BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
F.A.No.821 OF 2010 AGAINST C.C.NO.718 OF 2007 DISTRICT FORUM KHAMMAM
Between
Road Safety Club Pvt Ltd.,
Rep. by its Authorized Signatory
Sri N.Mani S/o Sri Nagadhani
aged 47 years, R/o Administrative Office
2-A, II Floor, Prakasam Road, T-Nagar
Chennai-017
Appellant/opposite party no.2
A N D
1. Smt Arikatla Krishnakumari W/o late Raghurami Reddy
age 33 years R/o H.No.7-3-100/2, Dwarakanagar
Khammam Town and District
Respondent/complainant
2. Shriram Chits Pvt. Ltd., Yellandu
rep. by its Branch Manager, Branch Office
1-2-29, Balaji Complex, Near Old Bus Stand
Yellandu Town & Dist.
3. Tata AIG General Insurance Co.Ltd.,
Motor Claims Dept., Raheja Towers,
9th Floor, Beta Wing, 177, Anna Salai
Chennai-2
Respondents/opposite parties No.1 and 3
Counsel for the appellant M/s MVR Suresh
Counsel for the respondents M/s K.Maheswara Rao (R2)
M/s K.Kishore Kumar Reddy(R3)
F.A.No.1116 OF 2010 AGAINST C.C.NO.718 OF 2007
Between:
Tata AIG General Insurance Co.Ltd.,
Motor Claims Dept., Raheja Towers,
9th Floor, Beta Wing, 177, Anna Salai
Chennai-2
Appellant/opposite party no.3
A N D
1. Smt Arikatla Krishnakumari W/o late Raghurami Reddy
age 33 years R/o H.No.7-3-100/2, Dwarakanagar
Khammam Town and District
Respondent/complainant
2. Shriram Chits Pvt. Ltd., Yellandu
rep. by its Branch Manager, Branch Office
1-2-29, Balaji Complex, Near Old Bus Stand
Yellandu Town & Dist.
3. Road Safety Club Pvt Ltd.,
rep. by its Manager, 2A, II Floor,
Prakasham Road, T.Nagar, Chennai-017
Respondents/opposite parties no.1 and 2
Counsel for the appellant M/s K.Kishore Kumar Reddy
Counsel for the respondents M/s K.Maheswara Rao (R2)
M/s MVR Suresh (R3)
QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER
MONDAY THE EIGHTEENTH DAY OF JUNE
TWO THOUSAND TWELVE
Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)
***
1. Both appeals are the offshoot of the same order passed in CC No.718 of 2007 by the District Forum whereby the opposite parties no.2 and 3 have been directed to pay an amount of `1,00,000/- with interest and costs.
2. The opposite party no.2 has filed F.A.No.821 of 2010 whereas the opposite party no.3 has filed F.A.No.1116 of 2010. The parties are referred to as they have been arrayed in the complaint.
3. The case of the complainant in brief is that her husband late A.Raghuram Reddy while working as Dy. Superintendent of Engineer (E&M) in Singareni Collieries joined as a member with the opposite party no.2 organization Road Safety Club on 13.03.2003 through the opposite party no.1 by paying an amount of `32,000/- towards membership fees. The opposite party no.2 except a membership certificate, did not issue any insurance policy. The sum assured under the Road Safety Programme scheme was `3 lakh. The complainant’s husband died in a road accident on 30.8.2006 near Sadasivapalli Village. The Police Manakondur registered a case in Cr.No.130/2006 U/sec304-A and 337 of IPC. The complainant informed the accident to the opposite party no.2 who informed her to submit the relevant documents along with claim form. The opposite party no.2 even after receipt of the relevant documents along with claim form did not process the claim nor paid any claim amount. The complainant got issued notice through her advocate. The notice had drawn response from the second respondent which assured the complainant that the claim was settled and proceeds was sent to the address of the complainant. But so far the opposite parties did not settle her claim.
4. The opposite party no.2 Road Safety Club resisted the case. In view of clause of ‘arbitration’ the complaint is not maintainable. The jurisdiction is restricted to Chennai courts. It admitted the issuance of membership certificate for a period of 7 years as also the certificate of insurance. It is only a facilitator between the insurance company and its members. It is incorporated to bring awareness among the public in regard to road safety, and they were made as members so that they would be covered by insurance policy. The moment the insurance policy was issued, the contract comes to an end. Its role is to process the claim and forward the same to the insurance company. It is the insurance company that has to settle the claim. It has processed the claim. If the insurance company, for any reason, has not settled the claim, it could not be made liable. Therefore, it prayed for dismissal of the complaint.
5. The opposite party no.3 filed counter contending that the Group Personal Accident Policy NO.GPA00120R was issued by the opposite party no.3 to the opposite party no.1 to cover the risk of their members as per the terms and conditions and coverage provided under the policy. If the premium payment is not made on or before the due date, the member will not be covered for the period for which he does not make the payment. The opposite party no.3 did not receive any premium from any party to cover the risk. The accident was not reported to the opposite party no.3 nor any document was submitted to substantiate the claim under policy if any. The complaint is bad for non-joinder of necessary parties. Any compensation if payable to the complainant is subject to the terms and conditions of the master policy and overage of a member of opposite party no.1 and 2 which was always subject to receipt of premium as required by Sec.64VB of Insurance Act. The personal accident claim under auto policy was paid to the legal representative of the deceased vide cheque nO.017020 dated 4.12.2006 for `2 lakh drawn on UTI Bank Ltd., Khammam.
6. The complainant has filed her affidavit and the documents Exs.A1 to A12. On behalf of the opposite parties Exs.B1 to B5 were marked.
7. The District forum allowed the complaint directing the opposite parties no.2 and 3 to pay the balance amount of `1,00,000/- with interest @ 9% per annum from 4.2.2006 till payment along with costs of `5,000/-.
8. Aggrieved by the order of the District Forum the opposite party no.2 filed appeal F.A.No.821 of 2010 contending that in view of clause of ‘arbitration’ the complaint is not maintainable. The jurisdiction is restricted to Chennai courts. It is only a facilitator between the insurance company and its members. The moment the insurance policy was issued, the contract comes to an end. Its role is to process the claim and forward the same to the insurance company.
9. The opposite party no.3 filed the appeal F.A.No.1116 of 2010 contending that as per the Auto Secure Private Car Package Policy, the opposite party no.3 paid `2 lakh to the complainant on 1.12.2006 towards personal accident and `1,39,503 towards Auto Secure Private Car Package Policy and the complainant also issued full satisfaction memo.
10. The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
11. The objection as to the maintainability of the complaint in terms of arbitration clause in the terms and conditions of the agreement entered into between members of the opposite party no.2 club and the opposite party no.3 is not sustainable as the arbitration clause does not oust jurisdiction of Consumer Forum to entertain the complaint.
12. The High Court of Andhra Pradesh and the Hon’ble Supreme Court have consistently held that an arbitration clause is an agreement does not oust the jurisdiction of Consumer Forum which was conferred upon them by Section 3 of the Consumer Protection Act which is more in the nature of additional remedy in the light of decision of the Supreme Court in :
i) Fair Air Engineers Pvt. Ltd. Vs. N. K. Modi (1996) 6 SCC 385.
ii) P. Anand Gajapathi Raju Vs. P. V. G. Raju (2000) 4 SCC 539
iii) Hindustan Petroleum Corpn Ltd. Vs. Pinck city Midway Petroleums’ (2003) 6 SCC 503.
13. In “Fair Air Engineers Pvt. Ltd. Vs. N.K. Modi” (1996) 6 SCC 385 rejecting the contentions of the opposite party that the proceedings under the Consumer Protection Act, 1986 could not continue in view of the Arbitration Clause in the agreement entered into between the parties, Supreme Court observed as under:
“It must be held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words “in derogation of the provisions of any other law for the time being in force” would be given proper meaning and effect and if the complaint is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy.”
14. This judgment of the Supreme Court has been followed in a number of subsequent cases. Similarly, Supreme Court in Indochem Electronic and Another Vs. Additional Collector of Customs, A.P. reported in (2006) 3 SCC 721 , Secretary, Thirumurugan Cooperative Agricultural Credit Society reported in (2004) 1 SCC 305, CCI Chambers Coop. Hsg. Society Ltd. reported in (2003) 7 SCC 233 and State of Karnataka Vs. Vishwabharthi House Building Coop. Society and Others reported in (2003) 2 SCC 412, has held that Consumer Protection Act, 1986 seeks to provide remedy in addition to the remedy provided under other Acts.
15. In view of the aforementioned decisions, the contention of the learned counsel for the appellants that the matter has to be referred to the arbitrator and arbitration clause disentitles the respondents/complaints to maintain the complaint before Consumer Forum is not sustainable.
16. The contention of the learned counsel for the opposite party no.2 that the opposite party no.2 club’s role is to bring awareness among the public with regard to the insurance coverage and road safety measures and educate them to enable them to get insurance cover and the moment the insurance company provides insurance coverage, the role of the opposite party no.2 club ceases, has force in as much as there is a specific clause in the agreement entered into between the opposite party no.2 club and the opposite party no.3 insurance company restricting the role of the opposite party no.2 club to that of a facilitator without being liable for any consequences of enforcement of the terms and conditions of the insurance policy issued by the opposite party no.3.
17. The learned counsel has relied upon the following decisions of this commission:
1. Manager Andhra Bank vs Smt Shanta Kumari and others in F.A.No.1314 of 2009
2. The Branch Manager, Andhra Bank, Vikarabad Branch Vs Smt T.Sulochana and others in F.A.No.1099 of 2005 and
3. The Branch Manager, Vysya Bank Limited, Ananthapur Vs Sambasiva and another in F.A.No.923 of 2002
18. The National Commission held in catena of decisions that a facilitator such as opposite partyno.2 herein cannot be fastened with any liability in the matter of insurance coverage extended by the insurance company to the members of the facilitator club. In Road Safety Club Pvt.Ltd vs Smt.Kodi Lakshmi Narayanamma and others in F.A.No. 191 of 2009 decided by the National Commission on 3.11.2009 and “Golden Multi Services Club Ltd vs Smt.Abeda Begum and others”. F.A.No. 797 of 2007 decided by this Commission on 5.12.2009 the National Commission and this Commission respectively held that the role of the facilitator is confined to the time till the insurance policy is issued in faovur of its member. It was held that the Club is not liable to make any payment to the member or his nominee in case of death, or accident etc. and it is the sole responsibility of the insurance company to process the claim arising out of the Membership Certificate and the insurance policy issued pursuant to the Membership Certificate and to pay compensation. In view of the terms of the Memorandum of Understanding and in the light of the aforementioned decisions, the opposite party no.2 is held not liable to pay any amount to the complainants.
19. In view of the aforementioned decisions of this Commission and the National Commission, the contention of the learned counsel for the opposite party no.2 club that the opposite party no.2 cannot be fastened with any liability is sustainable.
20. Coming to the appeal filed by the opposite party no.3 insurance company, it is contended by the learned counsel that the complainant had issued receipt towards full and final satisfaction of her claim can be considered as tenable since the complainant had received `2 lakhs under personal accident insurance policy and Rs.140,003/- under Auto Secure Private Card Package Policy. The complainant having received the amount of `2 lakhs and `1,40,003/- in respect of her both claims she had issued discharge voucher towards full and final settlement of her claims. It is not the case of the complainant that fraud was played upon her or the opposite party no.3 insurance company misrepresented her and made her receive the amount of `2 lakh and `1,40,003/- towards settlement of her claim.
21. In “United India Insurance Vs. Ajmer Singh Cotton and General mills and others” AIR 1999 Supreme Court 3027, the Supreme Court held that the complainant can question the settlement of the claim after issuing discharge voucher for final settlement, on the grounds of fraud, coercion misrepresentation etc. The Apex Court held “The claim preferred regarding the deficiency of service shall be deemed to be based upon the insurance policy, being covered by the provisions of Section 14 of the Act. In the instant cases the discharge vouchers were admittedly executed voluntarily and the complainants had not alleged their execution under fraud, undue influence, misrepresentation or the like. In the absence of pleadings and evidence, the State Commission was justified in dismissing their complaints”.
22. The complainant has not raised any objection and without raising any protest or whatsoever in regard to settlement of her claim as full and final, she had received the amount and thereafter she had chosen to file the complaint seeking for the amount stated to have been due in respect of the claim. The order of the District Forum as such is not sustainable and liable to be set aside.
23. In the result, the appeals F.A.No.821 of 2010 and F.A.No.1116 of 2010 are allowed by setting aside the order of the District Forum. Consequently the complaint is dismissed. The parties shall bear their own costs.
MEMBER
MEMBER
Dt.18.06.2012
KMK*
