State Consumer Disputes Redressal Commission
National Insurance Company Limited vs Kanhaiya Lal D.A.V. (P.G.) College on 8 February, 2008
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRA DUN
REVISION PETITION NO. 03 / 2007
National Insurance Company Limited
through its Regional Manager, Regional Office,
56 Rajpur Road, Dehradun
......Revisionist
Versus
Kanhaiya Lal D.A.V. (P.G.) College
Roorkee, District Hardwar
through its Principal / Manager
.....Respondent
Sh. Sudhanshu Dwivedi, Learned Counsel for the Revisionist
None for Respondent
Coram: Hon'ble Justice Irshad Hussain, President
C.C. Pant, Member
Dated: 08/02/2008
ORDER
(Per: Justice Irshad Hussain, President):
Order under challenge in this revision petition was passed on 21.11.2006 by the District Forum, Hardwar on an execution application preferred by the revisionist - National Insurance Company Limited, for recovery of insured sum paid by it to the insured.
2. The brief facts of the case are that a student Sh. Manoj Kumar Saini was insured under the Vidyarthi Suraksha Durghatna Yojna and the premium paid by the insured to the Principal used to be remitted to the insurance company. Despite the payment of the premium by the insured, institution faulted in remitting the same in time and meanwhile, the insured student died in an accident. Insured's father alleging deficiency in service filed consumer complaint for recovery of the insured sum against the institution through Principal, which was made opposite party No. 1 and the insurance company, which was 2 impleaded as opposite party No. 2. The District Forum allowed the consumer complaint and directed the insurance company to pay the insured sum together with interest to the complainant. It was also ordered that the insurance company shall be free to recover such insured sum from opposite party No. 1. The District Forum decided this consumer complaint No. 39 of 2002 by order dated 26.09.2003. The order was challenged in separate appeals by the insurance company as well as by the Principal of the institution before the State Commission, Uttaranchal (now Uttarakhand), which dismissed both the appeals by order dated 19.03.2004.
3. After dismissal of the appeals, insurance company paid the insured sum with interest to the complainant and thereafter moved an execution application before the District Forum with a prayer that a recovery certificate be issued against the institution, so that the insurance company may receive the insured sum with interest paid to the complainant. The application was rejected by the District Forum by the impugned order dated 21.11.2006 by observing that such a prayer cannot legally be granted by the Forum and the insurance company is free to file a regular civil suit for recovery against the institution. Aggrieved, the insurance company preferred this revision petition.
4. We have heard the learned counsel for the revisionist and considered the submissions in the light of the legal aspects of the case. None appeared despite service on behalf of the institution - respondent. Learned counsel for the insurance company vehemently argued that the District Forum failed to exercise its jurisdiction vested in it by law by refusing to entertain the execution application and issue recovery certificate against the institution - respondent as provided under sub-section (3) of Section 25 of the Consumer 3 Protection Act, 1986. According to the learned counsel, the District Forum by order dated 26.09.2003, has held that the institution on account of its default to remit the premium, was liable to pay the insured sum and since taking into account the interest of the consumer and to avoid delay, the insurance company was directed to pay the insured sum with interest and to recover the same from the institution later on, and, as such, the order is required to be enforced as provided under Section 25 of the Act.
5. The submission made by the learned counsel carry conviction in view of the fact that by order dated 26.09.2003, which had been affirmed in the appeal as stated above, the institution - respondent was found to have made deficiency in service in not remitting the premium in time to the insurance company in its capacity as an agent of the insurance company. In other words, the institution had been held liable to pay the insured sum with interest, but in order to facilitate the early payment of the sum due, the insurance company was directed to pay it to the complainant. It need to be stated that Consumer Protection Act, 1986 is a beneficial legislation like that of the Motor Vehicles Act, 1988 and in cases, where the insured-owner of the vehicles have been held liable to pay the compensation to third party claimants in the event of motor vehicle accident on account of the vehicle being driven by a driver having a fake licence, the insurance company have been directed to pay the compensation to the claimant and thereafter to recover the amount from the insured. The authority on this point is the case of United India Insurance Co. Ltd. Vs. Lehru and Others; 2003 (3) SCC 338 = 2003 AIR SCW 1695. The ratio of the decision in this case was that liability of the insurance company towards third party does not get avoided even in a case, where the licence of the driver has been found to be fake and in the event of a direction to the insurance company to pay the compensation to the 4 claimant, the insurance company have been given option to recover the amount from the insured. For making recovery by the insurance company, separate civil suits are not filed, but recovery from the insured is being made by issuing recovery certificate by the Motor Accident Claims Tribunal. The decision of the Hon'ble Apex Court in the matter of National Insurance Co. Ltd. Vs. Baljeet Kaur and Others; 2004 (2) SCC 1, is also an authority on this point. On similar analogy, when the institution has made deficiency in service in not remitting the premium in time to the insurance company, the insured sum with interest paid by the insurance company in compliance of the order of the District Forum, the amount can very well be recovered by issuing a recovery certificate by the District Forum itself as provided under Section 25 of the Consumer Protection Act, 1986, in order to serve the beneficial object of the legislation.
6. The above aspects of the matter were not taken note of by the District Forum in considering the execution application preferred by the insurance company in order to have the amount paid to the complainant after recovery from the institution so as to make compliance of its own order passed on merit on 26.09.2003 and incorrectly held that the insurance company was free to file regular civil suit for recovery of the amount against the institution - respondent. The District Forum, thus, failed to exercise the jurisdiction vested in it by law and, therefore, the impugned order cannot legally be maintained.
7. For the reasons aforesaid, revision petition succeed and is hereby allowed. Order dated 21.11.2006 of the District Forum is set aside. Execution Application, thus, stand restored at its original number 32 of 2006. The District Forum shall issue recovery certificate against the institution - respondent, as prayed for by the 5 insurance company, under the provision of sub-section (3) of Section 25 of the Consumer Protection Act, 1986 and shall dispose of the execution application No. 32 of 2006 in accordance with law. No order as to cost.
(C.C. PANT) (JUSTICE IRSHAD HUSSAIN) Kawal