JUSTICE V. B. GUPTA, PRESIDING MEMBER
In this revision there is challenge to order dated 2.2.2011, passed by State Consumer Disputes Redressal Commission, U. T. Chandigarh (for short, the State Commission) vide which appeal of the petitioner was dismissed with litigation costs of Rs. 5,000/-.
2. Brief facts are that respondent/complainant got insured his car on 25.2.2008 for a sum of Rs. 3,20,000/- from petitioner vide insurance policy after paying a premium of Rs. 8,382/- through cheque No. 799932 dated 25.2.2008 drawn on State Bank of Hyderabad, Sector 34, Chandigarh. The Vehicle was insured for the period from 25.2.2008 to 24.2.2009. On 5.10.2008, the said car met with an accident. On 6.10.2008, due intimation was sent to the police and petitioner was also informed. Sh. P. K. Bansal was appointed as surveyor by the petitioner who told the respondent that his car was not insured as premium of insurance was not received by the petitioner. Respondents case is that had already paid the premium, vide above mentioned cheque and was also having sufficient funds in his account on the date when the cheque was issued. It has been alleged by the respondent that he never received any letter from the petitioner regarding dishonour of the cheque nor any communication was ever received by him regarding cancellation of the policy. Alleging this act of petitioner as deficiency in service as well as unfair trade practice on its part, respondent filed complaint before the District Forum.
3. Petitioner in its written statement has taken the plea that cheque dated 25.2.2008 issued by the respondent against the premium, was presented for encashment but the same was dishonoured and as such, policy issued to the respondent was cancelled. Intimation of the same was given to the respondent on 15.3.2008. Thus, Petitioner is not liable in any manner to pay any compensation to the respondent. Pleading no deficiency in service or unfair trade practice on its part, petitioner prayed for dismissal of the complaint.
4. District Forum, vide its order dated 8.7.2009, allowed the complaint and passed the following directions:
œIn view of the above findings this complaint is allowed with a direction to OP to pay the insured sum of Rs. 3.20 lacs less Rs. 500/- as excess clause to the complainant towards the damaged vehicle with Rs. 10,000/- as compensation for mental agony and harassment etc. OP shall also pay Rs. 5,000/- to the complainant as costs of litigation. This order be complied with by the OP within one month from the date of receipt of its certified copy, failing which the OP shall be liable to refund the aforesaid total amount of Rs.3,29,500/- to the complainant along with penal interest @ 12% from the date of order till its realization?.
5. Aggrieved by the order of District Forum, petitioner filed an appeal before the State Commission, which was dismissed vide the impugned order.
6. We have heard the learned counsel for the parties. Both parties have filed written submissions also. We have gone through the record.
7. It is contended by learned counsel for the petitioner that cheque issued by respondent towards insurance premium contains the promise to pay the premium on presentation of the cheque for collection. The cheque of the respondent was dishonoured for the reason of insufficient funds. Thus, respondent failed in his promise and cannot make a claim pleading that the contract of insurance continued to subsist even on dishonour of the cheque. Since, cheque submitted by the respondent was dishonoured, therefore insurance policy issued in his favour was cancelled on 15.3.2008. Other contention of learned counsel is that the cover note is valid only subject to the realization of the cheque. Since, cheque in question has been dishonoured the cover note in these circumstances was not valid.
8. On the other hand, it has been argued by learned counsel for the respondent that respondent had sufficient funds in his bank account to honour the cheque issued towards the premium of the insurance and if the cheque was not presented for more than 15 days, then negligence is on the part of the petitioner and respondent cannot be held responsible for the same. Moreover, petitioner never intimated the respondent about non realization of the cheque issued towards the insurance premium till date.
9. District Forum in its order has held ;
œAdmittedly ,the car was insured by OP and the complaint had issued a cheque bearing No. 799932 dated 25.2.2008 drawn on State Bank of Hyderabad, Sector-34,Chandigarh for Rs. 8,382/- being the premium. The case of OP is that when the cheque was presented for encashment, the same was dishonoured by the Bank. So, the policy was cancelled and intimation was given to the complainant vide letter dated 15.03.2008. It is pertinent to mention here that in the reply filed by OP neither the date of presentation of the cheque to the paying Bank has been mentioned nor the date of its return as unpaid has been mentioned. Even the cheque returning memo of the Bank has not been placed on record. The cheque returning memo was the best evidence to prove that the cheque was duly presented but dishonoured. Even the original cheque issued by the complainant has not been returned to him. In these circumstances, there is no evidence on record to prove that the cheque was ever presented for encashment. Nor is there any evidence on record to prove that the cheque was dishonoured for any reason. The complaint has deposed that he did not receive any letter regarding cancellation of the policy. No postal receipt has been placed on record to prove that the letter was ever sent to the complainant. So if the cheque was not presented for encashment, the complaint is not at fault and the claim of the complainant could not be repudiated on the ground that the cheque has not been encashed.
From the affidavit furnished by the complainant, it has been duly proved that the car met with accident on 05.01.2008 and it was taken to M/s Ultimate Automobile Pvt. Ltd. for repairs and Annexure C-9 is the estimate of costs of repairs of the car. From the perusal of the estimate, it is apparent that the estimated cost of repairs is Rs. 5,80,650.02 which is more than the insured sum of Rs. 3.20 lacs. So OP is liable to pay only the Insured Declared Value (IDV) of the car i.e. Rs. 3.20 lacs less excess clause of Rs. 500/- to the complainant?.
10. The State Commission while agreeing with the findings of the District Forum observed ;
œThe contention of the learned counsel for the OP/Appellant is that the cheque submitted by the complainant was dishonored and therefore the insurance policy issued in favour of the complainant was cancelled on 15.3.2001. The OP Bank did not produce any document before the learned District Forum to prove any of these contentions. However, the Bank has produced a memo dated 1.3.2003 purported to have been issued by the State Bank of Hyderabad vide which the cheque issued by the complainant was alleged to have been dishonored for want of funds. The OP has also attached a letter dated 15.3.2008 vide which the policy is alleged to have been cancelled. He also produced a document showing that a letter was sent on 15.3.2008 from the Chennai Post Office. It is argued that these documents prove beyond doubt that the cheque was dishonored and the policy was cancelled by the OP and therefore, they are not liable to pay any compensation to the complainant. As mentioned earlier, the OP had not produced any such document before the learned District Forum for the reasons best known to it. If the documents are withheld, an adverse inference arises against the OP that the same were not in existence. The production of these documents now in appeal would not improve the case because neither these documents have been proved in accordance with law nor is there any request to allow the appellant to lead this evidence in appeal. Even the original memo alleged to have been issued by the State Bank of Hyderabad has not been produced for the reasons best known to the OP/appellant. There is no evidence either from the State Bank of Hyderabad or from the official of the OP if the cheque was sent to the Bank and was dishonoured. This document otherwise also becomes doubtful because if the cheque had been dishonoured on 1.3.2008, the OP/appellant would not have issued the insurance policy subsequent thereto on 6.3.2008. Further, there is no reason why the OP would have waited for 15 days to issue the letter of cancellation dated 15.3.2008. The complainant has denied having received any such letter. There is no document to suggest if the letter was ever served or delivered to the complainant. No evidence has been led from the Post Office as to when and by whom the said letter was delivered and who received the letter on behalf of the complainant. In view of these facts, the evidence now sought to be adduced cannot be entertained and otherwise also, the case of the complainant is not improved at all on the basis of this evidence (Emphasis supplied).
It is not disputed that the cover note was issued to the complainant on 25.2.2008 on which date, the cheque was issued by him. Section 64-VB (4) of the Insurance Act, 1938 provides that the said cheque was to be dispatched or deposited with the insurer within 24 hours of the collection. There is no evidence to suggest on which date the cheque was deposited with the insurer. There is no evidence to prove on which date the cheque was sent to the Bank. The OPs were, therefore, not complying with the requirements of law and were dealing with the case casually. They informed the complainant about the cancellation of the policy only after the accident when the complainant submitted the claim and do not appear to have either cancelled the policy prior to that nor intimated any such dishonour of the cheque or cancellation of the policy. The original cheque has not been returned to the complainant. The learned District Forum rightly observed that there is no evidence on record to prove that the cheque was ever presented for encashment or it was dishonoured for any reason and therefore, the complainant was not at fault and his claim could not be repudiated on the ground that the cheque has not been encashed.
If the cheque was not presented promptly and the dishonour thereof was not conveyed to the complainant to give him time to pay the premium afresh and even the cancellation of the policy was not intimated, these facts by itself constitute deficiency in service on the part of the OP. The OP would, therefore, be liable to compensate the complainant of the loss suffered by him due to lapses on the part of the OP. Viewed from any angle, the complainant was entitled to compensation?.
11. One of the grounds taken by the petitioner in its appeal filed before the State Commission states ;
œThat in the present case, the cheque was presented on 01.03.2008 and the same was dishonoured on 01.03.2008 vide memo of the even date of the Bank of the Respondent, which was intimated to the Appellant Company through their bank on 13.03.2008?.
12. Above defence and documents referred in it was never taken by the petitioner in its written statement filed before the District Forum. Nor any of the documents referred above were placed before the District Forum.
13. Thus, both fora rightly held œ that there is no evidence on record to prove that the cheque was ever presented for encashment. Nor is there any evidence on record to prove that the cueque was dishonoured for any reason?.
14. Under these circumstances, respondent cannot be said to be at fault and his claim could not have been repudiated on the grounds taken by the petitioner. Moreover, none of the judgments referred by the petitioners counsel in its written submissions are applicable to the facts of the present case.
15.Thus, no jurisdiction or legal error has been shown to us to call for interference in the exercise of power under section 21 (b) of the Consumer Protection Act, 1986, since two fora below have given cogent reasons in their order, which does not call for any interference nor they suffer from any infirmity or revisional exercise of jurisdiction.
16. It is not that every order passed by the Fora below is to be challenged by a litigant even when the same is based on sound reasoning.
17. Present revision petition having no merits and the same being without any legal basis, is hereby dismissed with cost of Rs.5,000/- (Rupees Five Thousand only).
18. Petitioner is directed to deposit the cost of Rs.5,000/- (Rupees Five Thousand Only) by way of demand draft in the name of œConsumer Legal Aid Account?, within four weeks from today.
19. In case, cost is not deposited within the prescribed period, then petitioner shall be liable to pay interest @ 9% p.a., till realization.
20. List on 28th September, 2012, for compliance.