APPEARED AT THE TIME OF ARGUMENTS

PRONOUNCED ON : 10^th OCTOBER 2017

O R D E R

PER DR. B.C. GUPTA, MEMBER

          This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the order dated 24.02.2016, passed by the U.P. State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in First Appeal No. 1516/2013, “Mahindra & Mahindra Financial Services Ltd. versus Jwala Singh & Ors.”, vide which, while dismissing the said appeal, the order dated 27.05.2013, passed by the District Forum, Lucknow in consumer complaint No. 445/2009, allowing the said complaint and giving directions to the petitioner to pay the insurance claim of ₹3,79,564/- alongwith interest @9%p.a. and a compensation of ₹40,000/- towards mental agony and ₹3,000/- as litigation cost, was upheld.

2.       Briefly stated, the facts of the case are that the complainant/respondent No. 1 purchased a Mahindra Bolero vehicle in June 2005 by depositing ₹50,000/- as margin money and availed a loan of ₹3,71,735/- from the petitioner/OP-1.  The said vehicle is stated to have been stolen on 23.04.2007.  It is stated in the consumer complaint that the manager of the petitioner/OP-1 approached the complainant at his Banthara Restaurant and persuaded him to purchase the said vehicle and stated that the loan shall carry an interest @6% p.a. only without any extra cost.  It was also assured that until the instalments of the loan were paid, the company will get the vehicle insured against theft etc.  It is further stated in the consumer complaint that the manager of the petitioner/OP-1 took a sum of ₹15,669/- from him on 23.06.2015 for getting the insurance done for the period 23.06.2005 to 22.06.2006.  For the subsequent year as well, the complainant paid a sum of ₹15,669/- to the said Manager for getting the insurance done.  The complainant was, therefore, under the impression that the said insurance had been got done by the OP Finance Company. 

3.       It was found, however, that the insurance was got done by the manager of the OP for the period 23.12.2006 till 22.12.2007 from the National Insurance Company for third party insurance only, after making payment of a premium of ₹926/-.  Alleging that the petitioner/OP-1 had failed to take appropriate insurance for the vehicle, the complainant filed the consumer complaint in question, seeking directions to the petitioner/OP-1 to pay the market value of the vehicle on the day of the theft, i.e, ₹3,79,574/- alongwith interest @12% p.a. and compensation of ₹1 lakh towards mental agony etc. 

4.       The complaint was resisted by the petitioner/OP-1 by filing a written statement before the District Forum, in which they denied that the Manager of the company had contacted the complainant at his hotel.  The OP-1 also stated that they had no role in getting the insurance done, rather the complainant had himself got the vehicle insured.  It is also stated that the complainant had been irregular in making payments of the monthly instalments of the loan.  The OP further stated that the cause of action had arisen to the complainant in December 2006, but the complaint had been filed in April 2009 and hence, it was beyond a period of two years of the cause of action and thus, barred by limitation.

5.       The District Forum vide their order dated 27.05.2013, allowed the consumer complaint and directed the petitioner/OP-1 to pay the insurance claim of ₹3,79,564/- alongwith interest @9% p.a. and a compensation of ₹40,000/- for mental agony and ₹3,000/- towards litigation cost as stated already.  Being aggrieved against the order of the District Forum, the petitioner/OP-1 challenged the same by way of an appeal before the State Commission, but the said appeal having been dismissed vide impugned order, the petitioner/OP-1 is before this Commission by way of the present revision petition.

6.       During arguments before us, the learned counsel for the petitioner submitted that the complainant had been defaulter in returning the instalments of loan, right from the very beginning, as was made out from the statement of his loan account.  Moreover, the petitioner/OP-1 had no liability in the matter, as the insurance had been taken by the complainant himself and not by the petitioner.  The learned counsel has drawn attention to clause IV of the loan agreement between the parties, saying that it was the duty of the complainant to obtain the insurance cover. 

7.       The learned counsel for the complainant stated, however, that it was laid down in the loan agreement that in case of failure of the borrower to take the insurance cover, the lender was required to keep the product insured.  In the present case, the petitioner/OP-1 had not obtained proper insurance cover for the vehicle and hence, both the consumer fora below had rightly decided the matter in favour of the complainant.  The learned counsel for the insurance company has drawn attention to para 3(b) of the memo of the revision petition filed by the petitioner, in which it has been stated that the insurance was taken for the period 23.12.2006 to 22.12.2007 by making payment of premium of ₹926/- as third party insurance only.  The Insurance Company was, therefore, not liable to pay any claim in the matter, and hence, the liability to pay was on the petitioner only. 

8.       We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

9.       The main issue that merits consideration in the matter is whether the petitioner/OP is liable to pay the amount of insurance claim to the complainant for their alleged failure in obtaining proper insurance policy for the said vehicle.  In this regard, the contention raised by the petitioner/OP-1 is that it was the primary responsibility of the complainant to obtain the insurance cover for the said vehicle.  This was laid down in the terms and conditions of the loan agreement as well.  The petitioner/OP-1 have also stated that the insurance cover in question was taken by the complainant and not by them.  This contention of the petitioner/OP-1 stands belied from the written statement filed by the OP-2 Insurance Company, in which they have stated categorically that the petitioner/OP-1 had taken third party insurance policy for the said vehicle, by paying a sum of ₹926/- to the insurance company for the period 23.12.2006 to 22.12.2007.  Moreover, in the memo of revision petition as well, the petitioner/OP-1 have admitted that the insurance cover was taken for the period 23.12.206 to 22.12.2007 and a premium of ₹926/- was paid as third party insurance.  The petitioner/OP-1 have not been able to provide any valid explanation as to why the insurance cover could not be obtained by them for the earlier period and why they could not take insurance on a comprehensive basis, covering the own damage claim to the vehicle as well.  The deficiency in service on the part of the Petitioner/OP-1 is, therefore, fully proved.

10.     It is also mentioned in the loan agreement that in case the borrower fails to obtain the insurance cover, the said insurance shall be taken by the lender.  Both the consumer fora below in their orders under challenge in the present petition, came to the conclusion that only the third party insurance was taken by the petitioner/OP-1, which amounted to an unfair trade practice.  Moreover, when the vehicle was purchased in the month of June 2005, insurance cover was to be taken from that time only, whereas as brought out on record, the insurance cover was taken from December 2006.  It is not clear from record, as to how the vehicle was plying without proper insurance cover.  However, the complainant alleged that he had paid a sum of ₹15,669/- to the Manager of the OP-1 for obtaining the insurance cover from 23.08.2005 onwards and then paid another sum of ₹15,669/- for the subsequent year.

11.     It is interesting to observe that the complainant has levelled allegations against petitioner/OP-1 that they did not obtain proper insurance policy for the vehicle, although they had charged premium from the complainant for the same.  However, the complainant have also not been able to explain anywhere, how the vehicle was being plied without any insurance.  In case, the petitioner/OP-1 failed to take the insurance policy, the complainant should also have been vigilant enough to ensure that he was equipped with proper insurance policy.  Before plying the said vehicle, it is a matter of general practice that comprehensive insurance cover is taken for the vehicle by the owner covering the own damage as well as third party claims. It is evident, therefore, that contributory negligence on the part of the complainant is also proved from the facts and circumstances on record, and the complainant is liable to suffer on account of such a lapse.

12.       From the entire facts and circumstances, it is made out, therefore, that the petitioner/OP-1 and the complainant are both guilty of deficiency in the whole episode.  Since the factum of theft of the vehicle is not in dispute, it is felt that it shall be in the fitness of things therefore, that the petitioner/OP-1 is saddled with the responsibility to pay only 50% of the insurance claim, i.e.,  a sum of ₹1,89,782/-, alongwith interest @9% p.a. and the compensation as ordered by the consumer fora below.  The complainant shall have to suffer for the loss of the balance 50% of the amount on account of lapse on his part.  The present revision petition is, therefore, partly allowed and the orders passed by the Consumer Fora below are modified to say that the petitioner/OP-1 shall be liable to pay a sum of ₹1,89,782/- alongwith interest @9% from the date of filing the complaint till realisation. A compensation of ₹40,000/- towards mental agony and ₹3,000/- as litigation cost, as allowed by the consumer fora below shall also be liable to be paid to the complainant.  There shall be no order as to costs.