National Consumer Disputes Redressal
Indian Overseas Bank vs Ms Sheba And Anr on 27 September, 2013
National Consumer Disputes Redressal Commission New Delhi Revision Petition no. 3521 of 2008 (Against the order dated 10.06.2008 in Appeal/complaint no. 2178 of 2007 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore) Indian Overseas Bank J P Nagar Branch Mysore Represented by its Petitioner Senior Manager Sri S R Prashanth Vs 1. Ms Sheba Wife of Robby Soans M/s Shawn Distributors 1656/F, K Block 6th Main Ramakrishna Nagar Mysore 570 023 2. National Insurance Co. Ltd. Respondents Bangalore Branch Office II 33, Sagar Complex, 2nd Floor Kempe Gowda Road Bangalore 560 009 Represented by its Branch Manager BEFORE : HONBLE MR JUSTICE V B GUPTA PRESIDING MEMBER HONBLE MRS REKHA GUPTA MEMBER For the Petitioner Mr Anup Kumar, Advocate for Ms V Mohana, Advocate For Respondent no. 1 Mr Rajendra Singh, Advocate with Mr Shiv K Bharti, Advocate For Respondent no. 2 Ms Pankaj Bala Verma, Advocate Pronounced on 27th September 2013 REKHA GUPTA Revision petition no. 3521 of 2008 has been filed under section 21 (b) of the Consumer Protection Act, 1986 challenging the order dated 10.06.2008 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (the State Commission) in appeal no. 2178 of 2007. The facts of the case as per respondent no. 1/ complainant are as follows: The respondent no. 1/ complainant is the proprietrix of the firm M/s Shawn Distributors and for her livelihood was engaged in the business of distribution of ice-creams as stockists and distributors for M/s Pastonji who are manufacturers of ice-creams. The business involved stocking and storing of ice-creams in cold storage, in cold rooms. For this purpose, the respondent no. 1/ complainant borrowed a sum of Rs.3,95,000/- as term loan from the 1st opposite party the Bank in October 2004 and put up a cold storage unit. The respondent no. 1 also availed a sum of Rs.1,00,000/- against stock of ice-creams in cold storage. During the course of transactions with the Bank, the respondent no. 1 noticed a debit of Rs.12,300/- in her account no. 310400023 on 25.01.2004. When the respondent no. 1 made enquiries with the Bank she was informed that in order to cover the risk of lending, the Bank had insured against any loss to the extent of the loan amounts and debited the account of the respondent no. 1 for a sum of Rs.10,882/- and a sum of Rs.1418/- as premiums paid to the 2nd opposite party insurance company. Since the actual act of insuring against any loss was handled by her Bank, the respondent no. 1 went about her business of attending to the day to day administration, being fully confident that she had reposed her trust and faith in the competent hands of the 1st opposite party the Bank. As demanded by the 1st Opposite Party Bank, the respondent no.1 even credited the said sum of Rs.12,300/- to the said account on 05.11.2004. The 2nd opposite party insurance company or its representative, did not ever meet this respondent no. 1 either before or after the payment of the premium by the 1st opposite party Bank. Even after considerable time had elapsed after the debit of the premium amount, the respondent no. 1 did not receive any receipt or policy from either of the opposite parties. So the respondent no.1 made enquiries with the 2nd opposite party insurance company regarding this. The 2nd opposite party insurance company then informed her that as there was a loan from the 1st opposite party Bank and there was a lien on the policies held by the 1st opposite party Bank, the policies had been sent to the 1st opposite party Bank. The 1st opposite party Bank confirmed the same and also assured her that all her interests and the 1st opposite party Banks own interests were fully protected. In view of the abundant trust and confidence that the respondent no. 1 had on the 1st opposite party Bank, she blissfully went about her business fully convinced. Whilst things stood so, there was a breakdown of the freezer compressor due to interruption of electrical supply on 4th March 2005. This resulted in the burning out of the freezer compressor and loss of ice-cream stock totalling to about Rs.2,86,000/- as is evidenced by the stock statement for the day. The same is produced herewith for the perusal of this Forum. Immediately, the matter was reported to the 1st opposite party Bank by the respondent no. 1 who advised her to inform the 2nd opposite party insurance company and present her claim, assuring her that she need not worry as everything was insured. Accordingly, the respondent no. 1 informed the 2nd opposite party insurance company under intimation to the 1st opposite party Bank. The 2nd opposite party insurance company carried out an inspection only on 13.04.2005. The respondent no.1 submits that what resulted thereafter was an extensive correspondence between the respondent no. 1 and the 2nd opposite party insurance company and their insurance surveyor, with the 1st opposite party Bank being kept abreast throughout. This respondent no. 1 was asked by the 2nd opposite party insurance company. Insurance surveyor on 29.12.2005, vide his letter no. NIC/ RSP 4 to submit the following to enable him to proceed further in the matter. (i) Claim form in original duly filled and with seal and signature (ii) Claim bill (iii) Latest quotation for carrier make CR SF 002 Model Cold Storage equipment of same capacity. (iv) Confirmation towards value for damaged parts. The respondent no. 1 furnished the first two items on 07.02.2006 and intimated that the salvage value be taken as NIL as there was no buyers for the same. The respondent no. 1 also informed that she would be obtaining item no. 3, i.e., the quotation, shortly. The respondent no. 1 also submitted a claim separately for the loss suffered on account of the damage to the stocks of ice-creams which were stored in the cold storage. The respondent no. 1 was shocked to receive a letter no. NIC/ RSP 5 dated 14.02.2006 from the insurance surveyor intimating her that he had not conducted any survey towards the loss of ice creams as it was not covered under the policy details given to him. Completely upset by this, the respondent no. 1 approached both the OPs and sought clarification in this regard. The 2nd opposite party insurance company informed the complainant vide letter dated 02.03.2006 the damages to the stocks in cold storage due to change in temperature were not covered under the General Exclusion Clause no. 6 of the policy, and hence, settlement of the claim towards damaged stock of the ice-creams does not rise. The said policies were in the custody of the 1st opposite party Bank. On March 2006, the 2nd opposite party insurance company sent a cheque for Rs.16,833/- in full and final settlement of the claim towards the freezer equipment damage. As the sum was substantially below the claim of Rs.1,00,000/- towards stock of ice-creams and Rs.53,583/- towards cost of repair and replacement of the compressor unit and other electrical items for the cold room freezer, made by the respondent no.1, the 2nd opposite party insurance company was contacted. On behalf of 2nd opposite party insurance company one Sri Ramesh, on the instructions of one Sri Govindaraj heard the representation of the respondent no. 1 with regard to the inadequacy of the amount and the disallowance of the claims, and informed her that the insurance surveyor Sri Prakash would be getting in touch with her soon. As the said Sri Prakash did not contact the respondent no.1 even till 17.06.2006, the respondent no. 1 returned the said cheque no. 733073 to the 2nd opposite party insurance company vide her letter dated 17.06.2006 requesting that her claim be settled in full. In reply to this, the 2nd opposite party insurance company vide their letter dated 27.06.2006 contended among others, that the 1st opposite party Bank had not taken cover for deterioration of stocks kept in cold storage and hence settlement of claim towards the damaged ice cream does not arise. The 2nd opposite party insurance company also contended that there was inadequacy of the sum assured, because the quotation furnished by the respondent no. 1 showed that the cost of new equipment of similar capacity and model is Rs. 6,46,875/- as against the insured sum of Rs.3,95,000/-. The 2nd opposite party insurance company also enclosed the same said cheque no. 733073 for Rs.16,833/-. Not being satisfied with the reply, the respondent no. 1 vide her letter dated 28.07.2006 returned the said cheque and sought copies of the policies under which the insurance was covered, as she did not have them, as also proposals together with the enclosures to it, if any. Vide their letter dated 10.08.2006, the 2nd opposite party insurance company forwarded the duplicate policies and once again reiterated the same contentions and highlighted the fact that the 1st opposite party Bank who had taken the insurance had not taken cover for the stock kept in cold storage. As the duplicate policies were not attested, the respondent no. 1 once again wrote to the 2nd opposite party insurance company on 29.10.2006 requesting attested copies of the policy along with the enclosed enclosure, if any. Vide their letter dated 28.11.2006, the 2nd opposite party insurance company sent the attested copies of the policies as also the proposal form. A close examination revealed that the said alleged proposal form was not at all signed by the respondent no. 1 or anybody else. The respondent no. 1 then sought the 1st opposite party Banks view in this regard vide her letter dated 26.12.20056 which was received by the 1st opposite party Bank on 27.12.2006. But the 1st opposite party Bank has not sent any reply till date. The respondent no. 1 is even today repaying the said debt to the 1st opposite party Bank with interest as demanded by the 1st opposite party who has thus nullified the very purpose of the insurance, the premium for which this respondent no. 1 was made to pay. The respondent no. 1 submits that, if the say of the 2nd opposite party insurance company that the 1st opposite party Bank never insured the deterioration of stocks of ice-creams kept in cold storage were to be accepted, then the 1st opposite party Bank is guilty of deficiency of service in that, the 1st opposite party Bank purporting to act in the best interests of their client viz., this respondent no. 1 and so having collected the premium amount from the account of this respondent no. 1, the 1st opposite party Bank has failed to protect the interests of this respondent no. 1 by not insuring against the very eventuality that the 1st opposite party Bank said had insured. Therefore, the 1st opposite party Bank has failed to provide the service for which it collected a hefty sum from the respondent no. 1. This respondent no. 1 further submits that if the say of the 2nd opposite party - insurance company that the 1st opposite party Bank has under insured the value of the machinery is accepted, then again, then the 1st opposite party Bank is gain guilty of deficiency of service in that; the 1st opposite party ought to have insured for a higher value keeping in view the escalation of costs. Since the 1st opposite party Bank did not do so, the 1st opposite party Bank has failed to provide the service for which it collected a hefty sum from the respondent no.1. This respondent no.1 further submits that the 2nd opposite party insurance company is guilty of unfair trade practice, in as much as, it never contacted this respondent no. 1 before finalising the proposal. The 2nd opposite party insurance company ought to have met the respondent no. 1 in person, explained the pros and cons of each condition in each of the policies and then only ought to have accepted the payment from the 1st opposite party Bank. The 2nd opposite party insurance company contended in his letters dated 27.06.2006, 10.08.2006 and 28.11.2006 that the 1st opposite party Bank has under insured the machinery value. The 2nd opposite party insurance company has based this contention on the quotation which was submitted by this respondent no.1. The said quotation is a comprehensive one, which includes the value of the building and also for two compressors and accessories. The second compressor unit is a stand by one which is not part of the original plant design. The said quotation also includes the value of an ante-room. These were not part of the items insured. In any case, the building was never insured at all as may be seen from duplicate schedule produced herein. The sum assured, as stated in the attested schedule furnished by the 2nd opposite party insurance company discloses that the total value of insurance is Rs.4,95,000/- and that too only for the refrigerator for the pre-fabricated building model CR and for the cold storage equipment freezer 2 HP Model SF 002. The suppliers of the equipment have since furnished the break up of the two items; viz., PUF panels (for the cold room building) is Rs.2,75,000/- and for the two units of refrigeration is Rs.2,40,000/-. What has been furnished as a quotation is for total replacement of the equipment, whereas what has been sought is only replacement of a part of the equipment. In fact, there is no need to base the settlement of the claim on a quotation, as the cost of replacement has been worked out on the actual bills. Hence, there had been no under insurance as contended by the 2nd opposite party insurance company. Also, after imposing a pre-condition that the sum assured shall be equal to the cost of replacement of the same capacity and same kind, the 2nd opposite party insurance company cannot deduct any amount towards depreciation. This respondent no. 1 submits that, in order to avoid settling the genuine claim of the respondent no. 1, both the OPs have colluded together and are coming up with such excuses. This is more than evidenced by the fact that the alleged proposal form does not carry anybodys signature, much less that of the respondent no.1. Even the scoring off in the said proposal form has not been attested by any one. The respondent no. 1 prays this Commission to direct the 1st opposite party Bank to pay damage to the respondent no. 1 for an amount of Rs.5,00,000/- together with interest at 36% per annum from the date of filing the complaint to date of paying the amount as damages for the harassment meted out to this respondent no.1 and causing mental agony torture and hardship. Direct the 2nd opposite party insurance company to settle the claim in full for a sum of Rs.1,53,583/- (which includes the value of stock to the extent of Rs.1,00,000/- only) as made out by the respondent no. 1 together with interest at 36% per annum from date on which the cause for claim arose, that is to say from 09.04.2005 to date of payment of the amount. Direct the 2nd opposite party insurance company to pay a sum of Rs.5,00,000/- together with interest at 36% per annum from the date of filing the complaint to date of paying the amount as damages for the harassment meted out to this respondent no. 1 and causing mental agony torture and hardship. Cost of this complaint and such other relief as this Forum may deem fit to grant under the circumstances. In their written statement before the District Forum the petitioner/ opposite party 1 Bank have stated that the respondent no. 1 has borrowed a sum of Rs.2,55,000/- on 05.08.2004 for purchase of cold storage freezer unit from 1st opposite party. It is not true that the respondent no. 1 has availed a sum of Rs.1,00,000/- against stock of the ice-creams but for the purpose of business and for that respondent no. 1 has pledged LIC policies in favour of 1st opposite party. It is true that 1st opposite party had paid premium of Rs.10,882/- and a sum of Rs.1,418/- in all Rs.12,230/- to 2nd opposite party insurance company in order to cover the risk of the lending amount of Rs.2,55,000/- only and hence debited the same into respondent no.1 account. It is also true that the policies had been sent to the 1st opposite party Bank by the 2nd opposite party insurance company as there was a lien. The same has been made in view of the terms and conditions of the section advice and also as per clause 7 of the agreement of terms loan and hypothecation executed by respondent no. 1 in favour of 1st opposite party Bank. The 1st opposite party Bank refutes the allegations made in paragraph 7 of the complaint and further this party was not aware of the entire correspondence but only knows part of the correspondence made by 2nd opposite party insurance company. The 1st opposite party Bank submits that the purchase value of the cold storage freezer unit was Rs.3,95,000/- at the time of advancing the loan, hence, insurance was made for the said amount of Rs.3,95,000/- wherefore question of inadequacy of the sum assured does not arise. It is true that the stocks kept in cold storage has been covered under the fire policy, along with plant/ machinery and accessories with 2nd opposite party insurance company to the tune of stock for Rs.1,00,000/- and Rs.3,95,000/- respectively. For which a sum of Rs.1,418/- has been paid by the 1st opposite party bank to the 2nd opposite party. The dispute is between respondent no. 1 and 2nd opposite party insurance company, since the dispute is due to the rejection of insurance claim by the insurance company. Therefore, this opposite party is not necessary party in the above case. The complaint is bad for misjoinder of this opposite party. Copy of the written statement/ reply of respondent no. 2/ opposite party no. 2 insurance company has not been filed but is seen from the order of the District Forum, that respondent no. 2 has filed their version stating that after it was informed about the break-down of machineries of the respondent no. 1 they had appointed a surveyor to assess the loss who after assessing the loss submitted a surveyor to assess the loss who after assessing the loss submitted his report. It is further contended that the first opposite party Bank had taken fire insurance policies in the name of the respondent no. 1, one of the machineries and other on the stock of ice-cream as against fire. The opposite party further referring to the report of the surveyor has contended that the cost of new equipment similar to one which break down was Rs.6,46,875/- including all other charges, but the first opposite party Bank has taken a policy for Rs.3,95,000/- therefore the machinery was under insured. That the policy taken for the stock in trade is not covered under the conditions of the policies as the 1st opposite party Bank had taken the policy on the ice-cream stock for fire explosion, riot etc., but the melting of the ice-cream due to power failure since was not conversed it is not liable to compensate the respondent no. 1. That on the basis of the surveyor reports taking into consideration, the under insurance depreciation etc., found itself liable to pay a sum of Rs.16,833/- to the respondent no.1, but when a cheque was sent to that amount to the respondent no. 1, she refused to receive the cheque. Therefore, stated that it is not liable to pay a sum of Rs.1,53,583/- and Rs.5,00,000/- as claimed by the respondent no. 1 and has prayed for dismissal of the complaint. The District Consumer Disputes Redressal Forum at Mysore (the District Forum) vide order dated 17.09.2007 has held that it is to be seen that the entire machinery was insured and not the parts. The surveyor having accepted the value of the replaced parts as furnished by the respondent no. 1 should have also seen whether the broke down parts were the major parts of the machinery costing more value than the amount for which the machinery was insured. Therefore, the surveyor having agreed with the cost of replacement of the broken out parts should have recommended the payment of the actual cost of parts replaced. The 2nd opposite party insurance company has not disputed the report of the surveyor. Therefore, on considering all these aspects of the matter, we hold that the respondent no.1 is entitled to a sum of Rs.42,714.38 towards the cost of replacement of broken parts and the 2nd opposite party insurance company is liable to compensate it. With this we answer point no. 1 in the affirmative. Points no.2 and 3 : - The 2nd opposite party insurance company though has also issued an insurance policy for Rs.1,00,000/- towards the ice-cream stock, stocked in the godown, but has contended that the 1st opposite party Bank has only taken a fire policy for the ice-cream stock on behalf of the respondent no. 1 and the intervention of electricity and deterioration of the ice-cream is not covered under the conditions of the policy, therefore, it is not liable to compensate the respondent no. 1. The respondent no. 1 and the 1st opposite party Bank have not disputed that the 1st opposite party Bank had only insured the stock in trade for storm, cyclone, typhoon, tempest, hurricane, tornado, flood and or inundation but had not taken the policy for protection of the ice-cream stock from electrical interruption. Therefore, we hold that the 2nd opposite party insurance company is not liable for compensating the respondent no. 1 towards the loss of ice-cream. The 1st opposite party Bank as we have already stated above has not disputed that it had not taken insurance for the stock of ice-cream kept in the godown for covering the risk from electric intervention, but only taken insurance under the fire policy. The 1st opposite party Bank who itself took the policy from 2nd opposite party Insurance company on behalf of the respondent no. 1 and deducted the premium amount from the account of the respondent no. 1 by way of debiting, ought to have taken care to take policy which could have covered the risk due to intervention of electricity. The 1st opposite party Bank in this regard has not come forward with any explanation for its failure to take an appropriate insurance for the ice-cream stock. As such, we find deficiency on the part of the 1st opposite party Bank in not covering the ice-cream stock with an appropriate insurance policy. This statement of the respondent no. 1 do indicate that she sustained loss of Rs.1,00,000/- towards the loss of ice-cream stocked in the godown. Even otherwise, the complainant had only got the ice-cream insured to an extent of Rs.1,00,000/- only, this has not been controverter or rebutted by the 1st opposite party Bank. Therefore, we find no reasons to disbelieve the claim of the respondent no. 1 for awarding compensation of Rs.1,00,000/- towards loss of ice-cream against the 1st opposite party Bank. With the results, we answer the points no. 1 and 2 accordingly and pass the following: The complaint is allowed. The 1st opposite party Bank is held liable to pay a sum of Rs.1,00,000/- to the respondent no.1 being the cost of the ice-cream stocked in the cold storage. The 2nd opposite party Insurance company is held as liable to pay a sum of Rs.42,714.38 being the cost of replacement of the broken parts of the machinery. 1st and 2nd opposite parties (Bank and Insurance Company) are directed to pay the compensation award to the respondent no. 1 within two months from the date of this order, failing which they are directed to pay interest @ 12% per annum from the date of this order till the date of payment. The 1st and the 2nd opposite parties (Bank and Insurance Company) are also directed to pay Rs.1,000/- each towards the cost of this complaint. Aggrieved by the order of the District Forum the petitioner filed an appeal before the State Commission. The State Commission vide their order dated 10.06.2008 dismissed the appeal and ordered as under: The petitioner/appellant has deposited a sum of Rs.85,000/- before this Commission. Office is directed to transfer the same to the District Forum with a direction to the District Forum to pay the same to the respondent no. 1/ complainant after due notice to the respondent no. 1. Hence this present revision petition. The main grounds for the revision petition are that: The State Commission erred in holding OP no. 1 the Bank had taken a wrong policy. There is no special contract to take a particular policy or that there is no question of taking any wrong policy. It is submitted that there is no mistake by Bank. In fact the dispute itself is not a consumer dispute and the consumer court does not have the jurisdiction to decide the present case. Though the 1st opposite party/ appellant Bank took out insurance policies to cover and insure the stocks, stocks-in-process and ice-cream for Rs.1,00,000/-, still the Forum below held that this 1st opposite party/ appellant Bank is liable to pay the insured amount of Rs.1,00,000/- on the ground that the appellant has not taken out a proper insurance policy, though the appellant Bank had specifically insured the stocks, stocks-in-process and ice-creams stored in the cold storage freezer. Since there was a breakdown of the freezer compressor on 04.03.2005 due to interruption of electrical supply, which resulted in burning of freezer compressor and loss of ice-creams stocks, the respondent no. 1/ complainant should have arrayed the electricity company of Mysore, i.e., CESCOM Chamundeshwari Electricity Supply Company as one of the opposite party for proper adjudication of the case. The State Commission failed to appreciate that the District Forum was wrong in holding that there was any deficiency on the part of the petitioner herein. The relationship between the petitioner and the first respondent is restricted to the petitioner granting a loan to the first respondent. The services of the petitioner do not include obtaining insurance cover for the goods hypothecated. The agreement in clause 7 specifically states that there is no obligation on the part of the Bank to obtain an insurance cover. On the contrary the agreement also specifically states that it is the borrower (the first respondent herein) who is obliged to insure the machinery and stock. In light of this specific clause in the agreement, the finding that the Bank was guilty of deficiency of service, is ex facie perverse and incorrect. The petitioner further submits that both the District Forum and the State Commission failed to appreciate that the provision in the Loan and Hypothecation agreement for obtaining an insurance cover of the machinery and the stocks, was with the intent of protecting the interests of the Bank and not the first respondent. The first respondent cannot take recourse to the said clause to contend that the Bank was obliged to insure the machinery and stock. The State Commission failed to appreciate that the District Forums direction to the petitioner herein to pay Rs.1,00,000/- is perverse also for the reason that no evidence was adduced by the first respondent in regard to the exact extent of stock which was damaged. Without the same being proved by evidence, the District Forum could not have held that the value of stock destroyed was Rs.1,00,000/-. It is highly excessive and without basis. We have heard the learned counsel for the parties and have also gone through the records of the case carefully. It is an undisputed fact that the respondent no.1 has borrowed a sum of Rs.3,95,000/- as term loan from the petitioner Bank in October 2004 to put up a cold storage unit in the name of M/s Shawn Distributors for her livelihood and was engaged in the business of distribution of ice-creams as stockists and distributors for M/s Pastonji who are the manufacturers of ice-creams. She had taken another loan of Rs.1.00 lakh against stock of ice-creams in cold storage. It is also an undisputed fact that the petitioner had as security for the loan advanced taken insurance of machinery and accessories. There was break down of electricity on 04.03.205 which resulted in the burning out of freezer compressor and loss of ice-cream stock. Respondent no. 1 claimed insurance of Rs.1,53,583/- with interest @ 36% per annum for the value of the stock which was repudiated by OP no. 2/ respondent no. 2, on the grounds that the policy taken for the stock in trade is not covered under the conditions of the policies as the 1st opposite party had taken the policy on the ice-cream stock for fire explosion, riot etc., and melting of the ice-cream due to power failure was not covered by the existing policy. Respondent no. 1 in her complaint had stated as follows: When the respondent no. 1 made enquiries with the Bank she was informed that in order to cover the risk of lending, the Bank had insured against any loss to the extent of the loan amounts and debited the account of the respondent no. 1 for a sum of Rs.10,882 and a sum of Rs.1418 as premiums paid to the 2nd opposite party insurance company. Since the actual act of insuring against any loss was handled by her Bank, the respondent no. 1 went about her business of attending to the day to day administration, being fully confident that she had reposed her trust and faith in the competent hands of the 1st opposite party the Bank. As demanded by the 1st Opposite Party Bank, the respondent no.1 even credited the said sum of Rs. 12,300/- to the said account on 05.11.2004. The 2nd opposite party insurance company or its representative, did not ever meet this respondent no. 1 either before or after the payment of the premium by the 1st opposite party Bank. Even after considerable time had elapsed after the debit of the premium amount, the respondent no. 1 did not receive any receipt or policy from either of the opposite parties. So the respondent no.1 made enquiries with the 2nd opposite party insurance company regarding this. The 2nd opposite party insurance company then informed her that as there was a loan from the 1st opposite party Bank and there was a lien on the policies held by the 1st opposite party Bank, the policies had been sent to the 1st opposite party Bank. The 1st opposite party Bank confirmed the same and also assured her that all her interests and the 1st opposite party Banks own interests were fully protected. Petitioner also have admitted that it is true that 1st opposite party had paid premium of Rs.10,882/- and a sum of Rs.1,418/- in all Rs.12,230/- to 2nd opposite party insurance company in order to cover the risk of the lending amount of Rs.2,55,000/- only and hence debited the same into respondent no.1 account. It is also true that the policies had been sent to the 1st opposite party Bank by the 2nd opposite party insurance company as there was a lien. The same has been made in view of the terms and conditions of the section advice and also as per clause 7 of the agreement of terms loan and hypothecation executed by respondent no. 1 in favour of 1st opposite party Bank. Counsel for the petitioner had also admitted that the initial policy was taken by the Bank and the premium for the policy was debited to the account of respondent no. 1. He further argued that it was for the respondent no. 1 to check on the policies taken. But as has been admitted in their written statement by the petitioner, the policies were taken by them and respondent no. 2 had sent the policies directly to the petitioner, in view of the terms and conditions of the agreement. As per the clause 7 of the agreement of the policy which states that shall be handed over to the Bank. Hence, petitioner cannot take the plea that respondent no. 1 should have checked the policy taken is the appropriate one. Respondent no. 1 has specifically written in her complaint that mentioning that on her enquiring with the second opposite party about the non-receipt of the policy, the respondent no. 2 had informed her that there was loan from petitioner and there was a lien on the policy held by the petitioner and the policy had been sent to the bank. The petitioner Bank had confirmed the same and has also assured her that all her interests and also the interest of the bank are fully protected. Respondent no. 1 in her complaint has also stated that not being satisfied with the reply, the respondent no. 1 vide her letter dated 28.07.2006 returned the said cheque and sought copies of the policies under which the insurance was covered, as she did not have them, as also proposals together with the enclosures to it, if any. Vide their letter dated 10.08.2006, the 2nd opposite party insurance company forwarded the duplicate policies and once again reiterated the same contentions and highlighted the fact that the 1st opposite party Bank who had taken the insurance had not taken cover for the stock kept in cold storage. As the duplicate policies were not attested, the respondent no. 1 once again wrote to the 2nd opposite party insurance company on 29.10.2006 requesting attested copies of the policy along with the enclosed enclosure, if any. Vide their letter dated 28.11.2006, the 2nd opposite party insurance company sent the attested copies of the policies as also the proposal form. A close examination revealed that the said alleged proposal form is not at all signed by the respondent no. 1 or anybody else. The respondent no. 1 then sought the 1st opposite party Banks view in this regard vide her letter dated 26.12.20056 which was received by the 1st opposite party Bank on 27.12.2006. But the 1st opposite party Bank has not sent any reply till date. The postal receipt is produced herewith as proof of dispatch. The petitioner has nowhere in the reply specifically denied these averments made by respondent no.1. Hence, there is no reason not to believe that she has correctly stated that she never signed any proposal form or taken any policy personally and that she had never received the policies with the terms and conditions, as also her statement that respondent no. 2 never discussed the same with her before issue of policies. In view of the above, we find that there is no jurisdictional error, illegality or infirmity in the order passed by the State Commission warranting our interference. The revision petition is accordingly dismissed with cost of Rs.10,000/- (Rupees ten thousand only). Petitioner is directed to pay an amount of Rs.5,000/- directly to respondent no. 1 by way of demand draft and deposit the balance amount of Rs.5,000/- by way of demand draft in the name of Consumer Legal Aid Account of this Commission, within four weeks from today. In case the petitioner fails to deposit the above said amounts within the prescribed period, then it shall be liable to pay interest @ 9% per annum till realisation. List on 22ndNovember 2013 for compliance. ..
[ V B Gupta, J.] ..
[Rekha Gupta] Satish