Rajesh Zamashankar Joshi vs Branch Manager, State Bank Of Bikaner & Jaipur

This revision petition has been filed by the petitioner Rajesh Zamashankar Joshi challenging the order dated 07.8.2012 passed by the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') in First Appeal no. A/10/6.

Facts of the case in brief are as under:

Original complainant/petitioner Rajesh Joshi is an account holder of respondent bank and the respondent had allowed cash credit facility of Rs.5 lac to the complainant/petitioner in the year 2003 and for that, the stock in business was hypothecated. The stock was insured with National Insurance Company for the period 6/11/2006 to 5/11/2007 and necessary premium was paid by the respondent bank by debiting it from the account of the complainant/petitioner. Said policy was lapsed on 6/11/2007. On 8/1/2007, the respondent bank had debited premium amount of Rs.3056/- from the account of the complainant/petitioner and sent it to the Insurance Company through the DTDC courier to whom, the Insurance Company has appointed as its collection agent for collecting cheques of premium from the customers. On 22/11/2007, at around 11.00 a.m. a fire broke out and the stock of the showroom was completely destroyed. The complainant immediately informed the Bank regarding the fire. Accordingly the Manager of the Bank asked the Insurance Company to send the surveyor to assess the loss. Accordingly, the surveyor visited the spot and ascertained the loss. The complainant/petitioner then asked the Insurance Company to supply Insurance policy for making claim. However, the Insurance Company informed the complainant that the insurance premium sent to it was received on 23/11/2007 and as such they could not issue the policy and in the meantime, the entire stock was lost in the fire. In this regard, the complainant made correspondence with the respondent bank, however, since there was no satisfactory reply, the complainant/petitioner filed consumer complainant before the District Forum, Nagpur. On hearing both the sides, the District Forum partly allowed complaint directing the opponent/respondent to pay Rs.8 lac to the original complainant/petitioner towards compensation and Rs.10000/- for physical and mental harassment and further Rs.5000/- as cost of proceeding. Aggrieved by the order of the District Forum, the respondent/opposite party preferred an appeal before the State Commission being First Appeal no. A/10/6. The State Commission vide its order dated 07.08.2012 allowed the appeal and set aside order of the District Forum and complaint was also dismissed.

Heard the learned counsel for both the parties and perused the record. Learned counsel for the petitioner stated that it was the responsibility of the bank to have sent the amount of premium to the Insurance Company in time. The bank deducted the premium from the account of the complainant on 08.11.2007 whereas the earlier policy expired on 5.11.2007. The assertion of the Insurance Company is that they received the premium amount on 23.11.2007. However, by that time, the incident of fire had occurred on 22.11.2007, therefore, no policy was issued. The learned counsel stated that the policy could not be issued as respondent bank deducted premium after three days of the expiry of the earlier policy and the same was sent with delay to the Insurance Company and that is why the Insurance Company received it only on 23.11.2007. Thus, the loss occurred to the complainant is due to the deficiency in service on the part of the respondent/bank and therefore, the District Forum had rightly awarded a compensation of Rs.8,00,000/- to the complainant though the claim was for about Rs.14,00,000/-.

In support of this contention learned counsel referred to the following judgments:-

RP 1552 of 2012, Kashmir Singh Vs. Punjab National Bank & anr., decided on 03.12.2014 (NC).

Indian Overseas Bank Vs. Ms. Sheba & anr., I (2014) CPJ 262 (NC)

Canara Bank Vs. Seth Prakash Chandra Jain & anr, I (2014) CPJ 76 (NC).

On the other hand, learned counsel for the respondent bank stated that the prime responsibility of getting hypothecated goods insured is of the borrower and in case borrower does not get the goods insured then the bank will take the insurance. Thus, the bank waited till the expiry of the earlier policy, but when the borrower did not come forward to take the policy, the bank deducted the premium amount from the account of the complainant and sent the same to the Insurance Company. If more time has been taken in transit of the premium amount, the bank cannot be held responsible. It is not the duty of the bank to take the insurance for hypothecated goods, however, in the interest of the borrower and in the interest of the repayment of loan, the goods are insured. Thus, there is no deficiency on the part of the respondent bank and the State Commission has rightly dismissed the complaint.

We have carefully considered the arguments advanced by the learned counsel for the parties and have examined the record. Clearly, the policy has not been issued in the present case and there was no insurance on the date of fire accident. Thus, there is no question of any insurance payment from the Insurance Company. The complainant has suffered loss, however, in the present matter no FIR has been lodged by the complainant and therefore, there is no panchnama conducted. Therefore, it is difficult to assess the loss suffered by the complainant. Moreover, the bank is not an insurer and even if there is any deficiency in service, the bank cannot be asked to indemnify the loss. On the other hand, it is also true that the policy in such cases is generally in the name of the bank and the borrower. In the present case, the bank has taken the earlier policy and therefore, it was expected that the bank will also take the next policy. In fact the complainant should have been more cautious about the insurance and should have taken the steps before expiry of the earlier policy for insuring the hypothecated goods for further period. The bank also should have acted during the currency of the earlier policy so that the next policy becomes valid from 06.11.2007, but the bank has failed in doing so and hypothecated goods remained without insurance after 06.11.2007. This is the case of contributory negligence as the main responsibility of taking the insurance for hypothecated goods remains with the complainant. However, the bank should have taken steps before the end of the earlier policy for getting the insurance for the next period. Therefore, it cannot be said that there is no deficiency in service on the part of the bank. This Commission in FA No.601 of 2012, State Bank of Bikaner & Jaipur vs. M/s. Jaishree Industries & Ors. Decided on 18.09.2018 (NC) has reduced the liability of the bank to Rs.8,00,000/- and liability of Insurance Company as nil in a case where the bank and the Insurance Company were held jointly liable to pay the insurance amount of Rs.36,89,345/- as the bank had not got corrected the address of the work place in the policy. It is further seen that in the case of Kashmir Singh versus Punjab National Bank and Anr. (supra), the compensation amount was already determined by the decision of the MACT and there was no discretion before the District Forum to decide the amount for deficiency in service whereas in the present case, the District Forum has just accepted the demand of the complainant for which there is no basis. In the second case referred to by the learned counsel for the petitioner i.e. Indian Overseas Bank versus M/s Sheba and Anr. (supra), the bank and the insurance company both have been held liable for the compensation. Part deficiency on the part of the bank has been considered in the present case also. In the case of Canara Bank versus Seth Prakash Chandra Jain and Anr. (supra), it is seen that this case is in respect of the deficiency of bank in granting loan when the area was already declared drought affected. Thus, none of the case referred to by the learned counsel for the petitioner correspond to the facts of the present case and therefore, inferences drawn under those cases cannot be transported to the present case.

Based on the above discussion, it is clear that there is some deficiency on the part of the respondent bank and therefore, in the facts and circumstances of the case, and keeping in view the major contributory negligence on the part of the complainant, we deem it appropriate to award a compensation of Rs.1,00,000/- (rupees one lakh only) to the complainant to be paid by the respondent bank. This order be complied with by the respondent bank within a period of 45 days from the receipt/service of this order. The order of the State Commission is set aside and order of the District Forum stands modified by this order. The order relating to compensation of Rs.10,000/- and cost of litigation of Rs.5,000/- is maintained.