Lallan Prasad vs Rahmat Ali & Anr on 13 December, 1966
12. Shri O.P. Gupta, the learned counsel for the appellant has argued that in fact as per the past practice adopted by the plaintiff-Bank, it was always the plaintiff-Bank getting the pledged/hypothecated goods insured and, therefore, for the period under the dispute it was for the bank to have secured the aforesaid insurance cover. Shri Gupta has relied upon Lallan Prasad v. Rahmat Ali and Anr., A.I.R. 1967 S.C. 1322, Durga Dass v. Sansar Singh, 2003(2) R.C.R. (Civil) 270 and N.R. Srinivasa Iyer v. New India Assurance Co. Ltd., A.I.R. 1983 S.C. 899 to contend that it was for the bailee to protect the property hypothecated and take such care of the goods pledged as required. As far as the proposition of law stressed by Shri Gupta is concerned, there is no dispute. However, in the facts and circumstances of the case, the aforesaid proposition of law does not arise. The relationship between the parities is governed by a specific agreement of hypothecation Ex.P10 and agreement for pledge Ex.P8. The two clauses with regard to the insurance cover of the aforesaid goods are Clauses No. 6 and 5, respectively, of the aforesaid agreement. The aforesaid clauses have been reproduced above, in the order. A bare perusal of the aforesaid clauses would show that the hypothecated goods were required to be insured by the borrowers against the fire and other risk. It was only if the borrower had failed to so insure the goods, then the Bank was at liberty to get the aforesaid insurance at the risk and expenses of the borrower.