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PETITIONER: PRADEEP KUMAR JAIN

       Vs.

RESPONDENT: CITIBANK & ANR.

DATE OF JUDGMENT:       12/08/1999

BENCH: S.R.Babu, S.Saghir Ahmad

JUDGMENT:

RAJENDRA BABU, J.  :

     The  appellant  borrowed  money after  making  certain initial  payments  for the purchase of a car from the  first respondent-Bank.   He also obtained in respect of the car  a policy  of  insurance  from the Oriental  Insurance  Company covering  the  period from January 21, 1989 to  January  20, 1990  and  the  policy  was endorsed to  indicate  that  the subject  of hire purchase would be payable by the Bank.  The appellant  issued 36 cheques in favour of the Bank, each  of them  for a sum of Rs.  2,316/- towards monthly instalments, to  pay off the entire loan.  He also issued two cheques  in favour  of  the Oriental Insurance Company  Limited  towards insurance  premium  for two years beyond January  20,  1990. The appellant claimed that in view of the assurance given by the  Bank  that they would take policies for subsequent  two years  beyond  January  21, 1990, the two cheques  had  been issued by him and the policy was to be automatically renewed in  the name of the appellant with hire purchase endorsement in  favour of the Bank.  The appellant took delivery of  the car on March 8, 1989.  On August 15, 1990 when the appellant was  driving  the  car along with five inmates met  with  an accident on the Delhi-Jaipur National Highway.  Not only his car  was damaged but Shri R.D.  Jain, Smt.  Madhu Jain, Smt. Rukmani  Jain, Master Ankit Jain and Master Rahul Jain,  all occupants of the car, sustained injuries and, later on, they succumbed  to the same.  The appellant was under a shock for quite  sometime and on June 5, 1991 instructed the Bank  not to  encash the cheques towards instalments, to get the claim settled   from   the  insurance   company  and  to   provide particulars  of  insurance for the period from  January  21, 1990  to  January  20, 1991.  The Bank did not  reply.   The appellant claims that the Bank had grievously neglected duty in  insuring the vehicle.  The appellant made a claim before the  National  Consumer Disputes Redressal  Commission  (for short the Commission) covering the loss of the car as well as  damages payable towards those who died in the  accident. The  complaint  before  the  Commission  was  based  on  the deficiency  in  service on the part of the first and  second respondents inasmuch as he had suffered a loss to the extent of  Rs.  1,55,000/- being the market value of the car on the date  of the accident and he was likely to be fastened  with

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the  liability of the third party claims to the tune of  Rs. 18  lakhs filed by the legal representative of the  deceased occupants  of  the  car  before the  Motor  Accident  Claims Tribunal,  Rewari  and  to keep  the  appellant  indemnified against  all  such claims.  He also claimed a sum of Rs.   1 lakh  for  mental agony and suffering caused to him  due  to gross  negligence of the opposite parties to discharge their services.

     The  Commission,  however, felt that the  question  of payment  of compensation arising out of fatal accident would fall  within the ambit of Section 165 of the Motor  Vehicles Act,  1988  (hereinafter  referred  to as  the  Act),  and following   the   decision  of   this  Court  in   Chairman, Thiruvalluvar   Transport  Corporation  v.    The   Consumer Protection  Council,  JT 1995 (2) SC 441, did not advert  to the  allegations or material on record in that regard.   The Commission  also noticed that a claim by the legal heirs  of the  deceased  occupants  had already been made  before  the appropriate  Tribunal.   Thus the Commission refrained  from going  to  the liability of the insurer for the third  party claims or grant any relief to the appellant.

     On  the  question  of the manner in  which  the  first respondent-Bank  treated  the two cheques, the stand of  the Bank  is  that  it  may  be   assumed  for  the  purpose  of proceedings before the Commission without prejudice to their rights  in  other proceedings that the premium cheques  were not  delivered  by  the City Bank to the  insurance  company although undertaken by the City Bank and thus there has been negligence  on  the  part  of the City  Bank  and  there  is deficiency  of service.  Therefore, the Commission took  the view that the loss payable by the insurer arising out of the accident to the vehicle is Rs.  76,990/- on the basis of the sum assured for the first year less 10% depreciation for one year  and ordered accordingly.  The Commission proceeded  on the  basis that if the first respondent had not neglected in its duty to take the renewal of the policy for the next year and  had, in fact, got the policy renewed then the insurance company  would  have settled the claim within  a  reasonable period  and thus the concession made by the first respondent would  have to be taken to its logical end.  The  Commission passed an order to that effect.

     In  this Court the contention put forth before us  now in  this appeal is that the Commission should have proceeded further and held that the Bank is liable for damages payable by  the  appellant for want of insurance of the  vehicle  as determined  by the Motor Accident Claims Tribunal.  Inasmuch as  insurance  policy had not been taken out, the  appellant has  been  left high and dry and, therefore, he had to  meet that damage.

     Under Section 146 of the Act there is an obligation on the  owner  of a vehicle to take out an insurance policy  as provided  under  Chapter XI of the Act.  If any  vehicle  is driven  without  obtaining  such an insurance policy  it  is punishable  under Section 196 of the Act.  The policy may be comprehensive  or  only covering third parties or  liability may  be  limited.   Thus when the obligation  was  upon  the appellant  to  obtain such a policy, merely by passing of  a cheque to be sent to the insurance company would not obviate his liability to obtain such policy.  It is not clear on the record as to the nature of the policy that had been obtained by  the appellant earlier when he purchased the vehicle  and

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which  was to be renewed from time to time.  It is also  not clear  whether  even  in  the   case  of  renewal,  a  fresh application  has  to be made by the appellant or on the  old policy  itself an endorsement would have been made.  In  the absence  of  such material on record, and the nature of  the insurance  policy  or any anxiety shown by the appellant  in obtaining  the  policy  as  he could not  ply  such  vehicle without  such an insurance policy being obtained, he  cannot claim  that merely because he had passed on the cheques, the entire  liability  to pay all damages arising would be  upon the first respondent.

     In  the  case  of life insurance  policy  certain  sum agreed  to be paid by the insurance company in the event  of the  death  of  the  insured or  a  contingency  arising  as indicated  in  the  policy.  The obligation is then  on  the insured to pay the premiums periodically.  There is no other obligation  upon  him.  In the case of a motor vehicle,  the risk  to be covered is not only in respect of a vehicle  but also  towards  the injury to others or damage caused to  the property arising out of an accident.  In such an event, when the  policy is renewed or a fresh policy is applied for,  an application  has  to  be  given and it is  to  be  indicated whether  any claim had been made in the previous year or not and to furnish appropriate material as regards the valuation of  the vehicle.  It can also be made clear as to the nature and  extent  of  the risk covered whether it is  only  third party  or comprehensive or otherwise.  The obligation  under the  Act  is only at least to cover third party risk.   Thus mere  payment  of premium could not result in  an  automatic renewal  of the policy.  In the circumstances, we find  that the  appellant  also had certain duties to discharge in  the matter  of obtaining insurance policy and cannot merely  put the blame on the first respondent.

     In  the circumstances of the case, we find that  there is  not  enough material to grant relief sought for  by  the appellant  and,  therefore, we reject the claim made by  the appellant  in  so far as payment of damages awarded  by  the Tribunal  in the accident claim is concerned.  In so far  as the  claim  made  and  settled   before  the  Commission  is concerned,  the  same proceeded on the basis  of  concession and,  therefore,  we  do  not think that  can  be  made  the foundation  to  grant  the  relief  as  sought  for  by  the appellant.   Thus appeal stands dismissed without any  order as to costs.