State Consumer Disputes Redressal Commission
Bank Of Baroda Dena Bank vs Tata Aig General Insurance Co. Ltd. on 13 August, 2024
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No. 248 of 2024
Date of institution : 17.05.2024
Reserved on : 02.08.2024
Date of Decision : 13.08.2024
Bank of Baroda Dena Bank through its Chairman/Managing
Director/Principal Officer service through its Branch Office at M.M.
Malviya Road, Civil Lines, Amritsar through its Branch Manager.
....Appellant/Opposite Party No.4
Versus
1. Tata AIG General Insurance Co. Ltd. through its
Manager/Person Incharge, Burj Punjab, SCO 9, 2nd Floor, District
Shopping Complex, B-Block, Ranjit Avenue, Amritsar
2. Tata AIG General Insurance Co. Ltd. through its
Manager/Person Incharge, Unit Nos. 810-816, 8th Floor, World Trade
Tower, Plot No. C-001, Sector 16, Noida (UP) 201 301
3. Tata AIG General Insurance Co. Ltd. through its
Manager/Person Incharge, 3rd Floor, Shanti Tower, SCO No. 37,
PUDA Complex, Jalandhar 144 001
....Respondents No.1 to 3/OPs No.1 to 3
4. M/s Dhan Guru Creations through its Proprietor Smt. Baljit Kaur
W/o S. Ranjit Singh, having its Business Place Opp. State Bank of
India, Karmon Deori, Amritsar
....RespondentNo.4/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 28.03.2024 passed by the District
Consumer Disputes Redressal Commission,
Amritsar.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
Mr. Vishav Kant Garg, Member First Appeal No. 248 of 2024 2
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present:-
For the appellant : Sh. Vishal Ahuja, Advocate
For respondent No.4 : Sh. Sukhandeep Singh, Advocate
SIMARJOT KAUR, MEMBER :
Appellant/Opposite Party No.4 i.e. Bank of Baroda, has filed the present Appeal through its Branch Manager to challenge the impugned order dated 28.03.2024 passed by the District Consumer Disputes Redressal Commission, Amritsar (in short, "the District Commission") on the ground that the District Commission had wrongly fastened a liability of Rs.1 Lakh upon them, payable to the Complainant.
Vide impugned order the Complaint filed by the Respondent/Complainant-Smt. Baljit Kaur Proprietor of M/s Dhan Guru Creations had been partly allowed.
2. It would be apposite to mention here that hereinafter the parties will be referred, as were arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the Respondent/Complainant in the Complaint filed before the District Commission are that M/s Dhan Guru Creations through its Proprietor Ms. Baljit Kaur had purchased Insurance Policy to secure the goods/stocks lying in the shop i.e. ladies suits, dress materials etc. The said Insurance Policy No.22601750760000, was valid w.e.f. 24.06.2019 to 23.06.2020. It had been purchased by the Complainant by availing the services of Bank of Baroda (earlier Dena Bank, which now merged with Bank of Baroda) as the Complainant had opened Cash Credit Account (Loan Account) with the First Appeal No. 248 of 2024 3 said Bank. The Complainant had purchased the insurance policies for the last 7 years through the services of his Bank. Local Agent of the OP No.4- Bank had inspected the premises of the Complainant at the time of issuance of insurance of Rs.40 Lakh. The Complainant had provided all the necessary documents like stock statement at the time of purchase of the Policy. The said Bank had deducted the premium of insurance from the loan account of the Complainant. It is averred that in the insurance policy in question the address of the Complainant had been wrongly mentioned as Cash Dhara Bazaar, Partap Bazar Chowk, Amritsar whereas the correct address was Karmon Deori Chowk, Opposite State Bank of India, Amritsar. The Bank official had also mentioned said address in its Godown Inspection Report dated 30.03.2019. Regarding the said mistake, the Complainant had informed the Bank vide letter dated 18.06.2018 that they had wrongly mentioned his address as Ist Floor, Near Babalal Ji Mandir, Cash Dhara Bazar, Partap Bazar Chowk, Amritsar and requested to correct the same as Karmon Deori Chowk, Opposite State Bank of India, Amritsar. On receiving the said letter, fresh godown inspection was conducted on 30.03.2019 and the Complainant was informed about the same vide email dated 02.08.2019. Surveyor of the Insurance Company i.e. Atul Kapoor & Company had also visited the site on 06.08.2019 and demanded certain documents from the Complainant regarding change of address in the policy vide letter dated 14.08.2019. The Complainant had provided all these documents to him. Unfortunately, before the change of address in the insurance policy, incident of fire had occurred in the Business premises of the Complainant. Intimation in this regard was given to the Bank as well as Insurance Company but the OP-Insurance Company vide email dated 29.12.2020 repudiated his insurance claim on the ground that the premises where fire incident had occurred was not First Appeal No. 248 of 2024 4 covered under the insurance policy. Thereafter, the Complainant served legal notice dated 19.01.2021 upon OPs requesting them to release the insurance amount but of no use.
4. Stating the act of the opposite parties to be deficiency in service and unfair trade practice, it was prayed in the Complaint that the OPs be directed to pay Rs.50,00,000/- (loss amount) alongwith 18% p.a. interest, Rs.5 Lakh as compensation and Rs.1 Lakh as litigation expenses.
5. Upon issuance of notice in the Complaint, the Appellants/ Opposite Parties filed their separate written statements. However, during the course of arguments, it was contended by the Counsel for Respondent No.4/Complainant that the Respondents No.1 to 3 i.e. Tata AIG General Insurance Co. Ltd. had cleared their liability by paying approximately an amount of Rs.42 Lakh to the Respondent No.4/Complainant as Insurance Amount. Meaning thereby that the said Insurance Company had accepted the Insurance Claim of the Complainant. Therefore, there is no need to mention the stand of Insurance Company at this stage.
6. OP No.4-Bank of Baroda had appeared before the District Commission by raising certain preliminary objections that they had no role in purchase of the insurance policy from OPs No.1 to 3. Therefore, no liability could be fastened upon them. There was no relationship of consumer between the Complainant and Bank qua the insurance policy in question. The Complaint was filed with malafide intention and she had tried to mislead by mixing the facts regarding the CC Limit Account with the Insurance Policy. It had been pleaded that the premium of insurance had only been paid to the insurance company on the instructions of the borrower. They had acted only as an agent of the borrower otherwise they had no role in purchasing the insurance policy. The said services provided by the Bank were not banking services rather extension services. Under First Appeal No. 248 of 2024 5 the instructions of the Complainant, they had paid the amount to the Insurance Company. It was the duty of the Complainant to inform regarding any change in address of premises of business/modification/alteration and other amendments etc. to the Insurance Company as well as the Bank. Factum of communication dated 02.08.2019 regarding inspection of godown by its official was admitted. It was pleaded that no services had been provided to the Complainant regarding purchase of the Insurance Policy, hence, no deficiency in service or unfair trade practice on its part. It was prayed that the Complaint be dismissed qua it.
7. After considering the contents of the Complaint and the reply thereof filed by the Opposite Parties as well as on hearing the oral arguments raised on behalf of both the sides, the Complaint filed by the Complainant was partly allowed by the District Commission vide order dated 28.03.2020. The relevant portion of said order as mentioned in Para- 16 is reproduced as under:
"16. Consequently we partly allow the complaint and the opposite parties No.1 to 3 are directed to pay the assessed amount of Rs.33,04,875/- alongwith interest @ 7% p.a. from the date of filing of the complaint till its realization. So far as compensation, since the complainant was compelled to knock the door of this Commission and the opposite parties No.1 to 3 did not bother to redress the grievance of the complainant when their own surveyor assessed the loss to the tune of Rs.33,04,875/- and certainly this litigation could have been avoided. Though admittedly compensation term has not been explained in the Consumer Protection Act, however since this Act is based on principle of equity, good concise and natural justice and the Commission is empowered to provide compensation after assessing the facts of each case. Hence, the opposite parties No.1 to 3 are liable to pay exemplary compensation to meet the ends of justice. So far as liability of the bank is concerned, they cannot take benefit of its own laxity as they itself admitted that complainant has informed the updation of wrong address in the policy and the branch was in process of intimating the same to the Tata AIG for updation of address First Appeal No. 248 of 2024 6 in the meanwhile the wire broke out, as such opposite party No.4 is also liable to pay compensation to the complainant. This Commission further relied upon the latest law on this point of compensation i.e. the Hon'ble Supreme Court in case Amitabha Dasgupta Vs. United Bank of India and others AIR 2021 SC (Civil) 1457 wherein it has been held that "Deficiency in service- Duty of care should be exercised by bank irrespective of application of laws of bailment to contents of locker- Bank inadvertently broke customer's locker, without giving prior notice, inspite of clearing pending dues by him- Bank acted in blatant disregard to responsibilities owned to customer as service provider- Case of gross deficiency in service-Imposition of costs of Rs. 5,00,000/- on bank, would be appropriate compensation to customer." As such Opposite parties No.1 to 3 are directed pay compensation of Rs. 1,00,000/- as well as litigation expenses to the tune of Rs. 10000/- to the complainant. In the present case also huge liability of the bank qua loan was involved and huge risk on behalf of complainant was involved, as such we have no hesitation to hold that opposite party bank has also taken very casual approach while dealing with the case of the complainant qua the updation of correct address while getting the policy for the complainant firm, as such Opposite party No.4 is also directed to pay compensation of Rs.1,00,000/- to the complainant. During the course of arguments, it is further argued by the complainant that amount of compensation and Insurance amount should be made available to the complainant directly for this purpose Ld.counsel for the complainant relied upon the law laid down in United India Insu.Co.Ltd. Vs. Inder Singh Chauhan 2007(1) CLT page 16 of the Hon'ble National Commission New Delhi wherein it has been held that practice adopted by the Insu. company of directly paying to the person from whom the loan was taken by the insured without the consent cannot be justified. If the Insu. policy is taken in the name of the complainant, there was no question of paying the amount straightway to the financier. As such the opposite parties No.1 to 4 are directed to pay the whole awarded amount to the complainant. However, opposite party No.2 is at liberty to get the amount if due against the loan from the complainant as per Law. Compliance of this order be made within 45 days from the date of receipt of copy of this order; failing which complainant shall be entitled to get the order executed through the indulgence of this commission."
8. The aforesaid order dated 28.03.2024 passed by the District Commission has been challenged by the Appellant/OP No.4 on the ground that the District Commission had not considered the stand of the First Appeal No. 248 of 2024 7 Appellant/OP No.4 in right perspective. There was no deficiency in service or unfair trade practice on the part of the Appellant-Bank. Vide M.A. No. 634 of 2024, the Appellant-Bank has prayed to place on record the copy of Sanction Letter (A-2) and Composite Hypothecation Agreement (A-3).
9. As the above mentioned documents are admitted documents between the parties, accordingly, the present application is allowed and the documents are taken on record.
10. Mr. Vishal Ahuja, Advocate, learned Counsel for the Appellant has submitted that the Complainant had purchased the insurance policy at her own will. The Bank had remitted the insurance premium to the Company only on the instructions of the Complainant. The Bank had played only a role of mediator in the correspondence between the Complainant and the OP-Insurance Company. No act of the Appellant could be attributed with respect to the service provided by it. A penalty of Rs.1 Lakh had wrongly been imposed upon the Appellant-Bank and prayed that the same be set-aside.
11. On the other hand, Mr. Sukhandeep Singh, Advocate learned Counsel for the Respondent No.4 has submitted that the Bank could not escape from deficiency in their service as it had not intimated to the Insurance Company about the change/wrong mentioning of the insured premises of the Complainant in timely manner. Due to said act of the Bank, Insurance Company had once rejected her genuine claim initially and she had to suffer lot. She had to agitate time and again to both the OPs with regard to clarification of mentioning of wrong address of her insured business premises in the insurance policy. The learned Counsel has further submitted that the claim of the Complainant i.e. approximately an amount of Rs.42 lacs had been already paid by Respondents No.1 to 3 to First Appeal No. 248 of 2024 8 the Complainant. Therefore, the liability of Appellant/OP No.4 of Rs.1 lac is yet to be paid and OP No.4 has to comply with the order of District Commission passed on 28.03.2024. It has further been reiterated that the District Commission had rightly considered this mistake of the OP-Bank and imposed penalty of Rs.1 Lakh upon the OP No.4-Bank. The order under challenge is well reasoned order and needs to be upheld. There is no ground in the Appeal and the same needs to be dismissed.
12. We have heard the arguments of learned Counsel for the parties and have also carefully perused the impugned order passed by the District Commission and all the relevant documents available on the file.
13. The Counsel for the Respondent No.4-Complainant during the course of arguments has himself made a statement that the insurance claim of Rs.42 Lakh had been cleared by Respondents No.1-3 and has been paid to the Complainant. He has also stated that now only the Appellant-Bank has to comply with its liability of Rs.1 lac as imposed in the impugned order. To controvert this submission, the learned Counsel for the Appellant has stated that they had no role in purchasing the Insurance Policy by the Complainant as the policy had been purchased by the Complainant herself. It was stated that they had only transferred the amount to the Insurance Company on the instructions of the Complainant.
14. The issue for consideration by us is as to whether the Bank had any role in payment of the insurance premium. Accordingly, the case file has been perused and found that the Policy Schedule issued by the TATA AIG Insurance (page 71) wherein the name of the policy has been mentioned as 'My Business My Choice - PACKAGE'. The name of the Agent/Broker has been mentioned as 'BANK OF BARODA, License Code
- CA0004'. Therefore, it has been clearly established that the Bank was First Appeal No. 248 of 2024 9 having direct role in the purchase of Insurance Policy in question by the Complainant. Since the Bank had purchased the insurance policy and also debited and remitted the premium charges to the Insurance Company after deducting the same from the Cash Credit Account of the Complainant, in that case the Bank had direct link in the said transaction. The Bank had provided the details of the Business Premises of the Complainant to the Insurance Company. The Bank had provided wrong address and the insurance policy had been issued on that wrong address (page No. 71 of the Appeal). Therefore it was a case of clear cut deficiency in service on the part of the Appellant-Bank. Due to the said mistake on the part of the Bank, the Complainant had suffered harassment and mental agony after occurrence of incident of fire in her business premises as she had to approach Insurance Company time and again to clarify the fact of mentioning of wrong address as her claim had been rejected due to the said reason. The Bank cannot be absolved from its act of deficiency in service by not supplying the correct address of the Complainant to the Insurance Company inspite of informing it. The District Commission after thorough consideration had fastened the liability of Rs.1 lakh upon the Bank in the form of compensation to the Complainant for mental agony and harassment. Therefore, the order passed by the District Commission qua the Appellant regarding liability of Rs.1 lac is justified in view of above observation.
15. With regard to the issue raised by the Appellant-Bank during the course of arguments that the said amount of Rs.42 lakh received by the Respondent/Complainant, had to be paid to them as the account of the Respondent/Complainant was NPA. In that case, the Appellant-Bank can First Appeal No. 248 of 2024 10 avail appropriate remedy to recover the said amount from the Respondent/Complainant.
16. Accordingly, the Appeal of the Appellant-Bank being without any merit is hereby dismissed and the impugned order dated 28.03.2024 passed by the District Commission is upheld.
17. Since the main case has been disposed off, so all the pending Miscellaneous Applications, if any, are accordingly disposed off.
18. The Appellant had deposited a sum of Rs.50,000/- at the time of filing of the Appeal. Said amount, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith. The Respondent/Complainant may approach the District Commission for the release of the same and the District Commission may pass appropriate order in this regard in accordance with law.
19. The Appeal could not be decided within the statutory period due to heavy pendency of Court Cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER (VISHAV KANT GARG) MEMBER August 13, 2024.
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