Mr. Anil U.Pandey                                ..    Petitioner 
                 Vs
The National Insurance Co. Ltd.             ..    Respondent

BEFORE : Hon'ble Mr. Justice K.S.Gupta, Presiding Member, Mr. B.K.Taimni, Member.

Dated: 30th August, 2004

JUSTICE K.S.GUPTA, MEMBER

     This revision is directed against the order dated 12-9-2001 of Consumer Disputes Redressal Commission, Maharashtra State dismissing appeal against the order 21-3-2001 of a District Forum whereby complaint filed by the petitioner was dismissed. 

     Complaint was filed, inter alia, alleging that in August 1997, petitioner approached respondent no. 2/Opposite Party no. 2 to arrange finance for a Tata Sumo to be purchased from M/s Autoriders (India) Ltd. and latter assured to arrange it from respondent no. 3/Opposite Party no. 3. On 5-9-1997, petitioner took delivery of a Tata Sumo from M/s Autoriders (India) Ltd. Petitioner handed over a cheque towards insurance premium to respondent no. 2 who was agent of respondent no. 1/opposite party no. 1. Covering note bearing no. 55013 was issued by respondent no. 1 through respondent no. 2 on 28-8-1997. It was further alleged that on 8-9-1997, when petitioner was returning from Shirdi to Bombay, Tata Sumo met with an accident. Concerned authorities were immediately informed of the accident. On claim being lodged, the respondent no. 1 repudiated it by the letter dated 18-9-1997 on the ground that neither any insurance policy had been issued nor premium received. Alleging deficiency in service, petitioner filed complaint which was contested by filing written version by respondent no. 1 and joint written version by respondent nos. 2 & 3.

     In the written version, respondent no. 1 denied liability for the amount claimed on the ground taken in repudiation letter dated 18-9-97. In their joint written version respondent nos. 2 & 3 alleged that in view of the cover note, it was the liability of respondent no. 1 to satisfy the claim of the petitioner. Since vehicle in question was hypothecated in respondent no. 3, the respondent no. 3 alone is entitled to recover the insurance claims. It was further alleged that on 30-12-1997, vehicle was repossessed and was thereafter sold for an amount of Rs. 1,25,000/-. After allowing credit for the payments made by petitioner and the said sale proceedings, amount of Rs. 1,76,000/- as on 22.12.98 was still due from the petitioner.

     While dismissing complaint/appeal fora below strongly relied strongly on the decision in Pradeep Kumar Jain Vs Citi Bank & Anr. (1996) 6 SCC 361.

     Having heard Shri H.H.Trivedi for petitioner and Shri Yogesh Malhotra for respondent no. 1, the main issue which arises for determination is whether petitioner is entitled to the amount claimed on the basis of cover note dated 28-8-97 handed over by respondent no. 2 to whom cheque towards insurance premium was given by the petitioner which was not encashed. Sub-Sections 1 & 2 of Section 64VB of Insurance Act 1938 which are material provide as under:

"1 No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.

2. For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer.

Explanation: Where the premium is rendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be.."

     At the cost of repetition it may be mentioned that the case as pleaded in complaint is that cheque towards premium amount was given by the petitioner to respondent no. 2. In written version respondent no. 1 has denied receipt of any such cheque. Joint written version filed by respondent nos. 2 & 3 is conspicuously silent in regard to respondent no. 2 having passed on that cheque to respondent no. 1. In its order (copy at page 25 to 35) the District Forum returned the finding that petitioner had failed to establish that the cheque given towards premium amount to respondent no. 2 was actually received by respondent no. 1 or that respondent no. 2 was the agent of respondent no. 1 - Insurance Co. and this finding was not disturbed by the State Commission in appeal filed by the petitioner. As may be seen from aforesaid Sub-Sections 1 & 2 of Section 64VB, unless the premium amount is received an insurer cannot assume any risk. Since the cheque for the premium amount did not reach the respondent no. 1, liability for payment of the amount claimed could not be legally fastened on respondent no. 1 on the basis of cover note dated 28-8-97. To be only noted that cheque was not got encashed by any of the parties. 

     That apart, it is admitted by the petitioner that said Tata Sumo was hypothecated by him with respondent no. 3 bank to secure repayment of the loan advanced and was reprocessed and thereafter sold by the bank. Respondent no. 3 alleges that 22-12-98 amount of Rs. 1,76,000 was outstanding against the petitioner. As ownership of vehicle vested with respondent no. 3, the petitioner did not have locus standi to file complaint as rightly held by the District Forum.

     Thus, Orders passed by the State Commission does not suffer from any illegality or jurisdictional error warranting interference in revisional jurisdiction under Section 21(b) of Consumer Protection Act 1986. Revision Petition is, therefore, dismissed. No order as to cost.