Delhi District Court
Shri Shahzad Ahmed vs National Insurance Co. Ltd on 13 November, 2007
SUIT NO.88/2003
1
IN THE COURT OF SH. ASHISH AGGARWAL, CIVIL JUDGE,
DELHI
SUIT NO.88/2003
Shri Shahzad Ahmed,
S/o Shri Fateh Mohd.,
R/o F-17, Dilshad Colony,
Delhi-110095.
...Plaintiff
Versus
1 National Insurance Co. Ltd.,
Sr. Direct Agent Branch,
Gopal Dass Bhawan,
12th Floor, 28 Bara Khamba Road,
New Delhi.
2 Shri Vikas Gupta, Agent,
Agency No. 138,
Through National Insurance Co. Ltd.,
Sr. Direct Agent Branch,
Gopal Dass Bhawan,
12th Floor, 28 Bara Khamba Road,
New Delhi.
Date of Institution : 7.5.2003
Date when judgment was reserved : 6.10.2007
Date of Decision : 13.11.2007
SUIT FOR RECOVERY OF RS. 1,45,000/-
JUDGMENT
Vide this judgment, I shall dispose off the suit for recovery of Rs.1,45,000/- with interest and costs. 2 The relevant facts as stated in the plaint are that the SUIT NO.88/2003 2 plaintiff purchased Maruti Car bearing registration No. DL-3C-A- 9562 for a sum of Rs.1,50,000/- on 27.6.1997. The plaintiff got the vehicle insured with defendant no.1 through its agent, defendant no.2 on 28.6.1997 vide policy cover note No. 407084. Immediately after insuring the vehicle, the plaintiff applied for transfer of the vehicle in his name before the Transport Authority. The vehicle was transferred in the name of the plaintiff on 2.7.1997. In the night intervening 29/30.6.1997, the vehicle was stolen from outside the house of the plaintiff. A complaint to this effect was lodged in Police Station Seemapuri and upon this FIR No.454/1997 dated 30.6.1997 was registered. The incident was brought to the notice of the defendants on 30.6.1997. A formal claim letter was given to defendant no.1 on 3.7.97 for registration of claim alongwith requisite documents. On 8.9.1997, the defendant no.1 deputed Mr.J.S. Dhillon for investigating the matter. Thereafter the defendants refused to make payment of the sum claimed by the plaintiff. The vehicle was also reported as untraceable by the police. According to the plaintiff, all conditions of insurance policy have been complied with by him. The plaintiff has filed the present suit claiming a sum of Rs.1,45,000/- as insurable value of the SUIT NO.88/2003 3 vehicle with interest @ 12% p.a. and costs of the suit. 3 After institution of the suit, summons were directed to be issued for service upon the defendants. Defendants filed their written statements. In its written statement, defendant no.1 contended that the suit is barred by limitation and that the plaintiff has no locus-standi to file the suit as he had no insurable interest. It was also contended that the suit is not maintainable in view of Section 64-VB of the Insurance Act, 1938. It is the case of the defendant that the cover note was got issued by the plaintiff with the connivance of defendant no.2 who was known to the plaintiff. Further it is stated that the rules of Insurance Company were not followed while issuing the cover note. It is averred that the defendant company was informed of the alleged theft only on 3.7.1997 while the alleged theft had taken place in the night intervening 29/30.6.1997. It was also contended by defendant no.1 that the market value of the vehicle was not more than Rs.1 Lakh at the time of alleged theft as assessed by the Surveyor and as per the conditions of policy, the liability of the insurer cannot exceed the market value of the vehicle.
4 In its written statement, defendant no.2 contended that SUIT NO.88/2003 4 he is only an agent of defendant no.1 and is not liable for the dues of the plaintiff. It is stated by defendant no.2 that the claim of the plaintiff is only against defendant no.1 and defendant no.2 has been wrongly impleaded as a party to the suit.
5 Replications to the written statements of the defendants were filed by the plaintiff wherein contents of the written statements were denied while contents of the plaint were reaffirmed as correct.
6 After completion of pleadings, the following issues were framed vide order dated 18.5.2004 passed by my Ld. Predecessor as follows:-
1. Whether the plaintiff is entitled for the recovery of suit amount? OPP.
2. Whether the suit is barred by law of limitation?
OPD
3. Whether the suit is not maintainable in view of Section 64-VB of the Insurance Act? OPD.
4. Relief.
7 Evidence was led by the parties. The plaintiff examined himself as PW-1 and tendered his affidavit Ex.PW1/A in evidence on 29.9.2004. In his affidavit, he deposed on the lines of the plaint. SUIT NO.88/2003 5 He identified copies of cash receipt, delivery receipt, policy letter, letter dated 4.3.1999, FIR, Letter for registration of claim dated 3.7.99, letter dated 19.11.99, final report of police and order of consumer forum as Mark A to Mark I respectively. He was cross- examined and discharged.
8 Defendant no.1 examined three witness in support of its case. Mr. Lalit Aluria, Divisional Manager of the defendant company was examined as DW-1. His affidavit Ex.DW1/A was tendered in evidence on 26.9.2005. In his affidavit, DW-1 reaffirmed the contents of the written statement. He identified investigation report dated 30.6.1998 as Ex.D-1, the survey report dated 19.12.1998 as Ex.D-2 and the survey report dated 14.8.99 as Ex.D-3. The insurance policy was also identified as Ex.PW1/D1. The witness was cross-examined and discharged. 9 Mr. Jeewan Aggarwal, Surveyor was examined as DW-
2. His affidavit Ex.DW2/1 was tendered in evidence on 26.9.2005. He identified his reports dated 19.12.1998 and 14.8.1999 as Ex.D- 2 and D-3. He also reaffirmed the contents of the survey reports. He was cross-examined and discharged.
10 Mr. J.S. Dhillon was examined as DW-3. His affidavit SUIT NO.88/2003 6 Ex.DW3/A was tendered in evidence on 26.9.2005. In his affidavit DW-3 has stated that he had investigated the matter and had submitted his report which is Ex.D-1. He has reaffirmed contents of the investigation report. He was cross-examined on behalf of the plaintiff and discharged.
11 Defendant no.2 also led evidence in support of its case and examined himself as D2W1. He tendered his affidavit Ex.D2W1/A in evidence on 13.10.2005. He has stated that he insured the vehicle on behalf of the defendant no.1. He has disclaimed his liability on the ground that he is only an agent of defendant no.1 and that there is no dispute between him and the plaintiff. He was cross-examined by Counsel for the plaintiff and Counsel for the defendant No.1 and was discharged.
No other evidence was led by the parties.
12 I have heard submissions advanced by Counsels for the parties and have gone through the record. My issue-wise findings are as under:-
ISSUE No.1 "Whether the plaintiff is entitled for the recovery of suit amount?
OPP."SUIT NO.88/2003 7
13 The onus of proving this issue was on the Plaintiff. It is the case of the plaintiff that he had insured his vehicle with defendant no.1. The defendant no.1 has refused to honour his claim on account of theft of the vehicle. It is the case of defendant no.1 that the plaintiff had secured cover note in collusion with defendant no.2 and that this is a case of fraud for which defendant no.1 cannot be held liable. Defendant no.1 has also contended that there is no insurable interest in favour of the plaintiff. Defendant no.2 has disclaimed its liability on the ground that it was only an agent of defendant no.1 and cannot be held liable for the theft of the vehicle as all acts had been performed by defendant no.2 only as authorized by defendant no.1.
14 It is not in dispute that the vehicle was purchased by the plaintiff on 27.6.1997. The cash receipt dated 27.6.1997 issued by the previous owner of the vehicle has been identified as Mark A while delivery receipt of same date has been identified as Mark B. The contention of defendant no.1 is that there is no insurable interest in favour of the plaintiff in as much as the application was made to the transport authority for registering the vehicle in the name of the plaintiff only on 2.7.1997.
SUIT NO.88/20038 15 Insurable interest has not been defined under the Insurance Act. Reliance has been placed by the defendant upon Section 7 of the Marine Insurance Act, 1963. Admittedly the Marine Insurance Act, 1963 does not apply to the facts of the present case. Yet the principle may derived and applied to the facts of the instant case. The concept of insurable interest is that a person who insures any product must have some interest in that thing so as to sustain his claim of being prejudiced by damage of the same. In other words, some advantage must be shown to be arising from the product to the person who insures the same. He must be able to demonstrate that he is prejudiced by circumstances that adversely affect the product and is therefore interested in maintaining its safety and quality. In the present case, the plaintiff became owner of the vehicle on the date of purchasing the same i.e. 27.6.1997. Registration of the vehicle in the name of the plaintiff is only ancillary to the said transfer. On the date on which the vehicle stood purchased, the plaintiff became entitled to lay claim over it. In case of any damage to the vehicle on that date, the plaintiff can be said to have suffered loss and it would therefore be detrimental to his interest. It cannot be said that on that date, he SUIT NO.88/2003 9 had no insurable interest in the vehicle. More so, the defendant cannot be permitted to raise this contention after issuing cover note in respect of the vehicle. Even if it is assumed that the title of the plaintiff was defective, it does not imply therefrom there is no insurable interest in the vehicle.
16 In the case of National Insurance Company Ltd. Vs. Rajesh Gupta, III (2006) CPJ 4, it was held that failure of a person to get vehicle registered in his own name after purchase is not relevant to insurable interest and a purchaser of the vehicle can make claim on satisfying the Court that he is the owner of the vehicle.
17 The defendant no.1 has placed reliance upon the judgment reported as Gurdev Singh Vs. Bawa Amarjit Singh & Ors., 1993 ACJ 979 wherein the transferee's claim was rejected. The judgment is inapplicable to the facts of the present case since in that case the claim had been rejected on the ground that there was no documentary evidence of transfer of the vehicle. In the present case, the delivery receipt and other documents clearly establish transfer of vehicle in favour of the plaintiff. 18 In view of the aforesaid circumstances, the said SUIT NO.88/2003 10 objection of the defendant is therefore rejected. 19 The other contention raised by defendant no.1 is that the cover note has been obtained by fraud and collusion with defendant no.2. In support of this contention, it has been pointed out that payment of premium had been made by way of cheque dated 27.6.1997. It is pointed out that PW-1 has admitted in his cross-examination dated 29.9.2004 that he had delivered the said cheque to agent of defendant no.1 on 27.6.97. 27th June, 1997 was a Friday. The agent was obliged by Section 64 VB (4) of the Insurance Act, 1938 to remit the said cheque to defendant no.1 within twenty hours of its receipt. However the cheque was not deposited with defendant no.1 till 30.6.1997 which was Monday. It is contended that the agent could have dispatched the cheque in compliance with his statutory responsibility on 28.6.1997 which was Saturday, even if the office of defendant no.1 was closed on Saturday. The cover note is also stated to have been issued by defendant no.2 on 28.6.1997. The delay in issuing cover note has not been explained by defendant no.2 when it has already come on record that he has received the cheque on 27.6.1997. 20 Responding to these contentions, Counsel for the SUIT NO.88/2003 11 plaintiff has submitted that the cover note of the vehicle had been duly issued on 28.6.1997. After having issued cover note, the defendant no.1 cannot disclaim its liability. It is also submitted that all necessary documents have been given to the Agent of defendant no.1 on that date. The cover note has not been prepared ante-dated. This is established by the fact that on 28.6.1997 itself while issuing policy, the defendant no.1 was duly apprised of receiving premium. It has been admitted by D2W1 in his cross-examination that the fact of issuing cover note was brought to the knowledge of Mrs. Anju Dhanda on 28.6.1997. It is also submitted that no action has been taken against defendant no.2 who is still working as agent of defendant no.1. Had there been some fraud or collusion, defendant no.1 would have surely taken action against defendant no.2. It is also submitted that there is no direction that cover note cannot be issued on Saturdays or on public holidays. This has been admitted by D2W1 in his cross- examination. It is also pointed out that this is not a solitary case in which cover note was issued on 28.6.1997. In another case, cover note was issued on the same date. This is evident from Ex.D-1. The investigation report has also been assailed on behalf of the SUIT NO.88/2003 12 plaintiff. It is pointed out that in the inspection report itself, it was mentioned by the Inspecting Officer that there was no evidence to show that the policy was issued after loss of the vehicle. It is also submitted that the investigation report was prepared without recording the statement of the plaintiff or defendant no.2. The cross-examination of DW-3 dated 26.9.2005 has been highlighted in this connection.
21 The defendant no.1 has relied upon the delayed intimation to defendant no.1 by defendant no.2 to substantiate its contention that there was collusion between defendants no.1 and
2. However, DW-3 has admitted in his cross-examination that he had intimated defendant no.1 through the concerned officer Mrs.Anju Dhanda on 28.6.1997 itself. DW-3 has not been further cross-examined on this point nor has any evidence been led to controvert this statement. The defendant no.1 has not produced Mrs. Anju Dhanda to rebut this contention. Mrs. Anju Dhanda being the concerned officer, is the agent of defendant no.1. As per Section 229 of the Contract Act, 1872, notice to agent in the course of business has the same legal consequences as if notice has been given to the principal himself.
SUIT NO.88/200313 22 Even if it is assumed that defendant no.2 defaulted in promptly communicating the fact of issuance of cover note and in timely transmission of insurance premium to defendant no.1, this does not affect the claim of the plaintiff. For the negligence of the agent, the principal may proceed against him. However as against third parties, the principal is bound by the acts of the agents. Contracts with the agents can be enforced against the principal as has been unequivocally laid down in Section 226 of the Contract Act, 1872.
23 Moreover, the contention that defendant no.2 had colluded with the plaintiff seems to be without force. Despite having notice of the alleged collusion, defendant no.1 has failed to take any action against defendant no.2, who admittedly continues to be an agent of defendant no.1. The defendant no.1 has also placed reliance upon the investigation conducted by DW-3. In this regard, perusal of the investigation report Ex.D-1 is imperative. In the said report itself, DW-3 has stated that there is no evidence to establish that cover note has been issued after loss of the vehicle. In case the cover note had been issued in back-date, the defendant no.1 would not have informed Mrs. Anju Dhanda on SUIT NO.88/2003 14 28.6.1997 itself. The conclusions arrived at in the investigation report do not inspire confidence as the report has been prepared without recording of statements of the plaintiff or DW-1, as admitted by the Investigator in his cross-examination dated 26.9.2005.
24 DW-1 and DW-3 have also identified Ex.D-1 in their evidence. Ex.D-1 shows that in another case, cover note had been issued on 28.7.1997. Thus the contention that cover note had been issued in back-date in the present case and that cover notes are not issued on Saturdays is without merit.
25 D2W1 has also admitted in his cross-examination that there is no rule that cover notes cannot be issued on Saturdays or on public holidays. D2W1 has not been cross-examined on behalf of the defendant no.1 on this aspect indicating acceptance of the correctness of the statement.
26 The fact that defendants no.1 and 2 have other business relations do not adversely affect the validity of the insurance policy. It is commonplace to get vehicle insured from an agent who is familiar and who can, therefore, be trusted. By mere fact that insurance policy was carried out through defendant no.2, it cannot SUIT NO.88/2003 15 be concluded that there is connivance or collusion between the defendants.
27 In the totality of circumstances, it has not been proved by preponderance of probability that the cover note was ante-dated or that plaintiff and defendant no.2 have colluded to defraud defendant no.1.
28 The insurance policy has admittedly not been cancelled or revoked till date. Thus, the contract of insurance continues to be valid and in existence. The insurance policy is therefore liable to be enforced.
In the case of Divisional Manager, United India Insurance Company Ltd. Vs. Labanga Sahu, AIR 1999 Ori. 193, it has been held by the Hon'ble High Court of Orissa that where a cover note has been issued by the Insurance Company, a mere denial that the said company is not sufficient to disclaim liability. It was observed as follows:-
"The contention that the Cover Note does not bring about a contract of insurance between the Insurance Company and the owner of the vehicle, being untenable is rejected.
xxx xxx xxx xxx The analogy that till a proposal of life insurance SUIT NO.88/2003 16 is accepted, mere collection of premium by the agent does not bring about an insurance cover cannot, in view of the specific provision contained in Section 94 of the 1939 Act and Section 146 of the 1988 Act, come to the aid of the insurer in defending a claim under the Motor Vehicles Act on the ground that issuance of a cover note does not bring about a contract of insurance. In other words, vehicles will come to a standstill till a policy is issued notwithstanding issuance of a cover note".
In the case of Life Insurance Corporation of India Vs. Imarti Devi, I (2007) CPJ 299, it has been held that the insurance transaction is complete when the authorized agent of the Insurance Company receives premium and issues cover note. It was held that the Insurance Company is bound by the acts of the agent.
In the case of Yellamma Vs. Bhy Sukhdev Singh, AIR 2006 Karnataka 240, the Hon'ble High Court of Karnataka has held that an insurance policy commences from the date of issuance of the cheque and not from the date of its encashment. It was held that unless the policy is cancelled, the same remains valid and enforceable.
29 The defendant no.1 has placed reliance upon the judgment reported as Oriental Insurance Company Ltd. Vs. M/s Sakala Veera Bhadraiah & Company I (2003) ACC 118. In that SUIT NO.88/2003 17 case, it was held that mere acceptance of premium by fraud and collusion does not bind the insurer to the policy if cover notes have been prepared after occurrence of the incident. The said judgment is not applicable to the facts of the case. In that case, the insurer was absolved from liability as premium had been received and cover notes had been issued after occurrence of the fire accident. It was also observed that premium had been accepted as result of collusion and fraud. On the other hand, in the present case, insurance premium had been accepted and cover notes had been issued prior to the loss of vehicle. Collusion or fraud has also not been conclusively proved. Hence, the judgment is not applicable to the facts of the present case.
In so far as the insurance policy is valid and in existence the same is liable to be enforced by the plaintiff. 30 It is also contended by Counsel for the defendant No.1 that the vehicle had been insured by the previous owner in the sum of Rs.80,000/- with some other insurer. The plaintiff has claimed to have purchased the vehicle at a price of Rs.1,50,000/-. The plaintiff insured the vehicle for a sum of Rs.1,45,000/-. It is contended that the price of the vehicle was inflated so as to make a higher claim SUIT NO.88/2003 18 with defendant no.1. Counsel for the defendant no.1 has also urged that the sale receipt has not been proven in accordance with law as the seller of the vehicle has not been produced as a witness.
31 In response to these contentions, Counsel for the plaintiff has submitted that the value of the vehicle was Rs.1,50,000/- and, therefore, was insured for a sum of Rs.1,45,000/-. It is pointed out that certain accessories were also attached to the vehicle which were valued at Rs.15,000/-. The policy of the defendant Ex.PW1/D1 in which the value of the accessories have been shown at Rs.15,000/- is highlighted to establish that the total value is Rs.1,45,000/-. It is also submitted that the defendant no.1 cannot be permitted to raise these contentions after having issued cover note. It is further submitted by the plaintiff that there is no bar of insuring the vehicle for a value which is less than the market value of the vehicle. It is asserted that the value declared is in consonance with the value on which the vehicle had been purchased.
32 The original insurance policy document has been produced before the court and has been identified as Ex.PW1/D-1. SUIT NO.88/2003 19 As per the clear terms of insurance policy Ex.PW1/D-1, in particular condition No.3, the insurance company has agreed to pay "the amount of actual value of the part damaged or lost less depreciation plus the reasonable cost of fitting and shall in no case exceed the insured's estimate of the value of the motor car" at the time of loss, whichever is less. The key words are "actual value". The plaintiff has provided value of the vehicle when it was purchased by him.
33 The actual value of the car alongwith electrical appliances has been assessed by the surveyor DW-2 as Rs.1 Lakh. Nothing material has been brought out in the cross- examination of DW-2 which may cast a doubt about the correctness of the testimony.
34 The plaintiff has in his affidavit tendered in evidence on 29.9.2004 stated that the insurable value of the vehicle is Rs.1,45,000/-. However for the purpose of the insurance claim, it is not the 'insurable value' but the 'actual value' which is relevant. The value of the vehicle for which it has been insured is relevant only as the upper limit beyond which the insurance company cannot award as compensation. The fact that the vehicle had been SUIT NO.88/2003 20 purchased for a sum of Rs.1,50,000/- is also irrelevant. The actual value of the vehicle may be different from the transaction value. The former alone is to be considered for the purpose of the insurance claim. Since the transaction value is not material for determining the insurance claim, there is no requirement to adjudicate the admissibility or mode of proof of the sale receipt. 35 In the case of Oriental Insurance Co. Ltd. Vs. Suresh Arjun Karande II (1992) CPJ 484, it has been held under similar circumstances that liability of the Insurance Company shall not exceed the actual value of the vehicle including accessories irrespective of the estimate of the value of the vehicle made by the Insured. This observation was followed and reiterated in the case reported as United India Insurance Company Vs. M/s Saurabh Resorts Pvt. Ltd., III (2004) CPJ 16.
36 In view of the aforesaid circumstances, the actual value of the vehicle inclusive of electrical appliances shall be treated as Rs.1 Lakh. The plaintiff is entitled to the recovery of Rs. 1 Lakh as insurance claim.
37 The plaintiff has sought to recover the insurance claim from the insurance company as well as the insurance agent. SUIT NO.88/2003 21 However, defendant no.2, being the insurance agent cannot be held liable to make payment of the insurance claim as he has entered into the transaction only on behalf of the defendant no.1 and not in an independent capacity. As per Section 230 of the Contract Act, 1872, the agent is not personally bound by contracts entered into by him on behalf of the principal.
Therefore, the plaintiff is entitled to recovery of Rs.1 Lakh only against defendant no.1.
38 The plaintiff has also prayed for interest at the rate of 12% per annum. However, considering the totality of circumstances, and also decline in bank rates, it is deemed fit to grant pendente lite interest at the rate of 9% per annum from the date of institution till the date of decree and future interest at the rate of 6% per annum from the date of decree till the date of realization.
The issue is decided in favour of the plaintiff and against defendant no.1.
ISSUE NO. 2
"Whether the suit is barred by law of limitation? OPD"
39 The onus of proving this issue was on the defendant. SUIT NO.88/2003 22 Counsel for the defendant No.1 has argued that the suit is barred by limitation as it has been filed after three years from the date of rejection of claim of the plaintiff. Facts relevant for deciding this issue are not in dispute. As per document Mark-F, the claim was made on 3.7.1997. The claim was rejected by defendant no.1 on 30.12.1998 as admitted by DW-1 in his cross-examination dated 26.9.2005. Thereafter, the plaintiff filed a complaint before the Consumer Forum on 15.3.1999. The complaint was decided on 19.2.2003 by the order of District Consumer Disputes Redressal Forum by which it was held that the matter is a complicated one and that the plaintiff must approach the Civil Court. Copy of Consumer Forum was received on 28.4.2003. The present suit was filed on 7.5.2003. There is nothing to show that the complaint filed before the Consumer Forum was not bonafide. Hence, the plaintiff is entitled to the benefit of exclusion of the period consumed in prosecuting the complaint i.e. from 15.3.1999 to 28.4.2003 in accordance with Section 12 and 14 of Limitation Act, 1963. Excluding the abovementioned period, the suit stands instituted within the period of limitation. The issue is decided in favour of the plaintiff and against the defendant. SUIT NO.88/2003 23 ISSUE NO.3 "Whether the suit is not maintainable in view of the Section 64-VB of the Insurance Act? OPD."
40 The onus of proving this issue is upon the defendant. It is the case of the defendant that the suit is barred by Section 64VB of the Insurance Act since the defendant had not received the insurance premium on the date prior to the alleged theft. The alleged theft took place on the night intervening 29/30.6.1997 while the cheque by which premium was paid by the plaintiff was received in the office of defendant no.1 only on 30.6.1997, which is contrary to the provisions of Section 64VB of the Insurance Act, 1938.
41 Counsel for the plaintiff has urged that the cheque was submitted to the agent of defendant no.1 on 27.6.1997 itself. The defendant no.2 had accepted the cheque on behalf of the defendant no.1. Thus the defendant no.1 cannot be permitted to state that it had not received payment of the insurance premium prior to the incident of theft.
42 PW-1 has stated in his cross-examination that insurance premium was paid by cheque which was handed over to defendant SUIT NO.88/2003 24 no.2 in his capacity as agent of defendant no.1 on 27.6.1997. This is not in dispute. It is also not in dispute that on 27.6.1997, the defendant no.2 was acting as agent of defendant no.1 with the consent and knowledge of defendant no.1. The cheque had been accepted on behalf of defendant no.1. Deposit of cheque before defendant no.2 has the same effect as handing it over to defendant no.1. In this behalf reference may be made to Section 226 and 229 of the Contract Act, 1872. The default in remitting the cheque, if any, is on the part of defendant no.2. The plaintiff cannot be held liable for the fault, if any, of defendant no.2. For the said default, the defendant no.1 has been at liberty to proceed against defendant no.2.
It has been held in the cases of Life Insurance Corporation of India Vs. Imarti Devi, I (2007) CPJ 299 and Yellamma Vs. Bhy Sukhdev Singh, AIR 2006 Karnataka 240 that the agreement of insurance becomes complete from the date when the insurance agent receives the cheque and issues cover note. The operation of the agreement is not kept in abeyance till the encashment of the cheque by the Insurance Company. Hence, by mere delayed remission of cheque by defendant no.2, the suit SUIT NO.88/2003 25 cannot be held to be barred. The issue is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 4 (RELIEF) 43 In view of the aforesaid circumstances, the plaintiff is entitled to recovery of Rs.1 Lakh against defendant no.1 alongwith pendente lite interest at the rate of 9% per annum from the date of institution till the date of decree and future interest at the rate of 6% per annum from the date of decree till the date of realization. The suit is dismissed against defendant no.2. Costs of the suit are also awarded in favour of the plaintiff and against the defendant no.1. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the Open Court (ASHISH AGGARWAL) on 13th day of November, 2007 CIVIL JUDGE : DELHI