BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
F.A.No.150 OF 2011 AGAINST C.C.NO.111 OF 2008 DISTRICT FORUM GUNTUR
Between:
Bajaj Allianz General Insurance Company Limited,
Rep. by its General Manager, D.no.10-1-445,
3rd floor, Peejay Plaza,
VIP Road, CBM Compound,
Visakhapatnam – 16.
Appellant/opposite party NO.2
A N D
1. M.Siva Kumari,W/o. late Basavaramaiah,
R/o. Aravapalli, Kakani (Village),
Narasaraopet (Mandal),
Guntur District.
Respondent/complainant
2. Om Sai Bajaj Authorized Service Centre,
Rep. by Krishna Reddy, R/o. Sri Ram Puram,
Narasaraopet, Guntur District
Respondent/opposite party no.1
Counsel for the Appellant M/s N.Mohan Krishna
Counsel for the Respondents Served
QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER
FRIDAY THE SEVENTEENTH DAY OF AUGUST
TWO THOUSAND TWELVE
Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)
***
1. The opposite party no.2 is the appellant.
2. The case of the complainant in brief is that the husband of complainant purchased a motor cycle from 1st opposite party and insured it with opposite party no.2. As per schedule annexed to cover note, the risk on the life of the owner-driver of vehicle covered with personal accident policy for an amount of `1,00,000/-. On 4.10.2006 the husband of the complainant met with an accident and while he was undergoing treatment died in the hospital on 21.10.2006. The complainant submitted claim form along with all the required documents requested by the opposite party no.2. The 2nd opposite party had sent a letter stating that they have not received premium for the policy and therefore, the policy is void ab-initio. The husband of complainant paid premium and 2nd opposite party issued cover note and subsequently till the death of complainant’s husband, they have not intimated anything to the insured about the non-receipt of premium.
2. The opposite party no.1 resisted the case contending that the motor cycle was duly insured with 2nd opposite party and that the 2nd opposite party issued policy covering motor cycle as such the first opposite party has no concern with the claim of complainant. The 2nd opposite party alone is liable to pay. There is no deficiency of service on the part of this opposite party. This opposite party only acted as an agent of 2nd opposite party and this opposite party has duly remitted premium amount to the 2nd opposite party and after receiving premium amount. The 2nd opposite party issued policy in favour of husband of complainant and on the date of accident, the insurance policy is in force. The 2nd opposite party has not issued any notice regarding cancellation of policy to the husband of complainant or to this opposite party. The 2nd opposite party cancelled the policy from its inception only to avoid compensation.
3. The opposite party no.2 filed counter contending that the complainant is not a consumer and the matter involves no consumer dispute. The opposite party no.2 while admitting that the husband of the complainant is the owner of the motorcycle denied that it was insured with opposite party no.2. The opposite party no.2 has not received any premium for providing insurance coverage to the complainant’s husband and his vehicle. The premium for insuring motor cycle was made by way of cheque dt.03-02-06 on Andhra Bank, Narasaraopet. The cheque was dishonoured due to insufficient funds in the account of the first opposite party. The policy issued in favour of husband of complainant was cancelled. There is no contract of insurance between the husband of complainant and the opposite party no.2.
4. The opposite party no.2 informed the complainant that the claim is not admissible as no premium was received by it to cover the risk of vehicle of her husband. The complainant is not entitled for any amount claimed from this opposite party as there was no contract of insurance between this opposite party and the husband of complainant. The complainant is put to proof that she is the only legal heir to the estate of her deceased husband. The complainant is put to strict proof that her husband was holding a valid and effective driving license as on the date of alleged accident. Under section III of the policy, it is clearly mentioned that the PF cover is subject to:
(a) The owner-driver is the registered owner of vehicle
insured herein;
(b) The owner-driver is the insured named in this policy
(c) The owner-driver holds an effective driving license,
in accordance with the provisions of Rule 3 of the
Central Motor Vehicles Rules, 1989, at the time of
accident.
5. If the above three conditions are not fulfilled then the PA claim is not payable. Hence, the opposite party no.2 prayed for dismissal of the complaint.
6. The complainant has filed her affidavit and the documents Exs.A1 to A5. On behalf of the opposite parties, the agent of the opposite party no .1 and the Junior Legal Executive of the opposite party no.2 have filed their affidavits and the documents Exs.B1 to B8.
7. The District Forum has allowed the complaint on the premise that the cheque was issued by the first opposite party and that the validity of the driving license was not mentioned in the repudiation letter.
8. Aggrieved by the order of the District Forum, the opposite party no.2-insurance company has filed appeal contending that the deceased violated provisions of the Motor Vehicle Act and terms and conditions of the insurance policy and that the personal accident cover is subject to condition that the owner-driver holds an effective driving licence in accordance with the provisions of Rule 3 of the Central Motor Vehicles Rules 1989 as also there was non-compliance of requirement of Sec.54 VD of the Insurance Act.
9. The points for consideration are:
1. Whether the insurance policy issued by the second opposite party is void abinitio?
2. Whether the repudiation of claim is made on valid and tenable grounds?
3. To what relief?
10. POINTS NO.1 AND 2 It is not disputed that the complainant’s husband purchased motor cycle from the first opposite party which having collected the sale price and amount towards premium, obtained cover note for the vehicle from the second opposite party-insurance company for a sum assured of `1 lakh and during the period of validity of the insurance policy, the complainant’s husband while driving the motor cycle on 4.10.2006 met with an accident and while undergoing treatment in hospital he died on 21.10.2006. The claim of the complainant was repudiated on the premise that the cheque issued by the first opposite party towards premium was dischonoured.
11. The second opposite party after receiving the cheque from the first opposite party drawn on 3.2.2006 on Andhra Bank Ramireddy pet, Narsaraopet, Guntur District issued cover note in respect of the vehicle. Later, the cheque was dishonoured and the second opposite party issued Ex.B4 endorsing cancellation of the insurance policy which was issued subsequent to the issuance of the cover note. It is an admitted fact that the first opposite party collected the amount from the complainant’s husband. The first opposite party collected the amount from the complainant’s husband and instead making payment of the amount issued cheque in favour of the second opposite party which was dishonoured leading to cancellation of the insurance policy by the second opposite party. The first opposite party cannot shirk burden on the second opposite party stating that it acted as the agent of the second opposite party and it has no concern for the subsequent events as to the result of dishonour of the cheque.
12. Coming to the question of validity of driving license of the complainant husband, the copy of driving license Ex.B7 is stated to have not been issued by the licensing authority Narsaraopet. The licensing authority Narsaraopet issued memo stating that the driving license Ex.B7 was not issued by them and no record was found in their office. Thus, basing on the statement of the RTA Narsaraopet, the learned counsel for the opposite party no.2 has contended that the driving license submitted is a fake driving license. In support of his contention, he relied on the following decisions:
1. NCJ 2004, page No.414 (NC) between National Insurance Company Ltd. Vs. Manohar Lal Batra
Insurance – Repudiation of claim on the ground driver of the vehicle was not holding valid driving license on the date of accident – driving license renewed after 35 days of the accident – no deficiency.
2. NCJ 2005, page No.48 (NC) between Salvador Rodrigues Margo Vs. The New India Assurance Company Ltd.
Violation of policy – validly of driving license is material fact – D.L. is being issued against law and expired as on the date of accident is a sufficient ground to reject the claim – held – appeal has no reason to interfere – rejected.
3. The Supreme Court of India in Civil Appeal No.6248/09 between National Insurance Company Ltd. and Om Prakash Jain confirmed the order of District Forum as the original license of driver was fake.
4. The National Commission in revision petition 408/2010 between Jai Prakash Goyal and United India Insurance Company Ltd. confirmed the order of State Commission since the DL submitted by complainant was found fake and as such the insurance company cannot be burdened with the claim sought for by the complainant since the complainant has violated the terms and conditions of policy.
5. The Supreme Court of India in civil appeal 4539/09 dt.20-07-
09 in a case between national Insurance Company Ltd. Vs.
Sahib Sing restored the order of District Forum wherein the District Forum dismissed the complaint on the ground that the license of driver of truck was fake.
13. The Hon’ble Supreme Court in Oriental Insurnace Company Ltd. Vs. Prithvi Raj reported in I (2008) CPJ 33 (SC) categorically held that :
“The inevitable conclusion therefore is that the decision in Swaran Singh's case has no application to own damage cases. The effect of fake license has to be considered in the light of what has been stated by this Court in New India Assurance Company, Shimla v. Kamla and Ors., 2001 (4) SCC 342. Once the license is a fake one the renewal cannot take away the effect of fake license. It was observed in Kamla's case as follows:
“12. As a point of law we have no manner of doubt that a fake license cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged. Section 15 of the Act only empowers any Licensing Authority to "renew a driving license issued under the provisions of this Act with effect from the date of its expiry". No Licensing Authority has the power to renew a fake license and, therefore, a renewal if at all made cannot transform a fake license as genuine. Any counterfeit document showing that it contains a purported order of a statutory authority would ever remain counterfeit albeit the fact that other persons including some statutory authorities would have acted on the document unwittingly on the assumption that it is genuine.”
14. The District Forum has observed the driving license was issued by RTA on the premise that it was not made ground for repudiation of the claim The insurance policy remains the basis for adjudication of rights of the parties. As the insurance policy issued has a recital that the cheque issued towards premium if not realized, would become void abinitio. The opposite party no.1 collected the amount from the complainant’s husband promising him that it would obtain some insurance policy covering the risk on his life. The first opposite party has not substantiated its contention that it acted as the agent of the second opposite party for collection of the premium. There is no evidence on record except mere contention of the first opposite party to the effect and in the circumstances, the complainant cannot be deprived of the amount promised by the first opposite party in terms of the insurance policy in case of her husband meeting his end in an accident.
15. The first opposite party has the obligation of taking care of realisation of the amount covered under the cheque issued by it towards premium to the second opposite party. The first opposite party has not only rendered deficient service it had also played unfair trade practice on the second opposite party and the husband of the complainant. The first opposite party cannot avoid its responsibility stating that the dishonour of cheque issued by it has no concern whatsoever with the consequent cancellation of the insurance policy. In any view of the matter the first opposite party is held liable to pay an amount of `50,000/- to the complainant. As the insurance policy was cancelled we do not feel it proper to award the amount in terms of the cancelled insurance policy. Accordingly, the order of the District Forum is modified.
16. In the result the appeal is allowed setting aside the order of the District Forum against the liability of the second opposite party. The opposite party no.1 is directed to pay an amount of `50,000/- towards compensation and `3,000/- towards costs. The complaint against the second opposite party is dismissed. There shall be no order as to costs in the appeal. Time for compliance four weeks.
.
MEMBER
MEMBER
Dt.17.08.2012
KMK*
