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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Dr. B.C. Gupta, Presiding Member and Prem Narain, Member
Karur Vysya Bank —Petitioner
versus
Pullugujju Venu Madhav and Anr. —Respondents
Revision Petition No.1294 of 2012
(Against Order dated 19.20.2011 in First Appeal Nos. 516 & 781 of 2010 of Andhra Pradesh State Consumer Disputes Redressal Commission)
Decided on 17.11.2016
Counsel for the Parties:
For the Petitioner:Mr. Vijay Kumar, Advocate
For the Respondent No.1:Mr. B.S. Sai, Advocate
For the Respondent No.2:Mr. Anuj Chauhan, Advocate
IMPORTANT POINT
When contract of insurance did not conclude, Insurance Company is not liable to discharge its obligations under policy.
Headnote:Consumer Protection Act, 1986—Sections 15, 17, 19 and 21—Banking—Deficiency in service—Dishonour of premium cheque—Insurance claim repudiated by Insurance Company on the ground that policy was not in force due to non-realisation of premium amount—Cheque of premium in question bounced due to insufficient balance in account of complainant which was caused due to double debiting of one cheque—Account of complainant had sufficient fund for clearing of cheque of premium but cheque was not cleared due to fault on part of bank—When contract of insurance did not conclude, Insurance Company is not liable to discharge its obligations under policy and claim is not payable by Insurance Company—However, Insurance Company did not immediately inform complainant after getting information about dishonour of cheque—Insurance Company had not taken note of dishonour of cheque and had not cancelled policy by date of accident—Complainant is entitled to get some compensation from Insurance Company for this deficiency—Insurance Company directed to pay sum of Rs. 25,000/- to complainant as compensation for deficiency on their part—Bank/petitioner is liable to pay only Rs. 60,000/- to complainant instead of Rs. 1,90,142/- as ordered by State Commission—Additionally, respondent/opposite party/ICICI Lombard General Insurance also directed to pay Rs. 25,000/- to complainant. (Paras 15 to 17)
Result: Revision Petition Partly allowed.
Prem Narain, Member—This revision petition has been filed by the petitioner, Karur Vysya Bank against the order dated 19 12.2011 of the State Consumer Disputes Redressal Commission, Andhra Pradesh, (in short ‘the State Commission’) passed in FA/781/2010 & 516/2010.
2. Brief facts of the case are that the complainant purchased Toyota Innova car in the year 2006. The car was being insured with the opposite party No. 1 and was insured till the year 2008. For the next year Insurance, the complainant issued a cheque for Rs. 13,000 dated 11.4.2009 to the opposite party No. 1, which issued the policy valid from 13.4.2009 to 12.4.2010. The vehicle met with an accident on 18.5.2009. The surveyor was appointed by the Insurance Company, who assessed the loss to be Rs. 1,90,022. However, the insurance claim was repudiated by the Insurance Company on the ground that the policy was not in force due to non-realisation of premium amount.
3. The complainant then filed a consumer complaint No. 116/2009 before the District Consumer Forum, Praksam District at Ongole, (In short ‘the District Forum’). The complaint was resisted by opposite party No. 1/respondent No. 2. Insurance Company on the ground that they are not liable for any claim because they never received the premium amount and therefore, the policy was a nullity. The petitioner herein/opposite party No. 2 also resisted the complaint on the basis that they were not the insurer and cannot be held liable for any insurance amount. The District Forum passed the following order on 8.1.2010:—
“15. In the result, the complaint is allowed in part directing the 1st opposite party to pay Rs. 1,66,253 covered under the bill and Rs, 5,000 for costs of litigation to the complainant within one month from the date of order. Failing which the amount carries interest at 12% p.a. till realization. Case against the 2nd opposite party is dismissed without costs.”
4. Aggrieved with the aforesaid order of the District Forum, the complainant as well as the Insurance Company/opposite party No. 1 preferred appeals before the State Commission, which were decided by a common order dated 19.12.2011 as under:—
“In the result the appeal preferred by the Insurance Company F.A. 516/2010 is allowed setting aside the order of the Dist. Forum against it. Consequently the complaint against OP1 Insurance Company is dismissed but without costs. The appeal preferred by the complainant FA. 781/2010 is allowed in part directing OP2 bank to pay Rs. 1,90,142 with interest @ 9% p.a., from the date of complaint viz., 18.6,2009 till the date of realization together with costs of Rs. 5,000. Time for compliance four weeks.”
5. Hence the present revision petition by opposite party No. 2/petitioner.
6. Heard the learned Counsel for the parties and perused the record.
7. Learned Counsel for the petitioner stated that the petitioner bank had earlier informed to the Insurance Company vide letter dated 20.5.2009 clearly mentioning the circumstances under which the cheque w as dishonoured. In fact there was a double debiting of a cheque of amount of Rs. 1,684.64 on 28.3.2009 and 31.3.2009 due to some fault in the computer system of the bank which resulted in less money in the account of the complainant and therefore, the cheque in question was dishonoured. At that time the computerisation work was in progress in the bank and all the systems were not in place and hence due to double debiting of another cheque, this fault has occurred. The learned Counsel further drew our attention to Section 147 (Explanation No. 4) of The Motor Vehicles Act, 1988 which reads as follows:—
“(4) Where a cover note issued by the insurer, under the provisions of this Chapter or the rules made there under is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the co
