West Bengal

Birbhum

CC/12/62

Narayan Ch. Kundu, S/o Lt. Bankim Ch. Kundu, - Complainant(s)

Versus

1) Br. Manager, SBI, - Opp.Party(s)

Self

22 Jan 2019

ORDER

            The Case of the Complainant Narayan Chandra Kundu in brief is that the Complainant is the borrower under the SBI of Kotasur Branch having his loan account being No. 11895224533 and 11895254976 and the OP No. 1 at the time of the disbursing the loan amount debited the insurance premium of Rs. 4320/- and they debited the same from loan account of the complainant as premium of the insurance policy but they did not deliver the policy to the Complainant.

            It is the further case of the Complainant that on 22/04/2012 at dead night the establishment of the complainant such as Mini Rice Mill was gutted in fire and inconsequence all the machinery, finished goods, semi-finished goods furniture and fixture and other valuable goods were severally damaged. That immediately after occurrence the complainant informed to the Fire-brigade and they came and extinguished the fire and thereafter they issued report in respect of loss due to fire. That the complainant informed to the police station and also the authority of the administration and to the OP/Bank about the aforesaid incident.

            It is the next case of the Complainant that he had been to the OP No. 1 and asked for insurance policy for which the premium has been debited from the loan account of the Complainant but, they did not deliver the same. That subsequently the complainant filed an application on 03/05/2012 under the RTI Act, 2005 before the OP No. 1 with a request to supply information in respect of the insurance policy but the OP No. 1 in reply they stated through their letter B, R 32/13 that there is no insurance till 2008. That the aforesaid statement of the OP No. 1 is false as from the Bank statements it will revealed that the OP/Bank debited insurance premium amount till 2011.

            It is the further case the Complainant that the OP/Bank intentionally without giving any information to him did not debit insurance premium in my loan account in the year 2012 although it is duty of Bank to insure hypothecated property. Be it mentioned here that the complainant never paid any premium in any cases to the insurance company directly. All the premium have been paid by the OP No. 1 themselves to the insurance company. That the bank authority did not disburse the entire subsidy amount to the complainant but they deposited partly subsidy amount. That in spite of subsidy amount deposited in the account of the complainant the OP imposed interest upon the entire loan account illegally. That the entire establishment i.e. Kundu Rise Mill of the complainant was hypothecated to the O.P No. 1 and O.P No. 1 is bound to insure the hypothecated property and the Bank did not supply the current status of the insurance policy even they did not supply the policy bond to the complainant. That the aforesaid act of the OP/Bank deprived the complainant from insurance claim and their such act is amounting to deficiency in service.

 

Hence this case for directing the Ops to pay Rs. 17,00,000/- as compensation for damages of the Rice Mill of the Complainant caused by fire and to pay Rs. 2,00,000/- (approximately) as 25% subsidy amount of the project with

            The Ops SBI have contested the case by filing W/V denying all material allegation of the complaint contending interalia the case is not maintainable and the complainant has no cause of action to bring the case.

            It is the specific case of the OPs that on receiving information regarding catching of fire of go-down on 23/04/2012 the bank official investigated the matter and found that no heavy damaged materials like paddy or rice at the go-down and the complainant also violated norms of rural go-down that go-down will stay with safety without any short circuit possibly and will free form outside hazards like fire equipment.

            It is the further case of the OPs that there was a massive objection from NABARD i.e. sponsored Bank that the Go-down was not constructed with scientific norms. In the report NABARD stated that “construction of rural go-down project is incomplete and he has not fulfilled the scientific norms of the rural go-down”. On the basis of that report from the NABARD they postponed to disburse his earlier subsidy amounting Rs. 87000/- and pending subsidy amount Rs. 110000/- which is in held up position due to NABARD report.

            We further find that it is the further case of Ops that all accounts of complainant are under NPA before long time of the alleged accident on 22/04/2012. No response found to deposit cash to reduce NPA form Mr. N.C. Kundu. Several demand notice served to repay these bad loans. But no response found from the part of complainant.

            It is the next case of the OPs that SBI Kotasur Branch has deducted the insurance premium for the year 2011-2012 but as per the transaction statement of his cash credit account would shows that no premium was deducted from his account and registered letter was sent to him informing this matter about the nonpayment of insurance premium. So the liability about the insurance claim is not justified and he cannot claim demurrage amount from Bank.

            Lastly the OP/Bank has claimed that the complainant to get ride form the bank due and to resist recovery proceeding of bank falsely filed the present case and demanded high, excessive and baseless compensation and the case is liable to be dismissed.

            During trial of the case the complainant Narayan Ch. Kundu was examined himself as PW 1. He also filed some documents. He was cross examined by the Ops.

 On the other hand one Anwar Patu, field officer of the Op No. 1 was examined as Opw 1. He was also cross examined by the complainant. The Ops also filed some documents.

 On hearing argument of both sides and considering materials on record, the present case was disposed on 20/08/2013 and following final order was passed:- That C.F case No. 62/2012 be and the same is allowed in part on contest against the O.P. No. 1, 2 and 3. The O.Ps are directed to pay Rs. 4,82,000/- as compensation + Rs. 8531/- as fire service charge + Rs. 10,000/- for harassment and anxiety + Rs. 5,000/- as litigation cost. in all Rs.5,05,531/- (Rupees Five Lakh Five Thousand Five Hundred and Thirty-One) only to the petitioner within one(1) month from the date of this order failing which the O.Ps shall be liable to pay Rs. 200/- (two hundred)per day for default from the date of order until payment in addition to the above amounts.

            Being aggrieved and dissatisfied with said order the complaint and Ops/Bank preferred FA/1007/2013 and FA/1096/2013 respectively before Hon’ble State Consumer Disputes Redressal Commission, West Bengal. Hon’ble State Commission was pleased to allow the appeals and modified the order passed by this forum in this way:-

 

            The Appellants/Ops Bank are directed to pay Rs. 8,00,000/- being insurance coverage, Rs. 5,00,000/- as compensation for harassment and litigation cost of Rs. 50,000/- to the Complainant/Respondent within 45 days from this date failing which simple interest @ 9% per annum shall accrue on the entire amount from the date of default till realization. The directions assed by the Learned District Forum are set aside. The impugned Judgment stands modified accordingly. Both the Appeals are thus disposed of.

            Being dissatisfied and aggrieved with said order Op/Bank preferred revision petition No. 1210/2016 before Hon’ble National Consumer Disputes Redressal Commission, New Delhi on Hon’ble National Commission was pleased to pass following order:-

            I allow the revision petition set aside the impugned orders and remand the matter back to the District Forum concerned for disposal in accordance with law. It is made clear that the complainant shall file amended complaint detailing all the facts constituting the case of action within four weeks. Thereafter the District Forum shall decide the complaint in accordance with law preferably within six months from today.

            During the present trial of the case the Complainant has filed application for amendment of the Complaint. The prayer was allowed. Then he filed Amended copy of the Complaint. The Op No. 1 to 3, have filed joint written version.

            The Complainant Narayan Ch. Kundu has filed fresh evidence as PW 1. He has been cross-examined by the Ops by filing questionnaires. He also filed some documents.

            The Op/SBI have also filed evidence of Sri Amit Sarkar, Branch Manager of Op No. 1, SBI, Kotasur as Opw 1. He has also been cross examined by the Complainant.

 Both parties have filed W/Argument and heard oral argument of both sides.

It is to be mentioned that Hon’ble National Commission has been pleased to direct this forum to dispose of the case within six months (preferably) after remend of the case.

            But after observing all formalities and giving opportunities to the parties to take necessary steps, some further time has been taken in disposing of the case, which is to be condoned.

Point for determination.

1.  Whether the complainant is a consumer under Sec. 2(1)(d)(ii) of the C.P. Act.?
2. Whether this Forum has jurisdiction to try this case?
3. Whether there is any deficiency in service on the part of the O.P.?
4. Whether the complainant is entitled to get any other relief or reliefs as prayed for?

DECISION WITH REASONS

Point No.1:- Evidence the Complainant took loan from the Op No. 1 SBI. Kotasur Branch to construct Rice Mill being Loan Account No. 11895224533 and 11895254976 and service provider and customer relation has been established.

During hearing of argument Ld. Advocate/Agent of the Ops/Bank submitted that the complainant is not a consumer U/S 2(1) (d) (ii) CP Act as he took loan for commercial purpose.

 In support of his contention he cited a ruling reported in 2011 (2) CPC 261 (N/C), where the complainant purchased 4 vehicles by taking loan form Op/Bank and failed to repay the loan. Hon’ble National Commission pleased to hold that as the complainant took loan for purchasing as many as 4 tracks, it cannot be said that he purchased the same for earing livelihood by self-employment and the purpose of the loan was commercial and the complainant was not consumer under CP Act.

            In the present case we find that the Ops raised no such plea that the present case is not maintainable as purpose of loan was commercial in previous W/V filed by them on 03/10/2012 before this forum.

 

They also did not raise such plea before Hon’ble State Commission or Hon’ble National Commission directing hearing of Appeal or revision respectively.

            By filing the present W/V on 20/06/2018 the Ops for the first time raised a plea that the complainant is not consumer under the Ops within meaning of S2 (1) (2) (ii) CP Act and the case is liable to be dismissed.

But there is no such is specific allegation that the purpose of the loan of the complainant was commercial and as such he is not entitled to set any relief in this case.

            We find that there is nothing in the record from which it can be concluded that purpose of loan was commercial.

            We find from the re-joinder dated 17/07/2018 filed by the Complaint that he claimed that he is marginal farmer having his small scale industries i.e. Kundu Mini Rice Mill with rural go-down.

            We find that in joint inspection report of go-down the complainant has been also shown as “farmer”.

            Considering over all matter into consideration and industrial a record we are constrained to hold that ruling cited by Ld. Advocate/Agent of the Ops is not applicable in this case and the complainant is consumer U/S 2(1) (d) (ii).

            Thus this point is decided in favour of the complainant.        

Point No. 2:- O.P No.1 and 2 have branch and office within jurisdiction of this Forum.

The total valuation of the case is Rs. 19,28,531/- which is  less than maximum limit of the pecuniary jurisdiction of the Forum i.e. Rs. 20,00,000/-. So, this Forum has territorial and pecuniary jurisdiction.

Point No. 3 and 4:- Both points are taken up together for convenience of discussion as they are related to each other.

Evidently the Complainant is the borrower under the SBI of Kotasur Branch having his loan account being No. 11895224533 and 11895254976 for the purpose of construction of a Mini Rice Mill with go-down of the complainant.

It is admitted fact that on 22/04/2012 at dead night the establishment of the complainant such as Mini Rice Mill was gutted in fire and inconsequence all the machinery, finished goods, semi-finished goods furniture and fixture and other valuable goods were severally damaged. 

We find that the Complainant in his Complaint and evidence stated that the OP No. 1 at the time of the disbursing the loan amount debited the insurance premium of Rs. 4320/- and they debited the same from loan account of the complainant as premium of the insurance policy but they did not deliver the policy to the Complainant.

We find that the Complainant in his evidence further stated that after such incident he had been to the OP No. 1 and asked for insurance policy for which the premium has been debited from the loan account of the Complainant but, they did not deliver the same. That subsequently the complainant filed an application on 03/05/2012 under the RTI Act, 2005 before the OP No. 1 with a request to supply information in respect of the insurance policy but the OP No. 1 in reply stated through their letter B, R 32/13 that there is no insurance till 2008. That the aforesaid statement of the OP No. 1 is false as from the Bank statements it will revealed that the OP/Bank debited insurance premium amount till 2011.

It appears from the letter No. 32/13 dated 07/05/2012 sent to the Complainant by Op No. 1 Brach Manager, SBI Kotasur in reply to RTI that the Complainant has not insured against his two accounts since June 2008 and also has not given duplicate copy of insurance policy to them.

But we have already stated that the Complainant has been claiming that since disbursement of loan Op No. 1/Bank has been debiting premium of insurance from his account.

 

It appears from the statement of account of the Complainant that on 04/06/2004 Rs. 4320/-, 18/06/2005 Rs. 4408/-, 13/06/2007 Rs. 3932/-, 31/07/2009 Rs. 3621/-, 06/10/2010 Rs. 3221/- have been debited by the Op No. 1/Bank from the Bank Account of the Complainant as premium of insurance.

During hearing of argument Ld. Advocate/Agent of Ops/Bank submitted that it was the duty of the complaint to renew his insurance policy but he failed to do the same. Certain amount deducted by the Ops/Bank till 2011 has done by mistake which has ultimately adjusted with loan account.

But we find that it comes out from the mouth of Opw 1. Answar patua on a question put to him by the forum that “the insurance of the stock of the petitioner at the time of materializing the scheme was made at the behest of our branch (Bank). The Acts of remitting the premium were performed by the Bank itself by way of debiting due amount time to time from the account of the petitioner. Subsequently, the policy was discontinued as the account of the petitioner stood NPA. The fact was immediately reported the petitioner.”

During hearing of argument it was submitted on behalf of the Complainant that it was duly of the bank to insure hypothecated property and in support of such contention submitted copy of a judgment passed RW. Petition No. 4645/2012 (chairman, Indian Bank and others Vs. Consumer Protection council) and reported in 2013 (1) CPR 261 (Nc).

In the said case the matter arose out of a House Construction loan taken by respondent/Complainant from the revision petitioner/Ops in 2003. The construction of the house was completed in September, 2004 and the building got damaged by floods in November, 2005. The Complainant claimed compensation from the Ops, alleging that the Bank had failed to insure the property. As per the complaint petition, it was responsibility of the Bank of insure it. The borrower was not required to send any proposal to Bank in this behalf and the premium was also debited to his account.

It was the case of the Ops/Bank that as per clause 13 of loan agreement the borrower shall, at his/her own cost, insure and keep insured the mortgage security when executed/created against fire and such other insurable risks, loss or damage as the bank shall from time to time require.

The District Forum dismissed the case and on appeal Hon’ble State Commission has been pleased to allow the Appeal, holding that further, the 2^nd opposite party failed to instruct the 2^nd complainant to insure the building at the earliest point of time and in case, even after that, the 2^nd complainant failed to insure the building, then without further delay the 2^nd OP should have insured the building, since all the documents relating to the building were vested with the 2^nd OP, invoking clause 13 of the Agreement Ex. B4. The failure to instruct the 2^nd complainant to insure the building and failure to insure the building debiting the premium amount to the 2^nd complainants account in time amounts to negligence and deficiency in service on the part of the Ops. That, there is stated in Ex. B4 “without being under any obligation” does not empower the Ops to commit arbitrary omissions and commissions amounting to negligence and deficiency in service.

Ultimately Hon’ble National Commission has been placed to dismiss the revision petition and to confirm the order passed by Hon’ble State Commission by holding that we are therefore, in full agreement with the view of the State Commission that ‘without being under any obligation’ did not empower the RP/OP to commit arbitrary omissions and commissions.

In reply Ld. Advocate/Agent of the Ops/Bank submitted ruling reported in LAWS (SC)-2014-12-02(HDFC Bank Vs. Kumari Resma), where the claimant was going on scoter being No. MP09Q92.

            At that time the scoter belonging to 2nd respondent and driven by the Respondent No. 3, in rash and negligence manner, who dashed a scoter and sustained facture  injuries with other injuries and was treated at various hospital. She filed claim of Rs. 4,50,000/-.

 

It is the case of the other side that vehicle was given on hire by the owner together with its existing and running insurance policy. A person in whose name motor vehicle stands registered is the owner of the vehicle and where motor vehicle is the subject of hire- purchase agreement or an agreement of hypothecation, the person in possession of the vehicle under that agreement is the owner. Borrower had the initial obligation to insure the vehicle, but without insurance he plied the vehicle on the road and the accident took place. Person in possession of the vehicle under the hypothecation agreement has been treated as the owner.

            The tribunal allowed the claim petition of the claimant by awarding Rs. 1,75,000/-.

            On appeal Hon’ble High Court has been pleased to dismiss the appeal preferred by the bank and allowed the appeal preferred by the claimant in part.

            On appeal Hon’ble Apex Court has been pleased to allow the appeal holding that to satisfy the award is that of the owner, the respondent No. 2 herein and not that of the financier and accordingly that part of the direction in the award is set aside with observation that the intention of the legislature is quite clear to the effect, a registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control and there is evidence on record that the respondent No. 2 without the insurance plied the vehicle in violation of the statutory provision contained in Section 146 of the 1988 Act.

            On careful perusal of the said ruling we find that facts of the present case is quite different with said ruling as this is not a case related to possession or control over the insurance property.

            Ld. Advocate/Agent of the Ops/Bank cited another ruling reported in LAWS (NCD)-2013-7-7 (Rahul Electrical Vs. SBI and others) where the complainant had obtained a cash credit limit of Rs. 3 lakhs from the respondent/Bank against the hypothecation of the stock. It is the case of the complainant that as per the agreement, the stock of the complainant was required to be insure and the OP/Bank had agreed to get the stock insured on behalf of the complainant and debit the insurance premium to the cash credit account of the complainant.

             It was the further case of the complainant that in pursuance to the agreement the OP/Bank had been getting the stock insured but on 24/05/2014 the OP/Bank failed to renew insurance and 30/05/2017 the shop of the complainant caught fire due to short circuit and entire stock was destroyed.

            The complainant filed a case before District Forum claiming compensation.

The OP/Bank contested the complaint and took the plea the stock hypothecated with the bank were to be insured comprehensively for the market value by the complainant in joint names of the bank and the complainant. It was alleged that the OP/Bank never got the goods insured and it was for the complainant to get the goods insured at his own responsibility.

            The case was dismissed by the District Forum. On appeal Hon’ble State Commission has been pleased to dismiss the appeal.

            On revision Hon’ble National Commission pleased to dismiss the revision application observing that it is evident that as per the agreement between the parties, the complainant borrower when required by the bank was under obligation to get the stock in his shop insured at his own expense in the joint names of borrower and the bank and if the complainant failed to get such insurance on being asked to do so in writing, the bank in its own discretion was entitled to get the goods insured against fire and debit premium and other charges to the account of the complainant. There is nothing in this clause which may suggest that the bank was under any obligation to get the hypothecated goods insured on behalf of the complainant.

            He cited another ruling reported in LAWS (NCD)-2015-7-150 (Himachal Gramin Bank and VS. Ajodhya dss and sons) where the complainant obtained a cash credit facility to the extent of Rs. 2,00,000/- from Himachal Gramin Bank, petitioner in Revision Petition No. 3655 of 2014 executing the

 

requisite documents with the bank for this purpose. As per the terms of the agreement, the complainant/borrower was required to keep to stock which he ad hypothecated with the bank insured against fire risk with an insurance company approved by the bank. The insurance policy was to be taken out either in the name of the bank or in the joint name of the bank and the borrower.  A fire allegedly broke out in shop of the complainant on 14/01/2017 it however, transpired that the said stock had not been got insured after 29/12/2006. Consequently, no claim became payable by the insurance company. A complainant was then filed before a District Forum, seeking a directing to the bank to compensate the complainant. The complainant was resisted by the bank on the ground that as per the agreement it was the obligation of the complainant to get the stock insured and the bank was not under an obligation to take an insurance cover in respect of the said stock. It was also stated in the reply that the complainant had not submitted the stock statement undertaking the value of the stock after December, 2005 and therefore the policy could not be got renewed.

            The District Forum dismissed the case. On appeal Hon’ble State Commission has been pleased to allow the appeal the part.

            On revision Hon’ble National Commission has been pleased to allow the revision filed the bank and dismissed the revision filed by the complainant observing that it would thus be seen that the complainant specifically agreed with the bank that even if the bank does not take the insurance policy, it will not be held liable by him, in case, the claim is rejected by the insurance company. In the present case the claim having been rejected on the ground that the insurance policy had expired prior to the loss, the above referred part of Clause 7 of the Hypothecation Agreement comes into play and consequently the bank cannot be held liable for the alleged omission to get the insurance policy renewed after 28/12/2006.

            But in the present case, the case is otherwise. Inspite of deduction of premium OP/Bank did not insure the mill and in the ruling reported in 2013 (1) CPR 261 (NC) Hon’ble National Commission pleased to confirm the order passed by the Hon’ble State Commission by observing that failure to instruct the Complainant to insure property in question and failure to insure building by the bank debiting the premium amounts in time amounts to negligence and deficiency service.

 We further find that it is the case of the Ops/Bank that all accounts of the Complainant are under NPA (Non performing Agents) loan before the time of alleged accident on 22/04/2012. So, the Ops/Bank has no liability against insurance claim of the Complainant.

Though it is the case of the Ops/Bank that accounts of the Complainant were NPA long before 22/04/2012 but statements of the Accounts of the Complainant show that on 12/03/2012 Rs. 550/- was debited for the account of the Complainant as A/C keeping fees, on 16/03/2012 Rs. 500/- was debited as inspections

charge and on 19/05/2012 Rs. 500/- was debited as processing fees.

It is the specific case for the Ops/Bank as the accounts of the Complainant are under NPA, so the Ops/Bank has no liability regarding Accounts of the Complainant.

But no scrap of paper like notification or order is forthcoming before the forum to show that in case of Account of the Complainant becoming NPA; every liability or obligation of the Bank would be sized.  

Considering over all matter into consideration and materials on record and relying upon the judgment passed by Hon’ble National Commission in Revision petition No. 4645/2012 we are constrained to hold that the act of the Ops i.e. failure to insure the Mini Rice Mill and go-down of the Complainant inspite of debiting the premium amount from the Accounts of the Complainant, amounts to negligence and deficiency in service on the part of the Ops and they are liable to compensate the Complainant by paying compensation.

 

We find that the Complainant has filed the present case claiming Rs. 17,00,000/- as compensation for  damage of his Rice Mill caused by fire with other relief. But we find that it is very much difficult to ascertain actual loss and damage of the Complainant.

However, we find from statements of Assessets Hypothecated dated 18/04/2012 for month of April 2012 i.e. at the relevant time valuation of Hypothecated property was shown as Rs. 4,82,000/- by the Complainant and Op No. 1/Bank received the same by putting seal and signature. Beside that no other document is forthcoming before the forum in this regard.

 Copy of TR form No. 7 shows that Rs. 8531/- has been deposited by the Complainant as fire extinguishing charge.

In this juncture we think the Complainant is entitled to get Rs. 4,82,000/- as compensation and Rs. 8531/- as fire service charge with compensation of Rs. 2,00,000/- as compensation for harassment and Rs. 50,000/- as litigation costs totaling Rs. 7,40,531/-.

So, both points are decided in favour of the complainant.

Case succeeds.

Proper fees have been paid.

Hence,

O R D E R E D

that C.F case No. 62/2012 be and the same is allowed with costs against the Op No. 1 to 3 SBI.

            The Ops are directed to pay to Rs. 4,82,000/- as compensation and Rs. 8531/- as fire service charge with compensation of Rs. 2,00,000/- as compensation for harassment and Rs. 50,000/- as litigation costs totaling Rs. 7,40,531/-.

The aforesaid order will be complied with by the O.P No. 1 to 3 within one month from this order failing which the complainant shall be at liberty to execute the order. 

            Copy of this order be supplied to the parties each free of cost.