34,56,000/- to the complainant.
12. As regards the complaint qua Opposite Party No.3 i.e. the Federal Bank Limited, we find that there is no cause of action towards it and hence the complaint stands dismissed qua Opposite Party No.3.
13. This Commission takes reliance upon the judgment of the Hon’ble Supreme Court India in (2008) 3 SCC 133 between National Insurance Co. Ltd. Vs. Abhaysing Pratapsingh Waghela, wherein the Hon’ble Supreme Court has, even after referring the decision of Dedappa (supra) has confirmed and held that when cover note was issued prior to date of accident i.e. on the date of cheque, the date when cheque was issued to the insurer, though cheque issued towards payment of premium was dishonoured, in absence of cancellation of policy on dishonouring of cheque, the liability of insurance company will remain in force till policy was cancelled and thereby it was held that appellant insurance company cannot avoid its liability.
14.  No other point, was urged, by the Counsel for the Parties.
15. For the reasons recorded above, the complaint is partly accepted, with costs, with the following directions: -

1. The Opposite Parties No.1 & 2 are jointly and severally liable to pay insured value of the vehicle at Rs.34,56,000/- to the complainant within one month from the date of receipt of copy of this order, failing which the OPs shall be liable to pay insured value of the vehicle along with interest @9% p.a. from the date of this order till payment.
2. The Opposite Party No.4 is restrained from charging parking charges @ Rs.500/- per day from the date of receipt of copy of this order.
3. Opposite Parties No.1 & 2 jointly and severally liable to pay compensation of Rs.50,000/- which also includes litigation expenses from the date of receipt of copy of this order failing which this amount also would attract @9% p.a. interest from the date of this order till payment.

16. Certified Copies of this order be sent to the parties, free of charge.
17. The file be consigned to Record Room, after completion.

 

Pronounced.

15.02.2022

 

                                                                           Sd/-

 [PADMA PANDEY]

PRESIDING MEMBER

 

 

 

 

                                                                            Sd/-     

[RAJESH K. ARYA]

 MEMBER

 

Gp