Adv. For the Complainant - Gopal Chandra Panigrahi and Others
Adv. For the O.P. No. 1 - Biswajit Patra
Adv.For the O.P. No.2 - Ranjit Padhi and Others
Date of filing of the Case - 17.08.2022
Date of Order -10.10.2023
JUDGMENT
Smt. Jyotsna Rani Mishra , Member
Brief facts of the case.
The complainant applied for loan under PMEGP scheme to the Op No.1 Manager CANARA Bank to establish a ten house in the name of Kabita tent house Limpara to earn his livelihood . and sanction a loan amount of Rs.475000 on 07.11.2020 and released a sum of Rs.95000 from the
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sanctioned amount from the Bank on cash credit facility and rest amount is paid by the Canara bank to Shree supplier kesinga OP3.
That due to the outbreak of fire incident on 04.05.2022 at the resident of the complainant and all the hypothecated stock materials for which the loan from the Bank was obtained was burnt and which was intimated to the bank concerned on the next date.05.05.2022. after getting information from the petitioner, the OP No.1 deposited the premium amount on 05.05.2022 , so as to cover insurance policy of the petitioner for the tent house, consequently therein the claim was filed before the OP No.2 for getting the insured amount but OP2 informed the petitioner that at the time of Occurrence of fire incident of the Tent House there was no valid insurance cover as the Occurrence took place on 04.05.2020 and OP1 deposited premium amount on 05.05.2022 . This was informed through a letter to the complainant informing that he is not entitled to get the insured amount from the insurance company . It means repudiating the claim of the petitioner was rejected.
Complainant informed to OP1 about above a matter who advised the complainant to file a petition informing that Tent house was burned on 14.05.2022 in order to enabling the petitioner to avail the insured amount which was denied by complainant on the ground that the dt. of occurrence of fire incident was bon 04.05.2022 and the station officer Titilagarh fire station has submitted his report on 20.05.2022 accordingly.
That simultaneously the fire incident matter was also reported to the police station Sindhekela and the S.I has also submitted his report vide GD No.11 of 04.05.2022.
The case credit facility of loan under PMEGP for an amount of Rs.475000 was sanct6ioned by Canara Bank Naren OP1 on dt.07.11.20 and an stock insurance premium amount of Rs.1134 was deducted from the account of the complainant on dt.18.12.20 by OP1 . Similarly the Canara Bank Naren deducted Rs.886 from the Account of complainant on dt.04.05.2020 for insurance coverage for fire Terrorism etc. so as to deposit with insurance company (OP2) for renewal of the insurance coverage . The OPP party No.1 and 2 undisputedly had been renewing the insurance policy on behalf of complainant by paying premium amount to the insurance company OP2 and deducting the amount from Account of complainant.
Complainant relied on the following documents.
- Copy of the loan sanctioned order Rs.475000 on dt.07.11.2020 issued by Canara Bank Naren.
- Copies of 10 numbers of bill of Shree Supplier Kesinga.
- Copy of letter dt.27.05.2022 of Bajaj Alljan2 General Insurance Company Ltd. Bhubaneswar.
- Copy report dt.20.05.2022 of station officer Titilagarh fire station.
- Copy of report of S.I Sindhekela police station bearing G.D. No No.11 dt.04.05.2022.
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Having gone through the complainant its accompanied documents and hearing the complainant prima facie, its seemed to be a genuine case hence admitted and notice to the OP were served and in response they appear through their advocates and filed their written version.
- To counter the charge in the rival contention Canara Bank OP1 filed their written statement admitting that Bank deposited the insurance premium amount of borrower on dt. 04.05.2022 and around the same time the Bank has deposited premium of several others as a routine to the Bank. But not an obligation to insure the asserts. And denied to advised the complainant to file petition to informing that Tent house was burned on 14.05.2022.
And as per the cash credit argument it was the borrows dutyto claim the insurance with facts and documents proof of incidents. And the agreement for the loan cast a duty on theborrower to get the hypothecated goods insured in the joint names of the complainantand the bank. It faulted the complainant for not having insured the properties.
And it is not a fact that there was as negligence and defection of the duty on part of OP1
because Bank as a business organizations always protect the rights of Bank as well as rights of
his customers. So there is no deficiency in service.
- Bajai Allianz General Insurance company OP2 filed their written statement admitting that OP1 deposited the premium amount on 05.05.2022 Hence there it is evident from the contentions of the of the complainant that on the dt. Of alleged loss. So there is no grievance of complainant against this insurance company.
- Shree Suppliers , Kesinga OP3
No such written statementsubmitted by OP3 as such he is admitted.
Heard the complainant persued the material on record with submission and vehement denials of the learned advocated for OPS with arguments. After going through the pleading of both the partiesI observed that OP1 CANARA BAQNK isunlawful but before entering to the merit of the case, it is better to have a bare knowledge about the Contract Act says about obligations.
A contractual obligation or duty is something that parties agree to do or become responsible for when they sign a contract. The obligation can vary widely between contracts but they will usually fall in to two board categories,A promise to do something and promise not to do something . If an obligation is not met the legal system of ten provides resource for the injured party.
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In a bilateral contract both parties agree to an obligation and involve equal obligation from the offer or and the offeree, something that is done for such reasons to fulfill one’s obligations, It is a course of action that some one is required to take whether legal or moral.
Indian contract Act 1872 Sec 37 states Obligation of parties to contracts the parties to a contract must either perform or offer to perform their respective promise unless such performance is dispensed with or executed under the provisions of this act or of any other law.
Obligation is a legal bond between two individuals which control each other not in all respect but just to perform any particular action. Obligation is that part of law which creates right of one person , is the duty of other.
Obligation arising from contracts have the force of law between the contracting parties and should be complied within good faith , obligation, either arise from law or contracts and they are Judicialnecessities.
Hence , in this case the Bank who is Op1. Has been obligated to paid the renewal insurance premium of the hypothecated stockannually and the complainant have the sufficient amount in his account that it is not hardship on the part of the OP1 to debit the Insurance premium amount from the account of complainant. When a financial institution like Bank tie up with an Insurance company and insured the loan advanced by the Bank, it is the duty of the Bank to paid the Insurances premium in time before lapse of the coverage period. The Insurance company is also duty bound to convey the Bank regarding the States of the policy and alaram the Bank to pay the premium in time before the expiry of the coverage date. The obligation should be reciprocal between the party.
Hence the borrower has only obligation to have sufficient funds to meet the Insurance premium paid by the Bank in auto debit system. More over regarding hypothecated stock , the Bank is duty bound to make secure of the stock before expiry period.
The Judgment cited by the Ops are not appropriate here in this case because in this case neither the Bank had given anynotice to the complainant regarding insurance , rather paid the insurance premium after the happening of the fire incident. The complainant A/C always have sufficient fund which can be easily debited in Auto debit system for payment of insurance premium but due to the latches and ignorance or commission or omission of the wrong the insurance premium amount not paid in time by the Bank.
The case in hand the occurrence took place on dt.04.05.2022 , the report submitted by the fire brigade Titilagarh is also started the occurrence took place on dt.04.05.2022. The 1st insurance policy made on dt. 18.12.2020 with a premium Rs.1134/- valid till 17.12.2021, the next renewal should be on dt.16.12.2021 to 15.12.2022 which was not done by the OP1 and the
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premium was paid on.05.05.2022 and fire incident was took place on. Dt. 04.05.2022. due to non payment of premium in time the policy was lapsed and not cover the insurance benefit.
There was no payment of premium by the OP1 to the Insurance company before 16.12.2021 which is not reflected in the statement of account found on the record. A sum of Rs.886/- was paid by the Op1 (CANARA Bank) to Op2 (Bajaj Allianz Insurance company) on dt.05.05.2022 reflected in the policy certificate found on the record after the fire incident , which shows the callousness of the OP1 was unfair trade practice and also defective trade practice which amounts to deficiency in service.
In the view of above fact and circumstances the complainant is exempted from contractual liability as there is no Scope on the part of the complainant to enter the agreement betweenOp1 and OP2 . The payment of premium by OP1 to OP2 , after lapse of policy was fruitless as such the OP1 is exempted from his liability. Due to non payment of premium amount in time the OP1 is lible to compensate the loss sustained by the complainant . In the view of the above discussion came to the conclusion that the complainant is allowing with following directions. Hence Order.
OP1 is directed to pay the insured amount Rs.4,75000/- with 10% interest to the complainant.
I further directed to pay Rs.50,000/- towards loss of trade and to pay Rs.5000/- towardsLitigation expenses and Rs.50,000/- towards mental agony and harassment within One month from the date of order. Failing which the entire amount should be paid by OP1 . with 12% interest till realization.
No award as to cost.
PRONOUNCED IN THE OPEN COMMISSION TO-DAY 10th day of October‘ 2023.