AT HYDERABAD.

F.A. 1897/2005 against C.D. 289 /2002, Dist. Forum-I, Hyderabad     

Between:

1. The Divisional Manager

M/s. Oriental Insurance Company Ltd.,

Suryapet, Nalgonda Dist.

2. The Manager (Motor Claims)

M/s. Oriental Insurance Company Ltd.,

Regional Office-III Floor,

Greenlands, Begumpet

Hyderabad.                                                  ***                         Appellants/

                                                                                                 O.Ps 1 & 2.

                                                                    And

1. M/s. Kotak Mahindra Finance Ltd.,

Rep. by K. Nagaraj,

Authorised Representative

Office at 414-9, 4^th Floor,

Minerva Complex

S.D. Road, Secunderabad.                         ***                        Respondent/

                                                                                                Complainant 

2. M/s. Bharat Fuel Company Ltd.,

Rep. by  Rakesh K. Sharma

Regional Office : 305, Vasmshee Estate

Ameerpet, Hyderabad-500 016.                  ***                         Respondent/                                                                                                        O.P. No. 3

Counsel for the Appellant:                          Mr. S. Agasthya Sharma

Counsel for the Resp:                                 Mr. R.S. Reddy (R1)

                                                                   R2 served  through  publication.                                            

QUORUM:

                          HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

&

SMT. M. SHREESHA, MEMBER

MONDAY, THIS THE  FOURTH  DAY OF AUGUST  TWO THOUSAND EIGHT

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          *****

          This is an appeal preferred by the insurance company (Opposite Parties 1 & 2 )  against the order of the Dist. Forum directing it to pay Rs. 1,70,000/- with varying interest @ 12%  and 9% together with costs of Rs. 1,000/-.

          The case of the complainant in brief is that  it has been engaged in the business of  Hire Purchase, Financing, Leasing  and other allied activities.   Opposite Party No. 3  M/s. Bharat Fuel Company Ltd., had obtained  an Eicher Canter Vehicle under Hire Purchase Agreement evidenced under Ex. A7.  An endorsement was also made in the R.C. book.   Thus, they are the owners  in terms of  Ex. A7 as well as  the Motor Vehicles Act.  The same was endorsed in the records of the appellant insurance company.   While so, when the vehicle A.P. 9V 9906  was met with an accident, they got it repaired  at  M/s. Talwar Auto Garages Pvt. Ltd., Hyderabad  at a heavy cost of Rs. 2,00,000/- vide receipts Exs. A8 & A9.  When they preferred the claim with the appellants, it was finally settled for Rs. 1,70,000/-.   Opposite Party No. 3  has also requested to pay the amount to them.   In fact, original cheque bearing No. 525279 Dt. 29.8.2001  was drawn in its favour.   Later, they came to learn that there was collusion between  Opposite Party No. 1 and Opposite Party No. 3 to its detriment,  drawn another cheque  for the said amount in favour of  Opposite Party No. 3.  On that, they got issued a legal notice Ex. A5 Dt. 23.2.2002  to Opposite Parties 1 & 2 calling them upon to pay the said amount.  In spite of receipt of notice evidenced under Ex. A6 acknowledgement, they did not reply nor paid the amount.   Therefore, the complainant  claimed Rs. 1,70,000/-together with interest  and Rs. 50,000/- towards mental agony and costs.

          Opposite Parties 1 & 2 filed their written version denying the facts averred in the complaint.  They alleged that the complainant cannot be termed as a consumer nor the dispute could be resolved  under the Consumer Protection Act.  While denying the claim made by the complainant, they alleged that they have settled the matter with Opposite Party No. 3 the real owner.  Accordingly an amount of Rs. 1,70,000/- was paid towards full and final settlement.   Though  a  cheque was  drawn by  them in  favour of complainant,

later it was drawn in the name of  Opposite Party No.3, when one of the  Directors Sri  J. Ramakrishna Rao  represented that the amount had to be paid to them.  The allegation of the complainant  that  the amount of Rs. 1,70,000/- was misappropriated by the office of Opposite Party No. 1  with the collusion of Opposite Party No. 3 is not true.   Since the complainant alleges that there was misappropriation, the Dist. Forum has no jurisdiction.   It should be adjudicated by a Criminal Court..  Remedy is elsewhere.  They are not entitled to interest @  18% as claimed.  Therefore, they prayed for dismissal of the complaint with costs.

          The complainant in proof of its case filed affidavit evidence and Exs. A1 to A9.  Refuting their evidence the appellants filed affidavit evidence and Exs. B1 to B3.    The Dist. Forum after considering the evidence place on record opined that the complainant was entitled to the amount claimed and the payment made to  Opposite Party No. 3 cannot be construed as full and final settlement of the claim of the complainant.  Therefore, a direction was issued against the appellants to pay Rs. 1,70,000/- with interest and costs.

          Aggrieved by the said decision the opposite parties 1 & 2 preferred this appeal contending that  they have paid Rs. 1,70,000/- to Opposite Party No. 3, they should not be mulcted with payment of amount to the complainant.  The payment made by them  is to be treated as full and final settlement.  Therefore, they prayed that the complaint be dismissed.

          It is an undisputed fact that  R2/Opposite Party No.3  M/s. Bharat Fuel Company Ltd.,  purchased a vehicle under Hire Purchase scheme  of the complainant M/s. Kotak Mahindra Finance Ltd., under Ex. A7.  Since the  complainant was a financier, the documents along with R.C. book was registered in the name of  financier, they being treated as owners (Ex. A4).  The vehicle was insured with the appellant, the   insurance company vide Ex. A3. The fact that it was covered by Hire Purchase  agreement was also made a mention in the policy - noting that the complainant is the owner.  .    

When the vehicle met with an accident the complainant had got it repaired at M/s. Talwar Auto Garage Pvt. Ltd., Hyderabad by spending  Rs. 1,70,000/- evidenced under Exs. A8 & A9.  Thereupon, it made a claim for recovery of the said amount.   It has issued a notice claiming the amount under Ex. A5.   The appellant issued reply under Ex. B1.

For the reasons not known,  the insurance company  though  prepared a cheque  drawn in favour of the complainant in the first instance, on the representation made by one of the directors  of  opposite party No. 3 Sri J. Ramakrishna Rao, it had issued the  cheque to him, and obtained receipt that it was towards full and final settlement of the claim. The complainant alleged collusion between them and contended that the said cheque was issued to  opposite party No. 3  in order to deprive the valid amount due to it.

The appellants contended that since there was no deficiency in service on their part and  paid the amount, they should not be directed to pay once again.  More over  when the plea of fraud and collusion is taken, it is Civil Court that  is competent to adjudicate the matter.

The appellant insurance company has admitted that Hire Purchase agreement stands in the name of the complainant, and that there was endorsement to that effect in their records.  When the vehicle met with an accident, the complainant got it repaired  and submitted a bill for Rs. 70,000/- and the same was approved.  They have even prepared a cheque in favour of the complainant  in the first instance.   Curiously it has prepared a second cheque and gave it to the owner on the ground  he represented that  he was entitled to it.   Admittedly the owner did not spend any amount towards repairs.  There is no reason for this sudden change in the decision.  It ought not to have issued the cheque in favour of original owner, since the very insurance company admitted under Ex. B1 reply that in their records  the Hire Purchase agreement of the complainant was made a mention.   At no stretch of imagination it could pay it to the owner and then claim that it has absolved its liability.  When the complainant had spent the amount for repairs and submitted the claim and having satisfied, prepared a cheque, it cannot turn round and contend that  it had paid the amount to the owner and therefore it has discharged its liability.   No explanation was given for preparation of the second cheque.  When rival claims were there,  the insurance company  ought not to have  paid the amount without  recoursing to any legal action.  It is a clear case of violation of terms of the policy.   Paying the amount to the owner, despite the Hire Purchase Agreement in favour of the complainant,  would amount to unjust payment.   Necessarily the complainant is entitled to be reimbursed, for the amount  spent towards repairs.  The Dist. Forum  has considered all these facts in its correct perspective.  We do not see any merits in the appeal.

In the result the appeal is dismissed with costs computed at Rs. 2,000/-.  Time for compliance four weeks.

          PRESIDENT                                               LADY MEMBER

                                       Dt. 04. 08. 2008.

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