Dt. 08.09.2015
JAGANNATH BAG, MEMBER
This appeal and appeal No. FA/476/2013 are directed against one and the same order dated 22.11.2012, passed by the Ld. District Consumer Disputes Redressal Forum, Birbhum, in CF Case No. CC/75/0/2011, whereby the compliant was allowed on contest against OP No.1 and ex parte against OP No. 2 with cost.
Both the appeals being analogous in nature will be covered by a common order.
The complaint case, in brief , was as follows:
The Complainant purchased a vehicle (No. WB-53A/7477) under hire purchase agreement with OP No.1 / Cholamandalam Investment and Finance Co. Ltd., who induced through their agent to insure the vehicle with their Insurance Company , i.e., OP No.2/ Cholamandalam MS General Insurance Co. Ltd., Accordingly, the vehicle was insured by the OP No.2. On 15.07.2011 the vehicle met with an accident because of collision with a Truck bearing No. WB-57/7923 causing the total damage of the vehicle and death of the driver. Though the insurance was valid up to 31st July, 2011, premium being paid ‘through cash and also through cheques’ and though the Complainant requested the agent ‘to arrange the payment of the assured money,’ ‘the (Insurance ) company withheld the policy documents /bonds’ and denied that there was any cause of action . In that position the complaint was filed seeking appropriate reliefs including payment of the assured sum of Rs. 6,32,000/- .
The complaint was contested by OP No.1, while OP No.2, as noted by the Ld. Forum below, ‘refused’ to receive the notice.
In their W.V. the OP asserted that Cholamandalam Investment and Finance Co. Ltd and Cholamandalam MS General Insurance Company are different companies having separate legal entities . They never induced the Complainant to take the insurance policy from ‘their own insurance company’ . As financier they provided loan amounting to Rs. 5,50,000/- vide a hypothecation agreement dated 31.05.2011 for purchasing the vehicle. The relationship between them and the Complainant is that of debtor and creditor . It was contended that the Complainant being a borrower does not come under the definition of ‘consumer’ under Section 2 (1) (d) of the CP Act. They also challenged the territorial jurisdiction of the Ld. Forum. As the OP No.2 was not located within the territorial jurisdiction of the Ld. Forum below. Accordingly, the case was liable to be dismissed.
Ld. Forum below after having considered the pleadings of the parties and materials on record observed that OP No.1 carried on business through OP No.2 within the territorial jurisdiction of the Forum and though , on the point of territorial jurisdiction , the OPs challenged the order of the Ld. Forum below in Revision Petition No. RC/37/2012 before the Hon’ble State Consumer Disputes Redressal Commission , the Revision Petition being dismissed and the OP not having moved before the higher Forum against the decision of the Hon’ble State Commission, the case was found to be maintainable before the District Forum. Further, on the point of status of the consumer it was held by the Ld. Forum below that the status of an insured is that of a consumer in relation to the insurance policy obtained from OP No.2 . There was no challenge about the admissibility of the insurance claim of Rs. 6,32,000/- which was assured as value of the vehicle. The vehicle being completely damaged and unworthy of service and the OP having not opposed that aspect of the Complainant’s claim in the W.V, the complaint was allowed with direction upon the OPs to pay jointly and severally the sum of Rs. 6,32,000/- to the Complainant within one month from the date of order failing which interest @ 10% p.a. would have to be paid from the date of filing of the case till the date of actual payment. The OPs were also directed to pay a litigation cost of Rs. 2,000/-.
Being aggrieved by and dissatisfied with the order of the Ld. Forum below, the Appellant has come up before this Commission with a prayer for setting aside the impugned order dated 22.11.2012.
Ld. Advocates appearing for the Appellant /Cholamandalam MS General Insurance Company as well as for the Appellant/ Cholamandalam Investment and Finance Co. Ltd., asserted that there is nothing in the petition of complaint that any claim form was submitted. The Appellant/Insurance Company had no knowledge about the complaint case as no notice was served upon OP No.2. Further, there was no office of the Appellant Insurance Company at the address mentioned in the cause title of the complaint petition . Ld. Forum below failed to notice that the vehicle was being used in contravention of law without insurance policy and Ld. Forum below relied only on the cover note to arrive at the conclusion that the vehicle was insured with OP No.2. The Respondent /Complainant never submitted any document that the premium towards insurance of the vehicle has been realized by the insurer. In that position the policy said to have been obtained from OP No.2 does not exist and in the absence of any valid insurance policy no claim can be entertained. The impugned order suffers from material irregularity , legal infirmity and jurisdictional error and, therefore, is liable to be set aside.
Ld. Advocates submitted further that the cheque which was issued by the Complainant towards payment of insurance premium was not encashed as the Complainant did not have sufficient fund. Demand notice was sent to the Complainant but no payment was realized as a result of which the insurance policy was not issued against the cover note. . In the absence of payment of premium and resultant non-issue of policy, the question of payment of insurance claim does not arise. Ld. Forum’s order is illegal and deserves to be set aside.
During hearing of the appeal , the Respondent/Complainant remained absent and the matter was proceeded with accordingly.
The point for consideration is whether the order of the Ld. Forum below suffers from material irregularity or jurisdictional error?
Decision with Reasons:
We have gone through the memoranda of appeals together with copies of the impugned order , the petition of complaint and other documents including the W.V filed by OP No.1, evidence-in-chief on affidavit filed on behalf of the Complainant, the Motor Insurance Cover Note bearing No. 8422304, the W.A filed on behalf of the Complainant and the BNA filed on behalf of OP No.1 before the Ld. Forum below.
It is the case of the Appellant that the vehicle in question was proposed to be insured by OP No. 2 who issued a cover note. The cheque bearing No. 193059 drawn on State Bank of India Murarai was not encashed as there was no sufficient fund with the account of the Respondent / Complainant as a result of which no insurance policy was issued. As per IRDA Rule, if premium is not received, the policy proposed shall not be issued. In case of a policy of General Insurance where the remittance made by the proposer or the policy holder is not realized by the insurer , the policy shall be treated as void ab initio. In the present case , no policy document could be produced by the Respondent/ Complainant in support of his averment that his vehicle was covered by a valid policy. There is no mention in the impugned order about the production of any insurance policy covering the vehicle in question except the cover note.
Ld. Forum’s observation that the vehicle was completely damaged and there was a cover note of Motor Insurance in respect of the vehicle which was valid up to 31.07.2011, would entitle him to a compensation of Rs.6,32,000/- is but erroneous in so far as the cover note does not prove by itself that the insurance policy was issued and such insurance policy was valid .Unless and until the premium for a particular policy is realized , insurance policy can not be taken for granted. In the present case no valid insurance policy could be shown by the Respondent / Complainant . Further, it is incorrect to hold that OP No.1 and OP No.2 jointly and in an overlapping manner run the business as financier as well as insurer. Those OP No.1 and OP No.2 are separate entities and one of the two can not be held responsible for deficiency in service of the other , if any. They have different business identity and can not be treated as having same functions.
We are constrained to hold that the Ld. Forum below did a material mistake in not differentiating the nature and practice of business of the OPs. While the OP No.1/ Appellant in FA/1208/2013 was engaged in the business of finance , the OP No.2 / Appellant in A/ 476/2013 was engaged in the business of insurance . In the cause title of the petition of complaint both the financing company and the insurance company have been shown as one and a single OP No.1, but the insurance company has again been shown as OP No.2 . Such identity of OPs as put by the Respondent / Complainant is anomalous which the Ld. Forum below overlooked . What Ld. Forum below observed in the impugned order is that ‘Exht-2 is the cover note of Motor Insurance in respect of the concerned vehicle No. WB-57/7923 and it was valid up to 31st July 2011.’ If the cover note is related to ‘WB-57-7923’, how does it cover the vehicle No. WB-53A/7477, which one is said to have been purchased by the Respondent/Complainant and in respect of which insurance claim is raised? Even if it is treated as a typographical mistake, how the cover note itself can be treated at par with or as substitute for an insurance policy in case the premium is not paid?. The cover note cannot be treated as a material evidence to show that there was an insurance coverage for the vehicle. There is enough force in the Appellant’s point that insurance policy was not issued as premium was not received on ground of bouncing of the cheque made over by the Respondent /Complainant. In that view of the matter, we are inclined to hold that neither the Appellant in A/476 /2013 , nor the Appellant in FA/1208/2013 had any deficiency in service. Evidently, the impugned order suffers from material irregularity and jurisdictional error .
Hence,
Ordered
That the appeals be and the same are allowed . The impugned order is set aside . Consequently, the complaint stands dismissed. There shall be no order as to costs.
