| Final Order / Judgement | BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM CACHAR :: SILCHAR Con. Case No. 8 of 2013 Mr. Nehar Uddin Barbhuiya, ………………………………………. Complainant. -V/S- 1. Oriental Insurance Co. Ltd., (A Govt. of India undertaking) Regd. Office, -A-25/27, Asaf Ali Road, New Delhi- 110 002. 2. Oriental Insurance Co. Ltd., Represented by Divisional Manager, Divisional Office -Town Club Building, PWD Road, Silchar-788 001. 3. Oriental Insurance Co. Ltd., Branch Office -Karimganj, Roy Patty, Karimganj- 788 711. 4. Canara Bank, Govindapur -Part-III, P.O.- Govindapur West, Cachar-788 804. 5. United Bank Of India, Karimganj, Assam, 788 711. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Opp. Parties. Present: - Sri Bishnu Debnath, President, District Consumer Forum, Cachar, Silchar. Mrs. Chandana Purkayastha, Member, District Consumer Forum, Cachar, Silchar. Shri Kamal Kumar Sarda, Member, District Consumer Forum, Cachar, Silchar. Appeared :- Sri Monaranjan Das , Advocate for the complainant. Sri Sukumar Sinha, Advocate for the O.P. Nos.1, 2 & 3. Sri Sukumar Choudhury, Advocate for O.P No.4. Sri Santanu Nandan Bhattacharjee, Advocate for O.P No.5. Date of evidence………………. 17-07-2013, 19-09-2013 Date of written argument… 02-06-2015 Date of oral argument ….. 23-03-2017, 29-03-2017 Date of judgment……………… 13-04-2017 JUDGMENT AND ORDER Sri Bishnu Dednath, President, Dist. Forum - The Complaint has been submitted u/s 12 of the Consumer Protection Act, 1986 by Mr. Nehar Uddin Barbhuiya son of Late Noor Uddin Barbhuiya of Govindapur Part- II, Cachar (referred hereinafter as ‘Complainant’) against the Oriental Insurance Company Limited and 4(four) others including Canara Bank, Govindapur Branch and United Bank of India, Karimganj Branch (referred all those as ‘OPs’’) for award of Rs 10,75,515 (Rupees Ten Lakh Seventy Five Thousand Five Hundred Fifteen) only.
- Brief Facts is as folows- The Complainant is owner of a Truck bearing Registration No.AS-01X-8776. The said Truck is referred as ‘Vehicle’ in this Judgment. The Vehicle was insured with the OP No.1 for the period from 02/12/2010 to mid-night on 01/12/2011. The Insurance Policy Number is 322601/31/2011/604. The Complainant paid insurance premium of Rs 14,457 (Rupees Fourteen Thousand Four Hundred Fifty Seven) only for the above period by Cheque No.068269 dated 30/11/2010 of his Saving Bank Account No.171501002414 drawn at Canara Bank, Govindapur Branch (referred here-in-under as ‘Premium Cheque’). The said Cheque was handed over to the OP No.3 on 30/11/2010. The declared value of the vehicle was Rs.6,17,647 (Rupees Six Lakh Seventeen Thousand Six Hundred Forty Seven) only. After receiving the said Cheque the OP No.3 issued Motor Insurance Certificate cum Policy Schedule for the aforementioned period.
- On 18/11/2011 the vehicle met accident on NH-44 at village Sonapur near Durga Mandir. In consequence, Helper (handyman) Md. Moin Uddin Mazumdar died on the spot and the Driver of the vehicle Md. Abbas Uddin Talukdar died after 4(four) days at Silchar Medical College and Hospital. Due to accident the vehicle fell down to 200 feet deep gorge and damaged completely.
- Accordingly, the Complainant submitted his Claim-papers to the OP No.3 on 25/11/2011 but on scrutiny the OP No.1,2 & 3 denied and repudiated the claim on the following 2(two) grounds (a) No clearance of Premium Cheque as on the date of accident and (b) Non compliance of Section 64 BV of the Insurance Act 1938, vide the letter of the OP dated 06/12/2012.
- Hence, on being agrived, the instant Complaint has been filed for reliefs stated above. The Ops received the Notice of this District Forum. The OP No.1,2 & 3 submitted their joint Written Statement. In the W/S they denied all the facts and allegation stated in the Complaint. They stated that no money was credited to the Bank account of the Insurance Company maintained in the United Bank of India, Karimganj Branch till the date of alleged accident except the receiving of the Premium Cheque and as such the Insurance Company is not liable to pay any compensation. In the W/S more specifically stated as below-
“In fact, even though the Insurance Policy was issued in the name of the Insured covering risk of the Vehicle insured w.e.f. 02-12-2010 upto 01-12-2011, but Premium of aforesaid Policy No.322601/31/2011/604 was not credited in the account of the Insurer The Oriental Insurance Co.Ltd even on the date of accident on 18-11-2011 ans as such, no Insurance Policy actually commenced at the relevant time of occurrence of accident as provided as per provision of Section 64VB of the Insurance Act,1938, and hence the Insurer has already repudiated the claim accordingly. - The OP No.4 in its W/S statede inter-alia that the Complainant is holder of Account No.1715101002414 with the Canara Bank, Govindapur Branch. It is also admitted by the OP No.4 that the Premium Cheque was presented to the Canara Bank, Govindapur Branch and the OP No.4 took timely action for clearing of the Premium Cheque as per NEFT system.
- The OP No.5 in its W/S stated inter-alia that the OP No.3 deposited the Premium Cheque on 01/12/2010 drawn on the OP No.4 and on the same date the said Cheque was forwarded to the OP No.4 by its OCC No.948 for collection/clearance of payment but the Cheque was not cleared by the OP No.4. So, the OP No.5 wrote a letter No.BK/KRM/OCC/CP/2007, dated 21/04/2011 to the OP No.4 for clearance of the Premium Cheque but no response received. So, the OP No.5 again by its letter No. BK/KRM/OCC/CP/2007, dated 20/07/2011 requested the OP No.4 to clear up thye Premium Cheque but in vain. Thereafter, the OP No.5 by its 3rd reminder, vide Letter No. BK/KRM/OCC/CP/2007, dated 09/11/2011 asked the OP No.4 to clear the Premium Cheque. Ultimately, after a long delay of almost one year, the OP No.4 credited the perceeds of the Premium Cheque amounting to Rs 14,457 in favour of the OP No.5 by NEFT and OP No.5 credited the same amount in the A/C No.00360050019510 of the OP No.3 on 01/12/2011, i.e., after the date of accident of the vehicle.
- During hearing the Complainant deposed as PW-1 and exhibited as many as 20 documents including Insurance Policy, Copy of Premium Cheque, copy of forwarding letter dated 01/12/2010 for collection of the Premium Cheque, Motoe Vehicle Accident Report dated 20/02/2011, the information dated 18/11/2011 about accident of the vehicle , letter dated 21/11/2011 in connection with claim of insured amount, Motor claim Form, etc.
- The OP Insurance Company also submitted deposition of Mr. Sanjeet Kumar Rai the employee of the OP No.2 as DW-1 and exhibited some documents including Investigation/Survey Report against the Insurance Policy No.322601/31/2011/604, copy of the letter of final repudiation of the claim, copy of Motor claim Security cum Assessment Sheet related to Nehar Uddin Barbhuiya against the Original Insurance Policy No.322601/31/2011/604, etc.
- The OP No.4 also examined its Manager Sri Karunamoy Chakraborty as DW-2. The OP No.5 also submitted deposition of Sri Partha sarathi Das, manager, United Bank of India, Regional Office, Silchar as DW-3. The said witness exhibited the copies of letter in respect of clearing of Premium Cheque.
- Perused the Written Argument of the Complainant. I have also perused the Written Argument of the OP No.2,4 and 5 and also heard oral argument of both sides’Counsels.
- On careful appreciation of the evidence on record it is concluded that Premium Cheque was handed over by the Complainant to the office of the OP No.3 on 30/11/2010 and on the same date the said Cheque was forwarded by the OP No.5 to the drawn Bank, i.e., OP No.4 for clearance but the cheque was not cleared on or prior to the date of accident of the vehicle. Rather on several correspondance by the OP No.5 to the OP No.4 the Premium Cheque was cleared 12 days after the date of accident of the vehicle. It is admitted fact the the vehicle met accident and due to the accident on 18/11/2011 the vehicle got total damage. So the evidence on are not required to establish that fact because admitted fact need not required to prove. It is also admitted fact that the Premium Cheque was cleared after the accident took place. That is why, the OP Insurance Company took plea that the Insurance Policy did not commence as on the date of accident and as such the insurance company is not liable to pay compensation in view of the Section 64VB of the Insurance Act.1938.
- From the evidence on record it is crystal clear that the OP No. 4 did not clear up the Premium Cheque for the reasons best known to its responsible officer. The OP No.4 examined the witness DW2but We do not find any convincing material in favour of the OP No.4 for delay in clearing the Premium Cheque after the date of accident of the vehicle. On the other hand OP No.5 examined the DW3 and exhibited all copy of letter regarding requesting the OP No.4 to clear up the Premium Cheque. I have gone through those letter, vide Ext,A,B,C & D. the above documents established a facts that the due to inaction of the OP No.4 the Premium Cheque was cleared lately after the date of accident. Thus in that matter We do not find any lacuna or dominancy of the Complainant for delay in clearance of the Premium Cheque. Of course, the OP No.1 to 3 took a plea that the Premium Cheque was dishonoured but the said plea was not establish because there is no iota of evidence available in the case record.
- From the above observation and finding the following moot point is appeared before us –
- Whether the OP No.4 being the Drawn Bank in respect of the Premium Cheque is treated as Agent of the OP Insurance Company.
- Whether Insurance Policy commence to cover risk of total damage of the vehicle due to acciden w.e.f the date of receiving the Premium Cheque by the OP No.4
- To decide the above points we have gone through the evidence on record including other relarant material on the case record. For our convenience of appreciation of evidence on record both points are taken together for decision.
- In this aspect the DW-1 exhibited Motor Claims Security cum Assessment Sheet, vide Ext.H. in the Ext.H it is observed by the OP Insurance Company as below in the page No.2:-
‘Compliance of Section 64VB – The premium was paid on 30-11-2010 through cheque bearing No.068269 Dtd.30-11-2010 drawn on Canara Bank, Govindapur Branch for Rs 14,457/- & was collected vide our collection No.406600144 on 30-11-2010. On the very next day, i.e., on 01-12-2010 the cheque was deposited with our banker – UBI,Karimganj Branch in our collection account for realization. Being found oustanding for realization of this cheque beyond reasonable time we made verbal quarries to our banker many a times & at every occasion our banker replied us that they were yet to receive any response from Canara Bank, Govindapur Branch of their several correspondances in this regard. Later, we even made written quarries on 18-07-2011 & on 09-11-2011 & visited in person twice. Our banker informed us in writing that they were yet to receive the proceeds from Canara Bank & expressed their helplessness in absence of such proceeds. By this time, i.e., on 18-11-2011 the accident of Total Loss along with the loss of two lives occurred. Even on this date of accident the Cheque was not realized. - Thus, it is crystal clear that cheque was handed over in tine prior to the date of accident of vehicle but cheque cleared after the accident of the vehicle and accordingly credited to the Bank Account of the Insurance Company. In this aspect, the Supreme Court of India In National Insurance Company Limited Vs. Abhaysing Pratapsing Waghela and Others, (2008)9 SCC 133 held that if Cover Note is issued, it remains valid till it is cancelled. In the same case also held that if Cover Note has been issued which in terms of Clause (b) of Sub-Section (1) of Section 145 of the Motor Vehicles Act, 1988 would come within the perview of definition of Certificate of Insurance, it would also come within the perview of the definition of Insurance Policy. In the instant case it is proved fact that the Ext.1 Insurance Certificate cum Policy Schedule issued by the OP No.3 on behalf of te OP No.1 and said Insurance Policy was not cancelled even prior to the date of accident of the vehicle as wel as after the date of accident of the vehicle and subsequently, Premium Cheque was cleared and amount of premium credited to the Bank Account of the Insurance Company maintained by the OP No.4.
- Hence, as per decision of the Supreme Court in the above referred case the Insurance Company is legally obligated to pay compensation for loss insured vehicle as per term and condition of the Insurance Policy. The Supreme Court also in Deddappa and Others Vs. Branch Manager, National Insurance Co.Ltd. (2008)2 SCC 595 held that payment of premium made by cheque is ordinarily accepted as valid tender subject to encashment and Section 64VB of the Insurance Act, 1938 also provides for such a Scheme and in Damadilal Vs. Parashram, (1976)4 SCC 855 held that unless dishonoured the Cheque operates as valid discharge of the debt.
- But the learned advocate of the OP Insurance Company argued that though Insurance Policy was not cancelled but Insurance Policy did not commence till the date of credit the amount of premium to the Bank Account of the OP Insurance Company in view of the provision of Section 64VB of the Insurance Act,1938. In that aspcet, the Supreme Court in Chairman, Life Insurance Corporation Vs. Raj Kumar Bhaskar, AIR 2005 SC 3087 held that if agent of the LIC received premium but did not deposit to the account of the Insurance Company the Insurance Company can not be absolved from the liability to pay claimed amount. Here in that case Supreme Court has given wide meaning of the ‘agent’ to cover the Bank who receive the cheque toward payment of Insurance premium. Hence, applying the ratio of the above referref Judgment of the Supreme Court by Rajasthan High Court in the Branch Manager, the Kota Central Co-Operative Bank Ltd & Another Vs. The District Legal service Authority & Other, AIR 2016 Raj 1 held that Bank had implied authority to act as agent of LIC in view of Section 186 of the Contact Act in the event of receiving Cheque for clearance and if the said agent failed to discharge duty as above in respect of premium cheque, the LIC can not be absolved from liability to pay claim.
- However,a question came up for consideration before the Supreme Court on Oriental Insurance Co. Ltd. Vs. Inderjit Kaur(1998)1 SCC 371, wherein it was opined that a policy of insurance which is issued in public interest would prevail over the interest of the insurance company. For which if issued a Insurance Policy on receipt of Cheque for premium in contravention of the provisions of Section 64-VB of the Insurance Act, 1938, applying the principle of estoppel, the Supreme Court held that the interest of the insured would be prevailed over the interest of the Insurance Company. Taking the ratio of the above referred case the Supreme Court in New India Assurance Co.Ltd. Vs. Rula, (2000)3 SCC 195 held that ordinarily a liability under the contract of insurance would arise only on payment of premium. If such payment was made a condition precedent for taking effect of the insurance policy but such a condition which is intended for the benefit of the insurer can be waived by it.
- In view of the ratio of the above reffered Judgments of the Supreme Court and persuasive effect of the decision of the Rajasthan High Court it is concluded that the OP insurance Company issued the Insurance Policy on receiving of Premium Cheque in wel advance and said cheque was not dishonored by the OP No.5, rather the Op No.3 accepted the premium on encashment of the Premium Cheque after the date of accident of the vehicla, so the OP No.1 to 3 are estopped to resciend from the agreement to bear the risk in respect of insured vehicle for the entire perion coverin from 02/12/2010 to 01/12/2011 irrespective of the date of receiving the actual amount of premium for the sake of public interest. Hence, in our considered opinion Section 64VB of the Insurance Act,1038 does not hit the instant case for non encashment of Premium Cheque prior to the date of accident.
- Therefore the O.P Insurance Company is liable to pay the claim of Rs. 6,17,647/- minus ( - ) depreciation amount of the vehicle as per law with a lump sum amount of cost of the proceeding of Rs. 5,000 ( Five thousand) only within 45 days from today. If fails to pay the awarded aforesaid amount within the stipulated period, then interest @10% per annum will be fetched in the total awarded amount till realisation of the full amount. With the above order and award, this case is Disposed off on contest.
Supply free certified copy of the Judgment to all concern. Given under signature of the President and Members and seal of this District Forum on this the 13th day of April, 2017. | |
