BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 441/2007 against C.C. 23/2006, Dist. Forum,Mahaboobnagar
Between:
1. M. Badrinath, S/o. Late Shankar Guptha
Age: 44 years, Business
R/o. 1-7-152/B, Premnagar
Near Boyapally Gate,
Mahaboobnagar.
2. M/s. Shankar Gupta & Company
New Gunj, Mahaboobnagar
Rep. by its partner M. Badrinath
R/o. 1-7-152/B, Premnagar
Near Boyapally Gate,
Mahaboobnagar. *** Appellants/
Complainants.
And
ING Vysya Bank
Mahaboobnagar
Rep. by its Branch Manager
Opp. Inspection Bungalow
Mahaboobnagar. *** Respondent/
Opposite Party.
Counsel for the Appellants: M/s. V. Gourisankara Rao.
Counsel for the Respondent: M/s. V. Dyumani.
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
SMT. M. SHREESHA, MEMBER.
&
SRI K. SATYANAND, MEMBER.
THURSDAY, THE EIGHTEENTH DAY OF MARCH TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D. Appa Rao, President)
***
1) Unsuccessful complainants are the appellants.
2) The case of the complainants in brief is that complainant No. 1 purchased a Tata Indica car on 19.10.2000 in the name of Shanker Gupta & Company a partnership firm complainant No. 2 under hypothecation agreement from respondent bank. The respondent bank represented that it would pay insurance charges by debiting to its loan account. While so, the car met with accident on 30.10.2005. A surveyor assessed the damages at Rs. 1, 50,000/- but in fact it spent about Rs. 2 lakhs. The said fact was informed to the respondent bank. When it informed and claimed the amount, the bank informed that it had failed to pay insurance premium by mistake. Exactly after one month the bank had issued show cause notice directing them to pay the loan amount obviously in order to evade payment of compensation amount. Since insurance premium was not paid it had sustained loss and therefore claimed compensation of Rs. 2 lakhs with costs.
3) The respondent bank resisted the case. It alleged that at the request of complainant No. 2 Shanker Gupta & Company it had sanctioned loan for purchase of car for Rs. 2 lakhs and it was hypothecated to it. The EMI (instalments) would commence from 16.11.2000 up till 16.10.2005. It had never promised to take insurance policy nor payment of insurance premia. In fact as per clause-5 of the hypothecation agreement the borrower had to take the insurance policy. Therefore, there was no scope for it to promise that it would take the policy and pay premia contrary to the terms of the agreement. The said allegation was made in order to claim the amount. However, at the instance of the complainant they had arranged payment of insurance premia for 2nd, 3rd, and 4th years. Accordingly it debited the amount. No request was made at the end of 4th and 5th years. It was not aware as to the accident. In fact the complainant had informed that it had moved Motor Accident Claims Tribunal (MACT) in O.P. 106/2006 claiming compensation from the owner. He was trying to claim the amount in different fora.
The complainant has to pay Rs. 26,993/- as on 30.6.2006 towards loan, supposed to close by 16.10.2005. Sri M. Badrinath was not the Managing Director. There are three partners in the firm who ought to have been impleaded. Therefore, it prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed the affidavit evidence of M. Badrinath and also an affidavit by the same individual on behalf of the firm, and got Exs. A1 to A14 marked. Refuting their evidence the bank filed the affidavit evidence of its Branch Manager and got Exs. B1 to B3 marked.
5) The Dist. Forum after considering the evidence placed on record opined that no policy of insurance was issued nor proved that the bank had failed to pay the premium. Caluse-5 of the hypothecation agreement stipulates that the complainant had to pay the premium. Already they have filed O.P. 106/2006 on the file of MACT-cum-Dist. Judge, Mahaboobnagar under M.V. Act claiming damages against the offending vehicle. Therefore, it dismissed the complaint.
6) Aggrieved by the said decision, the complainant preferred the appeal contending that the Dist. Forum did not appreciate the facts in correct perspective. It ought to have seen that the bank had paid the premium on 17.10.2001, 10.10.2002 and 24.10.2003 by debiting from its account. It had failed to renew the insurance coverage nor paid the subsequent premia. It would amount to deficiency in service and therefore prayed that the amount be granted.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that the complainant, a partnership firm, purchased a car after borrowing amount from the respondent bank by hypothecating the same evidenced under invoice Ex. A1. While the complainant alleges that the bank has promised to take the insurance policy, deduct the amount from the loan account towards premium, the bank denies that it has taken any policy though at the request of the complainant it had paid three premiums. However, for 2004 and 2005 since, no request was made it could not deduct the premium.
9) Evidently, the car met with accident on 30.10.2005 vide FIR Ex. A10 for which charge sheet was filed in C.C. No. 1073/2005 against the driver of the lorry vide charge sheet Ex. A11. The complainant took the vehicle to a nearby workshop, got the damages estimated by requisitioning Sri P. Srinivasa Rao, Surveyor & Loss Assessor. He assessed the loss at Rs. 1, 50,000/-, though according to the complainant he spent about Rs. 2 lakhs. We may clarify that he is a private surveyor who was not appointed by an insurance company but by the very complainant. The complainant also filed O.P 106/2006 in the MACT, Mahaboobnagar against the offending lorry owner and the insurance company of the said lorry claiming Rs. 2 lakhs vide copy of the complaint Ex. A13. Ex. A14 receipt would show that the complainant had taken a motor package policy wherein policy number was given as 051103/31/04/01/00001543. This pertains to the premium paid on 21.10.2004.
10) It is not known whether the said insurance company had issued any policy in favour of the complainant. The complainant for the reasons best known to it did not implead the insurance company in order to know whether the policy covers the accident in question, and the details of payment of premia and whether the respondent bank had agreed to pay the premia on behalf of the complainant. Instead of claiming the amount from the insurance company, if really the policy was in existence, it had claimed from the bank evidently on the ground that in view of failure to pay the premium, the insurance company would decline insurance amount and therefore the bank had to reimburse the amount. The contention was that the bank had failed to pay the premium which it had agreed to pay. Evidently it is all oral.
11) Clause-5 of the hypothecation agreement entered into between the complainant and the bank reads as follows :
5. The hypothecated goods shall be insured by the borrower against the fire accident, risk etc., and also for such other risks or purposes as may be prescribed by law for the time being in force. The benefits of all such insurance shall belong to the bank and it shall be the duty of the borrower to do everything necessary for the purpose of transferring to and effectively vesting in the bank the benefits of all such insurance. All sums received under any such insurance by the borrower or by the bank shall be applied in or towards the liquidation of the balance for the time being due to the bank.”
This makes it clear that it was the complainant who had to take the policy. The complainant could not prove that it had authorized the bank to pay the premium till the expiry of hypothecation agreement.
12) To sum up, the complainant did not file the policy nor impleaded the insurance company. There is no proof that the bank had undertaken to pay the premia on behalf of the complainant contrary to the terms and conditions of the hypothecation agreement Ex. B1. The Dist. Forum opined that the driver ought not to have driven the vehicle without insurance policy or without payment of entire premium up till 16.10.2005. Since the complainant could not prove that the bank had committed default in payment of premia obviously it was liable to reimburse the amount. He was not entitled to any amount. We do not see any mis-appreciation of fact or law by the Dist. Forum in this regard. There are no merits in the appeal.
13) In the result the appeal is dismissed. No costs.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
3) ________________________________
MEMBER
Dt. 18. 03. 2010.
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