R R FINANCIAL CONSULTANTS LTD Vs. SUNIL MALHOTRA

JUDGEMENT

(1.) Appellant is engaged in the business of financing the vehicles. Respondent availed the service of the appellant to purchase a Santro Deluxe Car on hire purchase agreement. Insurance cover note was to be provided by the appellant in spite of having received requisite premium from respondent No.1 the cheque issued by the appellant in favour of Insurance Company bounced. During the period of insurance mentioned in the cover note the vehicle of respondent No.1 met with an accident. The claim of the respondent was repudiated by the Insurance Company (respondent No.2) on account of there being no concluded contract in existence. Vide impugned order dated 19.2.2003 the appellant alone has been held liable on account of deficiency in service in not making the payment of premium of insurance as per term of the contract. Feeling aggrieved the appellant has directed this appeal.

(2.) As a matter of fact appellant R. R. Financial Consultants Ltd. is the sub-agent of main financier respondent No.3 AVCO Financial Consultants Ltd. However, it was appellant, who arranged loan and completed all the formalities to get the car financed. Respondent paid a cheque of Rs.20030 on 8.10.1999 towards first instalment and further a cheque of Rs.13,477 dated 8.10.1999 towards insurance premium of the car. However on the instruction of the appellant the respondent did not fill the name of the drawee on the cheque as the appellant had arrangement with different insurance companies who are subsidiary of General Insurance Corporation. The financed car was insured with respondent No.2 United India Insurance Company Limited by the appellant and insurance cover note No.826422 dated 3.10.1998 for the value of Rs.3,73,000 was issued by respondent No.2. When the cover note was received by respondent No.1, it was noticed that premium amount was shown as Rs.11,965 whereas the charged amount was Rs.13,477. On the representation of the respondent No.1 the appellant refunded the balance amount of Rs.1,512 vide letter dated 24.12.1998 by way of cheque. The renewal notice dated 21.9.1999 was also received from the Insurance Company respondent No.2 for the renewal of the insurance of the said car.

(3.) Hardly few days before the expiry of the policy the car met with an accident on 6.10.1999. The FIR was lodged with the Police Station on the same day. The claim preferred with the Insurance Company was repudiated on the ground that the cheque given towards the premium of the insurance amount of the car against which the insurance cover note was issued was dishonoured on presentation and, therefore, now neither the cover note nor the policy was in existence. It is pertinent to mention that intimation about dishonouring of the cheque was never given either to the appellant or to respondent No.1 by the Insurance Company respondent No.2.