DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD

Dated this the 18^th  day of December,  2023

Present      :   Sri. Vinay Menon V.,  President

                  :  Sri. Krishnankutty N.K., Member                                Date of Filing: 26/11/2021    

     CC/209/2021

1. P.D.Geetha,

W/o. M.A. Haridas,

Mangalamkunnu Angadi,

Kattukulam (PO), Ottapalam,

Palakkad – 679 514

2. M.A. Haridas,

S/o. Late Velu Pillai,

Mangalamkunnu Angadi,

Kattukulam (PO), Ottapalam

Palakkad – 679 514                                   -           Complainants

      (By Adv. S.P. Chandran)

                                                                                                Vs

1. Branch Manager,

HDFC Bank Ltd.,
Door No.111/219,Ground Floor,

Kadampazhipuram,  Azhiyannur – 678 633.

2. Managing Director & CEO,

 Bank House, Shiv Sankar Estate,

Dr. Annie Besant Road,

Worli, Mumbai – 400 018.

3. The Manager,

United India Insurance Co. Ltd.,

2^nd Floor,  Parapurath Tower,

Main Road, Ottapalam, Palakkad.

4. United India Insurance Co. Ltd.,

Corporation Building, Cherooty Road,

Manachira, Kozhikkode – 673 001                       -           Opposite parties  

      (OPs1 & 2 by Adv. K.A.Kailas)

        OP3 & 4 by Adv. M. Krishnadas)

O R D E R

By Sri. Vinay Menon V., President

A.         Relevant chronology

1. In a nutshell, complainant is aggrieved by the alleged delay in issuance of policy leading to non-coverage of the elephant at the time of its death, causing huge losses to the complainants.  Since the pleadings revolve around dates, dates involved are scheduled for easy reference, before going for pleadings.

B.         Pleadings/Counter pleadings

2. Complainants are the owners of one elephant, Mangalamkunnu Karnan. Said elephant was insured with the 3^rd O.P. Insurance Company. 1^st O.P. is the Bank of the complainant where he had drawn a cheque for issuance of premium. 2^nd O.P. is the Head office of 1^st O.P. 4^th O.P. is also the Insurance Company.
3. Elephant of the complainants was insured with the 3^rd O.P., covering the previous period of 26/01/2020 to 25/01/2021. The 2^nd complainant issued a cheque dated 22/01/2021 drawn on 1^st O.P. for the premium payable to the policy of the elephant. Upon receipt to the cheque, 2 policies,

(1) Elephant Cover policy; and

(2) Special Contingency policy,

were issued to the complainant by the 3^rd O.P. covering the elephant for the period 26/01/2021 to 25/01/2022. 3^rd O.P. handed over the cheque to their Banker on 22/01/2021 itself.  Cheque was handed over to 1^st O.P. on 28/01/2021.  While so, the elephant died on 28/01/2021.  On 29/01/2021 the complainant received a phone message showing debit of the cheque amount, which was later reversed for technical reason ‘Drawer’s Signature Differs’. Resultantly, policy issued on 22/01/2021 has become invalid. Aggrieved thereby, this complainant is filed  seeking reliefs against O.P.3 retaining cheque till 28/01/2021, and against 1^st O.P. for not taking pro-active steps in accordance with RBI guidelines to get KYC updated. 

4. O.P.1 filed version repudiating allegations of deficiency in service on their part. O.P.1 received cheque only on 28/01/2021 and on that day itself the cheque was returned. Account of the complainant was updated on 2016 and had to be updated only on 2026 as per RBI circulars. Return of cheque happened due to the negligence on the part of the complainant himself and sought for dismissal of complaint.  
5. O.P.s 3 and 4 filed version. They stated that cheque dated 22/01/2021 was received by them after banking hours. Cheque was handed over to their Banker on 25/01/2021, being the next working day. Cheque was handed over to O.P.1 Bank on 27/01/2021 and not on 28/01/2021. The cheque was dishonoured on 27/01/2021 itself.  Further, coverage was from 1715 hours of 26/01/2021 and not from the midnight of 25/01/2021.

C.         Issues

6. Based on pleadings, the following issues arise for consideration:

1. Whether there is any deficiency in service on the part of the O.P.1 in not updating the signature of 2^nd complainant in the records of the Bank?
2. Whether there is any deficiency in service or unfair trade practice on the part of the O.P.s 3 and 4 in not providing insurance cover to the elephant of complainants?
3. Whether there is any deficiency in service/unfair trade practice on the part of the opposite parties?

4.         Whether the complainant is entitled to any of the reliefs sought for?

5.         Any other reliefs ?

D.        Evidence adduced

8.         (i)     Evidence comprised of proof affidavit and Exhibits A1 to A11 marked through proof                     affidavit.

            (ii)    O.P.1 filed proof affidavit. They did not mark any documents.

            (iii)   O.P.s 3 and 4 filed proof affidavit and marked Ext. B1 to B6.

E.         Discussion

            Issue No.1

9.         Cheque issued by the complainant was dishonoured for the reason ‘Drawer’s signature differs’. Complainant’s case is that the O.P.1 Bank ought to have taken a pro-active step to get the signature updated.

10.       In order to counter the complainant’s allegation regarding non-updation of the signature, the 1^st O.P. raised the contention that the account was opened on 2/4/2011 and that the signature was updated on 26/10/2016. Therefore, further updation was due only during 2026. Signature differed only because of the fault of the complainant. If the complainant’s signature had varied, the complainant ought to have informed the O.P. and got the varied signature entered in the KYC.

11.       O.P.1 filed proof affidavit. But they did not file any documents to prove their contentions. They had stated that the signature of the complainant was updated during 2016, ie. 5 years after the starting of the account. But the O.P.s did not provide any explanation as to why the signature was updated after 5 years if updating was required only after 10 years as per RBI guidelines. Contention of the complainant acquires importance considering the fact that dishonor of cheque was made during 2021, ie. during the 10^th year after starting of the account. It can be seen that non-production of documents proves fatal to the case of the 1^st O.P. Non-production of the documents resulted in the failure to prove that the complainant had updated his KYC during 2016 and the necessity warranting updating after 5 years from 2011.

12.       The 1^st O.P. Bank was inept in contesting this case. They failed to address the crux of the dispute, ie. non-updating of the signature, by adducing cogent evidence that the last updating was during 2016 and the next updating was during 2026. Non-production of relevant documentary evidence can only lead to raising a primary presumption that the O.P.1 does not wish that the relevant documents be made subject of scrutiny, lest they stand to suffer losses. It is also note worthy that the 1^st O.P. has not offered any explanation for non-production of the documents pertaining to the account of the complainant.

                                     One might even be tempted to come to a conclusion, and rightfully so, that the O.P.1 might be attempting to charge penalties as a way of generating revenue from dishonor of cheques from the likes of complainant. But we refrain from coming to such a conclusion.

13.       Basing on the discussions above, we are of the opinion that the 1^st O.P. Bank has failed to inform the complainant regarding the updation of signature. A layman cannot be expected to remember, that updating of his signature is due after 10 years. It goes without saying that the complainant was receiving SMS from the O.P.1. It was the bounden duty of the O.P. to intimate the complainant to update his KYC details as per RBI guidelines, especially when the complainant had availed SMS services from the O.P.1.

14.       The 1^st O.P. has also not taken any steps to prove that the signature of the complainant had differed/varied over time, since it is their contention that the signature has varied.

15.       Therefore, we hold that there is deficiency in service on the part of the 1^st O.P. in not intimating the complainant regarding updating the signature and thereby being actively and directly instrumental in the dishonor of cheque. 

Issue No.2

16.       Discussions above show that the cheque was dishonored for a valid reason, ie. ‘Drawer’s Signature Differs’. Insofar as O.P.3 is concerned, they failed to receive the premium in time for no fault of theirs. Hence, the policy issued by the O.P.3 became invalid as per policy conditions.

                        Therefore we hold that there is no deficiency in service on the part of the 3^rd or 4^th O.P.s in providing coverage for the life of the elephant.

            Issue No. 3

17.       Apropos the discussion of Issue number 1, we hold that there is deficiency in service on the part of the 1^stO.P.

            Issue No. 4

18.       One outcome of the discussions above is that O.P.s 3 and 4 are not at fault and they are not at any liability to indemnify the complainant as there is no concluded contract.

19.       But we had already found that the there is deficiency in service on the part of the 1^st O.P. in not getting the signature updated. Hence to answer this Issue, extent of liability of the 1^st O.P. is to be ascertained. As already found in Issue no. 1, non-updation of the signature of the complainant in the records of the Bank is attributable to the negligence on the part of the 1^st O.P. Such non-updation and subsequent dishonouring has a direct, vital and substantial nexus to the cancellation of the policy. Cheque was dishonoured and policy cancelled for the sole reason “Drawer’s signature differs”.

20.       Had the 1^st O.P. provided timely service considering that the updation was due in view of the RBI guidelines, the complainant could have updated the details. Failure in updating the signature has led to cancellation of policy. It is to be taken note that the account of the complainant had more than enough funds to honour the cheque as is evidenced by Ext. A1. Hence the complainant had the intention of have the cheque honoured.

21.       We find that the negligence on the part of the 1^st O.P. has led to loss and financial damage to the complainants.  

22.       Therefore the complainant is entitled to compensation for deficiency in service in the part of the O.P.1. In the facts and circumstances of the complainant, compensation granted must cover the losses the complainant had to suffer owing to the deficiency in service on the part of the 1^st O.P., as losses have direct and substantial nexus to the conduct of the 1^st O.P.

F.         Conclusion

            Issue No. 5

23.        In view of the discussions above, we hold as herein below:

            1.         There is no valid insurance coverage and O.P.s 3 and 4 are absolved of any                                   liability.

            2.         There is gross deficiency in service of O.P.s 1 and 2.

            3.         Loss of coverage has direct and substantial nexus to the deficiency on the part of                         O.P.s 1 and 2.

            4.         O.P.1 and 2 are liable to compensate the complainant.

            5.         The 1^st O.P. shall pay a sum of Rs. 10,00,000/- (Rupees Ten lakhs only) being the                          coverage available to the complainant’s elephant as per Ext. B6.

            6.         The 1^st O.P. shall pay a sum of Rs. 25,000/- (Rupees Fifteen thousand only) being                         the coverage available for cremation of elephant as per Ext. A7.

            7.         The amounts shall carry interest at the rate of 10% per annum from 28/01/2021                          till date of payment.

            8.         The 1^st O.P. shall pay an amount of Rs. 2,00,000/- (Rupees Two lakhs only)                                    for deficiency in service on their part.

            9.         The 1^st O.P. shall pay an amount of Rs. 50,000/- (Rupees Fifty thousand only)                                as cost of the proceedings.

            10.       The 1^st O.P. shall comply with orders 5 to 9 within 45 days of receipt of a copy of                          this Order, failing which the 1^st O.P. shall pay Rs. 500/- per month or part thereof                   until the date of final payment.  

                                     Pronounced in open court on this the  18^th day of December,  2023.                                                                                                                                                 Sd/-

`                                                                                                                                       Vinay Menon V.

                                                                                                                                       President     

                                                                                                Sd/-                                                                                                                         Krishnankutty N.K.

                                                                                                                                        Member

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1   -  Print out of SMS messages   

Ext.A2  –  Copy of lawyers notice  

Ext.A3   - Original reply notice dated 10/8/2021

Ext.A4  -  Original elephant insurance policy covering 26/1/2020 to 25/1/2021  

Ext.A5  –  Original elephant insurance policy covering 26/1/2021 to 25/1/2022  

Ext.A6 –  Copy of letter dated 4/6/2021

Ext.A7 – Copy of  special contingency policy covering 26/1/2021 to 25/1/2022

Ext.A8 – Copy of certificate dated 28/1/2021

Ext.A9 – Copy of  data book of captive elephant.

Ext.A10 – Copy of  certificate of implantation of micro chip

Ext.A11 – Copy of mahazar dated 28/1/2021

Exhibits marked on the side of the opposite party:

Ext.B1 –   Original cheque bearing No.000062 dated 22/1/2021  for Rs.55,445/-

Ext.B2 –   Carbon copy of  cheque deposit slip

Ext.B3 –   Copy of instrument returned report

Ext.B4  –  Scanned copy of   communication dated 1/2/2021

Ext.B5  –  Original postal acknowledgment   in the name of 1^st complainant

 Ext.B6 –  Copy of Elephant Insurance Policy.  

Court Exhibit:  Nil

Third party documents:  Nil

 Witness examined on the side of the complainant : Nil

Witness examined on the side of the opposite party : Nil

Court Witness: Nil

NB : Parties are directed to take back all extra set of  documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.