Punjab

StateCommission

CC/99/2016

Manoj Kumar Vijan - Complainant(s)

Versus

Bajaj Allianz General Insurance - Opp.Party(s)

Munish Goel

01 Aug 2018

ORDER

                                                               FIRST ADDITIONAL BENCH

 

 

    STATE CONSUMER DISPUTES  REDRESSAL  COMMISSION,  PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH

 

                   Consumer Complaint No.99 of 2016

 

                                                          Date of Institution   : 30.03.2016                                               

                                                                Order Reserved on : 26.07.2018

                                                          Date of Decision     : 01.08.2018

 

 

1.       Manoj Kumar Vijan,  S/o Shri     Suderson Lal through his Legal heirs:-

 

(i)      Tushar Vijan s/o Manoj Kumar Vijan

 

(ii)      Smt. Geeta Vijan w/o Manoj Kumar Vijan

 

          Both R/o 72, Green Model Town, Jalandhar City.

 

2.       Smt. Geeta Vijan w/o Manoj Kumar Vijan, R/o 72, Green Model Town, Jalandhar City.

 

3.       Kanta Rani w/o Late Sh. K. Gopal, R/o 72, Green Model Town,   Jalandhar City.

                                                                                                                                                                                                 ….Complainants

                                      Versus

 

1.      Bajaj Allianz General Insurance Company Limited, Branch      Office, 2nd Floor, Satnam Complex, Near BMC Chowk, G.T      Road, Jalandhar 144001 through its Branch Manager/Officer in   Charge.

 

2.      Punjab & Sind Bank Limited, Model Town, Jalandhar 144001           through its Chief Manager.

 

3.      M/s Destination one, Portion of 592 (D-1), Model Town Market,        Jalandhar City (through) its partner (i) Smt. Geeta Vijan (ii)    Tushar Vijan.

 

4.      Arvind Life Style Brands Limited Corporate Office 8th Floor,    Duparc Trinity, 17 M.G. Road, Banglore-560 001 through its      Director/Senior Manager Commercial.  

 

                                                                    …. Opposite parties

 

 

Complaint U/s 17(1)(a) of the Consumer Protection Act, 1986 (as amended up to date).

 

Quorum:-

 

          Shri J. S. Klar, Presiding Judicial Member.

              Smt. Surinder Pal Kaur, Member.

Present:-

 

          For the complainants                 :  Sh. Munish Goel, Advocate

          For the opposite party no.1        :  Sh.Vishal Aggarwal, Advocate

          For the opposite party no.2        :  Ms. Manjari Joshi, Advocate

          For the opposite party no.3        :  Struck off vide order dated    17.05.2017

          For the opposite party no.4        :  Sh.Arjun Sharma, Advocate

……………………………………………………………………………….

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

                                     

                     The complainants have instituted this complaint U/s 17(1)(a) of the Consumer Protection Act 1986 (in short the "Act) against OPs on the premise, that they have been the owners of the  building D-1 (portion of 592) Model Town Market near post office Jalandhar Posh and Commercial Hub of the  Town. OP no.3 has been running business of readymade garments, as partnership concern under the name and style of "Destination One,' of U.S Polo Assn Brand, vide partnership deed dated 31.03.2008. On the first floor of the building, there is showroom of Flying Machine Brands, and of readymade garments run by OP no.4, second floor of the building was used as store, whereas the third floor was used as law office of complainant no.1. The complainant no.1 insured the building against risk coverage under Standard Fire Special Peril Policy and Burglary Insurance Policy dated 17.12.2011 for the  period 19.12.2011 to 16.12.2012 and thereafter got the renewal, vide proposal form dated 22.12.2012 for policy period 22.12.2012 to 21.12.2013 and further took policy, vide proposal form dated 29.01.2014 for the  policy period for 22.01.2014 to 21.01.2015. OP no.2 /Bank obtained insurance and paid premium as consideration on behalf of complainants, which was deducted from the account no. 13-96897 of the complainants maintained by OP no.2 and in turn was paid to OP no.1. The insurance policy for each year was obtained in the  name of the  complainants by OP no.2 ,which has tie up arrangement with OP no.1. The insured amount of the policy of building was Rs.38 lac. The complainants took financial assistance and loan on the building /business under reference from OP no.2/bank. OP no.2/bank started obtaining the insurance policies from the year 2011 onwards for the  above policy years by deducting the premiums from the account of the complainants. However, no proposal form was delivered by OP no.2/bank to complainant.  The policy documents were not delivered to the complainants for the policy year 2011, 2012, 2013 and 2014. The terms and conditions including exclusion clause of the policy were not communicated to the complainants. As ill luck would have it, fire erupted in the  insured premises of the  complainants on the mid night of 28/29.01.2014 at about 12.40 am. Fire brigade services were pressed into service to extinguish the fire and it was controlled by  6.00 am in the morning. All the items, articles, stocks lying in the US Polo Stores flying machine, show rooms as well as stores at second floor and law office at third floor were completed destroyed by fire including interiors, ceilings, wood and granite, floorings, wooden racks, computers, sounds systems, other lights, LCDs, electric fittings, fixtures, TV books of accounts and other old records and books etc were completed reduced to ashes. This news was also published even in the newspapers. Police report was also lodged at P.S Division no.6 Model Town Jalandhar  about this incident of fire, vide report no.15 dated 30.01.2014. Complainant no.1 informed about the incident of fire to OP no.2/Bank on the day of incident of fire and gave written intimation, vide letter dated 30.01.2014 as well. OP no.2/Bank took insurance policy risk coverage of the building of complainants for perils of fire including burglary and complainant no.1 also informed insurance company/OP no.1 about this mishap.  The complainant no.1 requested OP no.2/bank to furnish insurance policy and other related documents, as it has been getting insurance policies for the building/show rooms of the complainants. OP no.2/bank provided copy of proposal form dated 29.01.2014 covering the  risk for the policy period 22.01.2014 to 21.01.2015 for sum assured of Rs.38 lac by OP no.1, whereas OP no.2/bank stated that original proposal form had been submitted to OP no.1/insurance company with renewal premium of Rs.10888/- after deducting it from the account of the complainants. It was apparent from proposal form dated 29.01.2014 provided by the  Bank to complainants that date of commencement of the policy was 22.01.2014, whereas policy schedule mentioned the commencement date of policy for risk w.e.f. 29.01.2014 and it caused surprise to complainants. OP no.2/Bank has not obtained insurance policy or by renewing it, which lapsed on 21.12.2013 and rather obtained it after gap of more than one month from the lapse of previous policy. OP no.2/bank submitted proposal form for insurance on 29.01.2014 at 10.38 am to OP no.1/Insurance Company, after knowing the fact that fire had already occurred at the previous night in the insured premises. Insurance claim was lodged with OP no.1/Insurance Company, vide claim no. OC-14-1202-4001-00000020. Thereafter, OP no.1 appointed M/s Jasjeet Singh Hora & Co. for preliminary survey and then Puri Crawford Insurance Surveyors & Loss Assessors India Pvt. Ltd from its panel for final survey. The surveyor asked the complainants to provide information and documents, which were provided by the complainants accordingly. OP no.1/Insurance Company repudiated the insurance claim of the complainant, vide letter dated 31.03.2014 through registered post on 01.04.2014 delivered to the complainant no.1 on 02.04.2014. The act of OP no.1 repudiating the insurance claim of complainants has been termed as malafide by complainants. The complainants further averred that OP no.2/Bank committed deficiency in service in not taking policy immediately, just after expiry of the previous policy on 21.12.2013 and thereby caused immense loss to complainants on account of its omissions and commissions and unfair trade practices. OP no.2/Bank further committed deficiency in service in delaying the payment of premium to OP no.1/Insurance Company after duly debiting it from the account of the complainants. The complainants also applied under RTI Act through speed post dated 14.09.2014 to OP no.2/Bank for obtaining the documents detailed in it. Neither any report of surveyor was provided nor investigation report was provided to complainants by OP nos.1 and 2.  OPs no.3 and 4 have been impleaded as performa OPs, as the above fire has occurred in the showroom of OPs no.3 and 4. The complainants filed complaint praying that OPs no.1 and 2 be directed jointly and severally to pay insured amount of Rs. 38 lac on account of loss caused by fire to insured building of the complainants due to devastation of the insured building. The complainants further prayed for interest @ 12% p.a. on the amount of Rs.38 lac from the date of occurrence of fire up to its actual payment, besides Rs.10 lac as compensation and Rs.30,000/- as cost of litigation.

2.                Upon notice, OP no.1 /Bajaj Allianz General Insurance Company Ltd filed its separate written reply and contested the complaint of the complainant by raising preliminary objections that . complainants put up concocted story just to recover the money and hence complaint is not maintainable. The complainants have suppressed the material facts from the Forum and stood disentitled to the relief claimed. The intricate questions of facts and law are involved in the complaint, which required voluminous evidence for resolution and hence matter cannot be determined by the Consumer Forum invested with summary jurisdiction only. On merits,  OP no.1 /insurance company pleaded that complainants obtained insurance policies for insurance of building through OP no.2/bank for the first time in the year 2011, vide proposal form dated 17.12.2011 for the period covering 19.12.2011 to 16.12.2012. Thereafter, the complainant had proposed for insuring the said building for second time in the year 2012, vide proposal form dated 22.12.2012 for the period covering 22.12.2012 to 21.12.2013. Thereafter, the complainant had proposed for insuring the said building for third time in the year 2014 by concealing the material facts. The complainant had never renewed the policy as a continuous renewal, but each time opted to obtain a fresh policy by providing proposal form after a break-in period between each policy. The coverage to the insured building of complainants would commence after payment of premium, credited in the account of the insurance company. OP no.1 issued policy bearing no.OG-14-1202-4001-00003505 on 31.01.2014 with date of commencement 29.01.2014 to 28.01.2015 with coverage date starting from the time of clearance of the amount of premium, credited in the account of OP no.1. OP no.1 appointed investigator to look into the matter and surveyors M/s Jasjeet Singh Hora & Co. and Puri Crawford Insurance Surveyors & Assessors Pvt. Ltd assessed the loss. It was found in investigation that fire had already broken out in the building of the complainants at 11.30 pm on 28.01.2014  and intimation was given at 12.30 am on 29.01.2014 about this loss. The Bank Manager of Punjab and Sind Bank/OP no.2, in collusion with the complainant,ssssssssss called the sales executive of the insurance company /OP no.1 on the next day of occurrence of fire i.e. 29.01.2014 after opening of the bank and handed over the  proposal form dated 29.01.2014 and demand draft for the amount of premium against the  said policy dated 29.01.2014. The Bank Manager of OP no.2 set out the risk inception date on the proposal form to be 22.01.2014 and requested to issue policy providing coverage from back date on account of audit being carried out in the Bank. The policy premium was cleared on 29.01.2014 after deduction from the  account of the complainants in favour of OP no.1. OP no.1 issued policy with coverage date from 29.01.2014 to 28.01.2015 with risk inception from 29.01.2014. The surveyor found loss in his survey report as Rs.13,85,274/- to the building only and not Rs.38 lac as claimed by the complainants. The loss occurred in the intervening night of closing hours of 28.01.2014 before commencement of this policy on 29.01.2014. The loss was caused due to fire and complainants managed to obtain policy to insured building subsequently by misleading the facts. OP  no.1 repudiated the contract of insurance, vide repudiation letter dated 31.03.2014 on that account. This fact was not disclosed to OP no.1 that fire had already taken place on the previous night of 29.01.2014 . The good faith has been breached in this case by means of misrepresentation by complainants and OP no.2. OP no.1 further averred that complainants are not entitled to any claim on account of violation of condition no.1 and 8 of general conditions of Standard Fire and Special Perils Policy. OP no.1 controverted the entitlement of complainant to claim the amount and prayed for dismissal of the complaint.

3.                OP no.2 filed its separate written reply and contested the  complaint of the complainant by raising preliminary objections that complaint is not maintainable against it. Any unfair trade practice or deficiency in service on its part has been denied. The complainant no.1 has been running readymade business  at Model Town Jalandhar and also obtained a business loan, which is an admitted fact by him. Manoj Kumar Vijan has already died. There was no privity of contract between complainant and OP no.2/Bank for purchasing a new insurance policy with respect to their business premises. The matter is complex in nature, which cannot be adjudicated in summary manner by Consumer Forum and needs to be referred to civil court for adjudication only. The complainants are estopped by their act and conduct form filing the complaint. The complainants never informed OP no.2/bank at any point of time that they obtained insurance policy from their choice of insurance company. It is obligation of the  complainants to get the insurance in order to safeguard the interest of  OP no.2/Bank. OP no.2/bank never insisted upon the  complainants to get the insurance coverage from OP no.1. The complaint is bad for non joinder and mis joinder of necessary parties. The firm has not been made a necessary party in this case by complainants and complaint is not tenable. OP no.2 denied the averments of the complainants on the point that it had been taking insurance policies from OP no.1 from 2011 onwards on their behalf for the insured premises. The complainants never intimated OP no.2/Bank to take the insurance policy of their own. Whatever insurance coverage was obtained, the premium amount has to be debited from the account of the complainants. OP no.2 has not any tie up with OP no.1. This fact was denied in the written reply by OP No.2/bank that it delivered only copy of proposal forms to complainants, as pleaded in the complaint. It was also denied that policy documents for the year 2011 to 2014 were not ever issued /delivered to complainants. OP no.2/Bank laid emphasis on this point that complainants have not intimated it that they had taken the policy or would take policy at their own end and in the absence of same, no fault can be fastened upon OP no.2/bank. It was denied that in the proposal form provided by OP no.2, the date of commencement has been wrongly interpreted as 22.01.2014. The fire took place at the premises on the intervening night of 28/29.01.2014 and insurance policy was taken on  29.01.2014 threafter  by suppressing the material fact by complainants. The complainants manipulated the facts in the complaint. OP no.2/bank controverted the other averments of the complainants and disowned any liability on its part on account of any alleged deficiency in service or unfair trade practice. OP no.2/bank prayed for dismissal of the complaint.

4.                Counsel for OP no.3 gave statement on 14.06.2016 that OP no.3 did not want to file any written reply to this complaint.

5.                Defence of OP no.4 was struck off, for not filing the written reply, vide order dated 17.05.2017 passed by this Commission.

6.                The complainant no.2 tendered in evidence her affidavit Ex.C-A, affidavit of Tushar Vijan legal heir of complainant no.1 as Ex.C-B, affidavit of Engineer B.S Rupra as Ex.C-C along with copies of documents Ex.C-1 to Ex.C-34 and closed the evidence. As against it; OP no.1 tendered in evidence affidavit of Navjeet Singh Deputy Manager (Legal) as Ex.R-1/A along with copies of documents Ex.R-1/1 to Ex.R-1/2 and closed the evidence. OP no.2 tendered in evidence affidavit of Harbhajan Singh Assistant General Manager Punjab & Sind Bank as Ex.RW-2/A along with copies of documents Ex.R-2/1 to Ex.R-2/2 and closed the evidence.

7.                We have heard learned counsel for the parties and have also examined record of the case.

8.                The foremost submission raised by counsel for PNB/OP no.2 before this Commission is that there is no relationship of consumer and service provider between the complainant and OP no.2, as provided in Consumer Protection Act,1986. This point was pressed by counsel for OPno.2/Bank that complainants deals in commercial activities and many business have been running in the premises, where the building was insured with OP no.1 and hence this is a commercial transaction, wherein there is no relationship of consumer and service provider, as defined under Section  2(i)(d) of Consumer Protection Act. The counsel for OP no.2/Bank further submitted that complainants have not pleaded anywhere that they purchased policy exclusively for the purpose of earning their livelihood by means of self-employment from the premises, because complainant no.1 is lawyer by profession. On account of partnership business, complainants obtained loan from OP no.2/Bank. It is a commercial transaction and no relationship of consumer and service provider existed between the parties.  The reference was made to law laid down by National Commission in "Subhash Motilal Shah (NHUF) and others versus Melagaon Merchants Co-op Bank Ltd," reported in 2013(1) CPJ 34 and "Nidhi Knitwears (P) Ltd versus The Manager Bank of Maharashtra" reported in 2014(3) CPJ 147 NC and "HDFC Bank Ltd versus Subodh Ghanshyam Prabhu"  reported in 2014(2) CPJ 336 by National Commission and "United Bank of India versus Janata Paradise Hotel & Restaurant" reported in 2014(3) CPC 615  by National Commission. While relying upon the above authorities, counsel for OP no.2/Bank canvassed that bank advanced loan to the partnership concern and hence Bank is not service provider to complainants under the Act. On the other hand, counsel for complainants countered this argument by contending that the complainant got the building insured through OP no.2/PNB Bank from OP no.1 and in the contract of insurance, there is no differentiation of commercial and self-employment factors, as primarily, the insurance is taken for the indemnification of loss only. We are of this view that contention of counsel for OP no.2 /PNB bank is not tenable on this point. There is no dispute between the parties with regard to the loan transaction in this case. The dispute centers around the point of indemnification of the loss of the insured building only. It is settled principle of law that contract of insurance is for indemnification of loss only and even a corporate body would be  a consumer, when it takes insurance and suffers loss and can seek reimbursement thereof from insurance company. PNB/OP no.2 is only an instrumentality in obtaining the insurance policy for complainants from OP no.2/Bank and hence this is a dispute primarily with regard to indemnification of the loss and it cannot be said that this Forum is not competent to entertain to decide this matter. The authorities citied by counsel for OP no.2 before us have been found to be distinguishable, because these authorities did not pertain to point of indemnification of the loss. On this point, we find support from law laid down by National Commission in M/s Harsolia Motors Vs.  M/s National Insurance Co. Ltd reported in First Appeal No.159 of 2004 decided on 03.12.2004, wherein it has been held that hiring of services of the insurance company by taking insurance policy, the complainants were carrying commercial activities cannot be held to be a commercial purpose. The insurance policy is taken for reimbursement or for indemnification of the loss only, which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. It was authoritatively held in the above authority by National Commission  that taking of insurance policy is for protection of the interest of the assured in the articles or goods and is not for making any profit, trading, or carrying on commercial purpose. Consequently, since the center of controversy is not the loan transaction between OPs no.1 and 2 and it is only arising out of the transaction of loan and hence the complainants are held to be consumers, as defined in Section 2(i)((d) of Consumer Protection Act, 1986.

9.                The further submission of counsel for OP no.1 /Insurance Company before us is that it is not liable to reimburse the loss to the complainants, because the loss to the building had already occurred before taking the insurance policy in this case. It was argued that there was no contract of insurance  between complainants and OP no.1, as such insurance company is not liable in this case at all. We find force in the submission of counsel for OP no.1/Insurance Company on this point. The complainant also admitted this fact in the complaint that OP no.2/Bank used to get insurance policies for each year for the  insured premises of complainants from OP no.1, as it had tie up with OP no.1. OP no.2 had not obtained the insurance policy after expiry of previous policy on 21.12.2013 and obtained renewal of policy after gap of more than one month, when grace period of previous policy had expired. OP no.2/Bank submitted proposal form for insurance on 29.02.2014 at 10.38 am after knowing the fact of fire in the premises at the earlier night and submitted premium dated 29.01.2014 after opening hours of the Bank, vide cheque no. 505645. The complainant pleaded this fact in para no.10 of the complaint. There is admission of the complainant on this point that OP no.2/Bank submitted the proposal form and premium after occurrence of fire in the premises of the complainant to OP no.1. The complainant has not denied this fact that fire had broken out prior to taking of the policy in this case. OP no.2 categorically stuck to this stand that policy had been taken after incident of fire only and as such there was no contract of insurance entered into by OP no.1 at the time of eruption of above fire in the insured building. The complainants have nowhere testified on oath positively in the affidavits of witnesses on the record that fire occurred after contract of insurance in this case. There is sufficient evidence adduced on the record by OP no.1/Insurance Company to prove this fact that fire had occurred earlier on the intervening night of 28/29.01.2014 and the date of commencement of the policy was subsequent thereto. On this point, our attention has been drawn to affidavit of Navjeet Singh Deputy Manager Legal Bajaj Allianz General Insurance Co. Ltd is Ex.R-1/A on the record. He testified on oath in this affidavit that complainants concealed the material facts from OPs of incident of fire before the commencement of the policy. The proposal form with premium was submitted by OP no.2/Bank on behalf of complainant to OP no.1 on 29.01.2014 after more than one month from the expiry date of previous policy, when grace period was already over. The occurrence of loss of the insured property has been misrepresented by not disclosing correctly before taking the policy in question. The affidavit of Harbhajan Singh working as Assistant General Manager Punjab & Sind Bank Model Town Jalandhar is Ex.RW-2/A, which has also been perused by us. We find from appraisal of his affidavit that he nowhere testified positively that the insurance was taken prior to the incident of fire in the insured premises of the complainants.  OP no.1 repudiated the contract of insurance on account of concealment of material facts as referred to above, vide repudiation letter Ex.C-20 dated 31.03.2014 on the record. The complainant protested to the repudiation letter by filing reply Ex.C-21 but to no effect.

10.                  In the circumstances of the case, we have come to this conclusion that fire caused to the loss to the building of the complainant on the intervening night of 28/29.01.2014 and the policy was submitted on the next coming day of 29.01.2014. Consequently, we have come to this conclusion that at the time of loss of building due to eruption of fire, there was no contract of insurance between the complainants and opposite party no.1/Insurance Company and no premium had been paid to OP no.1 by complainant at that time through OP no.2 at that time and hence no privity of contract and hence no privity of contract came into existence between complainants and OP no.1 through OP no.2.

11.              The main grievance of complainant in this case has been directed against OP no.2/PNB for this loss. The submission of counsel for complainants before us is that complainants have been taking the policy through OP no.2/Bank since 2011 onwards. OP no.2/Bank has been sending the proposal form and remitting the premium to insurance company, as it has entered into a tie up with OP no.1 /Insurance Company. There is no dispute of this fact that OP no.2/Bank advanced the loan for this building and it was hypothecated by complainants with OP no.2/Bank. We have observed that this is not dispute of loan transaction, but this dispute is with regard to negligence and deficiency in service in the matter of taking insurance policy, which is primarily for indemnification of loss only. The counsel for complainant, while relying upon affidavit of complainant  Ex.C-A  of Geeta Vijan , Ex.C-B affidavit of Tushar Vijan, contended that OP no.2/PNB had been taking the policies for hypothecated property as it has advanced loan to complainant by remitting the premium from the account of complainants to the  insurance company,  but in this case after expiry of previous policy on 21.12.2013, OP no.2/Bank has not taken the policy within the grace period of 30 days nor it intimated to the complainant in this regard. The counsel for complainant argued that OP no.2 had also not issued any such notice to complainants to that effect. We have been referred to the evidence of the complainant on the record in this case. The complainant relied upon affidavit of Er. B.S Rupra  BE (Civil) M.Tech (Structures) Ex.C-C, who proved his report Ex.C-29 that complainant suffered loss to the tune of Rs.4913826/- in this case due to eruption of fire. The complainants also relied upon photographs to prove the fact of loss caused by fire to the building in dispute. On the other hand, counsel for OP no.2/PNB argued that there is no deficiency in service or unfair trade practice on the part of Bank, as there was no clause in the loan agreement making it obligatory to take the insurance policy for complainants by the Bank. Much emphasis has been laid on this point by counsel for OP no.2/ bank that no such clause in the loan agreement or hypothecation agreement existed to obligate the Bank to take the policy for the  complainants for the above referred period. It was argued that this is  primarily a matter of agreement between the parties only and in the absence of any agreement, OP/Bank cannot be held liable for not taking the policy by complainant, as complainant has not informed the Bank about it. Both parties have given their evidence against each other on this point, as to whether it was intimated to OP /Bank or not. Ex.R-2/2 is statement of account on the record. The Bank deducted the premium of Rs.10,888/- on 29.01.2014 as insurance as per this statement of account from the account of OP no.3 and complainants. This premium has been deducted after occurrence of fire at the premises of the complainants. The primary dispute hinges on this point between the parties, as to whether it was the liability of OP no.2/Bank to obtain the policy for complainant, as the building was hypothecated with OP no.2/Bank, as it advanced loan for this building to complainants. No doubt loan agreement or hypothecation agreement have not been placed on the  record in this case, from which it could be ascertained, as to whether there was any clause in the agreement obligating the Bank to take insurance policy for hypothecation of the premises of the complainant with it or not. The complainants have shown their good faith over this matter by moving an application before this Commission for giving direction to OP no.2 /Bank to produce above documents pertaining to loan transaction, as detailed in application for production of documents. OP no.2/Bank has not produced loan agreement or hypothecation agreement, which are primary documents in this case before this Commission despite an  order passed by this Commission and ultimately it was observed by this Commission on 17.01.2018 that  above referred documents have not been produced by the OP no.2/Bank and case cannot be adjourned for this purpose indefinitely. An adverse inference can be drawn at the time of arguments of this matter against the OP no.2/Bank for withholding them. Section 114 of Indian Evidence Act makes the position  clear that when documents are in possession of party and it failed to produce the same and withhold their production without any valid reason,  then adverse inference can be drawn against it. In addition to that, complainants have further expressed their good faith over this matter by relying upon an application moved under RTI to OP no.2/Bank for giving copies of these documents to them. The application moved to Public Information Officer by complainants of OP no.2/Bank is Ex.C-31 on the record. Ex.C-30 is postal order. Ex.C-30 authenticates this application Ex.C-31 whereby complainant sought information from Bank with regard to loan agreement and subsequent change in the loan agreement, if any, and other documents mentioned in it. OP no.2/PNB Bank has not supplied copies of these documents to complainants despite application under RTI Act and gave reply Ex.C-33 that this Commission is seized of the matter and documents have not been provided. The complainants did their best to get loan agreement and hypothecation agreement and other documents produced on the record, but OP no.2/Bank dug in its heels in withholding them despite an order passed by this Commission directing them to produce them. There is supposed to be a clause in the loan agreement or hypothecation agreement that OP no.2/Bank was under an obligation to take insurance policy for the complainants, as building to be insured was hypohthecated with it in connection with protecting its interest. The amount of the complainants was lying with OP no.2/bank and it could safely deduct the premium in time therefrom for getting the policy to safeguard its loan. Non-production of material documents by OP no.2/Bank before this Commission and withholding the same without any valid reason justifies us in drawing this conclusion that there must be provision therein obligating PNB/OP no.2  to take insurance policy on behalf of complainants regularly for hypothecated property to protect its own interest. On this point, we find support from law laid down by National Commission in "State Bank of India versus Kashmir Singh and another" reported in 2010 CTJ Page 1235 (CP) (NCDRC) holding the Bank liable in not taking the policy and hence it should suffer the consequences.  National Commission has also examined this point in Corporation Bank  versus Smt. Sandhya Shenoy and another , reported in 2009 CTJ 303 (CP) (NCDRC) , where it has been held that complainant availed loan from the Bank for business purpose by hypothecating stock-in-trade, furniture and other material. Sudden discontinuance of the policy by the petitioner/Bank without informing and instructing the complainant to take the policy herself amounts to deficiency in service. In this case, OP no.2 /Bank had been taking the policy earlier and due to this reason, it supplied proposal forms to complainant in this case of the earlier policy as well. Sudden discontinuance of the policy by OP no.2/bank herein without any notice to complainant is deficiency in service on its part, as held by National Commission in the above-referred authority. National Commission has also held in "Kashmir Singh versus Punjab National Bank and another", reported in 1(2015) CPJ 240 (NC)  that if Bank was in no mood to furnish insurance amount, it should have notified complainant about the same. The bank has been held deficient in discharging of its duties,  moreso; when premium was to be deducted from the account of the complainants and complainants were not required to pay premium. We are further fortified by law laid down by National Commission in "State Bank of Patiala versus Girija Devi and others", reported in 1(2015) CPJ 689 (NC), wherein it was held that money was with the Bank, but it did not pay amount. No notice was given to the insured that due to lack of money, premium is not paid. Bank has been held deficient in service.

12.              Taking into account the entire evidence on the  record and the above referred law, we have come to this conclusion that OP no.2/Bank had been taking the policies, as the building was hypothecated with it by the complainants. OP no.2/Bank has been earlier taking the insurance policies qua hypothecation of the building to protect its interest. Sudden discontinuance of policy without giving any prior notice to complainants by it is deficiency in service  in our opinion. OP no.2 Bank has been held to be deficient in service and guilty of negligence by us.

13.              The next point for adjudication is as to how much amount of compensation, complainants are entitled to from OP no.2/Bank in this case for deficiency in service and loss suffered by the complainants due to devastation brought about by fire in the above-referred building. The complainants relied upon report of Er. B.S Rupra  B.E (Civil) M. Tech Ex.C-29 proved in his affidavit Ex.C-C that complainant suffered loss of Rs. 49,13,826/-. He is a private Engineer engaged by complainants for this support. On the other hand, there is no dispute of this fact that surveyor was appointed in this case before repudiation of contract of insurance by OP no.1/Insurance Company. The surveyor of the insurance company found loss of less quantity.  Navjeet Singh Deputy Manager of OP no.1/Insurance Company stated in his affidavit on oath that the surveyor assessed the total claim payable as Rs.13,85,274/- for loss to the building. We are of this view that interest of justice would be served in case OP no.2/Bank is directed to pay  the amount of loss of Rs.13,85,274/-, as suffered by complainant on account of loss caused by fire to building due to sudden discontinuance of the insurance policy by OP no.2./bank.  The complainants are also held entitled to compensation of Rs.30,000/- for mental harassment and Rs.20,000/- as costs of litigation.  No order is passed against OP no.1/Insurance Company in this case.

14.              As a result of our above discussion, complaint of complainants succeeds against OP no.2 /PNB Bank only and it fails against OP no.1/insurance company. OP no.2/Bank is directed to pay the amount of loss of building of Rs.13,85,274/-, as assessed by surveyor, suffered by complainants on account of loss caused by fire to building due to sudden discontinuance of the insurance policy by OP no.2./bank. The complainants are also held entitled to compensation of Rs.30,000/- for mental harassment and Rs.20,000/- as costs of litigation.  The amount shall be payable in 45 days period from the date of receipt of copy of this order by OP no.2  to complainants, failing which, it shall carry interest @ 8% p.a from the date of filing the complaint till actual payment to complainants. No order is passed against OP no.1/Insurance Company in this case.

15.              Arguments in this complaint were heard on 26.07.2018 and the order was reserved. Certified copies of the order be communicated to the parties under rules.

16.              The complaint could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                          (J. S. KLAR)

                                                             PRESIDING JUDICIAL MEMBER

 

 

                                                                (SURINDER PAL KAUR)

                                                                                MEMBER

August 1 ,  2018                                                            

(ravi)