Date of Filing       : 26.07.2018

                                                                                                                                      Date of Disposal  : 20.05.2022

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

 BEFORE  TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law)                                    .…. PRESIDENT

                 THIRU. J.JAYASHANKAR, B.A, B.L.                                                                                ..… MEMBER-I

                 THIRU P.MURUGAN, B.Com.,                                                                                        ….. MEMBER-II

 CC. No.29/2018

THIS FRIDAY, THE 20^th  DAY OF MAY 2022

Mrs.Lakshmi, M/o.Late. Mr.Saravanan,

No.3, Nambi Nagar, 4^th Cross Street,

Poonamallee, Chennai -600 056.                                                    ......Complainant.

                                                                                  //Vs//

1.Tata Motors Limited,

   Rep. by its CEO, Bombay House,

   No.24, Homi Modi Street,

   Fort Mumbai – 400 001.

2.VST Motors Private Limited,

   VST Group Enterprise,

   Rep by its Director,

   199, Anna Road, Chennai – 600 002.

3.VST Motors Private Limited,

   Rep. by its Branch Manager,

   No.267/2, Poonamallee Bye Pass Road,

   Poonamallee, Chennai -600 056.

4.Tata Motors Finance Limited,

   Rep. by its Manager, No.116, Thiyagaraya Road,

   T.Nagar, Chennai -600 017.

5.Tata Motors Finance Limited,

   Corporate office,

   1-Think Techno Campus Building A,

   2^nd Floor Off Pokhran Road, 2,

   Thane West, 400021.

6.United India Insurance Company Limited,

   Branch Office 012602,

   No.1/127/A, 1^st Floor,

   Trunk Road, Poonamallee, Chennai -56.

7.United India Insurance Company Limited,

    Regional Office at No.24, Whites Road,

   Chennai -600 014.                                                                 .......Opposite parties.

Counsel for the complainant                                     :   M/s.S.Nisar Ahamed, Adv.

Counsel for the 1^st opposite party                            :   Mr.N.NanthaGopal, Adv.

Counsel for the 2^nd & 3^rd opposite parties              :    Mr.N.C.Ravichandran,Adv.

Counsel for the 4^th & 5^th opposite parties              :    Mr.M.Arunachalam. Adv.,

Counsel for the 6^th & 7^th opposite parties               :    Lr.T.V.Suresh. Adv.

This complaint having come up for final hearing before us on 12.05.2022 and on hearing the arguments of the complainant and opposite parties and upon perusing the material records, this Commission made the following;-

ORDER

PRONOUNCED BY TMT. Dr.S.M. LATHA MAHESWARI,   PRESIDENT.

               This complaint has been filed by the complainant alleging deficiency in service against the opposite parties and to pay a sum of Rs.4,50,000/- being the insured value of the vehicle, to pay a sum of Rs.3,00,000/- towards compensation for causing mental agony, pain and sufferings, to pay a sum of Rs.1,00,000/- towards the personal accident benefit and to pay a sum of Rs.10,000/- towards the expenses and cost of this complaint.

Brief facts culminating into Complaint;- 

Present complaint was filed for the reliefs mentioned above contending interalia that one Late. Saravanan approached the 1^st opposite party for purchase of a TATA INDICA V2 LS CAR for his livelihood through the 2^nd opposite party who is having Branch Office at Poonamallee who is the 3^rd opposite party herein and got delivery of the car on 30.06.2016.  The vehicle was purchased out of the finance/loan obtained from 4^th and 5^th opposite parties and that the vehicle was insured with the 6^th and 7^th opposite party. On 07.01.2017 when the complainant’s son was driving the vehicle along with his friends, the vehicle met with an accident at Melavalampatti and as a  result, the complainant’s son died on 08.01.2017 at Government Hospital, Chennai.  When the complainant approached the Insurance Company after informing the police and the financier by letter dated 17.02.2016 claiming insurance for her son and the vehicle, the 6^th opposite party rejected the claim of the complainant stating that as the cheque bearing No.487765 dated 29.06.2016 for Rs.22,407/- drawn on ICICI Bank issued towards premium was dishonoured, the insurance policy got automatically cancelled. The complainant submits that the cancellation of policy is unlawful and the 6^th and 7^th opposite parties were liable under the policy No.0126203116P104181742 which stands in the name of the deceased. Thus aggrieved by the repudiation of the insurance claim, the present complaint came to be filed before this commission.

Crux of Defenses raised by Opposite Parties:

The 1^st opposite party filed a detailed version stating that no deficiency in service has been alleged against them and the controversy revolves only with regard to the insurance claim of the car alleged to have been purchased by the son of the complainant.  The 1^st opposite party further submitted that they are not a party to the contract of insurance and denied that they did not arrange any financial services for the vehicle.  It is also submitted that the car was taken delivery only after the complainant was satisfied by the pre delivery inspection and performance of the car.  Further the opposite parties were restricted to manufacturing and not in providing any financial assistance to the costumers.  Thus stating that there is no privity of contract between them and the complainant and no deficiency in service was alleged against them, the 1^st opposite party sought for the dismissal of the complaint. 

The 2^nd and 3^rd opposite parties filed a version stating that the registration process for the vehicle was carried out by the 3^rd opposite party as per the RTO procedure and denied the factum of taking insurance by the complainant’s son from the 6^th and 7^th opposite parties through them.  It is submitted that the insurance was taken directly by the complainant’s son as per his own will and no way responsible for the cancellation of policy, thus they prayed for the complaint to be dismissed.

The 4^th & 5^th opposite parties submitted their version stating that the cancellation of policy due to non-realization of the cheque was not their fault.  It is submitted that the 6^th opposite party who cancelled the insurance policy has stated that the cheque bearing No.487765 dated 29.06.2016 for Rs.22,407/- issued by M/s VST Motors Private Limited, the 2^nd and 3^rd opposite party got dishonoured and hence they had to cancel the insurance policy.  It is submitted that though the policy was taken for the period 29.06.2016 to 28.06.2017 they were no way responsible for the cancellation of policy and had no knowledge about the premium inbuilt in the EMI.  Thus they sought for the complaint to be dismissed against them.

The crux of the written version filed by the 6^th and 7^th opposite parties was that M/s VST Motors Private Limited has been regularly taking policies for the new vehicles with them and they had issued the commercial vehicle policy for their customer Mr. S. Saravanan (Son of Complainant) by collecting a cheque bearing No.487765 dated 29.06.2016 for Rs.22,407/- issued by the VST Motors Private Limited vide Policy No.0126023116P104181742 for the period 27.06.2016 to 28.06.2017.  However, as the cheque got dishonored and bounced back due to insufficient funds, the policy got cancelled consequently which was duly intimated to the insured.  Thus submitting that they have no statutory liability to pay the claim of insurance for the complainant, they  sought for dismissal of the complaint.

On the side of complainant proof affidavit was filed and documents submitted marked as Ex. A1 to 15 was filed.

On the side of opposite parties respective proof affidavits were filed and documents were marked as Ex. B1 to B5 by 6^th and 7^th opposite parties and Ex. B6 to B9 were filed by 2^nd and 3^rd opposite parties.

Point for consideration :

1. Whether the complainant has proved that the opposite parties have committed deficiency in service?

2. If so to what relief the complainant is entitled?

Point 1:

Heard both learned counsels appearing for complainant and opposite parties.

The complainant had submitted documents Ex.A1 to A15 in support of his complaint allegations and the following facts stood proved out of the same:

a) The Commitment Form dated 09.06.2016 issued to complainant towards purchase of  vehicle was marked as Ex.A1;

b) The vehicle delivery acknowledgement note dated 30.06.2016 marked as Ex.A2 which shows that the vehicle was delivered to complainant on 30.06.2016;

c) Registration Certificate dated 30.06.2016 was marked as Ex.A3;

d) Insurance Policy issued by the insurance company has been marked as Ex.A4;

f) Letter of Tata Motors has been marked as Ex.A5;

g) Driving license of the deceased was marked as Ex.A6;

h) Permit letter by Transport Department dated 06.07.2016 has been marked as Ex.A7;

i) FIR copy dated 09.01.2017 with respect to the accident was marked as Ex.A8;

j) Death Certificate of Saravanan /son of complainant was marked as Ex.A9;

k) Letter of complainant to the 6^th opposite party dated 17.02.2017 and reply letter from the 6^th opposite party dated 20.02.2017 has been marked as Ex.A10 and Ex.A11;

l) Legal notice, acknowledgement card and returned cover has been marked as Ex.A12 to Ex.A14;

m) Reply notice from 2^nd and 3^rd opposite parties to the complainant dated 16.03.2017 has been marked as Ex.A15;

On the side of the 6^th and 7^th opposite parties the following documents were filed in proof of their defences:

n. Tax Invoice dated 22.06.2017 issued by VST Motors Private limited was marked as Ex.B1;

o. Vehicle Delivery Acknowledgement Note dated 22.06.2016 issued by VST Motors Private Limited was marked as Ex.B2;

p. Cheque issued by ICICI Bank, Velacherry Branch dated 29.06.2016 has been marked as Ex.B3;

Q. Registration Certificate dated 30.06.2016 has been marked as Ex.B4;

r. Policy and its condition which has been marked as Ex.A5;

On the side of the 2^nd and 3^rd opposite parties the following documents were filed:

s. Letter by Mr. Tholkappian dated 17.05.2017 and reply from the 3^rd opposite party has been marked as Ex.B6 and Ex.B7;

t. Statement of account from 01.04.2016 to 31.03.2017 has been marked as Ex.B8;

u. Tax Invoice dated 22.06.2016 has been marked as Ex.B9.

The pleadings and documents submitted by both parties were perused. The counsel for the complainant submitted that when the sale of the vehicle and the issuance of the insurance policy is admitted then the 6^th and 7^th opposite parties are statutorily liable to pay the insured amount.  Further it is contended that the matter of insurance in between opposite parties 1,2,3,6 and 7 and there is a valid insurance as per the delivery note issued by the VST Motors. 

The crux of the arguments advanced by the 1^st opposite party is that there is no privity of contract between the complainant and the 1^st opposite party.  It is the specific statement that when no deficiency is alleged against the manufacture of the car, they could not be held liable.    They also submitted various decisions in proof of the same.

On behalf of the 2^nd and 3^rd opposite parties, the learned Counsel argued that they were not responsible for the insurance taken by the complainant and it is only the 4^th opposite party whom the complainant has approached for insurance premium.  They relied upon the letter given by one Mr.Tholkappian with respect to the insurance.

 The crux of the arguments advanced by the 4^th and 5^th opposite parties is that the insurance cover provided under the policy issued to the complainant stands cancelled automatically from 29.06.2016 only due to the non realization of the cheque bearing No.487765 dated 29.06.2016 for Rs.22,407/-.  It is argued that the subject cheque was issued by M/s VST Motors private Limited, the 2^nd and 3^rd opposite parties herein.  Thus they argued that they were no way responsible for the cancellation of the insurance policy. 

The arguments advanced by the learned counsel for the opposite parties 6 & 7 was that the policy got cancelled automatically when the cheque issued by the 4^th opposite party got bounced with the endorsement “funds insufficient”.  It is specific the case since there was no contract of insurance between the deceased and this opposite party they are not liable to pay compensation.  It is argued that only the 4^th opposite party is responsible for cancellation of policy. 

We considered the pleadings and documents, written and oral arguments advanced by all the parties.  It is an admitted fact that the vehicle was purchased by an order dated 09.06.2016 by one Mr. Saravanan and the vehicle was INDICA V2 LS SILVER from TATA Motors as evidenced by Ex.A1.  As per the Vehicle Delivery Acknowledgement Note (Ex.A2) it is seen that the vehicle was delivered by the VST Motors Private Limited, Opposite parties 2 and 3 herein on 30.06.2016 by invoice No.VSTMoL-1617-00312 dated 22.06.2016.  As per that delivery note we could find the Vehicle Details, List of Items Supplied with Vehicle, Books and Documents and the Documents.  Under the 4^th category documents it is seen that the following documents were supplied as provided herein;

a) Sale Invoice                                               - Yes

b) Temporary Certificate                                   - No

c) RTO Tax Receipt/RC Book                            - No

d) Sales Letter                                                - No

e) Form 20/21/22                                            -No

f) Insurance policy/Cover Note                         - Yes

Therefore it is made clear vide the said document that the insurance policy was delivered to the complainant along with the delivery of the vehicle which in turn proves that the policy has been issued after payment of premium vide cheque dt 29.06.2016 which later got dishonored resulting in the cancellation of policy.  Further it is the specific case of the opposite parties 4 and 5 who are the financiers for the said vehicle that the cheque was issued by the dealers viz., the VST Motors in their words as,

“The answering opposite parties 4 and 5 submit that, as per the communication sent by the 6th opposite party to the complainant and marked as Ex.A11, it clearly speaks that due to non realization of the cheque bearing No.487765 dated 29.06.2016 for Rs.22,407/- drawn on ICICI Bank Limited towards payment of premium, the insurance cover provided under the above policy stands cancelled automatically from 29.06.2016.  The 6th opposite party who has cancelled the insurance policy has further stated clearly that the subject  cheque bearing No.487765 dated 29.06.2016  for Rs.22,407/- was issued by M/s VST Motors Private Limited, the 2nd and 3rd opposite party.  It is clear that cheque payment towards the Policy for the period from 29.06.2016 to 28.06.2017 was made by the 2nd and 3rd opposite party.  Hence, it is clear that this answering opposite party is no way related to the policy taken in respect of the vehicle financed by them for the period from 29.06.2016 to 28.06.2017.”

Further the opposite parties 6 and 7 who are the insurers who issued the insurance policy and later cancelled it had specifically stated in their written version that it is their normal practice to issue policy through dealers viz., the opposite parties 2 and 3 after collecting premium from them and in the present case they collected the cheque for the premium from the VST Motors Private Limited but the same got dishonored resulting  in the cancellation of the policy as,

 “This opposite party submit Ms.VST Motors Private Limited, (Passenger car dealer) has been regularly taking policies for their new vehicles and thus this opposite party issued a commercial vehicle policy (PCV4 wheeler not exceeding 6 passengers) for their customer Mr. S. Saravanan (The son of the Complainant) for the bearing No. New ( Chassis No.MAT 600185GTB02443 and Eng. No.4751 D103BTYP6356) and this opposite party collected a cheque bearing No.487765 dated 29.06.2016 for Rs.22,407/- issued by Ms.VST Motors Private Limited, vide Policy No..0126023116P104181742 for the period from 29.06.2016 to 28.06.2017, this was the practice by the vehicle dealer in insuring the new vehicle by issuing cheque collectively for a batch of new vehicles. This opposite party submits, the above presented cheque was dishonoured and returned back to this opposite party due to  insufficient funds and subsequently the policy was cancelled”.

Thus as per the version of opposite parties 4 to 7 it is established that the Dealer undertakes to take insurance for the new vehicles and it is the VST Motors Private Limited, the opposite parties 2 and 3 were responsible for the payment of premium for taking the insurance policy for the deceased’s vehicle.  This view is further supported by the document Ex.A5 dated 14.07.2016 the letter from TATA Motors which comprises the summary of LOAN contract account wherein it is mentioned about payment towards insurance as “Total Insurance Provision Amount” for Rs.43,200/-.  The said entry invariably leads us to conclude that the complainant’s son, the deceased had taken the loan from the 4^th opposite party which includes the premium to be paid for the insurance policy taken for the vehicle vide the policy document issued to the deceased along with the delivery of the vehicle.  The fact that the entire loan amount towards the vehicle’s sale price was disbursed to the 2^nd and 3^rd opposite party is not in dispute which includes also the insurance premium amount.  In such circumstances we have no other option except to conclude that it is the dealer who is responsible for the issuance of cheque towards premium for the insurance as they have collected the same along with the value of the vehicle from the financier.  The letter written by one Mr. Tholkappian  vide Ex.B6 supports our view wherein he had stated that he was employed as sales executive of the 2^nd and 3^rd opposite parties and  his job was to sell the cars along with registration and insurance.  Though he had contended in the same letter that as deceased Mr. Saravanan wanted to take the insurance policy on his own and on production of the insurance policy they registered the vehicle and hence the VST Motors Private Limited did not accept any amount towards the insurance premium, such statement is not supported by any concrete evidence but it is crystal clear that it is a bald statement made to protect his erstwhile employer.  The complainant has categorically stated that the opposite parties 1 to 3 arranged financial assistance through the 4^th opposite party and the road price of the vehicle inclusive of all taxes, insurance and miscellaneous charges which amounted to Rs.5,76,155/- and out of which Rs.4,16,000/- was arranged from the finance and the remaining was paid by the deceased.  It is also admitted by the opposite parties that the EMI of Rs.16,032/- was regularly paid by the complainant until the accident took place.  The loan contract account as provided under Ex.A5 clearly shows that the total loan contract is Rs.5,77,152/- which includes loan amount of Rs.4,16,000/-, Rs. 1,17,952/- towards interest amount for 36 months and Rs.43,200/- towards insurance provision amount.  In such circumstance when the dealers ie., Opposite parties 2 and 3 had not denied the factum of acceptance of the total amount from the opposite parties 4 and 5 who are the financiers which includes the premium amount, they should be held responsible for the payment of premium amount for the insurance policy  taken for the subject vehicle sold by them.  As per the version of the insurance company the cheque issued towards the premium amount got bounced for insufficient funds.  In such circumstances we have no other option but to arrive at a conclusion that the cheque towards premium was issued only by a person belonging to the dealer ie,. 2^nd and 3^rd opposite parties.  It is a clear negligent and patent error to issue a cheque without sufficient funds. Though the insurance company has stated that they have intimated about the cancellation of the policy to the complainant’s son, he cannot be blamed for the reason that he had accepted for the repayment of the entire loan amount which includes the insurance premium and also when the entire amount has been disbursed to the dealer towards the price of the vehicle.  Thus we hold that having accepted the amount from the opposite parties 4 and 5 and having under taken to get the registration of the vehicle with insurance it is the responsibility of the opposite parties 2 and 3 to see that the insurance premium is paid properly and having issued a cheque without sufficient funds in the account resulting in dishonor of the cheque and  consequently cancellation of the insurance policy is a clear deficiency and unfair trade practice on the part of the 2 and 3 opposite parties.  Further we hold that no case of deficiency was made out against opposite parties 1,4,5, 6 and 7.  This point is answered accordingly holding that the complainant has proved clear deficiency in service against opposite parties 2 and 3 and that they are liable to make the loss good. 

Point No.2:

When we come to the relief portion to be granted to the complainant it is admitted that as per document No.4 the vehicle was insured for a total value of Rs.4,50,000/- and the complainant cannot be deprived of the said amount for the negligence and deficiency in service committed by the 2^nd and 3^rd opposite parties and hence we hold that they are liable to pay the said amount to the complainant.  Further due to the deficiency they have committed, the complainant was put to mental agony and hardship for which we award a compensation of Rs.50,000/- to be paid to the complainant.  We also order a cost of Rs.5,000/- towards litigation expenses. 

In the result, this complaint is partly allowed as follows directing opposite parties 2 and 3 jointly and severely

1. to pay the complainant a sum of Rs.4,50,000/- (Rupees four lakhs fifty thousand only) towards the insured value of the vehicle,
2. Rs.50,000/- (Rupees fifty thousand only) as compensation,
3. Rs.5,000/- (Rupees five thousand only) towards cost of this complaint. 
4. Amount mentioned in clause (A) shall be paid within six weeks from the date of receipt of the copy of this order failing which said amount shall carry interest at the rate of 6% from the date of complaint till realization.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 16^th day of May 2022.

   -Sd-                                   -Sd-                                                  -Sd-

MEMBER-II                        MEMBER-I                                          PRESIDENT

List of document filed by the complainant:-

List of documents filed by the 6^th & 7^th opposite parties;

List of documents filed by the 2^nd & 3^rd opposite parties;

List of documents filed by the 1,4 & 5 opposite parties;

Nil

     -Sd-                                   -Sd-                                                  -Sd-

MEMBER-II                        MEMBER-I                                          PRESIDENT