Per Mr.P.N.Kashalkar, Hon’ble Presiding Judicial Member
This is an appeal filed by Syndicate Bank, original opponent against the judgement and award passed by District Consumer Disputes Redressal Forum, Thane in consumer complaint no.307/ 2007 decided on 01/08/2009. While allowing the complaint partly, District Consumer Disputes Redressal Forum, Thane pleased to direct appellant/opponent herein to pay to the complainant sum of `3 lakhs as compensation, `5000/- towards mental harassment and `2000/- towards cost and directed to comply the same within 30 days. As such, original opponent filed this appeal. Facts to the extent material may be stated as under:-
Respondent M/s.Kalyan Trading Co. had filed consumer complaint alleging that it deals in pulses and grains. It was having bank account with Syndicate Bank, Kalyan. It had taken cash credit facility from the said bank. It had hypothecated its’ Stock-in-trade with the bank while taking loan. Complainant had taken policy of his shop premises from M/s.New India Assurance Co.Ltd. The said policy was also pledged with the bank while taking cash credit facility. It was agreed between the parties that bank would pay insurance and purchase policy every year on behalf of the complainant firm and amount of premium shall be debited in the account of the complainant. It so happened that on 26/07/2005 because of unprecedented rains, the complainant’s grain bags kept in the shop were damaged in the floods and he suffered loss of `3,00,000/-. Tahsildar of Kalyan Tahsil recorded the panchanama and issued certificate about the loss. He intended to lodge insurance claim with the Insurance company. Therefore, he sought policy document from the Syndicate bank, opponent herein but it was found that Syndicate bank had not purchased policy for that particular year by paying necessary premium and, therefore, complainant firm came to know that it was deprived of the insurance claim for the default committed by Syndicate bank. He therefore, filed consumer complaint claiming compensation of `3,00,000/- against Syndicate bank, since bank had failed to procure insurance policy cover for his stocks kept in the shop, which were hypothecated to the Syndicate bank.
Opponent filed written version and contested the complaint. According to opponent, there was no merit in the complaint. Complaint has been filed just to extract monies from the bank. Complainant had availed of cash credit facility no.55/2004 and complainant had purchased insurance policy from the Insurance company. It was the duty of the complainant firm to purchase policy. Bank also pleaded that the complainant should have impleaded Insurance company as party in the consumer complaint. Bank pleaded that Bank is not responsible because complainant had failed to procure policy for the relevant year from the Insurance company. Opponent therefore pleaded that complaint should be dismissed with cost.
On considering affidavits and documents placed on record, forum was of the view that it was agreed between the complainant and opponent that opponent would purchase the policy and debit the insurance premium amount from the account of the complainant. This was done in the first year and it was expected to be done in every year and it was the duty of the bank to purchase policy by paying premium to the Insurance company and then to debit insurance premium amount from the account of the complainant. Since bank failed in its duty to purchase policy, the complainant firm was deprived of the insurance claim. Therefore, forum allowed the consumer complaint and passed award against the bank for its indifference and negligence in not purchasing policy on behalf of the complainant. Against this award Syndicate bank has filed this appeal.
We heard submissions of Mr.S.N.Acharya-Advocate for the appellant and Mr.Kamlesh Shah-Advocate for the opponent.
Mr.Acharya -Ld.counsel for the appellant took us through the Hypothecation Agreement. In the said Agreement there is a clause for Insurance. It is clause no.8 on page 65 of appeal compilation. Said insurance clause clearly mentions, “That all the ‘SAID GOODS’, which is the subject matter of this Agreement, shall be insured and kept insured by the Borrower against loss or damage by fire, theft, robbery, lightening, riot, civil commotion, malicious damages, strikes and/or any other risk as the Borrower may think necessary or as may be required by the Bank in its discretion in the joint name of the Borrower and the Bank with an Insurance Company/Companies approved by the Bank to the extent of actual value of the ‘SAID GOODS’ and the Borrower shall punctually pay the premium due for such insurance and the cover note/s and the insurance policy/policies thereof shall be delivered to the Bank.”
This Hypothecation Agreement is signed by the respondent M/s.Kalyan Trading Co. and it is bearing signature on all pages of Hypothecation Agreement including the insurance clause. This clause of insurance is binding on both the parties and in terms of this clause, it was the duty of the borrower to purchase insurance policy to safeguard the goods purchased by him in his premises on the loan taken from the Syndicate Bank. So it was the duty of the complainant/respondent to insure the goods and it was not the duty of the appellant bank to purchase the insurance policy. So default was on the part of the respondent firm in not purchasing the insurance cover for its stock in terms of clause 8 of the Hypothecation Agreement entered into between the appellant and respondent. This fact was patently overlooked by the District Consumer Disputes Redressal Forum while passing award. Thus, award passed by the District Consumer Disputes Redressal Forum is per se bad in law and cannot be allowed to sustain in law. It was the duty of the respondent alone to purchase insurance cover for its stock as per Hypothecation Agreement entered into between the parties and since respondent firm committed default, the said claim cannot be passed on to the bank alleging that bank had orally agreed to take insurance claim every year for the stocks held by the respondent firm. We had told respondent’s advocate that when there was written contract of hypothecation between the parties, any oral term contrary to the written agreement cannot be acted upon or cannot be given any credence since it is contrary to the written terms and conditions of the Hypothecation Agreement. Therefore, we are finding no substance in the respondent’s claim and there appears to be substance in the appeal preferred by the Syndicate bank. Award passed by the District Consumer Disputes Redressal Forum will have to be quashed and set aside by allowing this appeal. Hence the following order:-
ORDER
Appeal is allowed.
Impugned order dated 01/08/2009 is quashed and set aside.
Consumer complaint stands dismissed.
Amount deposited by the appellant be refunded to the appellant.
Inform the parties accordingly.
Pronounced on 9th January, 2012.
