DOF.27.12.08

DOO.1.11. 10

IN THE CONSUMER DISPUTES REDRESSAL FORUM, KANNUR

Present: Sri.K.Gopalan:  President

Smt.K.P.Preethakumari:  Member

Smt.M.D.Jessy:               Member

Dated this, the 1^st  day of  November  2010

CC.No.320/2008

M.Purushothaman,

Kurumboli House,

Maloor Post,

Thalassery Taluk.

 (Rep. by Adv.C.V.Narayanan)                             Complainant

1. Royal Sundaram Alliance Insurance Co. Ltd.,

    Sundaram towers, 45 & 46 whites Road,

    Chennai 14.

2. TVS & Sons Ltd.,                                             Opposite parties

    EP.IV.104 A, Thottada Post.,

    Kannur 7.

   (Rep. by Adv.E.K.Madhavan)

3. Maheendra & Maheendra

   Financial Services Ltd.,

   2^nd floor, Sadhana House,

   Worli, Mumbai 18.

  (Rep. by Adv.John Joseph)

O R D E R

Sri.K.Gopalan, President

          This is a complaint filed under section 12 of consumer protection act for an order directing the opposite parties to reinstate the insurance coverage and to repair the vehicle as per the report of the surveyor or to pay Rs.2, 89,900/- together with sum of Rs.25, 000/- for mental agony and loss sustained by complainant due to denial of insurance and also to pay cost of this proceedings.

          The case of the complainant in brief is as follows: The complainant had purchased a Maheednra Load king pup from the 2^nd opposite party on 28.3.08. At the time of purchase 2^nd opposite party stated that they are the dealer of the vehicle and complainant required to pay Rs.1, 59,650/- and for the balance amount they will arrange loan with 3^rd opposite party. 2^nd opposite party further stated that as a sales promotion for the month insurance for first year of the vehicle is free. At the time of entering in to Hire purchase agreement the 3^rd opposite party has obtained 10 signed cheque leaves from the complainant. The said vehicle was registered asKL58 A 6647. The 2^nd opposite party has issued the insurance certificate of the 1^stopposite party at the time of purchase of the vehicle. The insurance certificate shows that policy is valid from 28.3.08 to 27.3.09 with policy number VGC0028962000100. The complainant has started to pay monthly hire purchase installments to 3^rd opposite party from 2008 April onwards. On 23.11.2008 vehicle met with an accident due to complaint of break and vehicle was severally damaged and some pedestrians and workers in the vehicle sustained grievous injuries. Thereafter the complainant took the vehicle for repair with the 2^nd opposite party after informing the1st opposite party. The complainant has submitted the insurance surveyors report. As per the surveyors report Rs.2, 89,900/- is required for the repair. But the second opposite party has issued a notice dated 6.12.08 to the complainant stating that they are unable to do the cashless repair of the vehicle since the 1^st opposite party has informed them that premium cheque has  bounced and policy has cancelled. The complainant submitted before 2^nd opposite party that they informed him the insurance for 1^st year is free as a sales promotion and the complainant need to pay zero amounts towards insurance. But 2^nd opposite party had stated that they cannot do the repair for reason of the direction of the 1^st opposite party. Complainant purchased the vehicle believing the words of the dealer that the insurance is free. But the first opposite party has issued insurance policy certificate without stating any clause for validity of the policy. There is no endorsement in the policy about realization of cheque. The 1^st opposite party so far not informed the complainant about bouncing of the cheque . The complainant never issued any cheque to the 1^st opposite party. The 1^st and 2^nd opposite parties are under same management. The 2^nd opposite party represented the complainant that every purchase of the vehicle during March 2008 insurance is free. The financier so far not informed that there is no insurance policy in force. As per terms of the policy they will cover the vehicle till 27.3.2009. The act of opposite parties is amounts to clear unfair trade practice and deficiency of service. Hence this complaint.

          Pursuant to the notice opposite parties entered appearance and field version. The contention of the version filed by 1^st opposite party in brief is as follows: The vehicle owned by the complainant KL.58 A6647 was not having valid and subsisting policy since it was cancelled up on the bouncing of the premium cheque when presented. Notice to this effect was duly given to the complainant as well as to the RTO and to the 2^nd opposite party by letter dt.29/4/08. The alleged accident has taken place on 23.11.2008 whereas intimation about the cheque bounce was sent on 29/4/08. Hence there is no policy existing at the time of accident. The complainant’s premium cheque got bounced due to insufficient funds in his account. The details of H.P agreement are not known to this opposite party and that are matter between the complainant and the financier. Accident took place on23.11.08 but intimation was received only on 3.12.2008. Immediately a survey was done. It is the petitioner who has to prove the extent of damage. The 1^st opposite party has no role whatsoever, in the finance scheme arranged by the complainant. The contention that there is no endorsement regarding the premium cheque in the policy is not correct. The complainant has no case that he had paid any premium subsequent to the serving of notice on him regarding the dishonur of the premium cheque. It is denied that this and 2nd opposite party are under the same management. This opposite party has separate corporate identity. Since the complainant kept silence for 7 months after intimation of cancellation of policy he is not entitled for any relief. Hence the complaint is liable to be dismissed.

                    2^nd opposite party filed version separately contending as follows: The complainant has no case against 2nd opposite party. This opposite party had never assured that they would arrange the loan for the balance amount to be paid. He himself opted to avail loan from 3^rd opposite party. The statement of the complainant that as a sales promotion for the month, insurance for the vehicle for one year was offered as free is denied as incorrect, misleading and against facts.  He was informed that as a sales promotion he could either avail of a free insurance or cash discount or a subvention from the financier. Though  this opposite party was authorized to give cash discount of Rs.25,000/- owing to persuasion of the complainant he was given a total cash discount of Rs.35,000/-. The price of the vehicle with effect from 1.3.2008 was Rs.5,41,500/-.But total amount received from the complainant was only Rs.5,06,500/-.The complainant having issued a cheque in favour of the 1^st opposite party towards the premium amount for insurance coverage for the vehicle, this opposite party is duly authorized by the 1^st opposite party had issued a cover note for the insurance policy of the vehicle of the complainant. It was not issued as part of a free scheme and the validity of the insurance certificates would be subject to realization of the amount of cheque. This opposite party is not aware of signed cheque leaves. The statement of complainant that he has carried out all the stipulated services is not admitted. Complainant had brought his vehicle to the workshop of this opposite party for carrying out certain accident repairs. Accident repirs are not covered under warranty and as the complainant wished to have the repairs carried out under insurance, this opposite party had prepared an estimated and the same had been forwarded to the 1^st opposite party. On receipt of the estimate the 1^st opposite party informed that it would not be possible for them to give clearance for the work as there was no valid insurance policy in favour of the complainant. Complainant was informed the same by this opposite party. While issuing cover note it has specifically been informed to the complainant that the insurance policy would be subjected to realization of the cheque. The complainant having issued the cheque infavour of the 1^st opposite party, he is duty bound to assure that the said cheque got honoured on presentation. Further complainant has not given his clearance for carryout repair work. So this opposite party has not carried out the same. Complainant is not entitled to the relief sought for. Hence to dismiss the complaint.

          3^rd opposite party,  Mahindra & Mahindra Finance Service Ltd. denied the material averment in the complaint and stated thus in their version. This opposite party has sanctioned a loan of Rs.3, 60,000/- as per the request of the complainant. Offer of free insurance by 2^nd opposite party is not known to this opposite party. The averment that 10- signed cheque leaves from complainant had received by this opposite party is false. Issue of insurance certificate and policy number etc. are not known to this opposite party. This opposite party or its officials have not made any free insurance coverage. The attempt of the complainant is to avoid payments of monthly installments. He is highly irregular in payment of the loan. Opposite party is unnecessarily dragged to this proceedings and there by entitled to get compensatory cost. Hence to dismiss the complaint with cost.

          On the above pleadings the following issues have been taken for consideration.

1. Whether there is any deficiency on the part of opposite

    Parties?

2. Whether the complainant is entitled for any remedy as

    Prayed in the complaint?

         3. Relief and cost.

          The evidence consists of the oral testimony of PW1, DW1, DW2, Exts.A1to A11, and Ext.B1 to B9.

Issue Nos.1 to 3

          Admittedly complainant purchased the vehicle from 2^nd  opposite party on 28.3.08 complainant alleged that at the time of purchase of  the vehicle he was asked to pay only Rs.1,59,650/- and assured to arrange  loan with 3^rd opposite party for payment of the rest of the amount. Further averment of the complainant is that 2^nd opposite party further assure as a sales promotion for the same month that the  complainant will be given  insurance for the first year of the vehicle  free of cost and thus issued the insurance certificate of the 1^st opposite party at the time of purchase of the vehicle. The insurance certificate shows it is valid from 28.3.08 to 27.3.09. Complainant started paying installments and on 23.11.2008 vehicle met with an accident by which the vehicle was taken to 2^nd opposite party for repair. But 2^nd opposite party issued notice dt.6.12.2008 stating that they are unable to do the cashless repair of the vehicle since the first opposite party has informed them that premium cheque has bounced and policy has cancelled.

          The 1^st opposite party on the other hand contended that the complainant’s vehicle KL.58 A.6647 was not having valid and subsisting policy since it was cancelled upon the bouncing of the premium cheque when presented. Notice to this effect was duly given to complainant as well as to RTO and second opposite party by letter dt. 29.4.09. It is further contended that 1^st opposite party has no role in the finance scheme arranged by the complainant.

          Whereas the case of the 2^nd opposite party is that the statement of offer of free insurance of the vehicle for the first year is incorrect, misleading and against facts. He was informed that as a sales promotion he could either avail of a free insurance or cash discount or a subvention from the financier. The complainant had opted for a cash discount on the vehicle. Owing to the persuasion of complainant he has  given a total cash discount of Rs.35,000/- though 1^st opposite party was authorized to give a cash discount of Rs.25,000/-. 2^nd opposite party further contended that complainant issued a cheque infavour of 1^st opposite party towards the premium amount of insurance coverage for the vehicle and thus a cover note issued. The case of 2^nd opposite party is that the cover note was issued as against cheque issued by the complainant infavour of 1^st opposite party and was subjected to realization of the cheque and it was not issued as part of a free scheme. Hence 2^nd opposite party contended that the validity of insurance certificate subjected to the realization of the cheque. While issuing the cover note it had specifically been informed to the complainant that the insurance policy would be subjected to realization of the cheque. 1^st opposite party did not give clearance for the work as there was no valid insurance policy.

          The most important point to be answered in the light of the above facts is whether there is a valid insurance policy to the vehicle purchased by the complainant or not?

          Complainant filed chief affidavit in lieu of chief examination. Complainant  stated in his chief affidavit that “Rm³ hml-\T hm§p¶ Ah-k-c-¯n skbnÂkv {]tam-j³ Bbn {]kvXp-X-am-kT C³jq-d³kv kuP-\-y-am-sW¶v 2þmT FXnÀI£n ]d-ªn-cp-¶p. Bb-Xn-\m-emWv Rm³ hml-\T hm§p-hm³ XmÂ]-c-y-s¸-«-Xv. hml\T hm§nb DSs\ 2þmT FXr-I-£n-bn \n¶pT H¶mT FXr-I-£n-bp-tS-Xmb 28-þ3-þ2008 apX 27-þ3-þ2009 hsc {]m_-e-y-¯n-ep-ff C³jq-d³kv kÀ«n^n-¡äv e`n-¡p-I-bp-­m-bn:”. It is the complainant’s definite case that 2^nd opposite party had issued insurance policy to his vehicle valid from 28.3.2008 to 27.3.2009. Ext.A3 policy Schedule shows period of insurance

“From 10:10:00 Hrs on 28/03/2008 to

Midnight of 27/03/2009”.

          Royal Sundara Alliance Insurance company Ltd. Issued this policy in the name of Mr.Purushothaman.M, the complainant. Ext.A11 is the letter sent to complainant by 2^nd opposite party informing the complainant that according to their record the renewing date is 25^th March 2009. It is written thus: “ R§fpsS tcJ-I-fn \n¶pT Xm¦-fpsS hml-\-¯nsâ C³jq-d³kv t]mfkn ]pXp-t¡-­-Xv.    25^th March 2009  Xob-Xn¡v ap¼v BsW¶v a\-Ên-em-¡p-¶p. AÃm-¯-]-£T Xm¦-fpsS  hml-\-¯n\v  C³jq-d³kv kT-_-Ô-amb ]e-hn[ _p²n-ap«p-IÄ¡pT Imc-W-am-Ip-T. Xm¦-fpsS   t]mf-kn]pXp¡p-hm³ th­ klm-b-§Ä sNbvXp-X-cp-¶-Xn R§Ä¡v kt´m-j-ap-s­¶v And-bn-¨vsIm-f-fp-¶p.”. It is pertinent to note that the phone number of the representative 9995865856 is also given in the letter. This letter proves that there is a valid policy existing up to March 2009. In the cross examination for 1^st opposite party the complainant, PW1 deposed that “ameqÀ kn³Un-t¡äv _m¦nse sN¡v  {]oan-b-ambn H¶mT FXr-I-£n¡v sImSp-¯p-sh¶v ]d-ªm icn-b-Ã. Rm³ {]oan-bT sN¡v sImSp-¯n-«n-Ã. 21-þ4-þ08 \v  A¡u-­n ]W-anà F¶v ]dªv sN¡va-S-§n-sb¶v ]d-ªm icn-b-Ã.  Cash Bbn«pT premium  sImSp-¯n-«n-Ã.. kn³Un-t¡äv _m¦nse A¡u­v \T-]À sN¡v aS-§nb  A¡u­v  account Fsâ-X-Ã. 21.4.08 \v sN¡v aS-§n-b-Xn-\m t]mfnkn {]m_-e-y-¯n-en-Ã-sb¶v  ]dªv t\m«okv F\n¡v In«n-bn-«n-Ô. These facts brought out in cross examination strengthened the case of the complainant. Complainant gives evidence to the effect that he has not issued cheque of Malur Syndicate Bank to 1^st opposite party for payment of premium. It is not corrected to say that the cheque issued by him was bounced. The cheque of Syndicate bank returned was not that of complainant. He has not received any notice stating that the policy was not in existence since the cheque of the complainant was bounced due to insufficient amount in the account. It is repeatedly deposed by the complainant to another question that “policy cancel  sNbvXp F¶v ]dªv company bn \n¶v F\n¡v bmtXmcp t\m«o-kpT In«n-bn-«n-Ã.”

          Ext.B5 is the memo of dishonour of cheque and Ext.B 6 is the cheque. The Bank Manger of Malur Syndicate Bank examined as DW1 and Ext.B6 is marked through him. He has deposed in chief that Ext.B6 cheque is issued from his bank to Royal Sundaram Insurance Company. He has also stated that the cheque was dishonoured due to insufficient fund in the account and Ext.B5 is the memo of return of cheque. In the cross examination DW1 deposed that “Cu sN¡v (3026)sâ A¡u­v tlmÄUÀ ]pcp-tjm-¯-a³ F¶ Bf-Ã. kPo-h³ F¶ Bfm-Wv”. The evidence adduced by DW1 proves that the account holder of Ext.A6 cheque is one Sajeevan and not Purushothaman. The specific case of the complainant is that he has never issued any cheque to the 1st opposite party. The facts brought out in the cross examination of DW1 that the complainant has not issued cheque that of Malur Syndicate Bank is fully confirmed by the evidence adduced by DW1, the  Manger of  the Syndicate Bank, Malur. Thus the question of dishonour of cheque and the contention of  opposite parties that there is  no valid insurance policy since it was cancelled due to the bouncing of cheque is baseless and not sustainable also. It is pertinent to note that 2^nd opposite party has no reasonable explanation for the reason of sending the letter Ext.A11 informing the date of renewal of insurance policy. The very sending of such letter itself is a proof that the policy had been in existence at the time when the accident took place causing damage to the vehicle. The circumstances and the available evidence make it clear that the second opposite party has issued the insurance certificate and the same had been inexistence as valid at the time of accident. 3^rd opposite party did not discharge the obligation informing the particulars of Insurance to the complainant. 3^rd opposite party is having the copy of the insurance certificate of complainant. 3^rd opposite party is a financier  and he will be naturally informed if policy is cancelled. The denial of claim in the above ground is a cruel act on the side of opposite party which is a typical act of unfair trade practice which deserves the warning not to repeat this evil type of practice in future.

          The main contention against complainant is that his premium cheque got bounced due to insufficient funds. If that be true the insurer was duty bound to inform the complainant and also to transport authority. If the contract of Insurance had been cancelled without giving intimation, we are of opinion that the insurance company is liable to satisfy the claim. The evidence available in this case doesn’t show that the cancellation of the policy was communicated to the complainant. So also no evidence placed by the insurer in respect of any communication made to the transport authority. Ext.A4 in no way believed in the light of the evidence of DW1 on the one hand and secondly in the absence of acknowledgement of any such intimation. The Hon’ble Jharkand High Court in Oriental Insurance Co. Ltd. Vs. Neelu Devi and others reported in (2009) ACCI.C.R.44 (Thar) made it clear that in the case of cancellation of policy on the reason of dishnour of cheque issued by the owner towards premium the insurer is required to immediately inform the insured and in case where insurer failed to discharge its burden by not giving intimation the insurer is bound to compensate by indemnifying insured owner.

          Ext.A8 is the estimate by Surveyor of 2nds opposite party Royal Sundarm for carrying out the repairs occurred due to the accident in the vehicle of complainant. The total estimate amount shown is Rs.2, 89,900/-. It is not objected by the opposite parties. Complainant adduces evidence by chief affidavit that he has to make an expense of Rs.3, 00,000/- in the repair item. Complainant assesses an amount of Rs.25, 000/- for his mental sufferings. Complainant states hat he has not availed the cash discount as stated by the 2^nd opposite party in their version. 2^nd opposite party has not produced clear evidence to prove that complainant has availed the cash discount for an amount of

 Rs.35, 000/-. Ext.A1 cash receipt proves that complainant has paid Rs.1, 59,650/-. Ext.A4 shows that the amount financed is

and Rs.58, 465/- as Finance charge which the total comes to

Rs.4, 18,465/. The available document including the true copy of B8 series do not prove that complainant has received Rs.35, 000/- as cash discount. The authenticity of Ext.B8 (4) is not established. No responsible person examined at least to speak of the details. Hence the 1^st opposite party is liable to pay the repair charges. In general the amount of assessment of surveyor is acceptable and there is no reason to avoid the assessment in this case. There may occur incidental charges also. But considering details furnished by the surveyor we are impressed to allow an amount of

Rs.2, 89,900/- . Thus 1^st opposite party is liable to revive the policy and to pay an amount of Rs.2, 89,900/- to the complainant towards repair charges accepting the existence of valid insurance policy and further directed to pay all the opposite parties an amount of Rs.2500/- each towards mental agony suffered by the complainant.  The 1^st opposite party is also liable to pay Rs.1000/- as cost of this proceedings. Thus the issues No.1 to 3 are found in favour of the complainant and order passed accordingly.

          In the result, the complaint is allowed directing the 1^st opposite party to pay an amount of Rs.2,89,900/-(Rupees Two lakh Eighty Nine thousand  Nine hundred only) towards  repair charges  reviving the validity  of insurance policy. It is further directed to pay a sum of Rs.2500/- (Two thousand five hundred only) each by all the opposite parties towards mental agony suffered by the complainant. The 1^st opposite party is also liable to pay Rs.1000/-(Rupees One thousand only) as cost of this proceedings. This order shall be complied within one month from the date of receipt of this order, failing which the respective parties shall be liable for paying 10% interest per anum for the amount liable to pay from the date of this order till realization of the amount. The complainant is at liberty to execute the order on the expiry of one month as per the provisions of consumer protection Act.

                         Sd/-                    Sd/-                  Sd/-

                    President              Member                Member

APPENDIX

Exhibits for the complainant

A1.Copy of the cash receipt issued by OP

A2. Copy of the RC book.

A3. Copy of the Policy schedule

A4.Copy of the repayment schedule issued by OP

A5.Copy of the permit of the vehicle

A6.Copy of the FIR in crime No.287/08 of Maloor Police

A7.Copy of the MVI report

A8.Copy of the surveyors report

A9.Copy of the letter issued by 2^nd  OP

A10.Cash invoice dt.30.7.08 issued by OP

A11.Letter dt.1.3.09 issued by OP

Exhibits for the opposite parties

B1.Copy of the commercial vehicles package policy

B2.Motor insurance claim form

B3.Copy of the claim form dt.1.12.08.

B4.Copy of the letter dt.29.4.08 issued by Royal Sundaram  to

      complainant

B5.Memo of return of cheque

B6.Cheque issued to Royal Sundaram Insurance co.

B7.Copy of the letter dt.8.3.08 issued by N. Sankaranarayanan

B8.Copy of the retail invoice issued to complainant.

B9.Loan agreement

Witness examined for the complainant

PW1.Complainant

Witness examined for the opposite parties

DW1.Balakrishnan

Dw2.S.Vasudevan

                                                /forwarded by order/

                                                Senior Superintendent

Consumer Disputes Redressal Forum, Kannur