BANK OF INDIA vs JAIMALA

THE Bank of India appeals against the order of the District Forum, Gurgaon allowing the insured-consumer''s complaint and burdening the appellant with 50% of the insured claim.

IN view of the fact that the respondentNew INdia Assurance Company has not challenged the order under appeal which has thus achieved finality against them, the matter now lies in a very narrow compass. The facts may consequently be noticed with utmost brevity. The respondent-complainant Smt. Jaimala had purchased two buffaloes with the proceeds of a bank loan granted by the appellants and these were covered by an insurance policy obtained on the 23rd of April, 1991 from M/s. New INdia Assurance Company. One of the buffaloes died soon after the insurance was taken and inevitably a claim was lodged with regard thereto by the insured-consumer. However, getting no redress the consumer was compelled to knock at the door of the District Forum whilst arraying the appellant-bank and the Assurance Company as opposite parties. On notice being issued the appellant-bank took up the firm plea that the insurance policy was betwixt the insurer and the insured and there is no privity of contract between the bank and consequently they were in no way liable under its terms. On merits also the case was sought to be dismissed. On the other hand, the Insurance Company pleaded that the complainant had not obtained any policy from them but it was the appellant-bank which asked for the insurance of the buffaloes and that proposal was accepted and even allegations of fraud etc. were laid at the bank''s door.

The District Forum adverted to the facts and merits of the case and came to a firm conclusion in favour of the respondent complainant. However in granting the relief it burdened the appellant-bank only for the following reasons: "In this case the bank also failed in performance of its duty in not advising the complainant to move the matter in a formal way or could place the claim before the Insurance Company in a proper way instead of writing a simple letter as mentioned above. Thus both the respondents are held liable for the claim in the proportion of 50 : 50. Thus the Insurance Company Respondent No. 1 and the Bank of India respondent No. 2 shall make payment of the claim amount of Rs. 7000/- on 50 : 50 ratio. As the claim was not laid before the Insurance Company in a formal way so the complainant is not entitled to any interest or costs."

MR. D.S. Bhatia, the learned Counsel for the appellants had forcefully contended that the appellant-bank had acted only as the agent of the complainant-owner for effecting the insurance for their two buffaloes. The contract of insurance was betwixt the insurer and the insured and it was no part of the bank''s duty to either advise or to intercede on behalf of the one, or the other party with regard to the insurance claim. It was forcefully submitted that the liability lay fairly and squarely on the insurer alone. Mr. Deepak Suri, the learned Counsel for the respondent-insurer with great fairness stated that the New India Assurance Company had not preferred any appeal against the order of the District Forum and, therefore, he could not possibly challenge the District Forum order on merits. Even when pin-pointed the learned Counsel could not bring to our notice any provision in the policy which laid any obligation of advice or otherwise on the bank in getting the insurance claim processed.

WE find merit in the submission of the learned Counsel for the appellant Mr. Bhatia. The detailed provisions of the insurance policy were brought to our notice and one can not find thereunder any obligation laid on the bank to advise the insured complainant or to in any way intervene in the matter of the presentation of the insurance claim or its subsequent finalisation. Nor does it appear to be a matter of banking practice or law that a bank which extends a loan undertakes any oneous obligation of advising its debtors with regard to filing of insurance claim for their finalisation. With respect we are unable to find how within the consumer jurisdiction this could possibly be labelled as a patent deficiency in service for which the bank should pay half of the insurance claim. It bears repetition that the primal lis in this context is betwixt the insured and the insurer and not of the banker, who only incidentally extends a loan to the insured. In view of the above, this appeal must succeed and is hereby allowed. The order of the District Forum against the appellant-bank is set aside and the same is modified to the extent that the whole of the loss would be payable by the New India Assurance Company, who admittedly had not fairly challenged the order under appeal. There will be no order as to costs. Appeal allowed without costs.