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Canara Bank vs M/S Leatheroid Plastics Pvt Ltd. on 20 May, 2020

7.      Under Clause-12 of Facility Sanction Letter dated 21.12.2015 and Clause-8 of Composite Hypothecation Agreement dated 22.12.2015, obligation to take insurance policy of hypothecated good was upon the complainant but the complainant did not take insurance policy of hypothecated good as such the bank cannot be held guilty for committing deficiency in service as the bank was not under obligation to take insurance policy. While interpreting similar terms, Supreme Court in Canara Bank Vs. Leatheroid Plastic Private Limited, (2020) 5 SCC 722, held that duty to effect insurance was with the borrower and the bank could not be held responsible, if there was any loss or damage to hypothecated assets which was not adequately covered by insurance taken by the borrower.
Supreme Court of India Cites 4 - Cited by 1 - A Bose - Full Document
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