Puspita Sahoo W/o Rajendra Sahoo vs Senior Branch Manager,Oriental Insurance Co. Ltd

PETITIONER/Complainant has filed this Revision Petition against the judgment and order dated 2.05.07 passed by the State Consumer Disputes Redressal Commission, Orissa (in short, ''the State Commission'') in appeal no. 311/04 whereby the State Commission reversing the order of the District Forum has allowed the appeal filed by the Respondent Insurance Company and dismissed the complaint filed by the PETITIONER. FACTS:- Complainant/PETITIONER got her vehicle bearing registration No. OR-14B-8333 insured with the Respondent insurance Company (hereinafter to be referred to as ''Respondent No.1) through its authorized agent, Bijay Kumar Dass, Respondent No.2 herein (Opposite Party No.2 before the District Forum) for Rs.2,50,000/- by paying the premium of Rs.8,677/- in cash. As per the averments made in the complaint, it was alleged that the Respondent No.1 kept the cash with him and issued a cheque from his personal account towards the premium amount on behalf of the PETITIONER. Thereafter, Respondent No.1 issued Policy Certificate-cum-Policy Scheme in favour of the PETITIONER on 6.06.02. Policy was valid from 06.06.02 to 05.06.03. During the currency of the policy, the insured vehicle met with an accident on 7.06.02 at 10.45 A.M. as a result of which the vehicle was badly damaged and the passengers travelling in the vehicle sustained injuries. An FIR was lodged with the Police Station, Rajnagar. Intimation about the accident was given to the Respondent No.1 with a request to inspect the vehicle to assess the loss.

ON 18.06.02, Petitioner received a letter from the Respondent No. 1 informing her that the premium amount paid by her by cheque had not been credited to their account and as such the policy was not in existence on the date of accident. Petitioner informed Respondent No.1 that she had not issued any cheque towards the premium and rather she paid the premium amount of Rs.8,677/- in cash to the Respondent No.2 on 4.6.02. She also requested the Respondent No.1 to enquire into the matter. Petitioner alleged that on enquiry, it was revealed that the Respondent No.2 after receiving the amount of premium in cash from the Petitioner issued a cheque from his own account in favour of the Respondent No.1 towards the premium. Petitioner requested the Respondent No.1 to settle the claim as the Respondent No.2 was its authorized agent and it was liable vicariously towards the dishonest act of its authorized agent. That the Petitioner could not be penalized for the wrong act done by the employee/agent of the Respondent No.1. Respondent No.1 did not settle the claim on the ground that the issuance of the policy was subject to realization of the cheque and as the cheque was dishonoured the policy was not in existence on the date of accident. Petitioner, being aggrieved, filed the complaint before the District Forum. Respondent No.1, on being served, entered appearance and filed its written statement resisting the complaint mainly on the ground that the Petitioner submitted the proposal form along with A/c Payee cheque bearing No.060564 dated 4.06.02 for a sum of Rs.8,677/- drawn on Urban Co-operative Bank, Kendrapara towards premium for insurance of her vehicle. Since, the cheque issued was dis-honoured, no policy came into existence. Respondent No.2 in his written statement stated that the Petitioner never paid money to him at any time towards the premium and he had never granted any money receipt to her for the same. District Forum allowed the complaint in following terms :- " Having appraisal made above, it is directed that the repudiation of claim of the complainant is illegal and OP No.1 will reopen the claim file on the complainant once again and to depute a Surveyor to inspect the damaged vehicle. Accordingly basing on the report of the Surveyor, OP No.1 will award compensation for loss to the complainant within a month of receipt of this order. Complaint is allowed in part."

Petitioner, being aggrieved, filed an appeal before the State Commission. State Commission allowed the appeal, set aside the order of the District Forum and dismissed the complaint by observing as under:- "6. The limited question is whether the respondent No.1 paid premium by cash through respondent No.2 or paid it by way of cheque. There is no evidence to show that premium was paid in the shape of cash. On the other hand the cheque bearing No.060564 dated 4.6.02 for Rs.8,677/- goes to establish that premium was sought to be paid by way of cheque. The cheque was dishonoured with a remark ''account closed''. In the receipt granted to the respondent No.1 it was mentioned that in case of payment by cheque, it would be valid subject to its realization. The ICICI bank, Bhubaneswar to which the cheque was presented for encashment returned it with endorsement ''account closed''. Following the dishonor of the cheque the policy was cancelled on 21.06.02. There can be no doubt that acceptance of the policy by the appellant was subject to realization of the amount covered under the cheque. As a result of dishonour of the cheque it cannot be said that the respondent No.1 paid the premium. In these circumstances, it cannot be held that the vehicle in question was covered by the policy. Therefore, question of payment of any claim arising out of the policy does not arise. The District Forum has clearly failed to appreciate the facts.

STATE Commission held that since the cheque towards the premium was not encashed, the policy did not come into existence and was rightly cancelled by the Respondent Insurance Company. We agree with the view taken by the STATE Commission. The Policy Certificate-cum-Policy Schedule was issued subject to realization of the cheque. Cheque was dishonoured. Insurer assumes the risk on payment of the premium. No risk can be assumed unless the premium is paid. Since the cheque issued by the Petitioner was dishonoured, the policy did not come into existence and the Respondent Insurance Company rightly cancelled the same. In the absence of any policy, Respondent No.1 cannot be made liable to reimburse the loss suffered by the Petitioner. Petitioner has failed to prove that the Respondent No.2 was the agent of Respondent No.1 For the reasons stated above, we do not find any infirmity in the order passed by the State Commission. Dismissed. However, Petitioner is put at liberty to seek redressal of her grievance against the Respondent No.2.