ALLAHABAD BANK vs Baini Chand

LEARNED counsel for the parties present. Arguments heard.

SHRI Hira Chand, since deceased, is the father of Shri Baini Chand and Shri Jaswant Singh, the original complainants. Shri Hira Chand took loan from Allahabad Bank, opposite party No. 3. The truck was insured with Universal Sompo General Insurance Company Limited, opposite party 1 and its functionary, opposite party No. 2.

ALLAHABAD Bank purchased the policy from opposite parties 1 and 2. Initially, the policy was obtained form 5.2.2010 to 4.2.2011. Thereafter, a fresh policy was renewed in the name of Shri Hira Chand and the same was effective from 5.2.2011 to 4.2.2012. Unfortunately, Shri Hira Chand passed away on 19.11.2010. The truck met with an accident on 27.07.2011 i.e. after his death. The claim was lodged with opposite parties 1 and 2 but the insurance company repudiated the same on the ground that the policy was purchased in the name of Shri Hira Chand after his death and consequently, his legal representatives/complainants were not entitled to any claim. The complaint was filed with the District Forum. The District Forum dismissed the complaint. Thereafter, the complainants approached the State Commission. The State Commission saddled the bank with entire liability.

THIS is an indisputable fact that the bank used to pay the premium on behalf of Shri Hira Chand. Although, it was discretionary, yet, the bank opted to deposit the premium itself. This is also undisputable fact that the Bank was apprised of the death of Shri Hira Chand within one week of the date of his death. The bank committed an egregious mistake by sending the premium in the name of Shri Hira Chand. This clearly shows negligence, inaction and passivity on the part of the bank officers. Had they sent the policy in the proper name, this difficulty should not have arisen.

NOW , we turn to the position of the insurance company. The insurance company is bound to compensate the legal representatives of deceased, the original owner in view of the Supreme Court authority United India Insurance Company Limited vs. Santro Devi and Ors., 2009 1 SCC 558. It is surprising to note that instead of accepting the liability, the insurance company has tried to file the revision petition and has caused harassment and mental agony and making the complainants running from pillar to post as well as three tribunals to get the relief. Consequently, I am of the considered view that there is contributory negligence on the part of both of them. It is, therefore, ordered that both the respondents 1 and 3 will pay a sum of Rs.9,83,250/ - to the complainants No. 1 and 2 with interest @9% per annum from the date of filing of this complaint i.e. 20.1.2012 till the date of realization. The liability of both the parties is limited upto 50% only. I also modify the order of the State Commission and impose costs of Rs.30,000/ - each regarding compensation, harassment, which be paid to the complainants within 45 days from the date of receipt of this order otherwise it will carry interest @9% per annum till its realization. The Bank is allowed to adjust the loan amount from the above said amount. If the amount stands already paid, in that event the entire amount would be paid to the complainants. 6. The revision petition stands disposed of accordingly.