STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(Appeal No.430 of 2009)

                                                                   Date of Institution:12.08.2009

                                                                   Date of Decision  :02.02.2011

M/s. Cholamandalam General Insurance Co. Ltd., SCO No.2463-64, Sector 22-C, Chandigarh through its Manager.

……Appellant/OP.

V e r s u s

Sh. Narsimulu son of Sh. Ramanna, Resident of House No.822, Sector 16, Near Blue Bird School, Panchkula.

              ....Respondent/Complainant.

BEFORE:            MRS. NEENA SANDHU, PRESIDING MEMBER.

                        S.  JAGROOP  SINGH   MAHAL, MEMBER.

Argued by:            Sh. Paras Money Goyal, Advocate for the appellant.

                        Sh. Sunil Dixit, Advocate for the respondent.

PER  JAGROOP  SINGH  MAHAL, MEMBER.

1.                 This appeal under Section 15 of Consumer Protection Act, 1986 has been filed by the complainant against the order dated 8.7.2009 passed by learned District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter referred to as District Forum) vide which the complaint filed by the appellant was allowed and the OP was directed to pay the insured sum of Rs.3.20 Lacs less Rs.500/- as excess clause to the complainant towards the damaged vehichle; Rs.10,000/- as compensation for mental agony and harassment and Rs.5,000/- as costs of litigation. The order was to be complied with by the OP within a period of one month from the date of receipt of its certified copy failing which the amount of Rs.3,29,500/- was to be paid to the complainant with penal interest @12% per annum from the date of order till its realization.

2.                 Briefly stated the facts are that the complainant got insured his vehicle on 25.2.2008 for a sum of Rs.3,20,000/- from the OP vide insurance policy (Annexure C-2) after paying a premium of Rs.8,382/- through cheque No.799932 dated 25.2.2008 drawn on State Bank of Hyderabad, Sector 34, Chandigarh. The vehicle was insured for the period from 25.2.2008 to 24.2.2009. Unfortunately, on 5.10.2008, the said car met with an accident near Barwala. On 6.10.2008, due intimation was sent to the police and the OP Insurance Company was also informed. Sh. P. K. Bansal was appointed as surveyor by the OP who told the complainant that his car was not insured as the premium of insurance was not received by the OP.  The case of the complainant is that he had already paid the premium vide above mentioned cheque and he was also having sufficient funds in his account on the date when the cheque was issued. It was alleged that he never received any letter from the OP regarding dishonor of the cheque nor any communication was ever received by him regarding cancellation of the policy. Alleging this act of OP as deficiency in service as well as unfair trade practice on its part, the complainant filed the present complaint.

3.                 The OP opposed the complaint and submitted that when the cheque dated 25.2.2008 issued by the complainant against the premium was presented for encashment, it was dishonored and as such, the policy issued to the complainant was cancelled and intimation of the same was duly given to the complainant on 15.3.2008 vide letter (Annexure R-1). It was pleaded that the OP Insurance Company was not liable in any manner to pay any compensation to the complainant. Pleading no deficiency in service or unfair trade practice on its part, OP prayed for dismissal of the complaint.

4.                 Both the parties led evidence in support of their contentions. 

5.                 After hearing the learned counsel for the parties and perusing the record, the learned District Forum allowed the complaint vide impugned order dated 8.7.2009 as already mentioned in the opening para of the judgment.

6.                 The OP – Insurance Company has challenged the impugned order through this appeal.

7.                 We have heard the arguments of learned counsel for the parties and have also perused the record.

8.                 The contention of the learned counsel for the OP/appellant is that the cheque submitted by the complainant was dishonored and therefore, the insurance policy issued in favour of the complainant was cancelled on 15.3.2001. The OP Bank did not produce any document before the learned District Forum to prove any of these contentions. However, the Bank has produced a memo dated 1.3.2003 purported to have been issued by the State Bank of Hyderabad vide which the cheque issued by the complainant was alleged to have been dishonored for want of funds. The OP has also attached a letter dated 15.3.2008 vide which the policy is alleged to have been cancelled. He also produced a document showing that a letter was sent on 15.3.2008 from the Chennai Post Office. It is argued that these documents prove beyond doubt that the cheque was dishonored and the policy was cancelled by the OP and therefore, they are not liable to pay any compensation to the complainant. As mentioned earlier, the OP had not produced any such document before the learned District Forum for the reasons best known to it. If the documents are withheld, an adverse inference arises against the OP that the same were not in existence. The production of these documents now in appeal would not improve the case because neither these documents have been proved in accordance with law nor is there any request to allow the appellant to lead this evidence in appeal. Even the original memo alleged to have been issued by the State Bank of Hyderabad has not been produced for the reasons best known to the OP appellant. There is no evidence either from the State Bank of Hyderabad or from the official of the OP if the cheque was sent to the Bank and was dishonored. This document otherwise also becomes doubtful because if the cheque had been dishonored on 1.3.2008, the OP/appellant would not have issued the insurance policy (Annexure C-2) subsequent thereto on 6.3.2008. Further, there is no reason why the OP would have waited for 15 days to issue the letter of cancellation dated 15.3.2008. The complainant has denied having received any such letter (Annexure R-1). There is no document to suggest if the letter was ever served or delivered to the complainant. No evidence has been led from the Post Office as to when and by whom the said letter was delivered and who received the letter on behalf of the complainant. In view of these facts, the evidence now sought to be adduced cannot be entertained and otherwise also, the case of the complainant is not improved at all on the basis of this evidence.

9.                 It is not disputed that the cover note (Annexure C-1) was issued to the complainant on 25.2.2008 on which date, the cheque was issued by him. Section 64-VB(4) of the Insurance Act, 1938 provides that the said cheque was to be dispatched or deposited with the insurer within 24 hours of the collection. There is no evidence to suggest on which date the cheque was deposited with the insurer. There is no evidence to prove on which date the cheque was sent to the Bank. The OPs were, therefore, not complying with the requirements of law and were dealing with the case casually. They informed the complainant about the cancellation of the policy only after the accident when the complainant submitted the claim and do not appear to have either cancelled the policy prior to that nor intimated any such dishonor of the cheque or cancellation of the policy. The original cheque has not been returned to the complainant. The learned District Forum rightly observed that there is no evidence on record to prove that the cheque was ever presented for encashment or it was dishonored for any reason and therefore, the complainant was not at fault and his claim could not be repudiated on the ground that the cheque has not been encashed.

10.               If the cheque was not presented promptly and the dishonor thereof was not conveyed to the complainant to give him time to pay the premium afresh and even the cancellation of the policy was not intimated, these facts by itself constitute deficiency in service on the part of the OP. The OP would, therefore, be liable to compensate the complainant of the loss suffered by him due to lapses on the part of the OP. Viewed from any angle, the complainant was entitled to compensation.

11.               In view of the above discussion, we are of the opinion that there is no merit in this appeal and the same is accordingly dismissed with litigation costs of Rs.5,000/-.

12.               Copies of this order be sent to the parties free of charge.

Pronounced.

2^nd February, 2011.

Sd/-

[NEENA SANDHU]

PRESIDING MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Ad/-

STATE COMMISSION

(Appeal No.430 of 2009)

Argued by:            Sh. Paras Money Goyal, Advocate for the appellant.

                        Sh. Sunil Dixit, Advocate for the respondent.

Dated the 2^nd day of February, 2011.

ORDER

                    Vide our detailed order of even date recorded separately, this appeal has been dismissed with litigation costs of Rs.5,000/-.

(JAGROOP SINGH MAHAL)                                              (NEENA SANDHU)    

                MEMBER                                                            PRESIDING MEMBER