PRADEEP KUMAR JAIN vs CITI BANK

THIS Original Complaint by Shri Pradeep Kumar Jain, Proprietor of M/s. Jain Furniture House under Section 21 read with Sections 12,13 and 14 of the Consumer Protection Act, 1986 against the Citi-Bank, Opposite Party No. 1 and oriental Insurance Company Ltd. Opposite Party No. 2, has arisen out of an unfortunate accident on 15.8.1990 of Car No. DAJ-4111 purchased by the Complainant partly with the loan advanced by Opposite Party No. 1 under its "uto Loan Scheme" and allegedly insured with Opposite Party No. 2 at the time of accident.

THE facts relevant for the disposal of the complaint need only be noticed as established from the affidavit of Shri Pradeep Kumar Jain dated 24.12.1993 by way of evidence in support of the complaint. The Complainant approached the Citi-Bank with a request to finance the purchase of Maruti Car under its "Auto Loan Scheme". The Citi-Bank agreed to advance a loan amounting to Rs. 63,798/- towards purchase of a Maruti Car, the balance being payable by the Complainant himself. There total purchase price of the Maruti Car was paid to M/s. Agarwal Motors, the authorised dealer of Maruti Cars and Car No. DAJ -4111 was registered in the name of the complainant subject to hire purchase endorsement in favour of the Citi-Bank. The insurance cover was obtained from the 2nd Opposite Party for the period 21.1.1989 to 20.1.1990 with the insured value including accessories of Rs 86,655/-. The Complainant gave to the City-Bank 36 cheques without date in the name of the Citi-Bank, each cheque for Rs. 2,316/- representing the equated monthly instalments in order to liquidate the loan with interest within a period of three years. The Complainant has filed on record the cheque book from which those cheques were and according to him the Citi-Bank encashed 18 cheques. The Citi-Bank has also placed on record the copy of the statement of account of the Complainant duly certified under the Banker''s Book Evidence Act with the certificate of the Manager, the authorised signatory. There is no dispute on these facts.

THE Complainant deposed that for renewing the insurance for the next two years 120.1.1990, he gave to the Citi-Bank two cheques in the name of the 2nd Opposite Party bearing Nos. 126290 and 126291 without date and this is recorded in the record slip of the cheque book filed on record; that an assurance was given by the Citi-Bank that it would take policies for subsequent two years beyond 20th January, 1990, the cheque towards premium having already been delivered to the Citi Bank which in turn was passed on by the Citi-Bank to the 2nd Opposite Party and that there was nothing further that the Complainant was required to do to seek renewal of the policy for the said two subsequent years. He further deposed that on 15th August, 1990, at about 10.00a.m. while he was driving the Car No. DAJ-4111 along with Shri R.D. Jain, Smt. Madhu Jain, Smt. Rukmini Jain, Master Ankit and Master Rahul as passengers therein, it met with an accident with Truck No. MP-9-1548 in which the ca r became total loss and while he survived, the other occupants of the car succumbed to the injuries.

THE Complainant submits that both the Citi-Bank and the 2nd Opp. Party have grievously defaulted and have been grossly negligent in their service to the Complainant as it was the duty of the Citi-Bank to ensure that the insurer, on the basis of the consideration in the form of cheques already received, renews the policy of insurance on the due date for the next year and in the same manner for the subsequent year and the claim was settled expeditiously by the insurer. The Complainant claims that due to deficiency in service on the part of the Citi-Bank and the insurer, he suffered a loss to the extent of Rs. 1,55,000/- being the market value of the car on the date of accident to be reimbursed by the Opp. Parties, that he is likely to be fastened with the liability of the third-party claims to the tune of Rs. 18,00,000/- filed by the legal representative of the deceased occupants of the car before the Motor Accident Claims Tribunal, Rewari and thus to direct Opp. Party No. 2 to keep the Complainant indemnified against all such claims and that to award a compensation of Rs. 1 lakh for mental agony and suffering caused to the Complainant due to gross negligence of the Opposite Parties in the discharge of their service. The Supreme Court in a recent decision (dated 9.2.1995) in the case of the "Chairman, Thiruvalluvar Transport Corporation v. The Consumer Protection Council" JT 1995 (2) SC 441=1 (1995) CPJ 3 (SC) ruled that the Claims Tribunal constituted for the area in question had only jurisdiction to entertain any claim for compensation arising out of fatal accident since such a claim application would clearly fall within the ambit of Section 165 of the Motor Vehicles Act, 1988 and that being a special law would prevail over the relevant general laws such as Consumer Protection Act, 1986. We have, therefore, not referred to the allegations or material on record in that regard. The legal heirs of the deceased occupants of the car have already filed claims before the Motor Accident Claims Tribunal, Rewari, which will be determined there. The liability, if any of the insurer for the third-party claims will be determined before the Motor Accident Claims Tribunal. This Commission has no jurisdiction to go into the question of liability of insurer for third-party claims or grant any relief to the Complainant in these proceedings.

THE 2nd Opp. Party in its reply has stated that vehicle No. DAJ-4111 was only got insured for the period 21.1.1989 to 20th January, 1990, that on the date of alleged accident i.e. 15.8.1990 the was no insurance policy in existence and that since there was no contract of insurance, the question of any obligation on the part of the Opp. Party No. 2 does not arise. The matter came up for hearing before this Commission on several hearings during one of which the Citi-Bank was called upon as to how the two cheques delivered to it bearing Nos. 126290 and 126291 drawn by the Complainant in the name of Opp. Party No. 2 were dealt with or whether the Citi-Bank had paid the renewal premium to the Opp. Party No. 2 for the period 21st January, 1990 to 20th January, 1991. Shri P.P. Malhotra, learned Counsel for the Citi-Bank stated on the last date of hearing that it may be assumed for the purpose of this Original Petition without prejudice to his rights and pleas in other proceedings that the renewal premium cheque was not delivered by the Citi-Bank to the Opposite Party No. 2 although undertaken by the Citi-Bank and thus there has been negligence on the part of the Citi-Bank and thus there is deficiency in service. The total loss payable by the insurer in case the policy had been renewed for the next year would be the sum assured of Rs. 86,665/- less 10% depreciation for one year i.e. Rs. 8,666/-, net being I Rs. 76,990/- which amount he offered to the Complainant during the proceedings before this Commission as a settlement. The Counsel for the Complainant as well as the Complainant has refused to accept the quantum and prayed for the decision of his complaint on merits.

IT is mainfest from the record from the affidavit of the Complainant who does not make any positive assertion of the receipt of the premium by the Opp. Party No. 2 for renewal of the insurance policy, the concession of the Opp, Party No. 1 for the purpose of this case that the renewal premium cheque was not given to the Opp. Party No. 2 and the positive stand noticed above of the Opp. Party No. 2; that the Opp, Party No. 2 had not assumed any risk for the period subsequent to 21st January, 1990, that there is no contract of insurance on the relevant date of 15th August, 1990. The question of rendering any service by the Opp. Party No. 2 in the absence of the policy of insurance does not arise much less any deficiency in service. The Complainant in his affidavit also deposed that a photocopy of the survey report was filed on the record with the list of documents dated 6.4.1992, that a copy of the survey report was also forwarded to the Bank in notice dated5.6.1991requiringitto provide the insurance particulars for the period from 21.1.1990 to 20.1.1991 and that the said notice was duly served. It is clear that the Opp. Party No. 2 appointed "W.S. Tuteja, Surveyor and Assessor" under Cover Note No. 662726, with respect to vehicle No. DAJ-4111 registered in the name of the Complainant under hire purchase with Citi-Bank, but the said cover note is for the period from 21.1.1989 to 20il.l990. It appears that the Opp. Party No. 2 on receipt of the information about the accident to Car No. DAJ-4111 appointed W.S. Tuteja as the Surveyor to assess the loss. The survey report is dated 20.1.1991 and must have been submitted to the Opp. Party No. 2 soon thereafter. The Surveyor had assessed the reinstatement costs of Rs. 1,21,785/- Obviously, it was the case of total loss as reinstatement cost was much more than the insured value and the Insurance Company would not have settled the claim except on total loss basis. If the Opp. Party No. 1 had not neglected to take the renewal of the policy for the next year and had in fact got the policy renewed, then the Opp. Party No. 2 would have settled the claim within a reasonable period of six months from the date of the accident, as admittedly the survey report dated 20.1.1991 was filed by the said Surveyor with the Insurance Company. The concession made by the Opp. Party No. 1 has to be taken to its logical conclusion. The Complainant would have received a sum of Rs. 76,990/ - from the Opp. Party No. 2 within a reasonable period of six months i.e. by 15th February, 1991. As a necessary corollary, the Opp. Party No. 1 is liable to pay damages of Rs. 76,990/- as compensation to the complainant with interest at the rate of 18 per cent from 15.2.1991 till payment. In case there was a policy of insurance and the Insurance Company had not settled the amount of the claim within a period of six months, then the insured would be entitled to the claim along with interest at the rate of 18 per cent per annum. This grant of compensation with '' interest is without prejudice to the rights of the Opp. Parties in other proceedings. In the result, the complaint against the Opp. Party No. 2 is dismissed. The Opp. Party No. 1 is directed to pay a sum of Rs. 76,990/-with interest at the rate of 18 per cent per annum w.e.f. 15.2.1991 till the date of payment. The Opp. Party will be entitled to adjust the amount of Rs. 76,990/- (due on 4th May, 1995) or such other amount due from the Complainant. The payment of the balance of the amount shall be made to the Complainant by the Citi-Bank within one month from today. On payment of the amount, the Complainant shall deliver the salvage of the car to the Opposite Party No. 1. The Complainant is also allowed costs against the Opposite Party No. 1 assessed at Rs. 2,000/-. The Opp. Party No. 2 shall bear its own costs.