KOTAK MAHINDRA FINANCE LTD. vs Manmohan Ajubhai Patel

THE present revision petition has been filed by Kotak Mahindra Finance Limited (hereinafter referred to as the Petitioner) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Gujarat (hereinafter referred to as the State Commission) in favour of Shri Manmohan Ajubhai Patel(hereinafter referred to as the Respondent) who was the original complainant before the District Forum.

THE Respondents/Complainants case is that he had taken a loan of Rs.4,45,000/- from the Petitioner for purchasing a Maruti Esteem Car and had paid 4 installments of Rs.5,447/- in advance and had also issued 44 advance cheques for the remaining amount towards the repayment of loan. In addition to the 44 cheques, Respondent had also given 4 cheques for insurance premium to the Petitioner to whom the vehicle was hypothecated for payment since the responsibility to pay the insurance premium was on the Petitioner. However, the Petitioner paid the premium only upto 20.02.1996 and did not pay any premium after February, 1997. On 04.06.1997, the vehicle met with an accident which resulted in total loss. Respondent immediately contacted the Petitioner with the request to inform the insurance company in the matter so that his claim could be settled. However, the claim could not be settled with the insurance company on the grounds of non-payment of premium by the Petitioner to the insurance company. Aggrieved by this, Respondent filed a complaint before the District Forum seeking that a direction be given to the Petitioner to pay the Respondent Rs.4,85,000/- for damages to the vehicle with compounded interest @ 24% and cost of the litigation. Petitioner on the other hand denied the above contention and inter alia stated that while it is a fact that the Respondent had given 48 cheques but these did not include any advance cheques for payment of insurance premium. In fact the entire loan amount of Rs.4,45,000/- was payable in 48 instalments and, therefore, the 48 cheques given by the Respondent were towards repayment of loan instalments and not on account of payment of insurance. Also 14 of these cheques totally bounced and an amount of Rs.3,57,000/- is due and still payable by the Respondent. Further, as per condition No.20(k) of the insurance policy, it was the Respondent who was liable to get the vehicle insured but since he did not do so, Petitioner had got it insured on 17.06.1997 and came to know thereafter that the Respondent had not given any cheque for payment of insurance premium. Hence, there was no deficiency in service on the part of the Petitioner and the complaint of the Respondent is thus without any merit.

The District Forum after hearing both parties partly allowed the complaint and directed the Petitioner to pay Rs.4,45,000/- to the Respondent after deducting the amount of depreciation as per law with 9% interest from the date of accident i.e. 04.06.1997 till realization. It further directed the Petitioner to pay Rs.3,000/- towards mental agony and inconvenience and Rs.1,500/- as costs of the proceedings.

AGGRIEVED by this order, Petitioner filed an appeal before the State Commission which upheld the order of the District Forum and dismissed the appeal on the following grounds: opposite party(Petitioner) informed the complainant vide letter dated 27.12.1996 that insurance of the vehicle expires on 30.01.1997. We have post-dated cheques for renewal of the insurance but before that we want confirmation, whether you have necessary balance in your account or not? In case you fail to do so, then we will make payment of insurance premium and recover premium from you with penalty interest of Rs.250/- and opposite party wrote letter to the complainant on 25.01.1996 and informed in item No.4 of the said letter, that post-dated cheques for the insurance (Cheque Nos.360656 to 360359 four cheques) of Bombay Mercantile Co-operative Bank Limited, Vadodra received, which proves the fact that complainant gave cheques to the opposite party for payment of insurance premium, which opposite party has not paid in time which is deficiency in service. I do not agree with the statement of the opposite party that it is the duty of the complainant to make the payment of insurance renewal premium, I do not agree with this statement because complainant issued abovementioned four cheques of Bombay Mercantile Co-op Bank in advance which were in the custody of opposite party and which opposite party has not paid. The four insurance cheques were lost by the opposite party which was informed vide letter dated 2 July, 1997 to the complainant, opposite party admitting that as abovesaid cheques were lost therefore insurance premium was not paid and which was informed on 2 July, 1997(page 80) i.e. after the accident on 04.06.1997, to the complainant which proves deficiency in service of the opposite party and if complainant has not received the insurance claim then it is the responsibility of opposite party. Opposite party submits that under section 146, 196 of the Motor Vehicles Act, it is not the responsibility of opposite party and for their mistake, the responsibility cannot be imposed on the complainant and section 196 of Motor Vehicles Act attracts criminal offence and it is not applicable on Consumer Protection Act. I do not agree with the statement of the opposite party. Complainant has violated section 146, 196 of Motor Vehicles Act and learned counsel for the opposite party placed reliance on 1999 A.I.R.(ACC) 0-3191/99 ACC-6-361, Pradeep Kumar Jain Versus Citi Bank Judgment, but the facts of this case and the facts of opposite partys case are different and do not find any support for opposite party because keeping in view facts of the present case the mistake in payment of insurance is not on the part of complainant but it is the duty of opposite party and therefore abovesaid judgment is not supporting opposite party and complainant has not proved the total loss but complainant has mentioned all the facts in the complaint which opposite party has not proved wrong and have not filed any documentary evidence against the same and have not filed the surveyor report and in this manner opposite party fails to prove that there is no total loss of the vehicle and it is believed that complainant has proved total loss of the vehicle and therefore, we do not wish to interfere in the order of the Honble Forum. Hence, the present revision petition. Learned counsel for both parties were present and made oral submissions.

LEARNED counsel for Petitioner stated that the fora below erred in allowing the complaint and directing the Petitioner to pay Rs.4,45,000/- for the loss caused to Respondents vehicle. Counsel for Petitioner reiterated that in fact the Respondent had not paid any insurance premium and the 48 cheques were towards repayment of loan. Further, the onus to pay the insurance premium as per Condition 2(k) of the loan agreement was with the Respondent. Apart from this, out of 44 cheques given by the Respondent for repayment of loan 14 cheques bounced, so the Respondent had in fact paid only Rs.2,35,280/-, out of the total loan amount of Rs.4,45,000/-. Also, the fora below had not given any relief to the Petitioner in respect of the salvage by either deducting the cost of the salvage from the amount to be paid or by directing the Petitioner to return the salvage to the Petitioner. Counsel for Respondent on the other hand stated that the fora below on the basis of credible evidence produced before it had rightly concluded that the Respondent had paid 4 cheques on account of insurance premium to the Petitioner who lost these cheques because of which the Respondent could not file claim for insurance. Further, while it is a fact that the loan was to be repaid in 48 equated monthly instalments, it needs to be noted that apart from the 44 cheques, Respondent had paid 4 instalments of the loan in advance. Under the circumstances the revision petitioner has no merit and is to be dismissed and the orders of the fora below upheld. We have heard learned counsel for both parties and have gone through the evidence on record. We agree with the orders of the fora below that the Respondent had given 4 cheques to the Petitioner for payment of premium on the insurance of the vehicle in question. As per the evidence on record, these were post-dated cheques of Bombay Mercantile Cooperative Bank Ltd. It has come in evidence that these cheques were lost by the Petitioner and Respondent was also informed about this on 2nd July, 1997 i.e. after the accident took place on 04.06.1997 and, therefore, there was a clear deficiency in service on the part of the Petitioner on this account. It is further in evidence and not disputed by the Petitioner that out of the 44 advance cheques given by the Respondent to the Petitioner for a sum of Rs.4,45,000/- plus interest, 14 cheques had bounced. Therefore, an amount of Rs.3,57,000/- (including interest) of the total loan still remains to be paid by the Respondent to the Petitioner and the fora below erred in directing the Petitioner to pay Rs.4,45,000/- with 9% interest to the Petitioner.

KEEPING in view of the above facts, we modify the order of the State Commission and direct the Petitioner to refund to the Respondent an amount of Rs.2,35,280/- with interest at the rate of 9% from the date of accident till realization. Further, Respondent is directed to return the salvage to the Petitioner as per rules on this subject. The order of the fora below pertaining to Rs.3,000/- towards mental agony and Rs.1,500/- towards litigation costs is, however, upheld. The revision petition stands disposed of on the above terms.