1. The Petitioner has filed this case alleging deficiency-in-service by O.Ps. O.P No.1 is the Branch Manager, HDFC Bank Ltd., Balasore branch, O.P No.2 is Retail Loan Service Centre, C-III situated at Sahid Nagar, Bhubaneswar-751001 & O.P No.3 is the Chairman, HDFC Bank Ltd. situated at HDFC Bank house, Senapati Bapat Marg, Lower Parel, Mumbai-400013.
2. Petitioner’s case, in brief, is that being an agriculturist, he applied for a Tractor loan to District Agriculture Officer, Balasore for his agricultural purposes. The D.A.O sanctioned a loan for Rs.5,62,800/- (Rupees Five lakh sixty two thousand eight hundred) only under “STATE PLAN” (Annexure-I) only after verification of documents on 07.09.2012 in favour of the Petitioner through HDFC Bank Ltd., F.M Circle Branch, Balasore.
3. At the time of disbursement of loan amount, the Bank took the responsibility & assured to make payment of insurance dues for each year (in total for the period of three years). Accordingly, the HDFC Bank Ltd. insured the said Tractor as an agent of HDFC Ergo General Insurance Co. Ltd. by deducting first year’s premium (Annexure-4) amount at the time of disbursement of loan amount & also collected blank cheques from the Petitioner for the same. The Petitioner purchased the said Tractor from Mahindra Showroom, Remuna, Balasore vide Regd. No.OD-01A/0679 (MAHINDRA 295DI) (Annexure-5). The O.P No.1 sanctioned a loan in favour of the Petitioner for Rs.3,29,073/- (Rupes Three lakh twenty nine thousand seventy three) only at flat rate of interest 9.45% p.a on 09.10.2012 to be repaid in 36 E.M.I @ Rs.11,732/- (Rupees Eleven thousand seven hundred thirty two) only per month (Annexure-2).
4. While the said Tractor was threshing paddy on 21.01.2015, its break & steering were failed automatically, resulting the tractor run away towards a thatched house of one Sanatan Jena, S/o. Late Dukhi Jena of Village-Sarugaon, caused serious injury to the Petitioner & the tractor was fully burnt by such incident. The straw & paddy shives of Sanatan Jena & his brother Rama Chandra Jena were also completely burnt. The approximate cost of the burnt house & paddy shives would be around Rs.1,50,000/- (Rupees one lakh fifty thousand) only. After such incident, both Sanatan Jena & Rama Chadra Jena along with their people became violent, created Law & order problem, for which the Petitioner was compelled to give them a sum of Rs.1,50,000/- (Rupees one lakh fifty thousand) only as per their demand in the presence of the village gentries vide a money receipt. Fire brigade was also informed & reached at the spot to fight out fire. Police case bearing C.T No.61/2015 is now pending before J.M.F.C, Soro in connection with the incident. The Petitioner’s brother Sachindra Prasad Nayak had lodged F.I.R on 27.01.2015.
5. The E.M.Is of said Tractor loan were paid from 07.12.2012 to 10.01.2015 regularly (Annexure-6). Subsequently, the Petitioner visited O.P No.1 for his accident claim on 29.01.2015, where O.P No.1 assured to the Petitioner to look after the Insurance claim, but did not take any step in that regard. But, lastly the O.P No.1 declined for insurance claim on 09.12.2015 on the ground that the Insurance premium dues are not paid. Here, the Petitioner was deprived of insurance claim from the above said General Insurance Company only due to laches of O.P No.1 & for not paying Insurance premium, being acting as an agent of the said general insurance company. The O.Ps i.e. Bank never intimated to the Petitioner to pay the insurance premium by himself & that the Bank is not going to pay the same to the above said General Insurance Company. The Petitioner was severely injured & medically treated & has spent an amount of Rs.1,00,000/- (Rupees One lakh) only for recovery. The insurance company is not settling the claim, since the said Tractor in question is not within the coverage of Insurance at the time of accident. Under the circumstances cited above, the O.P i.e. HDFC Bank Ltd. is liable to make good the loss caused to the Petitioner & the Petitioner is entitled to get a sum of Rs.9,37,800/- (Rupees nine lakh thirty seven thousand eight hundred) only as per schedule towards cost of burnt tractor, burnt houses, paddy shives, medical treatment of the Petitioner, mental harassment & litigation cost.
6. It is prayed that, the O.Ps are directed to pay compensation for deliberate negligence in service & O.Ps further be directed not to submit the Petitioner’s cheques, which were taken blank by O.P No.1 from the Petitioner at the time of disbursement of loan & not to demand the rest loan installments till final disposal of the case.
7. On admission, summon was issued to O.Ps No.1 to 3 through Regd. Post with AD. It was received by O.P No.1 on 26.12.2015 & by O.P No.3 on 11.01.2016 as per respective ADs are returned & enclosed herewith. On 17.05.2016, neither the O.Ps filed hazira nor remained present. The O.Ps have not personally remained present & also not through their Advocates till 17.05.2016 from the date of receipt of summons received at their end i.e. on 26.12.2015 & 11.01.2016 respectively. They have not filed their written version or have taken time in this regard. Therefore against O.Ps are held to be sufficient, as a result the O.Ps are set ex-parte & ex-parte hearing on 24.05.2016.
8. The observations in this case are as follows:-
The Petitioner had availed a Tractor loan from O.P No.1 for Rs.3,29,073/-(Rupes Three lakh twenty nine thousand seventy three) only on 15.10.2012 being sponsored by District Agriculture Officer in favour of the Petitioner for Rs.5,62,800/- (Rupees Five lakh sixty two thousand eight hundred) only on 07.09.2012 under “STATE PLAN” (Annexure-I). The said vehicle was insured for Rs.5,33,900/- (Rupees Five lakh thirty three thousand nine hundred) only with HDFC Ergo General Insurance, for the period 15.10.2012 to 14.10.2013, where HDFC Bank Ltd. is an Agent. Registration No. of the Tractor is OD-01A/0679 (MAHINDRA 295DI) dt.22.01.2013.
In Para-10 (4) of Agreement for loan & guarantee states that “If the Borrower(s) fails to comply with any of the terms mentioned above in this clause, the Bank may without prejudice to its rights & remedies under this Agreement & in law take such steps as it may deem fit to keep & maintain the Asset or insure or renew such insurance at the Borrower(s)’s costs, charges & expenses, which shall be reimbursed by the Borrower(s) on demand by the Bank”. And also in Para-10 (5) of the said Agreement for loan & guarantee states that “In order to safeguard the security for the loan & to ensure that the Bank’s lien is marked on the insurance, the Bank may get the insurance done on behalf of the Borrower(s), by being a facilitator & making the premium payment to the approved Insurance Company through the Borrower(s)’s post-dated cheque/pay orders/ any other payment instructions. However, the Bank shall not be obliged to do the same & any non-payment on the part of the Bank due to any reason whatsoever shall not effect the liability of the Borrower(s) to pay the necessary insurance premium & to keep the Asset(s) insured. The first claim on any insurance proceeds shall be that of the Bank with respect to insurance Policy & its renewal as stipulated from time to time & shall pay Rs.250/- or such other amount as may be specified by the Bank from time to time as nominal compensation for the services rendered by the Bank for facilitating the above mentioned arrangement with the insurance Company & ensuring that the Bank’s name is marked under insurance. The transaction fee is subject to change at the discretion of the Bank. The Bank shall be entitled to recover any payments made pursuant to this clause as part of the dues under this Agreement. Here, the O.P No.1 had insured the Tractor & deducted first year’s insurance premium at the time of payment of loan amount & as an agent of said General Insurance Company.
Moreover, the O.P No.1 had taken the responsibility & assured to make payment of insurance premium for each year (in total for the period of three years) & also had taken blank cheque from the Petitioner for the same (Para-3 of Complainant’s petition).
At the time of accident, the said Tractor was threshing paddy & automatically its break & steering were failed (Para-5 of Complainant’s petition). Limitations as to use describes in Miscellaneous & special type of vehicles package Policy in Agricultural & Forestry vehicles use only for agricultural & forestry purposes (Annexure-4) for which the said Tractor was engaged on the day of said accident.
Further in Para-1.16 in Agreement for loan & guarantee “Repayment means the repayment of the principal amount of the loan; interest thereon, commitment and/or any other charges, Insurance (when applicable), premium, fees and/or all other dues payable in terms of this Agreement to the Bank & means in particular repayment as provided in this Agreement. Here, the installment fixed (EMI) for the above Tractor loan is Rs.11,732/- (Rupees Eleven thousand seven hundred thirty two) only & the term is 36 months (Annexure-2). Total repayment received by the O.P No.1 from the Complainant is Rs.2,94,661/- (Rupees Two lakh ninety four thousand six hundred sixty one) only within the period from December 2012 to January 2015 i.e. for 26 months @ Rs.11,333/- p.m. against E.M.I of Rs.11,732/- fixed, which indicates that the loan repayment is almost regular. But the O.P No.1 has not taken the responsibility for renewal of insurance of vehicle of the Complainant, which amounts to deficiency-in-service by O.P No.1. As per deposit slips annexed herewith repayment towards the said loan a/c includes EMI & Penal interest also (Annexure-6), which indicates that the loan a/c is regular so far repayment is concerned.
As per Agreement for loan & guarantee of O.Ps, it is the duty & responsibility of the Bank to insure the assets created out of Bank finance in order to safeguard the security for the loan & to ensure that the Bank’s lien is marked on the insurance, accordingly the O.P No.1 has not acted as per the above said Agreement. In view of the admission & contents of the documents, Complainant’s case is clearly established that due to non-payment of insurance premium amount by O.P No.1, at the right earnest, the Complainant sustained loss of Rs.4,32,500/- (Rupees Four lakh thirty two thousand five hundred) only, being the cost of Tractor after depreciation, which amount to deficiency-in-service by O.P No.1.
O R D E R
Having regards to our ex-parte judgment reflected above, the Complainant is allowed with direction to O.Ps to pay Rs.4,32,500/- (Rupees Four lakh thirty two thousand five hundred) only towards burnt & damaged value of Tractor along with compensation of Rs.1,00,000/- (Rupees One lakh) only towards burnt & damaged house of neighbours of the Complainant. The O.Ps are further directed to pay Rs.50,000/- (Rupees Fifty thousand) only towards medical treatment due to injury of the Complainant on the spot & Rs.10,000/- (Rupees Ten thousand) only towards compensation for mental agony & litigation cost within One month on receipt of this Order.
Pronounced in the Open Forum this day the 23rd day of June, 2016 given under my Signature & Seal of the Forum.
