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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Ashok Bhan, President and Vineeta Rai, Member
PUSPITA SAHOO - Appellant
Versus
ORIENTAL INSURANCE CO. LTD. AND ANR. - Respondents
Revision Petition No. 2398 of 2007 from Order dated 2.5.2007 in Appeal No. 311 of 2004 of State Consumer Disputes Redressal Commission, Orissa
Decided on : 30-04-2012
Mohd. Ehraz Zafar, Advocate, for the Appellant; Mr. R.S. Rana, Advocate, for the Respondent
The main legal point established in the judgment is that the policy was issued subject to realization of the cheque, and the dishonoured cheque led to the cancellation of the policy, absolving the insurance company from liability.
Headnote:
Insurance - Policy Cancellation - [Premium Payment, Policy Existence, Liability] - [Consumer Protection Act, 1986 - Section 21, Section 24] - The court discussed the issue of premium payment and policy existence. It highlighted the legal provision that the policy was issued subject to realization of the cheque and the consequences of dishonoured cheque on the policy existence. The court emphasized that no risk can be assumed unless the premium is paid, and in this case, the dishonoured cheque led to the cancellation of the policy, absolving the insurance company from liability.
Fact of the Case:
The Petitioner's vehicle was insured, but the insurance company cancelled the policy due to the dishonoured cheque for the premium payment. The Petitioner sought reimbursement for the loss suffered in an accident, claiming that the insurance company's authorized agent was liable for the dishonest act.
Finding of the Court:
The State Commission held that the policy did not come into existence due to the dishonoured cheque, and the insurance company was justified in cancelling the policy. The court dismissed the complaint, stating that the insurance company cannot be made liable in the absence of a policy.
Issues: The main issue was whether the insurance policy was valid and in existence, and if the insurance company was liable to reimburse the loss suffered by the Petitioner.
Ratio Decidendi: The court's decision was based on the fact that the policy was issued subject to realization of the cheque, and the dishonoured cheque led to the cancellation of the policy, absolving the insurance company from liability.
Final Decision: The court dismissed the complaint, stating that the insurance company cannot be made liable in the absence of a policy. The Petitioner was given the liberty to seek redressal against the authorized agent.
ORDER
Ashok Bhan, President - Petitioner/Complainant has filed this Revision Petition against the judgment and order dated 2.5.2007 passed by the State Consumer Disputes Redressal Commission, Orissa (in short, the State Commission ) in appeal No. 311/04 whereby the State Commission reversing the order of the District Forum has allowed the appeal filed by the Respondent Insurance Company and dismissed the complaint filed by the Petitioner.
Facts:
2. Complainant/Petitioner got her vehicle bearing registration No. OR-14B-8333 insured with the Respondent Insurance Company (hereinafter to be referred to as "Respondent No. 1) through its authorized agent, Bijay Kumar Dass, Respondent No. 2 herein (Opposite Party No. 2 before the District Forum) for Rs. 2,50,000 by paying the premium of Rs. 8,677 in cash. As per the averments made in the complaint, it was alleged that the Respondent No. 1 kept the cash with him and issued a cheque from his personal account towards the premium amount on behalf of the Petitioner. Thereafter, Respondent No. 1 issued Policy Certificate-cum-Policy Scheme in favour of the Petitioner on 6.6.2002. Policy was valid from 6.6.2002 to 5.6.2003. During the currency of the policy, the insured vehicle met with an accident on 7.6.2002 at 10.45 a.m. as a result of which the vehicle was badly damaged and the passengers travelling in the vehicle sustained injuries. An FIR was lodged with the Police Station, Rajnagar. Intimation about the accident was given to the Respondent No. 1 with a request to inspect the vehicle to assess the loss.
3. On 18.6.2002, Petitioner received a letter from the Respondent No. 1 informing her that the premium amount paid by her by cheque had not been credited to their account and as such the policy was not in existence on the date of accident. Petitioner informed Respondent No. 1 that she had not issued any cheque towards the premium and rather she paid the premium amount of Rs. 8,677 in cash to the Respondent No. 2 on 4.6.2002. She also requested the Respondent No. 1 to enquire into the matter. Petitioner alleged that on inquiry, it was revealed that the Respondent No. 2 after receiving the amount of premium in cash from the Petitioner issued a cheque from his own account in favour of the Respondent No. 1 towards the premium. Petitioner requested the Respondent No. 1 to settle the claim as the Respondent No. 2 was its authorized agent and it was liable vicariously towards the dishonest act of its authorized agent. That the Petitioner could not be penalized for the wrong act done by the employee/agent of the Respondent No. 1. Respondent No. 1 did not settle the claim on the ground that the issuance of the policy was subject to realization of the cheque and as the cheque was dishonoured the policy was not in existence on the date of accident. Petitioner, being aggrieved, filed the complaint before the District Forum.
4. Respondent No. 1, on being served, entered appearance and filed its written statement resisting the complaint mainly on the ground that the Petitioner submitted the proposal form along with A/c Payee cheque bearing No. 060564 dated 4.6.2002 for a sum of Rs. 8,677 drawn on Urban Co-operative Bank, Kendrapara towards premium for insurance of her vehicle. Since, the cheque issued was dishonoured, no policy came into existence.
5. Respondent No. 2 in his written statement stated that the Petitioner never paid money to him at any time towards the premium and he had never granted any money receipt to her for the same.
District Forum allowed the complaint in following terms:
"Having appraisal made above, it is directed that the repudiation of claim of the complainant is illegal and OP No. 1 will reopen the claim file on the complainant once again and to depute a Surveyor to inspect the damaged vehicle. Accordingly basing on the report of the Surveyor, OP No. 1 will award compensation for loss to the complainant within a month of receipt of this order.
Complaint is allowed in part."
Petitioner
