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Judgment
This revision petition has been filed by the petitioner Bank against the order dated 26.7.2013 of the State Consumer Disputes Redressal Commission, Madhya Pradesh, (in short 'the State Commission') passed in Appeal No.1595 of 2012.
Brief facts of the case are that on 06.05.2005, the respondent No.1-complainant was sanctioned cash credit facility of Rs.6 lakhs under the scheme of Financial Assistance to/for Retails/Small Traders/Small Business for commercial requirements of the respondent No.1-complainant. Respondent No.1-complainant took the insurance policy to cover the risk for the stocks hypothecated with the petitioner bank. The policy bearing policy No.451400/40/05/00329 under the name of Shopkeepers Insurance was active for the period 15.6.2005 to 14.6.2006. The address mentioned in the said policy was shop No.11, New Market, Bhopal. Since the policy taken by the respondent No.1-complainant did not cover the risk for the entire stock hypothecated with the petitioner bank which was worth Rs.22.00 lakhs, the petitioner bank availed of another policy also under the name of Shopkeepers Insurance for the period 28.4.2006 to 27.4.2007. The address mentioned in this policy was similar to the Shopkeepers Insurance taken by the respondent No.1 complainant. On 14.8.2006, due to heavy rains the complainant suffered losses of Rs.1,85,950/- towards stocks allegedly lying at his Malviya Nagar godown.
On 23.08.2006, the respondent No.1-complainant informed the surveyor that no loss has occurred at the shop and the loss has occurred in the godown. The claim was not approved by the Insurance Company. Being aggrieved the respondent No.1-complainant filed a complaint being CC No.548/07 before the District Forum, Bhopal on 26.6.2007. The District Forum vide its order dated 26.7.2012 allowed the complaint of the respondent No.1-complainant and directed the petitioner bank to pay a sum of Rs.1,85,950 towards damages as assessed by the respondent No.1-complainant and also directed the petitioner bank to pay a sum of Rs.10,000/- towards mental agony and further a sum of Rs.1,000/- towards litigation cost. Being aggrieved by the order of the District Forum, the petitioner filed an appeal being appeal No.1595/2012 before the State Commission on 29.8.2012. The State Commission vide its order dated 26.7.2013 partly allowed the appeal of the petitioner bank and observed that the respondent No.1-complainant had already been compensated for the total loss and that further compensation of Rs.10,000/- was unwarranted. However, the petitioner bank was directed to pay a sum of Rs.1,85,950/- to the respondent No.1-complainant.
Hence the present revision petition.
Heard the learned counsel for the petitioner as well as counsel for respondent Nos.2 & 3. Respondent No.1 was proceeded ex-parte vide order dated 22.11.2016 as none appeared on behalf of the respondent No.1 inspite of service of notice.
The learned counsel for the petitioner stated that there was no assessment by the surveyor in respect of the loss, however, the District Forum has accepted the loss as assessed by the complainant himself and accordingly, the District Forum ordered the payment of Rs.1,85,950/- to the complainant. It was argued that the assessment by the complainant himself cannot be taken as ground for awarding the same amount. The District Forum should have examined this assessment and the loss as claimed by the complainant as there has to be some basis for awarding the compensation which should be based on actual loss.
It was further stated by the counsel for the petitioner bank that the bank is not the insurer and even if there was some deficiency found against the bank that the bank did not get the insurance policy for the correct risk location,then also bank cannot be held liable for total claimed insurance amount. In fact, the first policy taken by the complainant itself expired on 14.6.2006. However, no effort was made by the complainant to insure the stocks as per the provision of the loan agreement. The bank had by then taken another policy to cover the total stocks w.e.f. 28.4.2006 to 27.4.2007. Clearly this shows that the respondent No.1/complainant was aware that the bank has taken some policy and that is why he did not try to renew his earlier policy which expired on 14.6.2006. Thus, either the complainant cannot take the view that he was not aware about the policy taken by the bank or the complainant has to consider himself negligent for not renewing his policy to cover the hypothecated stocks. It was further asserted by the learned counsel for the bank that the complainant has quoted the number of the policy taken by the bank in his letter. This clearly means that the complainant had the knowledge of the new policy taken by the bank. However, he did not object in respect of this policy that the risk location was not correctly mentioned. Learned counsel for the bank further stated that the bank has taken the policy for the same risk location address as was given in the earlier policy taken by the complainant as no further communication was made by the complainant that the risk location has changed. Learned counsel referred to the following observation of the State Commission:-
"7. The defence of the Bank is that the first policy did not cover the full market value of the hypothecated goods as depicted in the stock statement submitted to the Bank, and as per clause 14 of the agreement they were entitled to get the insurance done. This argument does not appeal to us. First there was already an insurance in force. They sat on it for 10 months. Then suddenly, they decided to get another policy, before the expiry of the first policy, whereas they could have asked the respondent-complainant to get the sum insured enhanced in the same policy.
Secondly, the first was already with them. The policy clearly showed the address of the respondent-complainant as 11, New Market and the place of insurance to be 9 Malviya Nagar. It mentions that the coverage is for stock of tea and crockery items kept at the godown at 9 Malviya Nagar. In the face of the clear mention on the policy, the bank had no reason to change the insured premises. The bank is relying only on the loan application which mentions place of business as 11, New market. We have perused the loan application. In column 4 of Business particulars, the question asked is 'Business Address and Telephone number'. Two which the respondent-complainant has mentioned his business address as 11, New Market. There is no column in the form which asks where the hypothecated goods are stored. The place of business does not necessarily infer that it is also the place where the goods are kept. The bank cannot say that they did not have any knowledge that the goods were stored at 9, Malviya Nagar. The first policy mentioning this fact was with them. They found the policy to be inadequate and decided to take another policy, without bothering to either inform the respondent complainant or checking which premises the first policy covered. There is definitely deficiency in service on the part of the Bank in taking a policy without verifying the location of the hypothecated goods."
Learned counsel also referred to the paragraph 13 of District Forum order which is mentioned below:-
"13. That due to heavy rains on 14.8.2006 water entered the complainant's godown at Malviya Nagar, due to which the complainant suffered losses which he assessed to Rs.1,85,950/-. The said information was also given by the complainant to the opposite party No.3 but the Surveyor, Sh. Sanjay Shrivas of the Opposite Party no.3 did not assess the damage on the ground that the godown was not insured. The information was also given to the Bank but they failed to get the damage assessed. In this scenario the damage assessed by the complainant is correct."
Learned counsel for the respondent No.2 stated that the respondent No.2 has issued policy to the bank for a different risk location and this location is not covered under this policy. Hence, there is no liability against the respondent No.2. Learned counsel for respondent No.3 stated that the incident is after the policy issued by the respondent No.3 had expired and therefore, no liability can be fixed with respondent No.3.
I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the material on record. First of all, contention of the petitioner bank is that the bank has insured the same risk location as was mentioned in the earlier policy taken by the complainant. It is seen that in the earlier policy taken by the complainant, which was effective from 15.6.2005 to 14.6.2006, it is clearly stated that property is situated at Plot No.9 Malviya Nagar, Bhopal, whereas in the policy taken by the bank, the risk location is mentioned as "Near Sainik Petrol Pump, Station Road, Mandideep, Bhopal, Madhya Pradesh". Thus, clearly, the bank has given the risk location as per their own choice and have not verified even from the earlier policy. This is clearly a deficiency in service and the State Commission has rightly observed the same. It is further seen that the complainant also did not care to insure his stocks after the expiry of the earlier policy, which ended on 14.6.2006. In fact the responsibility to insure the stocks rested with the complainant. If he had no knowledge of the Insurance policy taken by the bank then he was totally negligent because he did not care to extend his policy. On the other hand, if the complainant had information in respect of the policy taken by the bank, then he was negligent for not asking the bank or the Insurance Company to make change in the risk location. Thus, in any of the factual situation, the complainant is also partly responsible for contributory negligence on his part.
So far as the question of loss is concerned, the State Commission has accepted the figure claimed by the complainant and has allowed the claim as assessed by the complainant himself. Here I agree with the contention of the learned counsel for the bank that there was no independent assessment of the loss. Even the State Commission has not gone into the details of the claim to arrive at the correct figure of loss. I also agree with the contention of the learned counsel for the bank that the bank is not an insurer and if the claim of the complainant is not accepted by the Insurance Company, the bank cannot be made liable to pay the total insurance claim even if there has been some deficiency on the part of the bank. The bank is liable only to compensate the complainant for the loss suffered by the complainant due to deficiency of the bank. As no assessment has been done by the surveyor, so it is not clear as to what is the actual loss. In these circumstances, clearly bank cannot be held liable to pay the total loss as assessed by the complainant to the complainant. However, the bank would be liable to pay a compensation for its deficiency to the complainant. In the facts and circumstances of the case, interest of justice would be served if the bank pays a sum of Rs.80,000/- to the complainant as compensation for its deficiency in service.
Based on the above discussion, the revision petition is partly allowed and the order of the State Commission dated 26.7.2013 is modified to the extent that the petitioner bank would be liable to pay Rs.80,000/- (rupees eighty thousand only) to the complainant along with interest as ordered by the State Commission. Accordingly, the order of the State Commission dated 26.7.2013 as modified by this order is upheld. The order be complied with by the bank within 45 days. No order as to costs for this revision petition.