Orissa

Debagarh

cc/22/2014

Goutam Samal, aged about 58 years, S/o-Late-Darsania Samal, - Complainant(s)

Versus

Branch Manager, UCO Bank , 1 st floor Rajhans Building main Road Deogarh - Opp.Party(s)

07 Nov 2015

ORDER

IN THE COURT OF THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, DEOGARH .

Shri P.K.Dash,President and P.Ch.Mahapatra,Member.

Goutam Samal,aged about 58 Yrs,

S/O. Late Darsania Samal,

R/O. Deogarh Town,Rajamunda,

PO/PS/Dist/-Deogarh.                                                   ….                   Complainant.

 

                                                                        Versus

 

The Branch Manager,

UCO Bank, 1^st. Floor,

Rajhans Building,

Main Road, Deogarh,

At/Post/-Dist/-Deogarh.                                                            ….                   Opp.Party.

 

C.D.NO.10/2014.

DATE OF HEARING ; 04.11.2015 , DATE OF ORDER: 07.11.2015.

 

For the Complainant : -            Shri Pravas Kumar Mishra, Advocate.

                        For the Opp.Party      :-   Shri Pramathesh Guru, Advocate.

 

SHRI PRATAP CHANDRA MAHAPATRA, MEMBER:- The genus of the case lies in the fact that the complainant was debarred to get indemnified the loss consequential to theft of his shop due to non renewal of the Insurance Policy by OP i.e. United Commercial Bank (here in after stated as OP Bank), who is bounden to do so by virtue of the Agreement for Hypothecation in relation to a Cash Credit Account.

 

2.         Succistinctly the factual matrix of this case as contended by the complainant, are:

 

1. Complainant being owner of a Cloth-Store under the name and style of “ Rashmita Cloth Store” located at Traffic Chowk, Deogarh and was a bonafide customer of the OP Bank having  business relation since long.

 

2. OP Bank being satisfied from every angle were pleased to allow the Complainant Cash Credit facility bearing Account No.04020500000379  initially for a limiting amount of Rs.2,00,000/-which was enhanced to Rs.5,00,000/- on dated 16.09.2003 and thereafter to Rs.23.04.2005. As required, Complainant have executed all necessary documents/agreements with OP Bank and according to the Agreement for Hypothecation entire stock was hypothecated to the OP Bank who was getting the hypothecated stock insured by obtaining Insurance Policy save and except Fire Risk on his behalf debiting the charges thereof from the CC Account cited supra.
3. OP Bank failed to obtain any Insurance Policy to cover all other risks except fir risk after expiry of the Policy obtained for 2011-12 on 02.05.2011  debiting the premium to his CC Account. Even OP Bank did not intimated this fact to him after the policy expired on 01.05.2012 and on the other hand complainant remained under the bonafide impression that such policy has been taken by OP Bank.

 

4. Under premises as stated above the entire stock amounting to Rs.10,00,000/- was stolen by breaking open the locks of the shop in the night of Dt.4/5 – 12 – 2012, a fact which was intimated to OP Bank in order to submit claim on the loss on 08.12.2012, who in turn without submitting the claim to Insurer, sent a Demand Notice to the Complainant on 04.01.2013 raising a demand of Rs.11,25,867/-. It is at this juncture Complainant came to know the fact that Insurance has not been done by the OP Bank for 2012-2013 after the last policy taken on 02.05.2011.

 

5. Due to admitted latches on the part of OP Bank Complainant is unable to get the loss indemnified thereby sustained a loss of Rs.10,00,000/-. Accusing OP Bank of not acting in terms of the hypothecation deed executed on 22.09.2004, 23.04.2005 and 22.08.2006 in taking a policy before any insurance company covering other losses excepting fire risk, complainant as a customer of Bank, sustained loss and as such OP Bank is liable to pay a compensation of Rs.10,00,000/- towards loss of stock. Also the complainant is entitled to get a compensation of Rs.5,00,000/- towards mental agony and future business loss along with Rs.10,000/- towards cost of litigation.

 

Complainant has concluded his complaint praying after proper hearing both the sides to pass an order directing the OP Bank to pay a compensation of Rs.15,00,000/- to the complainant in the interest of justice.

The list of documents relied and adduced during different stages of the proceeding of the case by the Complainant is tabulated as follows :

Document No.	Description	Number assigned in the Case Record.
1	Copy of notice to borrower dtd.25.01.2013 of U.C.O.Bank,Deogarh.	Exbt. – P/1
2	Copy of Notice dtd.15.01.2013 of U.C.O.Bank,Deogarh.	Exbt. – P/2
3	Copy of Notice dtd.4.1.2013 of U.C.O.Bank,Deogarh.	Exbt. – P/3
4	Copy of the L.No.UCO/DGH/59221 Dtd.11.12.2003 of UCO Bank,Deogarh addressee to Rashmita Cloth Store,Deogarh.	Exbt. – P/4
5	Representation of Goutam Samal to UCO Bank on dtd.8.12.2012..	Exbt. – P/5
6	Copy of F.I.R lodge in Deogarh Police Station..	Exbt. – P/6
7	Copy of the representation of Goutam Samal to Deogarh Police Station in lodging the F.I.R..	Exbt. – P/7
8	Copy of the statement of account for the period from 31.10.2010 to 29.6.2013.	Exbt. – P/8
9	Copy of the judgment of Hon’ble High Court,Odisha in Writ Petition No.6485 of 2013.	Exbt. – P/9
10	Copy of the Acknowledgement documents towards letter address to UCO,Bank,Deogarh by the complainant .	Exbt. – P/10
11	Copy of the application of the complainant made to UCO Bank Zonal office for one time settlement of dtd.17.9.2013.	Exbt. – P/11
12	Copy of the statement of account for the period from 31.01.2008 to 31.3.2008.	Exbt. – P/12
13	Copy of the statement of account for the period from 01.04. 2008 to 30.09.2008.	Exbt. – P/13
14	Copy of the statement of account for the period from 01.10.2008 to 31.3.2009.	Exbt. – P/14
15	Copy of the statement of account for the period from 01.04.2009 to 30.09.2009.	Exbt. – P/15
16	Copy of the statement of account for the period from 01.10.2009 to 31.01.2010.	Exbt. – P/16
17	Copy of the Hypothecation agreement dtd.22.9.2004.	Exbt. – P/17
18	Copy of the Hypothecation agreement dtd.23.04.2005.	Exbt. – P/18
19	Copy of the Hypothecation agreement dtd.22.08.2006.	Exbt. – P/19
20	Copy of the Hypothecation agreement dtd.30.03.2012.	Exbt. – P/20
21	Copy of the Hypothecation agreement dtd.16.09.2003.	Exbt. – P/21
22	Copy of the statement of account for the period from 31.1.2010 to 29.6.2013 relating to F.F.D balance (Page 1 to 2 ) .	Exbt. – P/22
23	Copy of the statement of account for the period from dtd.01.12.2012 to 28.02.2013 .	Exbt. – P/23

  

3.         OP contested the allegation and filed the Verified Written Statement wherein contended as follows :

1. Making no comments on averments made in Paras 1 to 4 of the complaint, in regard to averment in Para 5 it has been stated that OP Bank had last ensured Insurance Policy for the period 2011-12 against Cash Credit Loan Account No.04020500000379 on 02.05.2011.   

 

2. It has been alleged that complainant turned deaf ears to notices issued by the OP Bank on 05.07.2011, 13.09.2011, 03.09.2012 and 10.11.2012 to regularise the CC Loan Account from which amounts of Rs.12,97,365/-, Rs.10,93,961/-, Rs.10,70,190/- and Rs.10,93,975/- respectively had been over drawn. However, the complainant approached the OP Bank only on 24.09.2011 admitting the overdue amount of Rs.2,43,961/- accumulated from time to time requested some more time regularise and failed to regularise it until end of 2011-12.

 

3. He neither consented nor co-operated at any instant to avail insurance policy benefit after 2011-12 by defaulting payment of the dues. This, as has been contended by the OP Bank, it was not possible on the part of the OP to insure the premises suo-motto, for which the Complainant is fully responsible.

 

4. Further, it has been contended that Inspecting Officer of the OP Bank inspected the shop premises in presence of the Complainant on 01.11.2012 and found the physical stock position of the shop to be Rs.2.00 Lakhs and as such made a comment of unsatisfactory transactions in the A/c and reported that there was no transaction since more than 3 years in the said account. Also it has been reported that the complainant had never submitted stock position reports, Purchase documents etc. suggesting various steps for regularization of the A/c, Closure or declaration as to non-performance.

 

5. In regard to averments made in Para-6 of the petition, it has been commented by the OP Bank that the Complainant/Borrower being extremely puzzled on the inspection/verification report of stock by the inspecting officer of the OP Bank has played mischief by declaring theft of entire stock of Rs.10.00 Lakhs on night of 4/5-12-2012 with a mischievous intention to evade the loan dues and have tried to shift responsibility to the OP Bank.

 

6. Averment made in Para-7 of the complaint petition have stated that it is not the duty of the OP Bank to claim/demand loss reported by the Complainant which appears to be false since the said loan A/c was not in proper running conditions for last 3 years due to non transaction as admitted by the Complainant in his petition of dated 24.09.2011.

 

7. Also it has been contended by the OP Bank that inspite of communications made to the Complainant to produce Sales Tax Certificate, Original Purchase Bill for the last two years, Up-to-date Stock Register Entry and Stock position etc, Complainant though has received such communication have failed to comply.

 

8. Further it has been submitted that the A.S.I., Deogarh P.S., the Inquiring Officer of the case lodged by the complainant through Inspector-in-Charge, Deogarh P.S. vide D.R.No.2146 Dtd 30.12.2012 had required several particulars to be furnished in connection to the Deogarh P.S.Case No.171/05.12.2012 U/S- 457/380 IPC and the same were furnished vide letter No.UCO/DEOG/86/2012-13 of Dated 31.01.2013. Police authority after investing in to the case of theft of the stock of the shop of the complainant on 4/5.12.2012 have concluded the case  as “False” on 03.06.2013.
9. Also it has been submitted by the OP Bank that the Complainant has filed this case before the Forum affixing Court Fee of Rs.2/- but without depositing the requisite fee of Rs.100/- in shape of I.P.O. as well without Verification.

 

In view of facts stated as above, the OP categorically added that there was no stock of the extent as claimed by the Complainant as per report of the Inspecting Officer of the OP Bank on 01.11.2012 there was no stock to the extent as claimed by the complainant and has tried his best declaring the stock to have been stolen falsely with intension to evade the Loan dues and to shift the responsibility over to OP only. As such OP Bank prayed that going through the documents adduced dismiss the case.

            The list of documents relied and adduced during different stages of the proceeding of the case by the Complainant is tabulated as follows :

Document No.	Description	Number assigned in the Case Record.
1	Copy of Notice to deposit the overdue amount with reference to CCA/c. No.379 of dated 05.07.2011	Exbt. – D/1
2	Copy of Notice to deposit the overdue amount with reference to CCA/c. No.379 of dated 13.09.2011	Exbt. – D/2
3	Copy of Notice to deposit the overdue amount with reference to CCA/c. No.379 of dated 03.09.2012	Exbt. – D/3
4	Copy of Notice to deposit the overdue amount with reference to CCA/c. No.379 of dated 10.11.2012	Exbt. – D/4
5	Copy of application submitted by G.Samal to UCO Bank on 24.09..2011	Exbt. – D/5
6	Copy of Report of The Inspecting Officer of Bank in favour of the shop premises of Goutam Samal	Exbt. – D/6-1
	Copy of letter No.UCO/DEOG/59/2012-13 of dated 11.12.2012 addressed to Goutam Samal to furnish documents consequential to Inspection by Inspecting Officer of the Bank	Exbt. – D/6-2
7	Copy of the representation of Goutam Samal of dated 13.03.2013.	Exbt. – D/7
8	Copy of letter DR No.2146/30.12.2012 of Deogarh Police Station addressed to UCO Bank, Deogarh.	Exbt. – D/8
9	Copy of letter No.UCO/DEOG/86/2012-13 of dated 31.01.2013 of Bank addressed to Deogarh Police Station	Exbt. – D/9

 

4.         Heard both the parties and on perusal of documents placed before us during the proceeding of the case by either party we find as follows:

 

1. Complainant is a bonafide customer of the OP Bank enjoying Cash Credit Loan Account to the limit of Rs.8,50,000/- at the material time.

 

2. Complainant’s allegation that it was duty of the OP Bank to get insured the hypothecated goods has no where been denied by the OP Bank. Also from the Account Statement filed by Complainant [Exbt. – P/22] it is seen that Insurance Premium has been paid by OP Bank for the year 2011-12 on 02.05.2011 and from [Exbt. – P/23] it is seen that Insurance premium has been deducted from the CC A/c of the complainant on 05.12.2012. This affirms the genuineness of the averment of the complainant “and on the other hand complainant remained under the bonafide impression that such policy has been taken by OP Bank.”

 

3. Complainant’s averment as to theft of Hypothecated goods from his shop premises to the tune of of Rs.10,00,000/- may not be disbelieved in absence of any Surveyors Report which was impracticable as there was no Insurance during the material period. It is self-established from [Exbt. – D/6-1] that “stock are not covered by insurance” Even thereafter such disclosure OP Bank never urged the Complainant to go for Insurance to get the stock insured immediately. This hints that it is not bounden responsibility of Complainant in the instant case.

 

4. Complainant has lodged a F.I.R. with Deogarh Police Station as to theft occurred at his shop named Rashmita Cloth Store, Traffic Chowk on the night of 4/5.12.2012 [Exbt. – P/6] is admitted by the OP Bank but has challenged the very incident of such theft corroborating correspondences between Deogarh Police Station and OP Bank  [Exbt. – D/8] and [Exbt. – D/9] submitting “ the police authority investigated in to the offence/Crime, submitted final Report after thread bare investigation and concluded the case on 03.06.2013 as “FALSE”

 

5. Clause 6 of the Agreement for Hypothecation executed between the Complainant and the OP Bank reads as here under:

“That the Hypothecated goods shall be insured against Fire risk by the Borrower in some Insurance office or offices approved by the Bank and in the name and for the sole benefit of the Bank for their full market value and that the Borrowers will on demand deliver to the Bank all policies for and the receipts for premia paid on such insurance endorsed and assigned with the full benefit thereof in favour of the Bank. Should the Borrowers fail to so insure or fail to deliver the policies or receipts for premia duly endorsed as aforesaid three days after demand, the Bank shall be at liberty, though not bound to effect such insurance at the expenses of the Borrowers. The Borrowers further agree that the Bank shall be at liberty at any time at its discretion(without being bound to do so)to insure the securities for their full market value against riot and civil commotion risk or any other type of insurance risk at the expenses of the Borrowers with any Insurance Company.”

 

On plain reading of the above said clause, it is evident that OP Bank is not bound or it is neither mandatory nor obligatory on the Part of OP Bank to insure the hypothecated goods in relation to the specific risk of Fire. In the instant when the Borrower/Complainant fails to insure relating to fire risk, Bank after three days of such demand to deliver policies or receipts of premia paid to the Borrower/complainant, shall go for insurance of the Hypothecated goods at his expenses. Further, the plea of the complainant that it is obligatory on the part of the OP Bank to get the stock insured for risks other than Fire in the written statement has not been denied by the OP Bank. The second part of the clause 6 cited supra entells Bank at any time at its discretion  not being bound to do so may insure the hypothecated goods at Borrower’s expenses for risks like riot and civil commotion or any other type of insurance risk.. In the instant case OP Bank has insured the Hypothecated goods for the year 2011-12 on 02.05.2011 and for 2012-13 on 05.12.2012. This conduct of the OP Bank attracts the Doctrine of Estoppel vide Section 115 of the Indian Evidence Act which  reads as under:

“Estoppel – When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.”

 

As such it can be said in the case in hand that OP Bank is deficient in service not by insuring the hypothecated goods after expiry of validity of insurance for 2011-12 and doing so in a later date i.e. on 05.12. 2012 for the year 2012-13. Had it been done in right time complainant could have got indemnified his loss from the Insurer as well as the loss sustained by Complainant could have been rightly assessed. So we believe that the Complainant has sustained loss due to deficiency of service on the part of the OP Bank. In absence of Insurance Policy Document we rely the limit of Cash Credit Account i.e. Rs.8,50,000/- and discard the averment of theft of Rs.10,00,000/- value of hypothecated goods.

 

Under premises as stated above we feel it shall not be prejudiced to believe that for deficient service on the part of the OP Bank, complainant sustained financial loss  being unable to indemnify the loss for lack of insurance. Also at the same time it shall be prejudiced to believe that the incident of theft is drama staged by the complainant as submitted by the OP Bank since OP Bank has failed to substantiate with documents as to fact that Police authorities have closed the case commenting as “FALSE” in face of admitted fact of lodging F.I.R. with Deogarh Police Station. Hence we are of firm view that OP Bank has miserably failed to establish his case although the learned advocate of the OP vehemently submitted for the defence of the OP Bank. I therefore order as hereunder:

 

 

                                                                                        ORDER

 

Petition is allowed. OP Bank is directed to pay the complainant an amount of Rs.6,00,000/- (Rupees six lakhs) as Compensation and Rs.2,000/- (Rupees two thousand) towards cost of litigation to the Complainant within 45 days of receipt of this Order and in case of failure interest at the rate of  9% shall have to be paid from the date this order is received till the date the amount is actually paid.

 

Office is directed to supply the free copies of the order to the parties free of costs receiving acknowledgement of the delivery thereof.

 

Order pronounced in the open court today i.e. on 7^th. day of November, 2015 under my hand and seal of this forum.

 

I agree,                        

 

                      (P.K.Dash)                                                                    ( P.C.Mahapatra)                                                                                                         PRESIDENT                                                                        MEMBER

                                                                                                           

                 Dictated and Corrected by me.

 

 

                        MEMBER