State Consumer Disputes Redressal Commission
Union Bank Of India vs M/S Gaurav Cycle Store on 27 March, 2017
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UP C-1 Vikrant Khand 1 (Near Shaheed Path), Gomti Nagar Lucknow-226010 First Appeal No. A/2009/643 (Arisen out of Order Dated in Case No. of District State Commission) 1. Union Bank Of India A ...........Appellant(s) Versus 1. M/s Gaurav Cycle Store a ...........Respondent(s) BEFORE: HON'BLE MR. Vijai Varma PRESIDING MEMBER HON'BLE MR. Raj Kamal Gupta MEMBER For the Appellant: For the Respondent: Dated : 27 Mar 2017 Final Order / Judgement RESERVED State Consumer Disputes Redressal Commission U.P., Lucknow. Appeal No. 643 of 2009 1- Union Bank of India, a nationalized Bank constituted under the Banking Companies (Acquisition and Transfer of Undertaking Act, 1970) having its registered office at 239-Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and one of its branch known as Rajpura Branch, Mawana Road, District, Meerut through its constituted attorney and Principal Officer of the Branch Jagdish Pal Sagar, Branch Manager, Rajpura Branch, Union Bank of India, Meerut. 2- Regional Manager, Union Bank of India, Begum Bridge Road, Meerut. ..Appellants. Versus M/s Gaurav Cycle Stores and Works through its Proprietor Smt. Urmila w/o Sri Sudesh Kumar, Rajpura Crossing, Mawana Road, Village and Post Rajpura, Distt. Meerut. ...Respondent. Present:- 1- Hon'ble Sri Vijai Varma, Presiding Member. 2- Hon'ble Sri Raj Kamal Gupta, Member. Shri P.K. Sinha for the appellants. Shri Vikas Agarwals for the respondent. Date 27.4.2017 JUDGMENT
(Delivered by Sri Vijai Varma, Member) Aggrieved by the judgment and order dated 2.4.2009, passed by the Ld. DCDRF, Meerut in complaint case No.370 of 2005, the appellant Union Bank of India and another have preferred the instant appeal.
Facts leading to this appeal, in short, are that the respondent/complainant had taken a loan of Rs.1,50,000.00 from the appellant/OP for doing business of selling of cycles and spare parts. For securing the loan (2) amount, the insurance was essential and the appellant had assured the respondent/complainant that the insurance was done and the premium is being regularly deposited. On 11.5.2004 at about 4.30 p.m. the shop of the complainant caught fire due to short circuit and the stock kept in the shop was gutted and the complainant's goods of Rs. 3 lacs were lost. The complainant met with the OP for getting the insured amount but it came to the notice that the amount of the premium was not deposited in the Insurance Company by the appellant/OP and when the complainant made a complaint to the OP then she was told that her policy has not been renewed. Because of the negligence on the part of the appellant that the insurance could be done and the complainant had to suffer the loss therefore, she filed a complaint case in the District Consumer Forum where the OP filed their WS mentioning therein that the insurance was to be done on the request of the complainant. It was the duty of the complainant to get all the stocks of the shops insured but she did not get the stock insured and hence, the appellant can not be faulted for carelessness of the complainant. Hence, the complaint was liable to the dismissed. After hearing counsel for the parties, the Forum below passed the impugned order which is an under:
"परिवादिनी का परिवाद विरूद्व विपक्षीगण स्वीकार किया जाता है। विपक्षीगण को आदेशित किया जाता है कि विपक्षीगण इस आदेश से एक माह के अन्दर बीमा के संबंध मे दावा धनराशि अंकन 98,000/- रूपये मय 12 प्रतिशत वार्षिक सूद दिनांक 11-5-2004 से अंतिम भुगतान की तिथि तक परिवादिनी को अदा करे। विपक्षीगण अंकन 10,000/- रूपये परिवाद व्यय भी परिवादिनी को अदा करें। विपक्षीगण निर्धारित अवधि में इस आदेश को (3) अनुपालन सुनिश्चित करें अन्यथ परिवादिनी विपक्षीगण के विरूद्व धारा 25/27 सी.पी. एक्ट 1986 के तहत कार्यवाही करने के लिए स्वतंत्र होगी।"
Feeling aggrieved with the impugned judgment and order, this appeal has been preferred.
The main grounds of the appeal are that it was the duty of the respondent-borrower to get insured the hypothecated goods of the shop and submit the insurance policy cover, failing which it was for the bank to get the stock insured but the respondent had never informed the appellant bank and therefore, the appellant had not committed any deficiency in service. The ld. Forum has passed wrong order as the complainant had not suffered the loss to the tune of Rs.98,000.00 and the Fire Officer's report can not be believed for the loss. Therefore, the impugned order is liable to be set aside.
Heard counsel for the parties and perused the entire record.
In this case, it is not disputed that the complainant had taken loan to the tune of Rs.1,50,000.00 for doing business and that the loan was to be secured by getting the stock of the shop insured. The disputed point according to the appellant is that it was the duty of the respondent/ complainant to get the stock of the shop insured with the insurance company whereas according to the respondent/ complainant the stock was to be insured by the appellant bank for securing the loss. Another disputed point is as to whether the complainant suffered the loss to the tune of (4) Rs.98,000.00 in a fire in her shop. If so, its consequences ?
It is argued by the ld. counsel for the appellant that the stock of the shop was to be insured by the respondent/ complainant as per the agreement where it is mentioned in para '6' as under:-
"That all the hypothecated goods, the subject of this Agreement, shall be insured by the Borrower against fire risk and any other risk as may be necessary and required by the Bank in its discretion in the joint names of the Borrower and the Bank with some insurance company/ companies approved by the Bank is the extent of at least 10% in excess of the invoice value or the market value whichever is lesser of the hypothecated goods and that the Cover Note/s or the Insurance Policy/Policies Certificate/s shall be delivered to the Bank. If the Borrower fails to effect such insurance, the Bank may insured the said hypothecated goods against fire and other risk as may be deemed necessary by the Bank in its discretion in such joint names and debit the premium and other charges to such account or accounts as the case may be."
On the basis of this term of the agreement, it is argued by the counsel for the appellant that it was the primary duty of the complainant-borrower to get the stock insured and hence, if the stock was not ensured then it was the negligence on the part of the complainant herself and the appellant could not be faulted for any negligence in this regard. Ld. counsel for the respondent/complainant on the contrary argues that the loan was to be secured by getting it insured by the Bank and that is why in the (5) aforesaid term of the agreement, it is clearly mentioned that in case the borrower fails to effect such insurance, the Bank may insure that the said hypothecated goods against fire and other risk as may be deemed necessary by the Bank in its discretion in such joints names and debit the premium and other charges to such account or accounts as the case may be. So for taking refuge under the aforesaid term of the agreement, it is argued that it was for the Bank to get the stock insured even if the complainant does not get the stock insured. It is further argued by the ld. counsel for the respondent that in fact the insurance was earlier got done by the appellant only, debiting the premium from the account of the complainant. In fact, only this time that the insurance was not got done by the appellant Bank and the complainant was totally unaware of the insurance not being done by the appellant as earlier the insurance was got done by the appellant Bank only. Hence, it was clear cut negligence on the part of the appellant in not getting the stock insured. We find that the appellant/OP has admitted in their appeal that on failure of the complainant in getting the insurance cover, the goods weres insured by the appellant Bank from 23.8.2001 to 22.8.2002, again from 24.9.2002 to 23.9.2003 and it is only thereafter, that the insurance was not renewed by the appellant Bank and that is why the complainant had to suffer because of no insurance policy renewed by the insurance company as was being done by it earlier. It is also interesting to note that the insurance was again renewed for the period 17.6.2004 to 16.6.2005 by the appellant Bank. So it is (6) quite clear that it was the appellant Bank which used to get the stock of the hypothecated goods insured and not the complainant and so it was essential for them to have got the insurance renewed for the period during which the fire accrued in the shop of the respondent. From the aforesaid term of the agreement also, it is clear that ultimately it was the Bank which was responsible for getting the insurance of the hypothecated goods done and that is the reason why the appellant Bank was doing it but only faulting for the year when the tragedy in the form of fire struck the complainant. So there is no doubt that it was the duty of the appellant Bank to have got hypothecated goods insured and since they committed deficiency in service in not getting it done therefore, the complainant had to suffer the loss. Therefore, they are liable to make good the loss accrued to the complainant.
Now we come to the point as to whether the complainant suffered loss to the tune of Rs.98,000.00 or not ? In this regard, we find that the ld. Forum below has after considering report of the Fire Department and other factors that they have found the amount of Rs.98,000.00 as loss occurring to the fire in the shop of the respondent/ complainant and hence, there is no reason to interfere in the assessment of the loss made by the ld. Forum below. However, interest @ 12% appears to be a little on the higher side as also the compensation of Rs.10,000.00 given when the interest has already been allowed. Therefore, considering the circumstances of the case, we find that interest @ 9% would have served the purpose (7) and there was no need for awarding any compensation when the interest is being given on the insured amount. Accordingly, the appeal deserved to be allowed partly and the impugned order is liable to be amended.
ORDER The appeal is allowed partly. The impugned judgment is amended to the extent that the interest will be paid 9% p.a. in place of 12% p.a. and compensation of Rs.10,000.00 will not be paid. Rest part of the order shall remain as it is.
Parties shall bear their own costs.
Certified copy of the judgment be provided to the parties in accordance with rules.
(Vijai Varma) (Raj Kamal Gupta) Presiding Member Member Jafri PA II Court No.4 [HON'BLE MR. Vijai Varma] PRESIDING MEMBER [HON'BLE MR. Raj Kamal Gupta] MEMBER