SRI.K. VIJAYAKUMARAN, PRESIDENT. Complaint seeking Insurance amount, compensation costs etc. The averments in the complaint can be briefly summarized as follows: The complainant is the owner of Maruthi 800 car bearing Reg.No.KL-03 G 8048. The opp.party has issued a comprehensive package policy for the above car in the name of the complainant for a period of one year extending from 1.4.2006 till 31.3.2007 and policy No.441400/31/2007/65 was issued on 31..3..2006. On 14.9.2006at about 12 ‘O clock in the mid night while the complainant was driving the above car to his relatives house in Karunagappally, a cyclist carelessly and without any warning , swung the cycle into the pathway of the car and in his attempt to save him from imminent danger swerved the car towards one side resulting in a collision of the car against the com0pound wall of an adjoining property by which the car sustained damages. The matter was reported to the Karunagappally Police who made necessary entries in the GD register. The complainant got the vehicle towed to the nearest Maruthi authorized workshop by name Mangalath “Automobile, Valiyakulangara. Necessary documents were submitted to the nearest branch of the Opp.party. After assessment of the loss by the opp.party necessary repairs were carried out for a sum of Rs.40,155/- and a final bill was submitted . On 18.12.2006 the opp.party informed the complainant that his claim is ready for settlement and for receiving the amount he has to submit a signed voucher. Accordingly a voucher was signed and delivered to the opp.party on 12.12.2006. On 23.12.2006 the complainant received a letter from the opp.party stating that since he has not surrendered the policy/ remitted the premium the above policy is cancelled from inception and that the company is not liable to any risk/claim. Another letter with a date shown as 26.4.2006 stating that the cheque issued by the complainant was dishonoured was also seen enclosed with the above letter. Although such a letter was never issued to the complainant prior to 23.12.2006 the opp.party has fraudulently referred to the same as already sent on 26.4.2006 which is denied by the complainant. Since the cheque issued towards premium amount was that of the mother of the complainant, the complainant informed her about the same. The complainant’s mother after enquiry with her bank informed the complainant that although there was sufficient funds for honouring the cheque after its issuance, the opp.party delayed its presentation for about four weeks and the same was dishonoured as result of the bank debiting a small amount in the meanwhile towards it service charges. The complainant as well as his mother were totally unaware bout the dishonour of the cheque till 26.12.2006. The opp.party never intimated the complainant about the dishonour of the above cheque. The complainant had been using the policy since its issuance. In pursuance of the claim raised by the complainant the opp.party entertained the same and did all follow up actions and even obtained signed voucher. It is only after all these that the opp.party issued a letter stating that the cheque issued towards the premium was dishonoured. The complainant on getting information about the dishonour of the cheque approached the opp.party on 26.12.2006 and tendered the cheque amount, the opp.party refused to receive the same. The opp.party inorder to try and wriggle out from the liability to pay the amount issued a notice to the complainant stating that the above policy was cancelled on 25.5.2006 and required the complainant to pay Rs.2985/- towards surveyor fee and administrative charges for which the opp.party is not entitled to any amount. The opp.party is not entitled to cancel the above policy and they are liable to make good the loss sustained by the complainant under the policy. The action of the opp.party is deficiency in service. Hence the complaint.. The opp.party filed version contending, interalia, that the complaint is not maintainable either in law or on facts. The complainant is not a consumer of this opp.party with whom no valid contract was existed at the time of sustaining damage to the vehicle. Therefore, the complainant has no cause of action against the opp.party. The opp.party has issued an insurance policy to the complainant for his vehicle bearing Registration No.KL3G/8048 for a period commencing from 1.4.2006 to 31.3.2007, on the basis of the proposal form submitted by the complainant on 31.2.2006 and by accepting cheque No.724526 drawn on Federal Bank, Karunagappally dated 31.3.2006 issued by the complainant towards the premium amount including the service tax applicable in the insurance contract for which a receipt was issued by the opp.party which bears a foot note mentioning that “For payment by cheque, receipt will be valid subject to realization of cheque”. It is clearly endorsed that in case of dishonour of premium cheques, the company shall not be liable under the policy and the policy shall be void abinitio from the inception. The warrantee endorsed in the policy is binding to the insured and the insured cannot go beyond the conditions. The opp.party on 25.5.2006 cancelled the policy issued to the complainant on the basis of the violation of warrantee endorsed in the policy. Due to the dishonour of premium cheque the policy issued by this opp.party became void abinitio from the date of inception ; There would not be a valid contract without consideration and no risk would be assumed unless the premium amount has been received by the insurer. The complainant was fully aware of the fact of the dishonour of the premium cheque issued by him and the consequent cancellation of the policy.. Thecomplainant after the occurrence of the accident on 14.9.2006 had approached the Kayamkulam branch office of the opp.party showing the original policy in his custody, which infact was already cancelled and reported the claim of the vehicle. The Kayakmulam Branch office of this opp.party immediately issued a claim form to the complainant and arranged survey of the vehicle through a licensed insurance surveyor. The surveyor without knowing the fact of cancellation assessed the loss sustained by the complainant to a sum of Rs.30,475.35. The Kayamkulam Branch Office of the opp.party where the claim was reported by the complainant by producing the original policy was not aware of the fact of dishonour of the premium cheque and the subsequent cancellation of the policy at Divisional Office, Kollam. This opp.party become aware of this aspect only when the file was received for final processing from the Kayamkulam office. The complainant has made a deliberate attempt to defraud the opp.party by reporting the claim before the Kayamkulam branch office without intimating the claim to this opp.party. The allegation that the cancellation of the policy was not intimated to the complainant by this opp.party is false and hence denied. The further allegation that the cheque was dishonoured due to the delay in presenting the cheque for clearance is not a sustainable contention and the reason stated for the dishonour of cheque is also unsustainable. It is the duty of the insured to assure that there will be sufficient funds in the bank account when the premium cheque issued was presented by the insurer for encashment within the permissible period given under the cheque. The averments that this opp.party entertained the claim of the complainant and did all action and even obtained the signed voucher from the complainant are false and hence denied. All the procedures were done by the Branch Office with an assumption that the original policy shown to them by the complainant at the time of reporting the claim was a valid policy at the time of the occurrence. The complainant had willfully suppressed the cancellation of the policy. Had the complainant reported the claim with this opp.party the same would have been rejected immediately. The complainant is liable to pay the expenses incurred by the opp.party for survey and other administration charges. The opp.party is not liable to pay any compensation amount to the complainant in the absence of a concluded contract. This opp.party is justified in disallowing the claim of the complainant. There is no deficiency in service on the part of the opp.party. Hence this opp.party prays to dismiss the complaint. Points that would arise for consideration are: 1. Whether there is deficiency in service on the part of the opp.parties 2. Reliefs and costs. For the complainant PW.1 is examined. Ext. P1 to P7 are marked. For the opp.party Ext. D1. D9 are marked. POINTS: As a matter of fact there is no dispute that the complainant is the owner of the vehicle bearing registration No. KL-3G /8048 and that the complainant was issued with a comprehensive policy for this vehicle for the period from 1.4.06 to 31.3.2007 by accepting a cheque drawn on the Federal Bank Karunagapally branch for a sum of Rs.3368/- towards insurance premium. It is also not in dispute that the above cheque was dishonoured due to insufficient funds in the account The vehicle was involved in an accident on 14.9.06 and the claim was presented before the Kayamkulam Branch of the opp.party are also not in dispute. The contention of the complainant is that on the date of accident Ext.P1 policy was inforce and since the dishonour of cheque and cancellation of policy was not communicated to him, the opp.party is bound by the policy and to pay damages incurred by him The contention of the opp.party is that the Ext. P1 policy itself was issued after accepting the cheque with a foot note mentioning that the policy will be valid subject to realization of the cheque and that they are not liable under the policy and the policy shall be void abinitio from the inception if the cheque is dishonoured and returned. It is the further contention of the opp.party that despite the fact that the policy was taken from Kollam and the accident occurred within Kollam district the claim was preferred before the Kayayamkulam branch office of the opp.party with a view to suppress the cancellation of the policy and the branch office at Kayamkulam has proceeded on the assumption that the policy was valid on the date of accident. The learned counsel for the opp.party would further argue that the insurance company is entitled to avoid or cancel the policy as against the insured when the cheque issued for payment of the premium was dishonoured relying on the decision of the Apex Court reported in 2001[1] KLT 822 In the above decision the Apex court has held “ In a contract of insurance when an insurer gives a cheque towards payment of premium or part of the premium, such a contract consists of reciprocal promise. The drawer of the cheque promises the insurer that the cheque, on presentation would yield the amount in cash. It cannot be forgotten that a cheque is a bill of Exchange drawn on a specified banker. A bill of Exchange is an instrument in writing containing an unconditional order directing a certain person to pay a certain sum of money to a certain person. It involves a promise that such money would be paid. Thus, when the insured fails to pay the premium promised, or when the cheque issued by him towards the premium is returned dishonoured by the bank concerned the insurer need not perform his part of the promise. The corollary is that the insured cannot claim performance from the insurer in such a situation”. The learned counsel for the complainant would argue that in cases where the cheque issued towards premium is dishonoured and the policy is cancelled the cancellation of the policy must be informed to the insured as well as RTO concerned and only after that the Insurance company would not be liable to satisfy the claim. In this case, according to him, the cancellation was made only in December after reporting the accident and therefore, the opp.party is bound by the insurance policy and in support of that contention he has relied on the decision of the Apex Court reported in 2008[1] KLT 296. But in our view that decision is not applicable in this case because in this case the complainant is claiming Insurance coverage for own damages whereas in the above decision of the Honourable Supreme Court has considered the claim of a 3rd party. It is also pertinent to point out that the cancellation of the insurance policy due to dishonored premium cheque was intimated to the complainant as per Ext. D5. For all that has been discussed above we find that the complainant herein is not entitled to get the insurance amount as the opp.party is entitled to avoid or cancel the policy as against the insured when the cheque issued for payment of premium was dishonoured. There is no deficiency in service on the part of the opp.party. Point found accordingly. In the result the complaint fails and the same is hereby dismissed. Dated this the 12th day of August, 2010. . I N D E X List of witnesses for the complainant PW.1. – Sangeeth List of documents for the complainant P1. – Insurance Policy Certificate P2. – GD Extract P3. – Finall bill dt. 31.12.2006 P4. – Letter dated 18.12.2006 issued by the opp.party to the complainant P5. - Notice dated 12.1.2007 P6. – Reply notice and postal receipt P7. – Postal receipt and acknowledgement List of witnesses for the opp.party DW.1. – R. Ashok Kumar List of documents for the opp.party D1. – Certified Insurance Policy D2.- Claim intimation letter D3. – Motor claim form D4. – Motor [Final] Report D5.- Package policy Endorsement Schedule D6. – Letter dt. 18.12.2006 D7. - Repudiation letter dt. 12. 1..2007 D8. – Photocopy of cheque D9. –Cheque dishonour letter | 
