State Consumer Disputes Redressal Commission
Ramesh Chander Agarwal Hyderabad vs The State Bank Of Hyderabad And Another ... on 24 December, 2008
BEFORE THE A BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD. F.A.No.1132/2008 AGAINST C.C.No.179/2008, DISTRICT CONSUMER FORUM-III, HYDERABAD. Between: Ramesh Chander Agarwal, S/o.B.N.Agarwal, aged about 55 years, Occ:Prop of M/s.Andhra Metal Box, R/o.14-1-354, Agapura, Hyderabad, A.P. Appellant/ Complainant And 1. The State Bank of Hyderabad, Darusalam Branch, Agapura, Hyderabad. 2. The State Bank of Hyderabad, Small Enterprises Credit Cell, Secunderabad, A.P. Respondents/ Opp.parties Counsel for the Appellant: Mr.Manne Hari Babu Counsel for the Respondents: Admission Stage. QUORUM: THE HONBLE MR.JUSTICE D.APPA RAO, PRESIDENT. AND SMT.M.SHREESHA, MEMBER.
WEDNESDAY, THE TWENTY FOURTH DAY OF DECEMBER, TWO THOUSAND EIGHT Oral Order:(Per Smt.M.Shreesha, Honble Member) *** Aggrieved by the order in C.C.No.179/2008 on the file of District Forum-III, Hyderabad, the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant is a self employed person operating a small scale unit under the name and style of M/s.Andhra Metal Box at Mahaboobnagar District. The complainant submitted that he availed working capital loan of Rs.5,00,000/- by hypothecating stocks and security of immovable property for his business in the year 2005 vide A/c.No.62002630944. The complainant submitted as per clause 5 of the terms and conditions of document No.1, a preliminary responsibility of obtaining insurance policy is fixed on the borrower. Considering the long distance from the office of opposite parties, it is orally agreed that opposite party No.1 shall complete the insurance formalities. The complainant submitted that the working capital loan was released on 8-12-2005 but no insurance policy was taken till 29-3-2006 due to which the complainant was at risk, as such, after oral adjustment of taking policy by opposite party No.1, it has debited on 29-3-2006 to the account of the complainant a sum of Rs.4,250/- towards insurance premium and the same is done by way of transfer entry and no cheque was issued by the complainant, which goes to show that the bank has agreed to obtain the insurance policy. Under the working capital loan, the complainant is required to submit monthly stock statement and extract copies of account books periodically. The ceiling of quantum of loan is very limited and the financial requirements of the complainant have become more and considering these factors, the complainant requested opposite party No.1 to increase the loan amount but opposite party No.1 has expressed its inability and suggested to submit an application for mortgage loan against more valuable property and the same shall be forwarded to opposite party No.2. If the same was approved, the outstanding amount of working capital loan account shall be adjusted from the mortgage loan amount and balance will be released to the complainant. The complainant agreed and accordingly submitted an application to opposite party No.1 on 26-4-2007 and the same was forwarded to opposite party No.2 through opposite party No.1. Opposite party No.2 sanctioned mortgage loan on 27-4-2007 and upon intimation by opposite party No.1, the complainant paid Rs.5,960/- dated 10-5-2007 to Sub-Registrar, Dood Bowli, Hyderabad towards registration fee and got executed the Mortgage deed in respect of immovable property worth more than Rs.25,00,000/- which is a pre-condition for release of mortgage loan. After completing all formalities, opposite party No.1 opened new mortgage loan account No.62031958557 on 14-5-2007 and debited a sum of Rs.4,54,773/- to the new account and credited the same into the old account of the complainant (working capital loan ) A/c.62002630994 and closed the old account. On 17-8-2007 midnight a burglary took place in the factory of the complainant in which raw material worth Rs.2,75,000/- was stolen. The complainant lodged a complaint on 19-8-2007 and informed orally opposite party No.1 on 20-8-2007 about the theft and requested to provide a copy of insurance policy, which was supposed to have been taken by opposite party No.1 on 31-3-2007. The complainant submitted that he was surprised to know that the bank has miserably failed to take the insurance policy on 31-3-2007 and did not bother to inform the same to the complainant so as to take steps to ensure the stocks are insured and submitted that this amounts to negligence leaving the complainant wide open the risk on his business, which constitutes deficiency in service.
The complainant got issued a notice to opposite party No.1 dated 23-1-2008 and he received a reply notice on 8-2-2008. The complainant submitted his application for mortgage loan on 26-4-2007 and the insurance policy is due for renewal on 31-3-2007. Opposite party No.1 failed to explain 26 days for non-renewal of the insurance policy or for non communication which amounts to deficiency in service and as such both opposite parties are jointly and severally liable to keep the complainant indemnified for the losses incurred and consequences thereof. Hence the complaint for a direction to the opposite parties to pay a sum of Rs.2,75,000/- for indemnifying the losses suffered due to deficiency is service caused by opposite parties, Rs.10,000/- per month from 17-8-2007 towards monthly income due to closure of business, Rs.50,000/- towards mental agony and Rs.5,000/- towards costs.
Opposite party filed its counter contending that the complainant has suppressed the material facts. The complainant availed working capital loan in the year 2005 for a Small Scale Industry set up at IDA, Kothur, Mahaboobnagar District. The loan application of the complainant contains that the preliminary responsibility of obtaining insurance policy is fixed on the borrower on his own at his costs for which opposite party is not at all responsible.
Opposite party No.1 has insisted the complainant to take insurance policy but he did not take the same on one pretext or the other and finally requested him to get insurance policy by debiting Rs.4,250/- towards the insurance premium from his account. Accordingly, opposite party No.1 has debited the amount and obtained the insurance policy in the name of M/s.Andhra Metal Box vide 431301/11/2007/39 valid from 19-4-2006 to midnight of 18-4-2007 against stock and machinery and Smt.Lakshmi Agarwal policy No.431301/11/2008/24 valid from 19-4-2006 to midnight of 18-4-2007 for building and furniture.
Opposite party No.1 has got the insurance policy as a value added service to facilitate the customer and it is not mandatory. Opposite party No.1 stated that the complainant availed working capital loan against hypothecation of stocks and security of immovable property and also requested to enhance the limit. The complainant requested opposite party No.1 to forward his fresh mortgage loan application against house property which is in the name of his wife, Smt.Lakshmi Agarwal and the same was forwarded to opposite party No.2, which was approved, the outstanding amount in old loan account shall be adjusted from new account and the balance amount was released to the complainant. The complainant registered the title deeds of immovable property thereafter a new loan against immovable property as mortgage loan with A/c.No.62031958557 was opened in the name of the complainant on 14-5-2007 and the outstanding amount of Rs.4,54,773/- was release from the new account which was credited to the old loan account and as such the old loan account was closed and in the old loan account stocks were insured from 19-4-2006 to midnight of 18-4-2007. The complainant submitted his application for a new loan against immovable property and the insurance for the said building for the mortgage loan is in force from 19-4-2006 to 18-4-2007. Opposite party No.1further stated that on midnight of 17-7-2007 a burglary took place in the factory in which the raw material worth Rs.2,75,000/- was stolen and a complaint was lodged on 19-8-2007 which was registered vide FIR No.180 dated 23-8-2007. The complainant gave written representation to opposite party No.1 on 23-1-2008 after lapse of 5 months and requested opposite party No.1to reduce the rate of interest in the mortgage loan and the same was rejected on the ground that the complainant himself requested opposite party No.1 to close cash credit facility while moving the application for mortgage loan against immovable property in which case the Bank do not insist for insurance of stocks as one of the condition laid down and there is no need for the bank to follow up for the same. Opposite party No.1submitted that they did not agree for reduction of interest rate on the existing mortgage loan because neither the stock was under hypothecation nor the limit was in operation and as such the reduction of interest was not possible. Opposite party No.1 denied that after burglary on 20-8-2007, the complainant informed it about the burglary and requested to provide copy of insurance which is supposed to have been taken on 31-3-2007 and submitted that the insurance policy is in the name of M/s.Andhra Metal Box valid from 19-4-2006 to midnight of 18-4-2007 as such there is no need of renewal of insurance policy on 31-3-2007 as alleged by the complainant. Moreover, the complainant had already expressed his intention of closing the cash credit facility i.e. loan against hypothecation of stocks and machinery and moved an application for mortgage loan against immovable property in which case opposite party No.1 do not insist for insurance of stocks and machinery as one of the condition when insurance policy is in force and prayed for dismissal of the complaint.
Based on the evidence adduced i.e Exs.A1 to A9 and Exs.B1 and B2 and the pleadings put forward, the District Forum dismissed the complaint.
Aggrieved by the said order, the complainant preferred this appeal.
The learned counsel for the appellant/complainant submitted that opposite party bank had debited an amount of Rs.4,250/- on 23-9-2006 and obtained insurance policies for house property covering the period from 19-4-2006 to 18-4-2011 and stocks, machinery etc. from 19-4-2006 to 18-4-2007. But opposite party failed to renew the policy from 18-4-2007 and the theft occurred on 17/18-8-2007 and because of non renewal of the policy by the opposite parties, the complainant could not claim the amount under the insurance.
We observe from the record that the facts not in dispute are that the complainant availed working capital loan for his business in the year 2005 for Rs.5,00,000/- and as per Clause 5 of the terms and conditions of sanctioning of loan, the primary responsibility of obtaining of insurance is fixed on the borrower. It is not in dispute that the working capital loan was released on 08-12-2005 and a sum of Rs.4,250/- was debited towards insurance premium on 29-3-2006.
It is the case of the complainant that opposite party No.2 sanctioned mortgage loan on 27-4-2007 and the complainant paid Rs.5,960/- dated 10-5-2007 towards registration fee and got executed the mortgage deed in respect of immovable property worth more than Rs.25,00,000/-. On 14-5-2007 an amount of Rs.4,54,773/- was debited to the new account and the same was credited into the old account and the old account was closed. Meanwhile on 17-8-2007 a burglary took place in the factory of the complainant and when the complainant wanted to make a claim he was informed that opposite parties did not renew the insurance policy. We observe from the record that the complainant has closed his former account for Rs.5,00,000/- and a new account for overdraft of Rs.10,00,000/- was opened by giving a different number, therefore, the insurance taken for covering goods for the former loan account of Rs.5,00,000/- will not continue for the overdraft facility of Rs.10,00,000/-. The complainant did not file any evidence in support of his case that he has requested the opposite parties to renew the insurance policy and that the opposite party has not adhered to that request. There are no terms and conditions furnished by the complainant to state that it is mandatory for the bank to renew the insurance policy without any request made by the complainant. In the absence of any terms and conditions furnished by the complainant to establish his case that the opposite parties are liable to renew his insurance policy, we are of the considered view that the observation by the District Forum that there is no deficiency of service on behalf of the opposite parties is justified. Therefore, we see no reason to interfere with the well considered order of the District Forum.
In the result this appeal fails and is accordingly dismissed. There shall be no order as to costs.
PRESIDENT. LADY MEMBER.
Dated 24-12-2008.