Monday, 17 June 2024

What action Insurance Company can take if its agent has issued fake insurance policy?

The Learned Tribunal after considering the evidence on

record has reasoned in its impugned Judgments as follows;

MAC App. Nos.07, 08 and 09 of 2020 10

“27. Shri Bikash Roy Pradhan, the Branch

Manager of the Opposite Party No. 3 clearly admitted

that Shri Rajen Tamang is the authorized agent of

Opposite Party No.3. Exhibit-10 is the certified copy of

the Insurance Policy of the vehicle. In Exhibit-10, in

place of the details of the agent/Broker, the name

of Shri Rajen Tamang with his agent code number as

„BA000015623‟ has been clearly mentioned. Exhibit-

10 was served upon the Opposite Party No.3. The

Opposite Party No. 3 failed to produce and examine

Shri Rajen Tamang, Authorized Agent of Oriental

Insurance Company Limited (Opposite Party No. 3)

despite several opportunities having been given to it.

By perusal of Exhibit -10, it is difficult to identify the

fake and the genuine policy. There is no evidence

produced by the Opposite Party No.3 that the

Opposite Party No.1 owner of the vehicle had

involved himself or influenced the said Shri Rajen

Tamang to illegally issued the fake insurance policy to

him. The Opposite Party No. 3 has not exhibited any

complaint/document against the Opposite Parties No.

1, 4 or Shri Rajen Tamang, authorized agent of

Opposite Party No. 3 stating that the Opposite Parties

No.1 and 4 had obtained a fake insurance policy of

the Oriental Insurance Company Limited or Shri Rajen

Tamang handed over the fake insurance policy to the

Opposite Parties Nos.1 and 4 and the same was in

their personal knowledge. There is no evidence to the

effect that the Opposite Parties No.1 and 4 had

obtained fake insurance policy in collusion with the

staff or agent of Opposite Party No.3. From evidence

on record, no apparent role appears to have been

played by the owner in obtaining the fake insurance

policy. It is very difficult to pin point who is

responsible for issuance of the fake insurance policy.

It is unbelievable that an insured would obtain a fake

certificate by paying the same premium at his own

risk and peril. The Opposite Party No.4 Shri Biren

Gurung further establishes that in order to obtain

Exhibit-10, Opposite Party No.1 had given him ₹

14,500/. He personally knows Rajen Tamang as he

is the agent of the Opposite Party No.3. Opposite

Party No.4 paid a sum of ₹ 14,500/- to Rajen

Tamang, agent of the Opposite Party No. 3 through

one Palden Bhutia and Rajen Tamang handed over

Exhibit-10 to Opposite Party No.4. Opposite Party No.

4 further establishes that as per the direction of

Rajen Tamang, he handed over premium amount to

Shri Palden Bhutia. On the facts and circumstances of

the case at hand, it cannot be held that Opposite

Party No.1 (Owner of the vehicle) has any role to

play in issuance of the fake policy, on the other hand

evidence on the record cast suspicion towards the

authorized agent of the insurance company. Since,

Opposite Party No. 3 has admitted that Shri Rajen

Tamang is its authorized agent, there is master and

servant relation between the Opposite Party No.

3 and the said Shri Rajen Tamang. From this angle

MAC App. Nos.07, 08 and 09 of 2020 11

also Opposite Party No. 3 is liable for the act of the

said Rajen Tamang. However, the Opposite Party No.

3 is as liberty to conduct an inquiry against its agent

Rajen Tamang in respect of issuance of Exhibit 10 to

find out the actual fact as narrated supra and if found

guilty, it can recover the amount paid to the Claimant

by way of the Award in the instant claim petition from

the said Rajen Tamang.” [emphasis supplied]

13. The observations of the Learned Tribunal in arriving at

its conclusions is perfectly reasoned and brooks no interference.

{Para 12}

 THE HIGH COURT OF SIKKIM : GANGTOK

(Civil Appellate Jurisdiction)

MAC App. No.07 of 2020

The Branch Manager, Oriental Insurance Company Limited Vs

 Padam Bahadur Rai and Others

Coram: Meenakshi Madan Rai, J.

DATED : 2nd December, 2022.

1. These three Appeals, being MAC App. No.07 of 2020,

MAC App. No.08 of 2020 and MAC App. No.09 of 2020, are being

disposed of by this common Judgment.

MAC App. Nos.07, 08 and 09 of 2020 2

2(i). The Learned Motor Accidents Claims Tribunal

(hereinafter, “the Learned Tribunal”) in MACT Case No.01 of 2017

(MAC App. No.07 of 2020), awarded compensation of ₹

55,93,328/- (Rupees fifty five lakhs, ninety three thousand, three

hundred and twenty eight) only, to the Claimant, Respondent No.1

herein, with interest @ 10% per annum, from the date of filing of

the Claim Petition till full and final payment.

(ii) In MACT Case No.03 of 2017 (MAC App. No.08 of

2020), an Award of ₹ 4,16,000/- (Rupees four lakhs and sixteen

thousand) only, was granted to the Claimant, Respondent No.1

herein, with the same rate of interest supra, from the date of filing

of the Claim Petition till full and final payment.

(iii) In MACT Case No.04 of 2017 (MAC App. No.09 of

2020), the compensation amount of ₹ 6,28,968/- (Rupees six

lakhs, twenty eight thousand, nine hundred and sixty eight) only,

was granted to the Claimant, Respondent No.1 herein.

(iv) In all three matters supra, the Insurance Company,

Opposite No.3 (Appellant herein), was directed to pay the

compensation.

3. The only point pressed in these Appeals is that, the

Motor Insurance Certificate-cum-Policy Schedule, Exhibit 10 in MAC

App. Nos.07 and 08 of 2020 and Exhibit 11 in MAC App. No.09 of

2020 (hereinafter, referred to “Exhibit 10”, both documents being

one and the same), relied on by the Claimant/Respondent No.1 is a

fake document, on the basis of which, liability was nevertheless

fastened upon the Appellant Company by the Learned Tribunal.

Hence, the assailed Judgments and Awards of the Learned Tribunal

MAC App. Nos.07, 08 and 09 of 2020 3

in MACT Case No.01 of 2017, MACT Case No.03 of 2017 and MACT

Case No.04 of 2017, be set aside.

4. Learned Counsel for the Appellant contended that the

Insurance Policy relied on by the Claimant-Respondent No.1 is a

fake document and was not issued by the Appellant Company.

That, the Branch Code Number of the Appellant Company is

“313203”, which is always cited prior to the Policy Number, issued

to the concerned person, e.g., “313203” followed by the Policy

Number allotted to the insured. That, the Branch Code Number

„313203‟ pertains to Sikkim, whereas Exhibit 10 does not reflect

this number nor does it precede the Insurance Policy Number

allotted to the insured. Instead, an alien number is reflected before

the Policy Number, viz., “313719”. It was admitted however that

the document did reflect the Sikkim Code “313203” at the “Issue

Office Code”. That, Exhibits „C1‟ and „C2‟ relied on by the Appellant

Company are Computer generated copies of original Insurance

Certificates, issued to the Insurers, which indicate the correct

Format of an original Insurance Policy. That, admittedly Rajen

Tamang, the person whose name is reflected in the alleged fake

Policy is indeed the Agent Broker of the Appellant Company duly

authorised to collect insurance premium from the insurers, but the

Policy purported to have been issued by him is a fake document.

That, in light of this fact, the Learned Tribunal ought to have

rejected the document and dismissed the Claim Petitions.

Consequently, these Appeals be allowed.

5. Per contra, it was contended by Learned Counsel

appearing for the Claimant-Respondent No.1 that the allegation

pertaining to a fake document is not borne out by the records, in

MAC App. Nos.07, 08 and 09 of 2020 4

addition to which, the Appellant Company failed to produce their

authorised Agent Rajen Tamang as a witness, to establish the

allegation that the document was a fake document, despite several

opportunities afforded to the Appellant, by the Learned Tribunal.

That, Bikash Roy Pradhan, the witness of the Appellant, under

cross-examination, admitted that Rajen Tamang was their

authorised Agent and his name appears on Exhibit 10 as also the

correct Office Code. The Agent was authorised to collect premium

amounts from the insured and deposit it in their Branch and collect

the Insurance Policy pertaining to the premium received. That, the

witness also admitted that he had not filed any document to

substantiate the fact that third party premium is fixed Region wise

despite such assertion. That, admittedly the Insurance premium

may vary from year to year depending upon the age of the

vehicles, its seating capacity and other taxes. As no error

emanates in Exhibit 10 nor was it established to be a fake

document, its issuance and acquisition, alleged to be mala fide are

unproved, hence the Appeals be dismissed.

6. Learned Counsel for the other Respondents endorsed

the submissions put forth by Learned Counsel for the Claimant-

Respondent No.1 and had no independent submissions to make.

7(i). The Claim Petitions were filed before the Learned

Tribunal on account of a Motor vehicle accident on 06-01-2016,

involving a “Mahindra Bolero”, bearing No.SK 04 J 0064, at “Deorali

Dara”, Namthang, South Sikkim, at around 0900 hours, in the

vehicle owned by Opposite Party No.1 (the Respondent No.2

herein).

MAC App. Nos.07, 08 and 09 of 2020 5

(ii) In MACT Case No.01 of 2017 (MAC App. No.07 of

2020), the accident claimed the life of one Supriya Rai, aged about

34 years, a Graduate Teacher by occupation in the Government of

Sikkim, receiving a monthly income of ₹ 38,287/- (Rupees thirty

eight thousand, two hundred and eighty seven) only.

(iii) In MACT Case No.03 of 2017 (MAC App. No.08 of

2020), the deceased was one Dhan Maya Tamang, aged about 71

years, by occupation of housewife, with a monthly income of

₹ 6,000/- (Rupees six thousand) only.

(iv) In MACT Case No.04 of 2017 (MAC App. No.09 of

2020), the deceased was Repose Tamang, aged 70 about years, a

retired Government servant, with a monthly income of ₹ 9,803/-

(Rupees nine thousand, eight hundred and three) only.

(v) After framing three Issues for determination, upon

consideration of the entire evidence on record, the assailed

Judgments and Awards were pronounced by the Learned Tribunal.

8. It is pertinent to mention that the records of the

Learned Tribunal reveal that the Appellant Company had been

granted several dates to enable them to produce their Agent, Rajen

Tamang as their witness. Initially, he was not listed as a witness of

the Appellant, however at a later stage they opted to drop the

listed witness, one Bindu Arjen and in her stead sought to examine

Rajen Tamang. The Learned Tribunal vide its Order dated 14-03-

2019 permitted their plea. However, pursuant to the Order,

despite several opportunities by way of adjournments, being

granted to the Appellant to produce the said witness, they were

unable to do so. On 04-04-2019, the Appellant again expressed its

inability to produce the witness, on grounds of his ill-health and

MAC App. Nos.07, 08 and 09 of 2020 6

furnished photocopies of medical documents to support its prayer.

The Learned Tribunal unimpressed with the documents concluded

that the documents did not mention that the illness of the witness

kept him from appearing in Court. It was also observed that

despite several opportunities afforded to the Appellant they had

failed to produce the witness, hence the evidence of the witness

was dispensed with. Thus, it transpires that the Appellant failed to

produce the one indispensable witness who in all probability could

have clarified the Appellant‟s position vis-à-vis Exhibit 10.

9. Although several grounds were urged in the averments

by the Appellant in the Memorandum of Appeal before this Court,

however, Learned Counsel for the Appellant during her verbal

arguments contended that the only relief pursued before this Court

pertained to the Insurance Policy being fake and as a result the

Judgment and Award having no basis. No alternative arguments

were advanced before this Court assailing the amount of

compensation granted by the Learned Tribunal, hence the

determination by this Court will be confined to the authenticity or

otherwise of Exhibit 10 and the resultant conclusion.

10(i). The Appellant Company in order to establish that

Exhibit 10 was a false document produced Exhibits „C1‟ and „C2‟

claiming that these two documents are samples of original

Certificates issued by the Appellant. In this context, we may

usefully refer to the evidence-on-affidavit of the witness, Bikash

Roy Pradhan, the Branch Manager of the Appellant Company for

twenty-five years. According to him, the Appellant Company has

different Branches and in the State of Sikkim they have a single

Branch, at Gangtok. They classified this Branch through their

MAC App. Nos.07, 08 and 09 of 2020 7

Branch Code "313203". The first six digits in the Policy denote

their Branch Code followed by the Policy Number, viz., „313203‟, in

„31‟ being the Motor Vehicle Department Code and the next four

digits denoting the Policy Number and the remaining numbers the

Policy Serial Number. That, in every genuine Policy the “collection

date” and the “Policy issuing date” will be the same. Pausing here

for a moment, on careful scrutiny of both Exhibit 10 and Exhibit

„C1‟ and Exhibit „C2‟, “the collection date” is found mentioned in the

document, but there is in fact no column styled as “Policy issuing

date” found on the documents, although Exhibit 10, Exhibit „C1‟

and Exhibit „C2‟ bear identical dates of 30-07-2015 at the end of

the policy document. No documentary evidence was put forth to

substantiate the assertion that “313203” was the Branch Code for

Sikkim, nor was it clarified as to which Region “313719” allegedly

an alien number was issued to, if at all.

(ii) It was his further evidence that a Policy issued by their

Office depicts the Bar Code with the Insurance Regulatory

Development Authority (IRDA) Registration Number. While mulling

over this evidence, it emerges that no document was furnished

before the Learned Tribunal to establish that the IRDA registration

number is contained in the Bar Codes. It was deposed that at the

relevant time, the scheduled premium for Third Party Policy for 10

+ 1 (probably indicative of the seating capacity of the vehicle, with

driver) was ₹ 13,265/- (Rupees thirteen thousand, two hundred

and sixty five) only, which is not reflected in Exhibit 10.

Momentarily pausing here, it is pertinent to notice that no schedule

of premium was furnished for the Learned Tribunal to hold that the

premium to be paid for that particular policy (Exhibit 10) would be

MAC App. Nos.07, 08 and 09 of 2020 8

₹ 13,265/- (Rupees thirteen thousand, two hundred and sixty five)

only. According to the witness, every Saturday and Sunday, their

Office remains closed, as per the guidelines of the IRDA,

Government of India, however the date of collection “12-04-2015”

reflected in Exhibit 10, fell on a Sunday, hence no collection could

have been made on that day.

(iii) The witness went on to identify Exhibit „C4‟ as the

Computer generated receipt dated 12-04-2015 to support his

evidence that no collection could have been made on the said date.

On this count, relevantly it has been extracted from the witness

during his cross-examination that, Rajen Tamang was the

Company‟s Agent and duly authorised to collect the premium.

Thus, if the Office was closed on 12-04-2015 being Sunday, it can

safely be assumed that the amount could well have been deposited

by the Agent on any other day, authorized as he was, to collect

insurance premium. No evidence was furnished to prove that on

the date of deposit of premium a copy of the Insurance Policy is to

be unfailingly made over to the Insurer. The witness went on to

depose that the seal and signature appearing in Exhibit 10 does not

belong to the Appellant Company, hence Exhibit 10 is neither a

genuine policy nor issued by their Office. On this aspect, it is

pertinent to remark that the original seal of the Company or the

original signature of the Agent were not furnished for comparison

by the Learned Tribunal, with the seal and signature affixed on

Exhibit 10. Without such comparison, there can be no authoritative

conclusion that Exhibit 10 is a fake document. As per the witness,

on 30-07-2015 only two Insurance Policies were issued by the

Office of the Opposite Party No.3 and the Office was not in receipt

MAC App. Nos.07, 08 and 09 of 2020 9

of the premium amount pertaining to the accident vehicle.

Although Exhibit „C1‟ and Exhibit „C2‟ were produced as the

Computer generated Insurance Policies issued to one Kapil Kumar

Pradhan and one Uttam Pradhan respectively, it does not establish

the contention that on that day only two Policies were issued. It

may well be assumed that records of other Policies issued on that

day were not printed out. The Appellant is required to furnish the

entire records maintained to lend authenticity to their claims.

11. It is also unfathomable as to how premium collected by

the agent from the insured, outside the Office, can be Computer

generated. The Appellant would have the Learned Tribunal believe

that Exhibits „C1‟ and „C2‟ are genuine documents, merely for the

reason that it has been furnished and relied on by the Appellant

Company, without considering that neither the issuance of the

documents nor its contents and signatures therein have been

proved. Despite the insistence that Exhibit 10 was a fake

document, no proof of any Complaint lodged against the Agent or

any other person before any Police Station to discover the truth of

the matter was before the Learned Tribunal. Indeed it is

inconceivable as to why an insured would pay a premium amount

to obtain a fake document at his own peril. However, third party

claimant is not concerned with the question of fraud or forgery

between the insurer and the insured. In the event, a fraud or error

is discovered to have been committed by any person, the Appellant

would necessarily have to resort to the remedy of initiating

appropriate action for rectification and penalty thereof.

12. The Learned Tribunal after considering the evidence on

record has reasoned in its impugned Judgments as follows;

MAC App. Nos.07, 08 and 09 of 2020 10

“27. Shri Bikash Roy Pradhan, the Branch

Manager of the Opposite Party No. 3 clearly admitted

that Shri Rajen Tamang is the authorized agent of

Opposite Party No.3. Exhibit-10 is the certified copy of

the Insurance Policy of the vehicle. In Exhibit-10, in

place of the details of the agent/Broker, the name

of Shri Rajen Tamang with his agent code number as

„BA000015623‟ has been clearly mentioned. Exhibit-

10 was served upon the Opposite Party No.3. The

Opposite Party No. 3 failed to produce and examine

Shri Rajen Tamang, Authorized Agent of Oriental

Insurance Company Limited (Opposite Party No. 3)

despite several opportunities having been given to it.

By perusal of Exhibit -10, it is difficult to identify the

fake and the genuine policy. There is no evidence

produced by the Opposite Party No.3 that the

Opposite Party No.1 owner of the vehicle had

involved himself or influenced the said Shri Rajen

Tamang to illegally issued the fake insurance policy to

him. The Opposite Party No. 3 has not exhibited any

complaint/document against the Opposite Parties No.

1, 4 or Shri Rajen Tamang, authorized agent of

Opposite Party No. 3 stating that the Opposite Parties

No.1 and 4 had obtained a fake insurance policy of

the Oriental Insurance Company Limited or Shri Rajen

Tamang handed over the fake insurance policy to the

Opposite Parties Nos.1 and 4 and the same was in

their personal knowledge. There is no evidence to the

effect that the Opposite Parties No.1 and 4 had

obtained fake insurance policy in collusion with the

staff or agent of Opposite Party No.3. From evidence

on record, no apparent role appears to have been

played by the owner in obtaining the fake insurance

policy. It is very difficult to pin point who is

responsible for issuance of the fake insurance policy.

It is unbelievable that an insured would obtain a fake

certificate by paying the same premium at his own

risk and peril. The Opposite Party No.4 Shri Biren

Gurung further establishes that in order to obtain

Exhibit-10, Opposite Party No.1 had given him ₹

14,500/. He personally knows Rajen Tamang as he

is the agent of the Opposite Party No.3. Opposite

Party No.4 paid a sum of ₹ 14,500/- to Rajen

Tamang, agent of the Opposite Party No. 3 through

one Palden Bhutia and Rajen Tamang handed over

Exhibit-10 to Opposite Party No.4. Opposite Party No.

4 further establishes that as per the direction of

Rajen Tamang, he handed over premium amount to

Shri Palden Bhutia. On the facts and circumstances of

the case at hand, it cannot be held that Opposite

Party No.1 (Owner of the vehicle) has any role to

play in issuance of the fake policy, on the other hand

evidence on the record cast suspicion towards the

authorized agent of the insurance company. Since,

Opposite Party No. 3 has admitted that Shri Rajen

Tamang is its authorized agent, there is master and

servant relation between the Opposite Party No.

3 and the said Shri Rajen Tamang. From this angle

MAC App. Nos.07, 08 and 09 of 2020 11

also Opposite Party No. 3 is liable for the act of the

said Rajen Tamang. However, the Opposite Party No.

3 is as liberty to conduct an inquiry against its agent

Rajen Tamang in respect of issuance of Exhibit 10 to

find out the actual fact as narrated supra and if found

guilty, it can recover the amount paid to the Claimant

by way of the Award in the instant claim petition from

the said Rajen Tamang.” [emphasis supplied]

13. The observations of the Learned Tribunal in arriving at

its conclusions is perfectly reasoned and brooks no interference.

14(i). In MAC App. No.07 of 2020, the Claimant/Respondent

No.1 (Padam Bahadur Rai) is the father of the deceased.

(ii) In Magma General Insurance Company Limited vs. Nanu

Ram alias Chuhru Ram and Others

1, the Supreme Court while

discussing consortium observed as follows;

“21. ................... In legal parlance,

“consortium” is a compendious term which

encompasses “spousal consortium”, “parental

consortium”, and “filial consortium”. The right to

consortium would include the company, care, help,

comfort, guidance, solace and affection of the

deceased which is a loss to his family. ..............

...............................................

21.3 Filial consortium is the right of the

parents to compensation in the case of an accidental

death of a child. An accident leading to the death of a

child causes great shock and agony to the parents

and family of the deceased. The greatest agony for a

parent is to lose their child during their lifetime.

Children are valued for their love, affection,

companionship and their role in the family unit.

...............................................

24. The amount of compensation to be

awarded as consortium will be governed by the

principles of awarding compensation under “loss of

consortium” as laid down in Pranay Sethi ................”

[emphasis supplied]

(iii) In Magma (supra) the Filial Compensation granted to

the Respondent Nos.1 and 2 the parents of the deceased was ₹

80,000/- (Rupees eighty thousand) only, and divided equally

between them.

1 (2018) 18 SCC 130

MAC App. Nos.07, 08 and 09 of 2020 12

(iv) In light of the said Judgment and for the purpose of

meting out complete justice in the matter, Filial Consortium of

₹ 40,000/- (Rupees forty thousand) only, is granted to the

Claimant/Respondent No.1 in MAC App. No.07 of 2020.

(v) Consequently, a sum of ₹ 40,000/- (Rupees forty

thousand) only, is added to the compensation of ₹ 55,93,328/-

(Rupees fifty five lakhs, ninety three thousand, three hundred and

twenty eight) only, computed by the Learned Tribunal. All other

calculations remain the same.

15(i). In MAC App. No.08 of 2020 and MAC App. No.09 of

2020, the deceased persons were the parents of the

Claimant/Respondent No.1 (Karma Tshering Tamang).

(ii) In Magma (supra), the Supreme Court while discussing

Parental Consortium observed as follows;

“21.2. Parental consortium is granted

to the child upon the premature death of a parent, for

loss of “parental aid, protection, affection, society,

discipline, guidance and training.”

...............................................

24. The amount of compensation to be

awarded as consortium will be governed by the

principles of awarding compensation under “loss of

consortium” as laid down in Pranay Sethi ..............”

[emphasis supplied]

(iii) Consequently, for the purpose of meting out complete

justice, Parental Consortium of a total of ₹ 80,000/- (Rupees

eighty thousand) only, i.e., ₹ 40,000/- (Rupees forty thousand)

only, each, in MAC App. No.08 of 2020 and MAC App. No.09 of

2020, is granted to the Claimant/Respondent No.1.

(iv) Thus, a sum of ₹ 40,000/- (Rupees forty thousand)

only, is added to the compensation of ₹ 4,16,000/- (Rupees four

lakhs and sixteen thousand) only, in MAC App. No.08 of 2020 and,

₹ 40,000/- (Rupees forty thousand) only, to the compensation of ₹

MAC App. Nos.07, 08 and 09 of 2020 13

6,28,968 (Rupees six lakhs, twenty eight thousand, nine hundred

and sixty eight) only, in MAC App. No.09 of 2020. Other

computations made by the Learned Tribunal in both the matters

supra, warrant no alteration.

16. The amounts computed in all the Appeals shall be paid

within a period of two months from today with interest @ 10% per

annum, failing which the Appellant shall pay simple interest @ 12%

per annum, from the date of filing of the Claim Petition, till full

realisation, duly deducting the amounts, if any, already paid by the

Appellant Company to the Claimants-Respondents.

17. Consequently, Appeals are dismissed and disposed of

accordingly.

18. Copy of this Judgment be forwarded to the Learned

Tribunal for information, along with its records, if any.

19. Pending applications, if any, also stand disposed of.

( Meenakshi Madan Rai )

Judge

02-12-2022

Approved for reporting : Yes

ds/sdl

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