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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Sangita Dhingra Sehgal, President & Anil Srivastava, (Member)
[Via Video Conferencing]
BhodevSingh – Appellant
Versus
General Insurance
Co. Ltd. – Respondent
First Appeal No. 297/2016
Decided on 04.06.2021
(A) Consumer Protection Act, 1986 – Section 15 (Consumer Protection Act, 2019 – Section 41) – First Appeal - Appeal against Distt. Forum decision dt. 16.04.2016 in State Commission - Complainant claimed he paid Respondent Rs.11,462 in cash for insuring vehicle – Vehicle stolen, complainant claimed insurance - Insurance terminated due to dishonor of cheque, had to be paid via cheque only– Respondent claimed no cash received as cash receipts not recognized –Distt. Forum dismissed claim on grounds of lack of evidence and concealment of material facts - Payment made vide Cheque no. 085605 dt. 16.01.2009 concealed from the forum– State Commission upheld Distt. Forum decision - Insurance is terminated due to dishonour of cheque – No further notice needed to be sent. (Paras 1, 2, 5, 7, 16 & 18)
(B) Indian Evidence Act, 1872 – General Principles of Evidence - Appellant failed to produce any receipt of the Cash paid and acknowledged by the Respondent.
Held: Even though a Consumer Commission is not bound by the rigours of the Indian Evidence Act, 1872, still, the General Principles of Evidence can be resorted to come to a just decision in a case. In the present case, the stand of the Appellant is that the payment was made in Cash to the Respondent for which, a Cash Voucher was also issued. However, the Appellant failed to produce any receipt of the Cash paid and acknowledged by the Respondent. The cash voucher produced by the Appellant is a document for internal purposes of his business and cannot be said to be evidence for the purposes of the present case. (Para 14)
(C) Indian Contract Act, 1872 – Section 25, 65- Policy stands void ab initio as no valid contract exists between parties.
Held: On a similar set of facts the Hon’ble National Commission in United India Insurance Co. Ltd. vs. Khairati Ram Salwan and Ors. reported at II (2016) CPJ 63 (NC), has held as under:
“10. The main point for consideration in the case is whether the policy can be stated to be in force on the day of incident, because intimation about dishonour of the cheque was not given to the complainant/respondent No. 1, or the Insurance Company received such intimation from the Bank on 20.8.2007, although the accident had taken place on 17.8.2007. It is true that the Bank sent a communication to the Insurance Company on 3.8.2007, intimating them about the dishonour of the cheque on account of difference in signatures of the drawer, but the said intimation was received by them on 20.8.2007 and communicated to the complainant/respondent No. 1 on 29.8.2007. Following the ratio of the judgments given in National Insurance Co. Ltd. v. Seema Malhotra (supra) and Divisional Manager, Oriental Insurance Co. Ltd. v. Sanjay Kumar Panigrahi (supra), it can be safely concluded that the insured is not liable to be given the claim amount under the insurance policy, because the said policy became void ab initio because of the dishonour of the cheque. It shall not be legally justifiable to hold that the insurance policy was valid till intimation about the dishonour of cheque was given to the complainant/respondent No. 1. By no stretch of imagination, the insurance policy can be stated to be in force for a period of certain days, during which the matter regarding realisation of the premium amount remained under correspondence between the Insurance Company and the Bank. There is no valid reason, therefore, to agree with the conclusion arrived at by the State Commission that there was deficiency in service on the part of the petitioner as they withheld information about the dishonour of the cheque from the complainant/respondent No. 1 for a number of days and that the insurance policy was valid on the day the accident took place. It is held, therefore, that there was no valid contract between the parties, because an agreement made without consideration is void under Section 25 of the Indian Contract Act and further under Section 65 of the said Act, when a contract becomes void, any person, who has received any advantage under the said contract is bound to restore it to the person from whom he received it.” (Para 17)
Result: Complaint Dismissed
JUDGMENT
Sangita Dhingra Sehgal, President —Brief facts of the case are that the Appellant received a call from the agent of the Respondent to renew the Insurance Policy of the vehicle bearing number DL-XXX-3542. Mr. Vikram, one of the agent of the Respondent called the Appellant and allegedly informed him that since the vehicle to be insured is a commercial vehicle, the premium amount shall be payable in cash only and by no other means. The Appellant agreed to the same and sent one of his employee namely, Mr. Ashok to the office of Mr. Vikram.
2. An amount of Rs. 11,462/- was handed over to Mr. Vikram by Mr. Ashok being the amount payable as Insurance Premium, allegedly in cash, and a cover note was issued by Mr. Vikram whereby the vehicle was insured for an amount of Rs. 3,40,000/-, for the period beginning from 17.01.2009 till midnight of 16.01.2010.
3. The insured vehicle of the Appellant was parked at 35, Main Road, Mandawali, Fazalpur, Delhi, but on the morning of 29.07.2009, the vehicle was found missing from the parked place. The Appellant inquired from the neighbours but all in vain. The Appellant thereafter got registered a FIR bearing no. 336/09 with Police Station Mandawali, East Delhi District. The Respondent was also informed by the Appellant about the theft of the vehicle.
4. The Appellant filed the relevant documents, necessary for the processing of the claim and the Respondent appointed an investigator. Despite the aforesaid exercise, neither the claim of the Appellant was processed nor was any information made available to the Appellant regarding his claim. Aggrieved by the same, the Appellant approached the District Forum.
5. The Complaint before the District Forum was contested by the Respondent on the ground that since the Cover Note was issued subject to the encashment of the cheque issued for the payment of the Insurance Premium, which was dishonoured, hence, there existed no privity of contract between the contesting parties.
6. Rejoinder was also filed before the District Forum, wherein it was stated that the Appellant never issued a cheque for the payment of the Insurance Premium and the premium was paid in cash only. It was stated that the agent of the Appellant who handed over the cash to the agent of the Respondent was not versed with the English Language and failed to notice that the Cover Note carried the remark “Cheque” instead of “Cash”.
7. The District Forum after taking into consideration all the relevant factors, vide its order dated 05.04.2016, held as under:
“The only contention of Ld. Counsel of complainant is that the premium amount was paid in cash by Sh. Ashok to Mr. Vikram Singh and who after accepting the cash issued the cover note. In fact complainant has concealed the material fact. The premium was paid by way of cheque bearing No. 085605 dated 16.01.2009. It is nowhere stated in the rejoinder that complainant never issued this cheque of that complainant was not having account in SBI and the cheque did not pertain to him. It is categorically mentioned in cover note by complainant himself that the premium received by way of cheque. The details of the cheque are mentioned in the cover note. The cover note is placed on record by complainant himself. Complainant is very well aware of the fact that premium amount has been paid by cheque. There is no question of receiving the amount in cash. The so called payment voucher is a self-created document in order to create a false story. It is mentioned in the cover note itself that “in the event of dishonour of cheque insurance cover provided under this document automatically stands cancelled from its inception, irrespective of the fact whether separated communication sent or not, the cover note comes to an end on the dishonour of the cheque. Insurance contract has never come into existence. The contention of Ld. Counsel for complainant is that till filing of the complaint OP has not repudiated the claim of complainant and has not se
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