BAM DEV vs United India Insurance Co. Ltd.

THE complainant has filed a complaint under Section 17 read with Section 12 of the Consumer Protection Act, 1986 (for short ''the Acf) against the opposite party claiming Rs. 6,35,000/- alongwith interest @ 20% p.a. from the date of incident till payment as detailed in paragraphs 7 & 9 of the complaint.

THE issue herein lies in a narrow compass and the relevant facts are not in serious dispute. THE complainant got his truck No. HIU-4588, Model 1987 comprehensively insured with the United India Insurance Co. Ltd., Nangal Branch {for short ''the Insurance Company'') for Rs. 3 lacs for the period commencing from 19.8.1990 to 18.8.1991 and according to him one Ramji Das of Nangal Town had paid the instalment premium of Rs. 7,861/- on his behalf by cheque, which was got encashed by the Insurance Company and the policy of insurance was accordingly issued to him. THE complainant''s case is that on 7.10.1990 at about 9.15 p.m., his truck being driven by his driver Sucha Singh, was going from Amritsar to Nangal and on its way near Bhatta, some miscreants stopped his truck. It is alleged that both the driver and the cleaner of the truck of the complainant were tied up with a tree by those miscreants and thereafter his truck was driven away towards Garhshanker. It is stated that Sucha Singh driver lodged the FIR at Police Station Garhshanker on 8.10.1990 and on the same day, the Insurance Company was intimated about the said incident by the complainant. According to the complainant, the Insurance Company appointed a surveyor, who recommended the payment of Rs. 2,88,500/- for the loss suffered by him. It is alleged that the Insurance Company took its time to investigate the matter. Having failed to receive any relief on making representations to the Insurance Company, the present complaint was preferred to this Commission. In the reply filed on behalf of the opposite party seven preliminary objections were raised, which, however, were not seriously pressed at the threshold. On merits, the firm plea of the opposite party was that the instalment premium of Rs. 7,861 /- against the said policy was paid by one Ramji Das on behalf of the complainant by a cheque dated 17.8.1990 and the receipt dated 20.8.1990 (Annex. R-l) was issued by the Insurance Company in thisregard. It was averred that the cheque was forwarded to Behdala Branch of the Punjab National Bank on 22.8.1990 and the same was dishonoured by the said Bank on 25.9.1990 for lack of funds and that ultimately the cheque in question was encashed on 8.10.1990 i.e. one day after the alleged occurrence on 7.10.1990. It was the firm case of the opposite party that since the premium amount of Rs. 7,861/- could be realised by the Insurance Company on 16.10.1990, the contract stood void abinitio by virtue of the terms and conditions of the receipt (Annex. R-l) and also as per provisions of Section 64-VB of the Insurance Act and that there was no valid contract on 7.10.1990, the alleged day of occurrence and that the complainant had no cause of action and the present complaint was totally misconceived. In the replication filed by the complainant, all the allegations were reiterated by him.

Since the material facts relevant to the basic question are not in serious dispute, it is wholly unnecessary to advert to in any great depth to the evidence adduced by the opposite party. In support of his case, the complainant rested himself content by filing the documents Annexures A-l to A-5. The learned Counsel for the complainant had stated before us that these documents may be treated as evidence on behalf of the complainant. In rebuttal, the opposite party put on the record the documents Annexures R-l to R-5. On the request of the learned Counsel for the parties, their evidence was closed by the order of the Commission.

BE that as it may, before coming to the primal arguments of Mr. M.B. Singh, learned Counsel for the complainant, it is necessary to clear the decks with regard to one factual aspect. This pertains to the question whether on 7th of October, 1990, the truck of the complainant was covered by the Insurance Policy under Cover Note No. 11090/90. It may be highlighted here that Ramji Dass, on behalf of the complainant had drawn a cheque of Rs. 7,861/- dated 17.8.1990, which was delivered to the Insurance Company by way of premium and that cheque was forwarded for payment to the Punjab National Bank, Behdala through the banker of the opposite party and the Behdala Bank dishonoured the cheque for lack of funds on 25.9.1990. Mr. Natin Kumar, the learned Counsel for the opposite party had strenuously urged that by operation of the terms and conditions of the receipt (Annexure R-l), the policy issued by the Insurance Company stood automatically lapsed from the date of inception viz. 19.9.190 as it became void abinitio and therefore, it was not liable to pay anything to the complainant for the theft allegedly took place on 7.10.1990 and the complaint was liable to be dismissed on this ground alone.

MR. M.B. Singh, the learned Counsel for the complainant had contended that since the cheque was duly encashed on 8.10.1990 and the Insurance Policy having been issued to the complainant earlier to the said date, the policy could not be terminated with effect from 19.8.1990. We are afraid that there is no merit in this submission sought to be raised on behalf of the complainant. It is common ground of the parties that the cheque was dishonoured on 25.9.1990 by Punjab National Bank, Behdala and the same was encashed on 8.10.1990 i.e. one day after the alleged loss of the truck on 7.10.1990 and the money could be realised by the Insurance Company on 16.10.1990. Further, it is also manifest from the statement of account of Ramji Das (Annexure R-5) produced by the Manager of Punjab National Bank, Behdala which goes to show that Ramji Das had no funds in his SF No. 532 and therefore, the cheque was dishonoured on 25.9.1990. As per Section 65-VB of the Insurance Act, the Insurance Company will not assume the risk unless the premium stands paid, which is mandatory statuary requirement for the insurance contract. The cheque was encashed on 8.10.1990 and its proceeds were realised by the Insurance Company on 16.10.1990. Therefore, if at all the contract came into force, it was from 8.10.1990 only and not earlier. The theft took place on 7.10.1990. On that day there was no valid contract and therefore, the complainant had no cause of action. To finally conclude, the answer to the primal question posed above has to be rendered in the negative. In the aforesaid context, we find that repudiation of the claim under insurance policy was made after due application of mind and for relevant reasons. As such, there is no deficiency of service on the part of the Insurance Company. The complaint, therefore, must fail and is hereby dismissed on the aforesaid ground with no order as to costs. The complainant is relegated to his ordinary remedies before the Civil Court as he may be advised. Complaint dismissed.