(Passed this on 18th July, 2017)
Shri. S.P. Muley, President –
1. Both these complaints are being disposed of by a common order since both the cases are clubbed together. Besides, same question of facts and law are involved in both the cases.
2. For the sake of convenience we shall refer the parties as complainant and OPs as they stand in the complaint case No. 12/464.
3. Brief facts are that the complainant is a Financial Corporate Body registered under the Company Act. It provides finance for sale purchase of goods and commercial vehicles. The O.P.1 is United India Insurance Company and O.P.2 is the owner of vehicle bearing No. MH-31-AP-3916. The complainant has provided financial assistance of Rs. 5,60,842/- to the O.P.2 for purchasing the said vehicle.
4. Accordingly, a loan agreement has been executed between the complainant and O.P.2. The loan amount was to be repaid by 47 monthly installments @ Rs. 18672/- ans period of repayment was from 20/9/2006 to 20/7/2010. The vehicles were insured with the O.P.1 for the period from 6/10/2007 to 5/10/2008. The vehicle of the O.P.2 was hypothecated with the complainant under the Deed of Hypothecation. The vehicle of the O.P.2 was stolen in July 2008 and in that respect he had lodged insurance claim with the O.P.1 on 20/8/2008. Since the complainant has provided finance to purchase said vehicle and the same is hypothecated with it, the complainant is a beneficiary and therefore is a consumer of the O.P.1 and has right to get insurance claim. The O.P.2 is not taking any steps to get the insurance claim and the O.P.1 is not paying the claim to it. This is deficiency in service of the O.P.1 due to which the complainant is suffering huge loss. Hence, it is prayed that the O.P.1 be directed to pay insurance claim of Rs.9,99,343/- to it with 18% interest, besides compensation for harassment and litigation cost.
5. The O.P.1 has filed written reply and raised some preliminary objections. It is stated said vehicle was alleged to have been stolen on 26/7/2008 and FIR was given to concerned Police Station on 20/8/2008. No intimation was given to it immediately. The O.P.2 had filed insurance claims with the O.P.1, who asked them to supply necessary documents but no compliance was made. So, his claim was closed as NO CLAIM on 25/8/ 2009 and accordingly the O.P.2 was informed. Then, on 4/7/2012 the complainant filed consumer complaint and the O.P.2 filed the complaint in the year 2013. As such both the complaints are barred by limitation. It is further stated no agreement was executed between the complainant and O.P.1 and no service was provided to the complainant. Therefore, the complainant is not its consumer and so the complaints are not maintainable. Besides, the IDV of the vehicles was much less than the amount claimed by the complainant. Therefore on this count also the claim cannot be entertained.
6. It is denied by the O.P.1 that the complainant is a beneficiary under the policy and has right to make claim for insurance amount. The averments regarding providing finance to purchase vehicles and other details are denied. It is however admitted that the vehicles were insured with it for the period mentioned in the complaints and the vehicles were hypothecated. There was much delay in giving intimation of the incident to police as well as to the O.P.1. Therefore there was breach of policy condition No.1 and 5 also as the O.P.2 did not take reasonable steps to safeguard the vehicles from loss.
7. In the complaint filed by the O.P.2, ( C.C.No.13/294) reply of the O.P.1 is almost same that he did not supply necessary documents to scrutinise the claim. There was breach of policy condition by not giving prompt intimation of theft to police and to it. Closure of the claim was informed to the O.P.2. Thus denying the right of the complainant to claim insurance amount of the vehicles by questioning its locus standi, and denying any deficiency in its service towards the O.P.2, it is submitted to dismiss the complaints.
8. The O.P.2, who is the complainant in case No. 13/294, has relied on his complaint as written reply. It is stated he had insured his vehicle with the O.P.1 for IDV Rs. 5,00,000/-. During subsistence of the policy the vehicle was stolen. He tried to give report to police immediately, but it was not taken as he was asked to take search for some days and then lodge report. As the vehicle could not be found, FIR was lodged on 14/8/2008. On 27/8/2008 matter was reported to the O.P.1. He handed over all relevant documents to the agent of the O.P.1. Later it was found that the documents were not supplied to the office of the O.P.1. On inquiry, the agent told him he lost the bag containing documents. Thereafter copies of documents were supplied. But the claim was neither granted nor repudiated. Alleging this to be deficiency in service, he filed the complaint to claim insurance amount.
9. The O.P.1 has denied all the averments regarding theft of vehicle, its prompt intimation to police and handing over all documents to an agent of it by the complainant. Alleging that the O.P.1 gave intimation of theft belatedly to police and to it, there was clear breach of condition. Besides, no documents were supplied. Hence the claim was closed as No Claim.
10. We have heard Ld counsels for the complainants and O.P.1. None appeared for the O.P.2, but a pursis is filed that notes of argument be treated as oral submission. Upon consideration of submissions of rival parties in the light of documents and rejoinder, following points arise for our determination. We have recorded our findings for the reasons given below.
POINTS : FINDINGS
- Whether the complainant (Indiabulls Co) : No
Has locus standi to file consumer complaint
in the facts and circumstances of the case ?
- Whether it is established by the O.P.2 that : No
There is deficiency in service of the OP1 ?
- What order ? : As per final order
Point No.1:-
11. The O.P.1 has questioned the locus of the complainant (financier) to file consumer complaint against it. We would, therefore, like to examine this aspect first before going into merits of the case.
12. Ld. counsel for the O.P.1 submitted there is no relation of service provider and consumer between the complainant and O.P.1 nor is any contract executed between them regarding insurance. Therefore the complainant cannot be a consumer of the O.P.1. As against this, Ld counsel for the complainant relying on some judgments contended the finance was provided by the complainant and the vehicle was hypothecated in its favour. The O.P.2 has not repaid entire loan amount. Therefore the complainant has first charge over the vehicle and under the insurance policy of the vehicle the complainant became beneficiary to claim insurance amount in the event of theft of the vehicle and default of the O.P.2 in repaying loan amount. He further submitted the charge over the vehicle is in nature of actionable claim and it can be put to execution by the complainant. Our attention is drawn to the insurance clause in the Loan-cum-Hypothecation Agreement, wherein it is written that the first claim of any insurance proceedings shall be of the Lender. The Borrower authorised the Lender to receive the claim proceeds of the insurance policy. In the Registration certificate the vehicle is shown hypothecated in favour of the complainant. Thus, it is contended the complainant has every right to claim insurance amount of stolen vehicle as the O.P.2 has not paid entire dues.
13. Reliance is placed on one judgment in the case of Chief Eexecutive Officer & Vice Chairman, Gujrat Maritime Board v/s Shri Haji Daud Haji Harun Abu (1996) 11 SCC 23. This judgment was relied on in a subsequent case of M/s Krishna Food & Baking Industry P. Ltd. v/s M/s New India Assurance Co. Ltd 2008 (13) SCALE 747. We have gone through these judgments. What is held in those judgments is that as soon as a decree or order is made in favour of the complainant (borrower), the bank/financier is entitled to the said amount. Thus it is to noted that there must be a decree or order in favour of the borrower and then only the financier can claim the amount. Therefore these two judgments do not come in aid of the complainant, in as much as, no decree or order is made in favour of the O.P.2 (borrower).
14. Ld counsel for the complainant further advancing his argument submitted the vehicle was hypothecated with the complainant who has charge over the vehicle to secure the loan amount. The charge created by the agreement is in the nature of an actionable claim, which is executable by the complainant against the O.P.1 without the consent of the O.P.2. This legal position is not disputable. But the point is that there is no transfer or assignment of actionable claim in its favour. Section 130 of the Transfer of Property Act says that transfer of an actionable claim with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor. There is no such instrument of transfer in writing in favour of the complainant. Therefore this argument does not hold water.
15. The right of the complainant to claim outstanding dues from the O.P.2 is not disputed nor denied; what is disputed is its locus to file consumer complaint in absence of any order passed against the O.P.2. We agree with the objection as to the locus and hold that the complainant, in the facts and circumstances of the case has no locus standi to maintain the consumer complaint. The first point is therefore held in the negative.
Point No. 2:-
16. During the course of submissions, it is brought to our notice that the complainant has already initiated arbitration proceedings and has got an award against the O.P.2. Since the O.P.2 has not complied the award, execution proceeding is also filed and it is pending. Law is well settled that once an arbitration award is passed in the matter the consumer forum loses its jurisdiction to consider the same matter. The complainant has already chosen remedy of arbitration and has got award.
17. On facts in the complaint filed by the O.P.2, it is found that there was admittedly much delay in giving intimation of theft to police and O.P.1. As per condition No.1 of the insurance policy, the insured shall give immediate written intimation of theft of insured vehicle to police and to the insurer. Breach of this condition absolves the insurer from its liability to indemnify loss of insured vehicle. Perusal of FIR reveals the vehicle was stolen in the intervening night of 26/27th July 2008 and the FIR was lodged on 14/8/2008 and the O.P.1 was given intimation on 27/8/2008. The O.P.2 has tried to explain this delay by stating that police did not register FIR immediately and asked him to search the vehicle for about a week. But the FIR does not support his explanation, as it mentions the delay was on the part of the O.P.2 only. Therefore we find this explanation hard to accept. Even assuming that delay in FIR was due to police, the O.P.2 could have given immediate intimation to the O.P.1, insurer. Why he waited for almost a month to intimate the O.P.1 is inscrutable.
18. It is further stated that the claim form along with documents were handed over to an agent of the O.P.1. When even after lapse of considerable time there was no intimation from the O.P.1, he inquired with the office of O.P.1. Then he came to know no documents were filed with the claim form. When he contacted the agent, he said he lost the bag containing documents. Even though allegation is made against the agent, he has not been joined as O.P. in the case. It is stated in reply by the O.P.1, since no documents were supplied, the O.P.1 by letter dated 28/4/2009 asked the O.P.2 to submit documents. On his failure, the claim was closed as No Claim under intimation to the O.P.2 by letter dated 25/8/2009. This particular averment in reply has not been refuted as no rejoinder is filed by the O.P.2. Therefore it can be can be accepted that the claim was closed and decision was intimated to the O.P.2. Now, after a gap of 4 years the O.P.2 filed this complaint (C.C.No.13/294) asking for insurance claim. The remedy has been barred by limitation. There is no deficiency in service on the part of the O.P.1. The second point is answered in the negative.
19. For aforesaid reasons, the complaints filed by the complainant (financier) and the O.P.2 (borrower/insured) have no merits and are liable to be dismissed. Hence, we pass the following order.
ORDER
- Both the complaints (C.C.No. 12/464 & 13/294) are dismissed.
- No order as to cost.
- Copy of judgment and order be given to both parties, free of cost.
