State Consumer Disputes Redressal Commission
Oriental Insurance Co. Ltd. vs Smt. Yashoda Devi & Another on 30 November, 2015
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRADUN
FIRST APPEAL NO. 353 / 2010
1. State of Uttarakhand
through District Magistrate, Chamoli
2. Department of Education
through Basic Shiksha Adhikari
Gopeshwar, Chamoli
......Appellants / Opposite Party Nos. 1 and 2
Versus
1. Smt. Yashoda Devi W/o late Sh. Madan Singh Rana
R/o Village Sonla, Patwari Vrit Saikot
Tehsil and District Chamoli
......Respondent No. 1 / Complainant
2. The Oriental Insurance Company Limited
through Branch Manager, Branch Office Devi Road
Kotdwar, District Pauri Garhwal
3. State Bank of India
through Branch Manager, Gopeshwar, Chamoli
......Respondent Nos. 2 and 3 / Opposite Party Nos. 3 and 4
Sh. Ashok Dimri, A.D.G.C. (Civil), Dehradun, Learned Counsel for the
Appellants
Sh. Pradeep Bartwal, Learned Counsel for Respondent No. 1
Sh. M.K. Kohli, Learned Counsel for Respondent No. 2
Sh. S. Parashar, Learned Counsel for Respondent No. 3
AND
FIRST APPEAL NO. 06 / 2011
The Oriental Insurance Company Limited
Branch Office, Devi Road, Kotdwar
District Pauri Garhwal through Senior Divisional Manager
The Oriental Insurance Company Limited
47, Rajpur Road, Dehradun
......Appellant / Opposite Party No. 3
Versus
1. Smt. Yashoda Devi W/o late Sh. Madan Singh Rana
R/o Village Sonla, Patwari Vrit Saikot
Tehsil and District Chamoli
......Respondent No. 1 / Complainant
2. State of Uttarakhand
through District Magistrate, Chamoli
2
3. Department of Education
through Basic Shiksha Adhikari
Gopeshwar, Chamoli
4. State Bank of India
through Branch Manager, Gopeshwar, Chamoli
......Respondent Nos. 2 to 4 / Opposite Party Nos. 1, 2 and 4
Sh. M.K. Kohli, Learned Counsel for the Appellant
Sh. Pradeep Bartwal, Learned Counsel for Respondent No. 1
Sh. Ashok Dimri, A.D.G.C. (Civil), Dehradun, Learned Counsel for
Respondent Nos. 2 and 3
Sh. S. Parashar, Learned Counsel for Respondent No. 4
Coram: Hon'ble Mr. Justice B.S. Verma, President
Mr. D.K. Tyagi, H.J.S., Member
Mrs. Veena Sharma, Member
Dated: 30/11/2015
ORDER
(Per: Justice B.S. Verma, President):
These two appeals, one by the State of Uttarakhand and another by The Oriental Insurance Company Limited, filed under Section 15 of the Consumer Protection Act, 1986, arise out of the order dated 30.09.2010 passed by the District Forum, Chamoli in consumer complaint No. 64 of 2005. By the order impugned, the District Forum has allowed the consumer complaint and directed the opposite party No. 2 - Department of Education to pay sum of Rs. 5,000/- to the complainant towards mental agony and Rs. 5,000/- towards litigation expenses within a period of one month from the date of the order, failing which the complainant was also held entitled to interest @8% p.a. on the above amount from the date of filing of the consumer complaint till the date of payment. By the impugned order, the District Forum has also directed the opposite party No. 3 - The Oriental Insurance Company Limited to pay the insured amount of Rs. 80,000/- to the complainant together with interest @8% p.a. from the date of filing of the consumer complaint till payment. Since both 3 the appeals arise out of the same impugned order passed by the District Forum, hence these are decided by this common order.
2. Briefly stated, the facts giving rise to the present appeals are that the complainant filed a consumer complaint before the District Forum, Chamoli, alleging therein that her husband was posted as Officiating Principal in Junior High School, Dasholi, District Chamoli and was covered under the Nagrik Suraksha Policy. It was alleged that the amount of premium was to be deducted from the salary of the deceased and thereafter was to be remitted to the insurance company. The deceased succumbed to the injuries in a road accident on 17.11.2003. The complainant, the wife of the deceased, lodged the claim for insured amount, which was repudiated by the insurance company on the ground that on the date of the accident, the deceased was not covered under the policy and the amount of premium was received on 30.04.2004.
3. The consumer complaint was resisted by the opposite party No. 3 - insurance company by filing the written statement, alleging therein that there was no valid insurance of the deceased on the date of the accident and the policy of insurance was not effective on the date of the accident and since the premium was received on 30.04.2004 and the accident took place on 17.11.2003, therefore, no deficiency in service was made by the insurance company and the claim was rightly repudiated.
4. The opposite party Nos. 1 and 2 - State of Uttarakhand and Department of Education filed written statement and stated that the claim form submitted by the complainant was forwarded to the insurance company for payment, but the insurance company did not make the payment.
45. The consumer complaint was decided by the District Forum vide order dated 02.02.2007, which was challenged by the insurance company before this Commission by filing appeal. The appeal filed by the insurance company was allowed by this Commission vide order dated 23.11.2009 and the case was remanded back to the District Forum for decision afresh in accordance with law and the complainant was directed to implead State Bank of India, Chamoli as party to the consumer complaint.
6. After remand of the case, the complainant impleaded State Bank of India, Gopeshwar, Chamoli as opposite party No. 4 in the consumer complaint. The opposite party No. 4 filed written statement before the District Forum, wherein it was stated that an account was opened in the name of insurance company bearing Current Account No. 01000055305 and an amount of Rs. 3,15,070/- was deposited in the said account on 09.09.2003 and thereafter on 01.10.2003, a draft was issued in the name of the insurance company and only the above two entries exist in the said account and the liability to pay the insured amount is that of the insurance company.
7. Before the District Forum, the complainant as well as the opposite parties led their evidence by way of affidavit and witnesses were also cross-examined. After hearing the parties and perusal of the entire documentary evidence on record, the District Forum has allowed the consumer complaint vide impugned order dated 30.09.2010 in the above manner. Aggrieved by the said order, the present appeals have been preferred.
8. The insurance company has preferred the appeal mainly on the ground that it was clearly established on record that the premium was 5 received on 30.04.2004 and the accident had taken place on 17.11.2003, therefore, no contract of insurance was in existence on the date of the accident. The District Forum fell in error by not considering Section 64VB of the Insurance Act, 1938. The District Forum has not considered that as per the agreement executed between the insurance company and the Department of Education, the draft of the premium amount was to be sent to the insurance company by the Department of Education and not by the bank itself. It is an admitted case that the duplicate draft of the amount of premium was prepared on 02.02.2004 and received by the insurance company on 30.04.2004. It was specifically alleged that the original draft could not be encashed on account of deficiency on the part of the Department of Education and this was the reason that application for issuance of duplicate draft was submitted to the bank on behalf of the Department of Education and hence it was clear that on the date of the accident, the amount of premium was not with the insurance company and, as such, it can not be said that the deceased was insured on the date of the accident or there was a valid contract of insurance. The District Forum has also not considered the Government Order No. 50/Madhyamik/2003 dated 06.05.2003 and the fault, if any, is of the Department of Education and not of the insurance company.
9. Sh. M.K. Kohli, learned counsel appearing on behalf of the insurance company, has vehemently urged that in the case at hand, certain facts are admitted between the parties and the said facts were not disputed by the parties before the District Forum. The said facts are that under the Government Order dated 06.05.2003, the insurance company and the Department of Education were jointly liable to enforce the scheme. It is also admitted that from the salary of the employees for the month of August, 2003, the amount of premium amounting to Rs. 3,15,070/- was deducted and which was deposited 6 with the bank in the account of the insurance company on 09.09.2003 and the deceased died on 17.11.2003 after deposit of the premium in the account. There is also no dispute with regard to the fact that the earlier draft which was prepared in the name of the insurance company, was for whatsoever reason not sent to the insurance company and thereafter a duplicate draft was prepared, which was received by the insurance company on 30.04.2004. This fact was also admitted by Sh. Hukum Singh Negi, witness of the Department of Education, in his cross-examination before the District Forum. Sh. D.S. Tomar, Branch Manager, State Bank of India, Gopeshwar, Chamoli, has stated in his cross-examination before the District Forum that application for issuance of duplicate draft was made on 01.10.2003 and the date of duplicate draft was 31.01.2004. As per clause (E) of the agreement executed between the Department of Education and the insurance company, the premium under the policy was to be paid in advance. Admittedly, the draft was prepared on 31.01.2004 and the policy was issued on 03.02.2004 valid upto 02.02.2005. It was also contended that when this fact came to the notice of the insurance company that the deceased had died, the premium amount was refunded by the insurance company to the Department of Education. Lastly, it was contended that since the first draft prepared by the bank was not encashed and later on, a duplicate draft was prepared after the date of the accident, therefore, no amount of premium was lying with the insurance company on the date of the accident and, thus, the insurance company was not at all liable to pay any compensation. The District Forum fell in error by fastening the liability upon the insurance company.
10. Sh. Ashok Dimri, A.D.G.C. (Civil), Dehradun, learned counsel appearing on behalf of the State of Uttarakhand and Department of Education and Sh. Pradeep Bartwal, learned counsel for the 7 complainant, have contended that the insurance company has written a letter dated 25.07.2003 to Director of Education, Basic Evam Madhyamik Shiksha, Uttaranchal and others including all District Basic Shiksha Adhikari, Uttaranchal in respect of implementation of Nagrik Suraksha Policy for the benefit of teachers / employees working in Department of Education. Para 3 of the said letter is reproduced below:
"3- d`i;k fofnr gks fd leLr foÙk vf/kdkjh @ dks"kkf/kdkjh ¼jkT; csfld ,oa ek/;fed½ ç/kkukpk;Z @ ç/kkuk/;kid vius gh gLrk{kj ls vius fo|ky; ds lEcfU/kr cSad esa ,d cpr vFkok pkyw [kkrk [kksyus dk d"V djsxs]a tks fd "fn vksfj,UVy bU";ksjsal dEiuh fyfeVsM" ds uke ls gksxk] rFkk mlesa i= O;ogkj dk irk 'kk[kk çcU/kd] fn vksfj,.Vy bU";ksjsal dEiuh fy0 nsoh jksM+ dksV}kj&246149] ftyk ikSM+h x<+oky vafdr djsxsA f"k{kdksa @ f"k{k.ksÙkj deZpkfj;ksa ds osru ls dh x;h dVkSrh }kjk lEiw.kZ ,df=r /kujkf"k dks mDr cSad&[kkrs esa vfoyEc tek fd;k tk;sxk] ftlls chek vf/kfu;e dh /kkjk 64 ¼oh½ ch0 dk vuqikyu fd;k tk lds tks fd nkok fuLrkj.k esa foyEcrk dks jksdx s k] vFkkZr ge fdlh Hkh ykHkkFkhZ @ deZpkjh dk nkok fuLrkfjr rHkh dj ldrs gS tc mldk okafNr chek & ç"kqYd gesa vfxze çkIr gks x;k gks] gekjh chek dEiuh ds uke ls [kksys x;s [kkrs esa vkids }kjk tek fd;s x;s çhfe;e dks ;g ekuk tk;sxk fd gesa rn&fnukad dks gh çhfe;e vfxze çkIr gks x;k gS ;fn cSad 8 & [kkrk [kksyus esa dksbZ dfBukbZ eglwl djsa rc gesa vo'; fy[ks ;k nwjHkk"k }kjk lwfpr djsa rFkk cSad [kkrk [kksyus ls lEcfU/kr çi=ksa dks Hkh lkFk es layXu djds Hkstus dks d"V djs]a ftudks ge gLrk{kj djds vkidks okil Hkstxs] ftlls vki cSad esa [kkrk [kksy ldsaA"
11. It was also contended that in view of the above condition mentioned in the letter dated 25.07.2003 issued by the insurance company itself, the arguments advanced on behalf of the insurance company do not provide any help to the insurance company. In view of the above letter, it is an admission on the part of the insurance company that as and when the premium is deducted and deposited in the account of the insurance company, the amount deposited shall be treated as receipt of advance premium. So far as the argument in respect of draft is concerned, the first draft prepared could not be sent to the insurance company and thereafter a duplicate draft was prepared and was sent to the insurance company, however, as per the relevant Government Order, the draft was to be remitted to the insurance company by the bank itself. This fact has also come in evidence.
12. Having heard learned counsel for the parties and after perusal of the record, the controversy to be decided is whether the amount of premium be treated as advance payment as and when the same was deposited in the account of the insurance company with the bank or the payment of premium to the insurance company would be treated when the duplicate draft was received by the insurance company and whether the Department of Education has rightly been levied compensation and litigation expenses by the District Forum.
913. We have perused the Government Order referred above and agreement executed between the insurance company and Director of Education on the basis of the said Government Order as well as the letter dated 25.07.2003 written by the insurance company to the Director of Education and other concerning officers of the Department of Education.
14. Sh. M.K. Kohli, learned counsel for the insurance company vehemently urged before us that unless and until the premium is not received in advance, in view of clause (E) of the agreement, the risk will not commence and it is an admitted case that the draft of the premium was received by the insurance company after the date of the accident. Therefore, there is no liability of the insurance company to pay compensation.
15. The argument of the learned counsel for the insurance company can not be accepted for the simple reason that there was a specific provision in the Government Order that as and when the amount of premium is deposited in the account of the insurance company, the employees whose premium have been deducted from their salary and deposited in the account, will be entitled to the benefit of insurance policy known as Nagrik Suraksha Policy. This fact was also admitted by the insurance company in their letter dated 25.07.2003 referred in paragraph No. 10 of the order and wherein it was specifically mentioned that as and when the premium is deposited in the account of the insurance company with the bank, the same shall be treated as advance premium. There is no dispute with regard to the fact that the account was opened in the name of the insurance company prior to the date of the accident. It is also admitted that the amount of premium was deducted from the salary of the employees and the same was deposited in the account of the insurance company before the date of 10 the accident. Mere receipt of the draft by the insurance company after the date of the accident in the given facts and circumstances of the case, will not absolve the insurance company from its liability for the reason that the amount of premium was to be remitted by way of draft to the insurance company by the bank, as has been mentioned in the Government Order. Therefore, we are of the considered view that the District Forum has rightly held that the insurance company is liable to pay the insured amount. Thus, the appeal filed by the insurance company has no force and is liable to be dismissed.
16. So far as the appeal filed by the State of Uttarakhand and Department of Education is concerned, the District Forum has also rightly imposed the amount of compensation on the Department of Education on the ground that the draft which was prepared in the name of the insurance company, was not sent to the insurance company in time and the officials of the Department of Education acted in a negligent manner. Although as per the Government Order, it was the liability of the bank to send the draft to the insurance company, but if the officials of the Department of Education had collected the draft from the bank without any authority, the same should have been remitted to the insurance company well in time. Since the draft was not remitted to the insurance company and hence a duplicate draft was got prepared, which was sent by the bank to the insurance company. The negligence on the part of the officials of the Department of Education has created controversy in the matter. Therefore, the District Forum has also rightly imposed compensation and cost against the Department of Education. Thus, the appeal filed by the State of Uttarakhand and Department of Education is also liable to be dismissed.
1117. For the reasons aforesaid, both the appeals are dismissed. Costs of the appeals made easy.
18. Let the copy of the order be kept on the record of First Appeal No. 06 of 2011.
(MRS. VEENA SHARMA) (D.K. TYAGI) (JUSTICE B.S. VERMA) K