UNITED INDIA INSURANCE CO. LTD. vs SATRUGHAN SHARMA

THIS revision petition arises out of decision of the State Consumer Disputes Redressal Commission, West Bengal, in S.C. Case No. 474/A/95 dated 24th July, 1996 whereby the State Commission has upheld the decision of the District Forum awarding a sum of Rs. 30,000/- against United India Insurance Co. Ltd., the petitioner herein, and a sum of Rs. 10,000/- against the Bank of India-respondent Nos. 2 & 3 in this petition. The Bank has not challenged the findings of the State Commission. The revision petition was admitted and notice was duly issued to all the respondents. All tine three parties i.e. the petitioner, respondent No. 1 and respondent Nos. 2 & 3 were heard. Facts of the case briefly stated, are that one Satrughan Sharma respondent purchased a vehicle being Ambassador Car being Registration No. WS-04/4426on 15th May, 1991. The purchase of the said car was financed by Bank of India, Ballygunge Military Camp Branch against the security of, inter alia, hypothecation of the said car. The Bank was to get the said car insured under comprehensive insurance cover with the petitioner i.e. the United India Insurance Co. Ltd. No. V, 25, Brabourne Road, Calcutta and the insurance policy was valid until 16th May, 1992. The wife of the respondent No. 1 visited the Bank on 13th May, 1992 and deposited with it in cash an amount of Rs. 4,104/- towards insurance premium with specific instructions to send this amount to the Insurance Company. The Bank was keeping the insurance cover wherein it was shown as the hypothesee of the vehicle. Needless to point out that the Bank as a secured creditor particularly after it had already been put in funds before the expiry of the policy by the debtor-respondent No. 1 for paying the premium for renewal of the insurance policy, was under an obligation to deposit that amount before the expiry of the insurance cover on 16th May, 1992. The said wife of the respondent No. 1 died on 18th May, 1992 and the respondent carried her ashes and proceeded in the said vehicle towards his native village. But on the way to Howrah Station the vehicle met with an accident with private bus at 7.50 a.m. on 19.5.1992. The respondent No. 1 duly informed the petitioner -Insurance Company and preferred a claim but the said claim was repudiated on 22nd May, 1992 by the Insurance Company, the petitioner, on the plea that the premium for renewal of the insurance policy was not deposited in time and that there was no insurance cover in existence a t the time of accident. The respondent No. 1 was duly informed that the insurance premium was deposited on 22nd May, 1992 and the policy was issued to her at 10.00 a.m. on 19.5.1992 which was the date of despatch of the premium by the Bank. The insurance cover was made operative from 10.00 a.m. on 19.5.1992. The claim of the respondent No. 1 was initially dismissed by the District Forum but on appeal the matter was remanded back with certain directions to dispose of the claim. After remand the District Forum reheard the case and the matter was disposed on 24th of August, 1995 whereby the claim of the respondent No. 1 was allowed to the extent of Rs. 30,000/- against the petitioner-Insurance Company and Rs. 10,000/- against the Bank of India.

AGGRIEVED by the said order an appeal was preferred by Insurance Company which was rejected by the State Commission on the plea that the renewal of the insurance policy which was effective from 19th of May, 1992 should relate back to the midnight hour when the date 19th May commenced and any accident which had taken place after the midnight hour would he covered by tine said policy and the Insurance Company is liable. Whiled is posing of that appeal we are afraid that tine State Commission had overlooked the decision rendered by Hon''ble Supreme Court in the Oriental Insurance Company v. Sunita Rathi and Ors., 1997 9 JT 767. In that case the policy was taken at 2.55 p.m. on 10th December, 1991 when the accident had occurred at 2.20 p.m. The Hon''ble Supreme Court while rendering its decision in the above case had considered its decision in Kamdayal''s case i.e. The New India Assurance Co. ltd. v. Ramdayal and Others, (1990) 2 SCC 680, distinguished it on the ground that the decision in Kamdayal''s case only date of commencement of the policy was mentioned and no time of commencement on mat date was given. As no time was mentioned on the insurance policy in Kamdayal''s case it was held that it would be the midnight hour from which the date mentioned on the insurance cover commences wherefrom the risk would get covered. We are afraid that it is not the case here and in fact a specific time is mentioned on the insurance cover. Therefore, the law laid down in the case of Oriental Insurance Co. Ltd. v. Sunita Rathi and Ors., and not Ramdayal "s case would apply. In the present case the insured has renewed the policy with effect from 10.00 a.m. i.e. the commencement of the office hours on 19th May, 1992 and this time has duly been mentioned in the policy. As such any accident that may have taken place prior to this hour would not be covered by the said insurance policy. On the other hand there is a clear deficiency of service on the part of the Bank who having accepted the amount of premium from its customer and its debtor in respect of the vehicle hypothecated in its favour of the Bank on 13th May, 1992 which was three days prior to the date of expiry of the insurance cover, did not care to remit the amount to the Insurance Company to keep the vehicle duly insured. There is no explanation for such delay available on the file. No one on behalf of the Bank including the Counsel at the time of hearing has been able to point out or furnish any reason which prevented the Bank from depositing the amount on or before 16th May. In that view of the matter we are of the view that the claim of the insured has been rightly repudiated by the petitioner-Insurance Company and that the petitioner-United India Insurance Co. Ltd. in the present case has no liability. In fact it is the failure of the Bank -respondent No. 2 who sat on the money of the owner of the vehicle and failed and neglected to remit that amount until the morning of 19th May, 1992. No fault can be found with the conduct of the insured who had done all that he had to do by putting the Bank in funds for the timely renewal of the policy of insurance. It is the Bank who was guilty of deficiency in service and is consequently liable to make good the entire loss to the insured and that liability of the Bank cannot be confined to the sum of Rs. 10,000/- only as has been done by the State Commission. Accordingly this revision petition is accepted and we hold that the claim of the insured was repudiated for valid reasons. We also hold that it is the Bank-respondent No. 2 who is guilty of deficiency in service and accordingly direct to the said Bank to make the entire payment of Rs. 40,000/- to the respondent No. 1. That amount should be paid alongwith interest at the rate of 12% per annum from 22.5.1992 when the claim was preferred till the date of the payment. Looking to tine peculiar nature of facts of this case, parties are left to bear their own costs.