UNITED INDIA INSURANCE CO LTD vs NEHA PROVISION STORES

BEING aggrieved by the order dated 13. 4. 2007 passed by District Consumer Forum, Raigad in consumer complaint No. 43/2006 whereby the Forum below was pleased to direct the O. P. /united India Insurance Co. Ltd. to pay amount of Rs. 3,45,500 to the complainant with interest @ 8% p. a. from 11. 11. 2005 till realization on entire amount and also pay Rs. 8,000 towards compensation and Rs. 1,000 towards cost of litigation, the United India Insurance Co. has filed this appeal.

THE respondent No. 1/neha Provision Store through its Proprietor Mr. Prabhudas Pragji Thakkar, resident of Bazarpeth Nagothane, Tal. Roha, Dist. Raigad had filed consumer complaint. He pleaded in his complaint that he was running a grocery store at Nagothane, Tal. Roha in the market area. He had taken two policies, one for Rs. 1 lakh and another for Rs. 4 lakh for the said grocery shop. The policies were in force. In respect of both the policies, he had given cheque of Rs. 2,391 to the O. P. on 19. 6. 2005. On 7. 7. 2005 he learnt that the said cheque was not honoured by the Bank and therefore on 8. 7. 2005 he approached the Roha Ashtami Urban Bank, Nagothane and took a Demand Draft for the said amount and through Palande Courier Service, he sent the Demand Draft to O. P. No. 1. The O. P. No. 1 received the said parcel on 11. 7. 2005 and, therefore, according to the complainant, O. Ps. received premium amount from him on 11. 7. 2005. According to the complainant, there has been heavy rainfall in Raigad District on 24th and 25th July, 2005. Because of constant rains, he suffered damages worth Rs. 4,34,000 and his whole grocery, furniture and fixtures were damaged and he suffered loss because of flood. Immediately, he informed the O. P. about the loss sustained by him because of flood. On 3. 8. 2005 he filed claim petition with the O. P. The cheque sent by the complainant was not encashed and therefore his policies were cancelled and as such the Company was not under legal obligation to honour the policies and to reimburse him for the loss sustained because of heavy flood. Since the Company has repudiated the claim, the complainant filed consumer complaint. The Company informed him by the registered letter dated 19. 7. 2005 that his policies stood cancelled since inception and there was no risk undertaken by the Company in respect of above policies because of dishonour of cheque. Thus, the complainant filed consumer complaint against the officials of United India Insurance Co. for alleged deficiency in service. He filed affidavit and documents in support of consumer complaint. The O. P. /insurance Company filed written statement and admitted that the complainant was issued two policies by the Company and the complainant had paid premium through one single cheque. However, the cheque was dishonoured for insufficient funds. The Bank informed accordingly to the Insurance Company on 19. 7. 2005 and on the same day the Insurance Company cancelled the policies and sent intimation to the complainant since by 19. 7. 2005 premium had not been paid by the complainant either in cash or through any other mode of payment. Thereafter, there was heavy rainfall on 25. 7. 2005. The complainant was informed orally about cancellation of two policies consequence upon dishonour of cheque. By letter dated 11. 11. 2005 the same was informed to the complainant. According to the Company after receipt of complaint from the District Consumer Forum, they learnt from the complaint that on 8. 7. 2005 the complainant had sent a Demand Draft of Rs. 2,391through Palande Courier Service to Mr. Sandeep Patne, Development Officer of Insurance Company. When enquired, Shri Patne told that there was no draft, but certain documents of insurance policies were enclosed. In the circumstances, the Company took up the plea that the policies stood cancelled and they had not incurred the risk in respect of two policies on the basis of which the complainant had filed complaint. The Company admitted that they had appointed Surveyor and the Surveyor had visited the grocery shop and submitted Survey Report on 16. 9. 2005. However, since the premium of the policies was not received by the Insurance Company, it had already sent a repudiation letter to the complainant. It pleaded that since inception both the policies were cancelled. Therefore, they were not liable to pay any amount towards both the policies purchased by the complainant. It therefore prayed that complaint should be dismissed with cost.

On the basis of documents, and affidavits placed on record, the learned District Consumer Forum held that the Insurance Company was liable to pay insurance claim and was even guilty of deficiency in service. Therefore, the Forum below was pleased to direct the Insurance Company to pay amount of Rs. 3,45,500 as per Survey Report and passed the award in favour of the complainant.

AGGRIEVED thereby the Insurance Company has filed this appeal. We heard Mr. A. S. Vidyarthi, Advocate for the appellant/insurance Company and Mr. V. N. Deshpande, Advocate for respondent No. 1/org. complainant.

EVERYTHING is accepted except the payment of premium. So, in this appeal, the crucial question is whether the Insurance Company received the premium from the complainant. It is an admitted fact that the complainant had paid premium for both the policies by one single cheque of Rs. 2,391 on 19. 6. 2005. However, that cheque was bounced. It is the contention of the complainant/respondent herein that he learnt on 7. 7. 2005 from the issuing Bank that the said cheque was dishonoured and, therefore, on 8. 7. 2005 he purchased a Demand Draft for the same amount from Roha Ashtami Urban Bank, Nagothane in the name of appellant/company and sent it through Palande Courier Service in the envelope and on 11. 7. 2005, org. O. P. No. 2 Smt. Sunita Talegaonkar, Asstt. Administrative Officer received that envelope and therefore it is the contention of the complainant that he had paid premium amount by Demand Draft. However, in the course of arguments, we specifically asked Mr. Deshpande, Advocate for the respondent No. 1 as to whether he had enclosed any letter with the said Demand Draft mentioning therein inter alia that Mr. Prabhudas Thakkar learnt from his Banker that the cheque issued to the Insurance Company dated 19. 6. 2005 had been dishonoured for want of sufficient fund and therefore he was sending Demand Draft in respect of those two policies. Mr. Deshpande had no answer. It is the common knowledge that the United India Insurance Company is having thousands of policy holders. It is not possible to keep track on individual cases and, therefore, unless that Demand Draft, assuming it was sent by the complainant through Palande Courier Service was accompanied with letter and reference about two policies, which the complainant had purchased, it was not possible for the officials of the Insurance Company to take note of the same in their Register and on their policy documents that in place of dishonoured cheque sent by Mr. Prabhudas Thakkar, they had received Demand Draft of Rs. 2,391 from the complainant. Not sending letter, not keeping Xerox copy of the Demand Draft, not producing those two vital documents before the Forum below is in our view fatal to the complainant''s case and this fact is ignored by the Forum below while allowing the complaint of the complainant. If somebody is sending Demand Draft without accompanying a letter as to why it was sent, one cannot be heard to say that the said Demand Draft was sent by Mr. Prabhudas Thakkar towards payment of premium of both the policies, which he had earlier purchased. So assuming that the appellant might have received the Demand Draft, still in absence of letter accompanying Demand Draft, mentioning all these details, it was not possible for the appellant/insurance Company to say that they had received Demand Draft in lieu of dishonoured cheque earlier given by the complainant in respect of two policies purchased by him for his grocery shop. This crucial aspect was not considered by the Forum below while allowing the complaint and directing the Insurance Company to pay Rs. 3,45,500 to the complainant pertaining to both the policies. What is pertinent to note is the fact that the Insurance Company in the Forum below in the written statement in Para 10 clearly stated on verification with the Development Officer Mr. Sandeep Patne that the envelope, which was received through Palande Courier Service on 11. 7. 2005 contained copies of cancelled policies only and no Demand Draft was enclosed. In Para 11, again they mentioned that they had not received any Demand Draft in the envelope sent by the complainant through Palande Courier. Further the complainant had not at all confirmed it. As well as the complainant failed to keep sufficient fund in his account due to which they incurred unnecessary administrative cost, which was demanded by their letter dated 19. 7. 2005. In Para 12 of the written statement, they mentioned that while scrutinizing the Survey Report and other documents, they found that the premium for the said policies was not remitted by the complainant and hence, "no premium, no cover" on the date of loss. The Insurance Company by letter dated 7. 7. 2006 informed the Forum below that they had cancelled the policies on the instructions based on Bank of India''s Debit Advice Note regarding dishonoured cheque, vide their Advice dated 14. 7. 2005 received by them on 19. 7. 2005. It was further mentioned in this letter sent to the District Consumer Forum that on remittance of premium in cash or Demand Draft, they assumed the risk from the date of fresh collection subject to the insured confirmation that there had been no loss so far. So, these conditions were violated by the complainant. Moreover, this was also told to the complainant by letter dated 8. 2. 2006 by Smt. Sunita Talegaonkar, Asstt. Administrative Officer of the Insurance Company. On 11. 11. 2005 the same ground was informed to the complainant/neha Provisions Store that their claim was treated as ''no claim'' because of dishonour of cheque. Mr. Sandeep Patne filed statement in writing before the Forum below explaining all these facts and non-receipt of Demand Draft in the envelope sent through Palande Courier Service. In the circumstances, we are finding that the Forum below committed patent error in holding that the Insurance Company was liable to pay amount as per loss assessed by the Surveyor. There was no payment of premium in respect of both the policies by the complainant to the appellant and policies stood cancelled as per letter dated 19. 7. 2005 sent by the Insurance Company to Neha Provision Store, Nagothane and therefore the learned District Consumer Forum erred in law in directing the appellant/insurance Company to pay amount of Rs. 3,45,500. By allowing this appeal said error will have to be rectified and complaint will have to be dismissed. Hence, the following order: ORDER 1. Appeal is allowed. The impugned order passed by the Forum below is quashed and set aside. Complaint stands dismissed. 2. Parties are left to bear their own costs. 3. Misc. Appl. No. 1046/2007, which is for stay, stands disposed of. 4. Copies of the order be furnished to the parties.

Appeal allowed.