National Consumer Disputes Redressal
Sow. Sayyad Bilkhis Nijamoddom vs Branch Manager, Osmanabad Janta ... on 29 January, 2024
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3014 OF 2017 (Against the Order dated 16/01/2017 in Appeal No. 588/2015 of the State Commission Maharashtra) 1. SOW. SAYYAD BILKHIS NIJAMODDOM R/O. AMAN ROAD, "C" BLOCK, MAHEBUB NAGAR, LATUR ...........Petitioner(s) Versus 1. BRANCH MANAGER, OSMANABAD JANTA SHAKARI BANK LTD. OSMANABAD, BRANCH SHIVAJI CHOWK, LATUR ...........Respondent(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER
FOR THE PETITIONER : MR MOHIT GAUTAM, MR SHIRISH K DESHPANDE,
ADVOCATES FOR THE RESPONDENT : MR HEMENDRA JAILIYA, ADVOCATE
Dated : 29 January 2024 ORDER
This revision petition under section 21 (b) of the Consumer Protection Act, 1986 (in short, 'the Act') assails the order dated 16.01.2017 of the Mumbai State Consumer Disputes Redressal Commission, Maharashtra (in short, the 'State Commission' in FA no. 588 of 2015.
2. The brief facts of the case are that the petitioner/ complainant obtained a cash credit loan facility of Rs.3.00 lakh on 01.01.2009 from the respondent bank. The respondent bank at the time of granting the loan obtained an insurance for the stock in trade for Rs.6.00 lakh from ICICI Lombard General Insurance Company and debited Rs.26,103/- as insurance premium in the loan account of the petitioner. A Hypothecation Agreement for the stock in trade of the petitioner was executed by the respondent bank with the petitioner vide Hypothecation Agreement dated 19.11.2009, and an insurance policy was issued from 30.11.2010 to 29.11.2011. The petitioner alleges that the respondent Bank did not renew the policy thereafter. On 01.03.2012 there was a fire in the shop of the petitioner/ complainant due to short circuit which caused a loss of stock in trade of Rs.6,65,626/-. The claim of the petitioner was denied by the Bank on 24.04.2012. The petitioner approached the District Consumer Disputes Redressal Forum, Latur (in short, 'the District Forum') which, on contest, allowed the complaint and directed payment of Rs.3.00 lakh within 30 days failing which with interest @ 9% per annum along with Rs.5,000/- compensation for mental agony and Rs.3000/- towards cost.
3. On appeal, the Maharashtra State Commission Consumer Disputes Redressal Commission, Mumbai, Circuit Bench at Aurangabad (in short, 'the State Commission') set aside the order dated 16.01.2017 on the ground that it was obligatory for the respondent Bank to get the insurance policy renewed as per clause 11 of the Hypothecation Agreement which was for the insured goods against fire and other risk. It was only in default, thereof, that the bank 'may' but not 'shall' be bound to renew such insurance. The State Commission relied upon the judgment of the Hon'ble Supreme Court in the case of HDFC Bank Ltd., vs Reshma and Ors., 2015 (3) SCC 679. This order is impugned before us on the grounds that the order of the State Commission was based on an erroneous interpretation of clause 11 of the Hypothecation Agreement and that the ratio in HDFC Bank Ltd., (supra) pertains to hire purchase agreement which is not applicable to the present case.
4. I have heard the learned counsel for the parties and have carefully perused the documents on record.
5. The learned counsel for the petitioner argued that the petitioner had stated that he had taken the policy to secure the loan extended to him by the respondent and that there was no dispute regarding fire. It was argued that the bank was obliged to renew the insurance in case the petitioner fails to do so, therefore, the liability of the claim rests upon it.
6. Per contra, the respondent argued on the basis of clause 11 of the Hypothecation Agreement and stated that there was no such obligation cast upon the respondent. Clause 11 of the agreement reads as follows:
11. The borrower shall at the borrower's expenses keep the hypothecated goods in marketable and good condition and shall insure the same against fire and such other risk, as the Banks shall from time to time require for the full market value in one or more insurance offices approved by the Bank and shall deliver to the Bank the policies of insurance, duly assigned to the bank shall keep (on foot) and maintain such insurances throughout the continuance of the security and deliver to the Bank the renewal receipt. In default, the Bank may (but shall not be bound to) condition and render marketable to the goods or effect or renew such insurance. Any premium paid by the Bank and any costs charges and expenses incurred by the Bank shall be repaid on demand forthwith and shall until repayment with interest at the rate aforesaid, be a charge on the hypothecated goods. All sums received under such insurance shall be applied in or towards liquidation of the amount for the time being due to the Bank.
[ Emphasis added ]
7. As per this clause, the Bank may renew the insurance but is not mandatorily bound to renew the insurance. Therefore, the renewal of the insurance by the Bank cannot be held against it or it be made liable for the loss/damage on account of the fire being latched on the Bank.
8. In view of the above, the order of the State Commission cannot be faulted with and therefore, does not warrant any interference. For these reasons, the petition is liable to fail.
9. In view of the foregoing and the facts and circumstances of the case, the revision petition is dismissed as being without merits. There shall be no order as to costs.
10. All pending IAs are also stand disposed of with this order.
...................................... SUBHASH CHANDRA PRESIDING MEMBER