CONSUMER DISPUTES REDRESSAL FORUM

PALAKKAD, KERALA

Dated this the 7^th day of January, 2012.

Present: Smt. Seena. H, President

: Smt. Preetha. G. Nair, Member

: Smt. Bhanumathi. A. K, Member Date of filing:

CC / 105 / 2011

Mini Narayanan. P,

D/o. B.K. Narayanan. P,

Kadankot House,

Kalleppully P.O,

Palakkad – 678 005. - Complainant

(BY ADV. M.P. RAVI)

Vs

1. Muraleedharan. P,

Devi Sadanam,

Vallengi, Nemmara P.O,

Vallengi.

2. The Manager,

Reliane Life Insurance Company,

Tharas Arcade, Main Road,

Chittur – 678 101 - Opposite parties

(BY ADV. K. HARIDAS)

O R D E R

BY SMT. SEENA. H, PRESIDENT

Brief case of the complaint:-

The complainant had taken a policy from the 2^nd opposite party through the 1^st opposite party who is working as an agent under the 2^nd opposite party. The complainant has paid the 1^st premium of Rs. 10,000/- in cash to the 1^st opposite party for which a receipt was issued by the 2^nd opposite party. In the said receipt the name of the 1^st opposite party is also mentioned. On 9/3/2011 the 1^st opposite party came to the house of the complainant and has collected a sum of Rs. 10,000/- towards the 2^nd premium of the policy. But when he failed to issue receipt for the said amount the complainant approached the 2^nd opposite party and they told that the 2^nd installment amount is not remitted by the 1^st opposite party and hence the policy is lapsed. Subsequently the 2^nd opposite party has obtained a cheque for Rs. 10,000/- from the 1^st opposite party which was dishonoured on presentation. Later the complainant has issued notice to the 2^nd opposite party for which also there was no reply. The acts of the opposite parties amounts to deficiency of service and unfair trade practice and hence the complaint.

The 1^st opposite party has been set exparte.

2^nd opposite party filed version contenting the following:-

2^nd opposite party admits receipt of 1^st premium and issuance of policy. Policy lapsed on account of non-payment of 2^nd premium. It is also stated that 1^st opposite party was working as Sales Manager with 2^nd opposite party at the time of issuance of the policy. Since 2^nd opposite party has not received the 2^nd premium, policy lapsed. Hence there is no deficiency in service on the part of 2^nd opposite party.

Complainant and 2^nd opposite party filed their respective chief affidavit. Ext. A1 to A8 marked on the side of the complainant. No documentary evidence on the side of 2^nd opposite party.

Issues for consideration:-

1. Whether there is any deficiency in service on the part of opposite parties ?

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

Heard both parties and has gone through the entire evidence on record.

Issues I & II

The specific case of the complainant is that though 2^nd premium was paid to the agent of the 1^st opposite party, the policy stands lapsed. 2^nd opposite party admits that 1^st opposite party is their agent at the time of availing insurance but denies the payment of 2^nd premium by the complainant.

Complainant availed policy from 2^nd opposite party is admitted and revealed by Ext. A1. In Ext. A8 receipt for payment of 1^st premium, name of 1^st opposite party ie, agent of 2^nd opposite party is mentioned. Counsel for 2^nd opposite party vehemently argued that 1^st opposite party is only a canvasing agent and the complainant ought to have paid the premium directly to the company. We do not find any strength in the said argument. It is an admitted case that 1^st opposite party is the agent of 2^nd opposite party and 1^st opposite party has collected the 1^st premium from the complainant. 2^nd opposite party made believing the complainant that premium can be paid through 1^st opposite party, cannot now turn over and escape from the liability even if the agent has committed any fraud. As per the rule of agency, if the fraudulent act is with in the agents authority, it binds the principal as far third parties are concerned. No iota of evidence is placed before us to show that agent has not acted within its authority. Hon'ble National Commission in ICICI Prudential Life Insurance Co. Vs Gurmeet Singh and Another IV(2011)CPJ 545(NC) has held that “Having garnered policy through him, it does not behove the Insurance company to say that agent was adviser for insured and had no thing to do with them. The facts of the case in hand and the above stated one are almost similar and the decision rendered by the National Commission squarely apply to this case also.

The act of the Insurance Company is based on utmost good faith and if the insured had trusted the agent who had earlier received the premium and issued receipt, the Insurance company cannot now absolve liability.

In view of the above stated facts and circumstances of the case, we are of the view that there is deficiency in service on the part of both opposite parties and that the complainant is entitled for relief.

In the result complaint allowed and we order the following;

1). 1^st opposite party is directed to make payment of the 2^nd premium and issue receipt to the complainant.

2). 1^st opposite party is directed to regularize the policy and permit the complainant to pay the due premium for the year 2011.

3). Both opposite parties jointly and severally directed to pay complainant an amount of Rs. 5,000/- as compensation for the deficiency in service and Rs. 1,000/- as cost of the proceedings.

4). Order to be complied within one month from the date of receipt of order failing which the complainant is entitled for an additional amount of Rs. 10,000/- from both opposite parties.

Pronounced in the open court on this the 7^th day of January, 2012

Sd/-

Smt. Seena. H

President

Sd/-

Smt. Preetha.G.Nair

Member

Sd/-

Smt. Bhanumathi.A.K

Member

APPENDIX

Exhibits marked on the side of the complainant

Ext. A1 – Insurance Policy Certificate (copy) issued by the 2^nd opposite party to the complainant dated 22/03/2010.

Ext. A2 – Reminding Letter (copy) sent by the 2^nd opposite party to complainant.

Ext. A3 - Postal receipts (copies) of two registered letters.

Ext. A4 – Cheque ( copy) presented by the 1^st opposite party to The Federal bank, Thrissur branch.

Ext. A5 – Letter (copy) sent by the complainant to Head Office, Reliance Life Insurance Co. Ltd, Mumbai.

Ext. A6 – Reply letter (copy) issued by the Head Office, Reliance Life Insurance Co. Ltd. to complainant.

Ext. A7- Letter (copy) sent by the complainant to 2^nd opposite party dated 30/06/2011.

Ext. A8 – Premium Collection Receipt (copy) bearing the No.WC0007599148.

Exhibits marked on the side of the opposite parties

Nil.

Witness examined on the side of the complainant

Nil.

Witness examined on the side of the opposite parties

Nil.

Cost allowed

Rs. 1,000/-(Rupees One thousand only) allowed as cost of the proceedings.