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Judgment
THIS appeal is preferred by the United India Insurance Company Limited represented by its Divisional Manager, Divisional Office at Anantapur which was the opposite party in C.D. No. 227/1992 being aggrieved by the order of Anantapur District Forum dated 8.7.1997 allowing the C.D. and directing it to pay a sum of Rs. 16,145 /- with 12% interest from 13.8.1992 till realisation and also to pay costs of Rs. 300/-.
THE respondent in this appeal was the complainant in the C.D. In his complaint he states that he was a partner of a registered partnership firm by name M/s. Bhagya Lakshmi Financiers of Guntakal and that it was dissolved on 31.3.1994 by a deed of dissolution and that the same was intimated to the Registrar of Firms, Hyderabad. Under the deed of dissolution other partners of the firm agreed to give away the running business of the firm to the complainant and since then he had been running the business of the firm as proprietary concern. One C.V. Prasad was due some amount to the said firm. He owned a vehicle A.P.A. 4744 which was involved in an accident. THE said vehicle was insured with the appellant Company and it had insurance cover at the time of the accident. THE appellant had to pay a sum of Rs. 12,750/- to C.V. Prasad. This is not disputed by the Insurance Company. C.V. Prasad authorised the appellant to pay the said sum of Rs. 12,750/- to the complainant towards dues he owed to the firm. THE complainant approached the appellant for payment and he also given a copy of the deed of dissolution. According to the complainant, after a great deal of ordeal the appellant issued a cheque dated 3.9.1990 for the said sum in the name of the dissolved firm as follows: "M/s. Bhagya Lakshmi Financiers Account Payee C.V. Prasad". As it was issued account payee C.V. Prasad it could not be encashed by the complainant. Inspite of several approaches made by the complainant and notices issued through lawyer the appellant did not send a cheque for the said sum in his name. THE appellant got issued are ply through Advocate dated 4.l2.1990 raising several objections and enquiring whether the dissolution of the firm was intimated to the Registrar of Firms and wanted a certificate to that effect. Even after the same were complied after the complainant applied for and got necessary certified copies from the Registrar of Firms the appellant did not issue proper cheque. Under those circumstances the complainant approached the Anantapur District Forum claiming in all a sum of Rs. 16,045/-. THE said sum comprised of Rs. 12,750/- which the appellant had to pay towards compensation for the accident involving the vehicle of C.V. Prasad, Rs. 2,295/- towards interest @ 18% per annum on the said sum from 3.9.1990 (the date of the first cheque) to 20.2.1992, Rs. 1,000/- towards damages due to loss in business and Rs. 100/- towards Advocate''s notice charges. THE complainant alleged that the Insurance Company owed a duty to render prompt service by paying the accident claim amount at the earliest. In the counter filed by the appellant before the District Forum it is stated that the complainant was issued a cheque dated 13.8.1992 for Rs. 12,750/- towards full and final settlement of the claim and that the complainant received the cheque and did not make any protest. But, obviously that was after the complaint was already presented in the District Forum on 27.6.1992. The appellant also stated in the counter that "there is absolutely no delay in settling the claim of the complainant. Immediately, after the claim is made by the complainant, the claim has been processed and this respondent company has issued a cheque Bearing No. 832107, dated 3.9.1990 for Rs. 12,750/- in the name of M/s. Bhagya Lakshmi Financiers, Guntakal, as per endorsement No. 10 of the terms and conditions of the insurance policy issued to Shri C.V. Prasad, Guntakal and that the said clause provides that the Financiers are deemed to be the owners and any payment made by the Insurance Company to the Financiers completely discharges the complainant from their liability to the Insured". From this it is obvious that the appellant did not deny that the first cheque dated 3.9.1990 was issued as the complainant stated "M/s. Bhagya Lakshmi Financiers Account Payee C.V. Prasad". The appellant also admitted in his counter that the said cheque was issued in the name of M/s. Bhagya Lakshmi Financiers Guntakal as it was provided in the deed of dissolution dated 31.3.1984 that one of the partners had taken over the entire business and that he was continuing the business in the name of the said firm. From this it is clear that the appellant was aware even at the time when the first cheque dated 3.9.1990 was issued that the firm was dissolved and that the complainant took over the business and he was running it as a proprietory concern. The appellant also stated in his counter as follows: "This respondent company further submits that on 4.12.1990, the company has addressed a letter to the complainant, requesting him to send a copy of the letter of intimation to the Registrar of Firms, Hyderabad, with regard to the Dissolution of the Firm viz., M/s. Bhagya Lakshmi Financiers, Guntakal and informed the complainant that only after the receipt of the said copy of the letter of the intimation to the Registrar of Firms, further steps will be taken with regard to the settling the claim of the complainant. But the complainant has sent a photostat copy of Form ''A'' received from the Registrar of Firms, Hyderabad, dated 7.5.1991 stating that the Firm M/s. Bhagya Lakshmi Financiers, Guntakal has been dissolved with effect from 31.3.1984, only on the 9th May, 1992. So, immediately after taking legal opinion, the company has issued a cheque Bearing No. 194587, for Rs. 12,750/-. The delay is only due to the non- sending of the said copy of the letter of intimation to the Registrar of Firms, Hyderabad".
The District Forum in its order dated 8.7.1997 observed that the appellant in his counter admitted that he sent the cheque in the name of the dissolved firm despite the complainant having informed the respondent to pay a cheque in his name and held that it was the duty of the appellant to pay the amount to the complainant as the complainant gave a copy of the deed of dissolution. The District Forum further held that as the appellant issued a cheque in the name of dissolved firm despite the information to it that the firm was dissolved and that the complainant had taken over the business of the firm instead of in the name of the complainant there was deficiency in service on the part of the Insurance Company. In that view of the matter the District Forum directed the appellant to pay a sum of Rs. 16,145/- with 12% interest from 13.8.1992 till realisation.
WE heard the learned Counsel for the appellant. The respondent appeared in person on 21.10.1997 and also filed an affidavit of the same date. He admitted that a sum of Rs. 12,750/- was paid by the appellant by way of a cheque as stated by the appellant, but that payment was made belatedly after a very long time and that the balance amount to Rs. 3,395/- and interest and other expenses was still to be paid. The question now is only whether the appellant has to pay interest on the said sum of Rs. 12,750/- atleast from the date of the first cheque i.e. 3.9.1990.
WE have seen that the complainant has categorically stated in the complaint that C.V. Prasad "authorised the respondent (appellant herein) to pay the said sum of Rs. 12,750/- to the complainant herein towards his dues". This was anterior to the date of the first cheque i.e. 30.9.1990, which itself, according to the complainant was issued "after a great deal of ordeal".
This statement that C.V. Prasad authorised the respondent to pay the amount was not denied or controverted in the counter of the appellant dated 24.4.1993 filed before the District Forum. On the other hand, the appellant admitted in the said counter that even by the date of the issuance of the first cheque it knew that the firm M/s. Bhagya Lakshmi Financiers was dissolved and all the partners agreed and the complainant took over the business of the firm and was running the same. WE find that there is no proper explanation whatsoever for the appellant not issuing a cheque for Rs. 12,750/- immediately after C.V. Prasad instructed it to pay the amount to the complainant. Going through the record of the District Forum before us, we find from the copy of the letter dated 8.6.1992 addressed by the appellant to the complainant that the accident to the vehicle of C.V. Prasad - APA 4744 - occurred on 22.1.1988. From the deed of dissolution of M/s. Bhagya Lakshmi Financiers dated 31.3.1984 we find that the said firm was dissolved with effect from 31.3.1984 itself and that Sri S. Radhakrishna Shetty, the complainant, expressed his desire to take over the running business of the said dissolved firm and the remaining partners agreed for that and that the running business of the firm was taken over by the complainant alongwith its trade name and its products, movable and immovable properties, assets and liabilities, past, present, future, contingent or otherwise etc. The counter of the appellant admits that the appellant was aware of these facts even by the date the first cheque dated 3.9.1990 for Rs. 12,750/- was issued by it. When Sri C.V. Prasad authorised the appellant to pay the amount to the complainant, there is no explanation whatsoever coming from the appellant for issuing the cheque in the name of the firm adding. "Account Payee C.V. Prasad". It goes without saying that account payee cheques can be deposited only when there is an account specifically as in the payees'' name is shown in the cheque. After me complainant remonstrated and requested me appellant to send the cheque in his name, there was no reason whatsoever for the appellant to further delay in immediately issuing the cheque showing the complainant as drawee when admittedly it knew that the firm was dissolved and that the complainant took over the business of the firm and C.V. Prasad authorised it to pay the amount to the complainant. In the light of these circumstances, on consideration of all the facts, we wholly agree with the District Forum that there was deficiency in service on the part of the, appellant in not issuing the cheque in the name of the complainant in the first instance itself. As already pointed out by us earlier the accident took place more than four years earlier on 22.1.1998 and the said sum of Rs. 12,750/- was the un-disputed sum agreed by the appellant to be paid to Mr. C.V. Prasad for the damage sustained to his vehicle APA 4744 in the accident. However as the sum of Rs. 12,750/- was only paid by the appellant by way of cheque dated 13.8.1992 which was sent by the appellant alongwith its covering letter dated 14.8.1992 and it was encashed thereafter during the end of August, 1992 the order of the District Forum directing the payment of Rs. 1,6145/- with interest @ 12% from 13.8.1992 till realisation has to be modified. In view of the attitude displayed by the appellant in unnecessarily delaying the payment of the amount and thereby denying the complainant of the benefit of the said sum, we direct the appellant to pay interest on Rs. 12,750/- from the date of the first cheque issued by it i.e. 3.9.1990 upto the date of actual sending of the second cheque i.e. 14.8.1992 which was encashed on 27.8.1992 i.e. for a period of two years at the rate of 18% per annum i.e. Rs. 4,590/-. As interest is being paid, the complainant will not have any further sum towards damages. In addition a sum of Rs. 300/- shall be paid towards costs as awarded by the District Forum. Thus in all, the appellant shall pay to the complainant a sum of Rs. 4/890/- within six weeks from today. The appeal is accordingly allowed in part. No costs. Appeal partly allowed. _______________