Dishonouring a cheque due to insufficient funds justifies the invalidity of the insurance policy under the Consumer Protection Act.

1. The present Revision Petition No. 1094 of 2015 under S.21(b) of the Consumer Protection Act 1986 (for short "the Act") is filed by Pawan Kumar Gupta (hereinafter referred to as the Petitioner / Complainant) against State bank of India and Others (hereinafter "referred to as the Respondents / Opposite Parties) challenging the Impugned Order dated 19/01/2015 of the State Consumer Dispute Redressal Commission, Chandigarh, Punjab (hereinafter referred to as the "State Commission") in FA - No. 1616 of 2012.

2. The brief facts leading upto the present case are that the Petitioner purchased an Insurance Policy from Bajaj Allianz General Insurance Company limited (One of the Respondents) vide cover note No. MC100094133 for the period of 16th July, 2010 to 15th July, 2011 in respect of her car "FORD ICON" bearing Registration No. PBO 5P / 6811. The Petitioner has paid the premium to the Insurance Company vide cheque No. 01190003411 dated 16th of July, 2010 payable at State Bank of India. It was cashless policy. An amount of Rs.17,162 was paid to the Insurance Company at the time of purchase of the policy.

3. The Petitioner stated that her car met with an accident at Ludhiana on 17th May, 2011. Accordingly, a Daily Diary Report (DDR) No. 8 dated 19th May, 2011 was registered by the police of Police Post, Sherpur, PS Focal Point, District Ludhiana. The Insurance Company telephonically informed that the claim was not admissible as the policy of Petitioner / Complainant was allegedly not in force and therefore, the Insurance Company did not pay the amount of loss suffered by the Petitioner. As per the estimate prepared by AB Motors Pvt. Ltd. Ludhiana, the car in question had suffered a loss to the tune of Rs.6,34,607.

4. Aggrieved by the aforesaid acts of the Respondents / Opposite Parties, the Petitioner / Complainant filed a Complaint before the District Forum, Ferozepur, Punjab which allowed the Complaint and gave the following order:
"In view of the above discussion, this Complaint is accepted and with Rs.5000 as compensation and Rs.3,000 as litigation expenses and Opposite Parties No. 3 to 5 are directed to pay the amount of Rs.6,34,607 to the Complainant along with amount of compensation and litigation expenses within a period of thirty days from the date of receipt of a copy of this order, failing which Opposite Parties No. 3 to 5 shall be liable to pay interest at the rate of 9% per annum on the above awarded amount of Rs.6,34,607 from the date of Order till its actual payment to the Complainant.."

5. The Respondents / Opposite Parties challenged the Order of the District Forum in the State Commission which held as under:
"There was no such deficiency on the part of Opposite Parties Nos 3 to 5, who had been exercising their right of lien and making deductions from the savings account of the Complainant in view of the undertaking given by her for the withdrawal of the amounts from that account towards the loan amount. The District Forum committed an illegality while recording a finding to the contrary. There is no law nor there is any such clause in the Loan­ - Cum - Hypothecation Agreement, which required the issuance of the advance notice before exercising the right of lien. It was incorrectly concluded by the District Forum that the order of the competent authority was required for withholding the amount of the Complainant, without looking into the documents proved on the record. The findings: so recorded by the District Forum, which are against law, ca