State Consumer Disputes Redressal Commission
The Managar, State Bank Of India, Main ... vs M/S.Sri Easwari Vaccines & Om Vaccine ... on 27 September, 2011
THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI (BENCH II) Present: Thiru.A.K.Annamalai, M.A., M.L., M.Phil., Presiding Judicial Member, Thiru.S.Sambandam, B.Sc., Member. F.A.No. 480/2009 [Against order in C.C.No.226/2006 on the file of the DCDRF, Trichy] TUESDAY, THE 27th DAY OF SEPTEMBER 2011. The Managar, State Bank of India, Main Branch, Contonment, Trichirappalli-1. .. Appellant /1stopposite party /Vs/ 1. M/s.Sri Easwari Vaccines & Om Vaccine Clinic, Partnership Firm, Rep. by its Managing Partner, S.P.Ashok, S/o.M.Ponnan, Having Office at : B-6, A& B, Chitra Complex, Chinthamani, Trichy-2. .. 1st Respondent/Complainant 2. The Manager, The New India Assurance Co. Ltd., No.66, WB Road, Trichy-8. .. 2ndRespondent/2ndopposite party The appeal coming before us for hearing finally on 05.09.2011, upon hearing the arguments of both sides and perused the documents, written submissions as well as the order of the District Forum, this Commission made the following order :- Counsel for the Appellant/1st opposite party : M/s. P.D.Audikesavalu, Advocate. Counsel for the 1st Respondent/Complainant : M/s. A.Mohammed Ismail, Advocate. Counsel for the 2nd Respondent/2nd opp.party : M/s. Elveera Ravindran, Advocate. ORDER
A.K.ANNAMALAI, PRESIDING JUDICIAL MEMBER
1. The 1st opposite party is the appellant.
2. The complainant filed a complaint against the opposite parties claiming for refund of Rs.2,74,512/- regarding the insurance claim for the loss of goods and a sum of Rs.50,000/- towards compensation for damages mental agony and for costs.
3. Complainant availed loan on the basis of trade and business for Rs.5,00,000/- as per the loan account No.01563/071131 dated 11.3.04 after complying all the formalities for the same and the 1st opposite party who had advanced the loan and tie up with 2nd opposite party to insure the goods stock of the complainant to the guarantee of the loan as insisted by the 1st opposite party. On 25.11.2005, the complainants clinic was completely damaged due to floods from Cauvery and damage was caused due to heavy inundation caused by the floods and thereby the 2nd opposite partys surveyor conducted the spot inspection and estimated the damages and on 29.11.05 when the 1st opposite party was informed about the occurrence the complainant came to know that the renewal of the party was not at all made in March 2005 for the subsequent period and thereby in spite of various letters addressed to the opposite parties no response was made and the opposite parties are liable to compensate for the loss suffered by the complainant as 2nd opposite party repudiated the claim since there was no renewal of policy and thereby complainant has come forward with this complaint claiming the above reliefs.
4. The opposite parties denied the allegations of the complainant in their written version and the 1st opposite party contended that the loan was granted subject to the terms and conditions and as per the terms and it is the duty of the complainant to see the renewal of policy then and there and copy of the policy was already given to the complainant and the opposite party never took the responsibility to pay the premium as alleged and since the loan amount was itself cleared on 27.10.05 after which one month later on 25.11.05 the occurrence was taken place and in no way the 1st opposite party is liable. The 2nd opposite party contended there is no contract of insurance on 25.11.05 on the date of damages caused and no coverage of insurance on that date.
Hence the 2nd opposite party in no way liable to pay any amount.
5. On the basis of both sides the District Forum after an enquiry allowed the complaint by directing the 1st opposite party to pay Rs.2,59,512/- towards insurance claim and Rs.10,000/- as damages and Rs.1,000/- as costs.
6. Aggrieved by the order of the District Forum, the 1st opposite party has come forward with this appeal and it is contended that the District Forum wrongly allowed the complaint as it is not the duty of the 1st opposite party to renew the policy for the purpose of guaranteeing the loan amount which was already closed at the time of occurrence of the damages caused to the complainant. The complainant contended even though the loan was closed prior to the occurrence date since the policy must be kept in alive for the renewed period up to 31.3.2006, the 1st opposite party failed to renew the same and thereby liable for the same.
7. While considering both sides arguments, averments and contentions it is the admitted case of both sides that the complainant availed loan facilities on the basis of business product to the extent of Rs.5,00,000/- from 1st opposite party by executing necessary documents like Exhibit B3, B7 and B6 and B8 and n that basis on condition that the goods entrusted as security to the bank insurance to be made for the same from the 2nd opposite party as tie up arrangement with the 1st opposite party and thereby there was a policy for the earliest period from 31.3.04 to 30.3.05 as per Exhibit B1, B2 and B4 it is also not in dispute that after the expiry of policy on 30.3.05, there was damages to the articles of the complainant due to flood and inundation on 25.11.05 for which through the 2nd opposite party a survey was made and the survey report Exhibit A11 was also submitted.
In those circumstances it is the contention of the 1st opposite party on 27.10.05 the loan account was closed and the occurrence of flood taken place on 25.11.05 for which they cannot be held liable. Regarding this the complainant contended even though the loan was closed on 27.10.05 if the policy was kept alive by renewing the same from 1.4.05 to 31.3.06 in between the policy period for the losses caused on 25.11.05 they would be in a position to get the relief from the 2nd opposite party as an insured person.
Regarding this contention it is acceptable one since the 1st opposite party was keeping the original policy which was obtained at the time of granting of loan by the complainant and it should be kept alive till the loan is discharged and thereby it is clear on the date of discharge of loan the policy was not renewed and it is the contention of the 1st opposite party that the complainant alone has to be more watchful in renewing the policy and they are not expected to do the same.
8. While considering this contention on perusal of Exhibit B2 and B4 the policy stands in the name of 1st opposite party and the complainant jointly and as per Exhibit B7 the agreement entered in to between the complainant and the 1st opposite party in condition No.10 it is stated that stocks and machineries should be insured against perils with an approved insurance company in the joint names of Firm and the bank and the policy will be retained by the bank and as per the agreement in Exhibit B8 in condition No.8 for insurance it will be done for the cost price against all applicable risk with bank clause and as per Exhibits B3 and B8 and in those circumstances it is clear that the 1st opposite party shall have the policy jointly executed in its favour also along with complaint and to retain the same with the bank till the loan is discharged and from that conditions it is clear it is also duty of the 1st opposite party to see that the policy kept alive till the disposal of loan discharge. Admittedly in this case on the date of occurrence the period for covering of insurance would be between 1.4.05 to 31.3.06 for which period the policy was not renewed even though the loan was in subsistence as on 1.4.05 till 27.10.05 the date of discharge of the loan and in the circumstances even though the occurrence was taken place on 25.11.05 after the date of discharge of the loan but within the period of policy in force if the policy was renewed at the earlier point from 1.4.05 when the loan was in subsistence the complainant would have availed the benefit of claim of insurance which is subsequently to be adjusted towards the loan amount due with the 1st opposite party.
9. The 2nd opposite party also contended that it is the duty of the 1st opposite party to send the proposal for the policy and premium amount to the 2nd opposite party through the 1st opposite party for the purpose of tie up arrangements and since the policy was not renewed the claim was repudiated as per Exhibit B6. For this purpose the learned counsel for the appellant relied upon the ruling reported in IV 2005 CPJ 112 (NC) State Bank of India Vs. Nagaraj and Others in which it is held as per the agreement of hypothecation that the stock goods shall be kept at borrowers risk and expenses in good condition and fully insured against los or damage as may be required by the bank, and also relied upon the ruling reported in 1999(6) SCC 361 Pradeepkumar Jain Vs. City Bank and Anr. for the same purpose pointing out that the insurer must keep the renewal of the policy at his risk and thereby the appellant is not liable for any insurance. The 1st respondents counsel relied upon the ruling reported in Pradeepkumar Jain Vs. City Bank and Anr by pointing out that the obligation of mere payment of premium could not result in automatic renewal of the policy. We find that the appellant also had certain duties to discharge in the matter of obtaining the insurance policy and cannot merely put the blame on the 1st respondent. Hence in this case since the policy stood jointly in the name of 1st opposite party and the complainant as well it is a duty of the 1st opposite party to see that the policy being renewed and kept alive pending discharge period of the loan and in our case it was not done by the 1st opposite party thereby which caused to loss to the complainant in getting the claim amount and the violation on the part of the 1st opposite party is clearly established the deficiency of service and in this circumstances we are of the view that the District Forum by considering all the aspects allowed the complaint and on the basis of Surveyors Report the claim was ordered to be paid. While considering surveyors report Exhibit A11 the surveyor has estimated the net suffered loss of Rs.2,59,512/- and on perusal of the report since the surveyor has inspected the spot immediately on28.11.05 the very next day after the occurrence and ascertained the details by giving descriptive details. The report estimated the loss to the extent of Rs.2,59,512/- and in view of the lapse on the part of complainant also to watch the renewal of policy we are of the view that 50% of the liability could be burned by the complainant even though the District Forum fixed the liability 100% on the 1st opposite party by allowing the entire amount of Rs.2,59,512/- to be payable by the 1st opposite party as the claim of insurance. Hence in those circumstances the appeal to be allowed in part to that extent alone by modifying the order of the District Forum regarding the quantum of compensation also. We are of the view that the District Forum awarded only a sum of Rs.10,000/- which we feel a reasonable and acceptable one by considering the loss and damages and mental agony caused to the complainant.
10. In the result, the appeal is allowed in part by modifying the order of the District Forum as follows :- (a) The order of the District Forum directing the 1st opposite party to pay Rs.2,59,512/- is hereby set aside. (b) The 1st opposite party is directed to pay only a sum of Rs.1,29,756/- (50% of Rs.2,59,512/-) towards the loss of insurance claim to the complainant. (c) In other respects the order of the District Forum is hereby confirmed. (d) No order as to costs in this appeal.
S.SAMBANDAM A.K.ANNAMALAI, MEMBER PRESIDING JUDICIAL MEMBER INDEX : YES / NO sg/B-II/aka//SBI