JUDGMENT PER JUSTICE V.R. KINGAONKAR, PRESIDING MEMBER 1. There has been delay of 32 days in preferring the first appeal beyond the prescribed period of limitation, for which an application for condonation of delay has also been filed. Having gone through the reasonings assigned therein, we hereby condone the delay. 2. This appeal arises out of the judgment in Complaint Case No. C-109/94 rendered by the State Commission, Delhi. By the impugned judgment and order, the State Commission directed the appellant - Bank to pay compensation of Rs. 2,50,000/- to the respondent, on account of pecuniary and non-pecuniary damages. 3. The complainant (respondent herein) was having over-draft facility with the appellant Bank. He approached the State Commission alleging that the appellant – Bank committed act of ‘deficiency in the services’ due to its failure to obtain insurance cover for ‘burglary’ though it was required to be obtained in pursuance to the earlier practise and the instructions in this behalf. The complainant came out with a case that the appellant – Bank used to take insurance policy so as to cover risk of ‘fire and burglary’ since 1978 and, therefore, was required to renew such policies, from time to time. The complainant further alleged that the appellant – Bank failed to renew the policy for the relevant year 1991-’92, without any particular instruction to stop the insurance cover for risk of ‘burglary’. The complainant alleged that there took place theft in his factory premises in the night intervening between 13th and 14th January,1992. He visited the factory premises and found that brass, scrap, casting, semi-finished material, etc., were stolen away. The value of the stolen articles was Rs. 1,93,600/-. The complainant lodged First Information Report (FIR) with the Police in the morning of 14.01.1992 and on the same day, gave information to the insurance company about the theft. In pursuance to his letter, dated 14.01.1992, the insurance company repudiated the liability on the ground that the insurance policy covered only risk of damage caused due to fire and it did not cover the risk on account of ‘theft’ or ‘burglary’. The complainant vide a letter, dated 07.09.1992 addressed to the Manager of the appellant – Bank requested the Bank to send the insurance policy obtained against risk of ‘burglary’ for the relevant period. The appellant – Bank informed him that the insurance policy covered only risk of damage caused due to fire and there was no ‘burglary insurance policy’ obtained on his behalf. The appellant further made it clear in the said letter dated 15.09.1992 that in 1990, the ODH (Over-draft against hypothecation of goods) account was closed and thereafter insurance cover for ‘burglary’ or ‘theft’ was not obtained on behalf of the complainant. The complainant filed complaint before the State Commission alleging that the appellant – Bank was under obligation to obtain the burglary insurance and committed deficiency in the service on account of the omission to take such insurance policy on his behalf. The complainant further alleged that the appellant – Bank was liable to compensate him for the loss of the goods and on account of undue harassment, mental agony and expenditure required for filing of the complaint. 4. The appellant - Bank denied truth into the allegations regarding deficiency in the service. The appellant Bank alleged that it was not under obligation to insure the machinery and goods in the factory of the complainant covering risk of burglary and fire. It was only by way of goodwill that the fire insurance cover was being obtained on behalf of complainant. The appellant further submitted that the complainant had not given any specific instructions to obtain the insurance against the risk on account of ‘burglary’ nor it was necessary for the Bank to do so. The appellant Bank further alleged that the complainant was previously having ODH Account with it and, therefore, for some period, between 1978 to 1984, the Bank had insured the goods against risk of ‘burglary’ and ‘fire’. The ODH account was closed in 1990. The Bank had stopped taking of insurance for risk of burglary after 1984 onwards. The complainant was aware of the nature of the insurance policy taken by the Bank on his behalf. The subsequent nature of the account was only ODD (Overdraft against Deposits) and, therefore, the Bank had left no insurable interest in the goods of the complainant. In short, the appellant Bank categorically denied any deficiency in the service purportedly required to be given to the complainant as a customer and hence sought dismissal of the complaint. 5. The parties placed on record certain documents before the State Commission. The State Commission came to the conclusion that the appellant Bank failed to continue the burglary insurance policy and was, therefore, liable to indemnify the complainant. Consequently, the impugned judgment and order was rendered by the State Commission. 6. We have heard learned counsel for the appellant – Bank. None appears for the respondent. Mr. R.S. Raju, learned counsel holding for Mr. M.B. Rama Subba Rao submits that the conduct of the complainant is indicative of after-thought claim, on assumptive omission of the appellant to obtain the insurance policy against risk of ‘theft’ or ‘burglary’. He contended that from 1984 till 1991, the appellant - Bank had never obtained such insurance policy and, therefore, the complainant must have been aware of such absence of legal liability on the appellant to obtain the insurance cover against risk of ‘burglary’. He further submits that after the alleged incident of burglary which occurred in the night between 13th and 14th January,1992, for the first time, on 07.09.1992, the complainant wrote a letter to the appellant Bank, in order to create certain ground for the purpose of seeking compensation. He argued that that the complainant had committed such delay, only with an ulterior motive to create certain record and as such, the so called “deficiency in service” is artificially created in order to file the complaint. He would submit that the State Commission over-looked the material documents and fastened liability on the Bank, only because previously, the insurance policy for burglary and fire was being obtained when the ODH account was in existence. 7. Crux of the problem is whether the appellant Bank was under legal obligation to obtain insurance to cover risk of ‘burglary’ or ‘theft’ in the relevant year. If it is found that the appellant Bank was under ‘express’ or ‘implied’ obligation to cover the goods and machinery in the factory of the complainant, for risk against ‘theft’ or ‘burglary’ too, along with the fire insurance, the Bank may be held liable to indemnify the complainant. 8. What appears from the impugned judgment of the State Commission is that the continuity of practice of obtaining such insurance by the appellant Bank and deduction of the insurance taken from time to time on behalf of the account of the complainant, was taken as a ‘sole basis’ to reach the conclusion that for the year 1991-’92, the appellant Bank was required to continue the same service to him. 9. We have noticed from the record that the complainant immediately lodged the FIR and claim was also submitted to the insurance company, without any delay. It is, but natural that he would have, in the ordinary course of human conduct, submitted such claim with the appellant Bank without any delay. It may be gathered from the copy of the letter dated 14.01.1992, addressed to the Manager of Oriental Insurance Company Ltd., that the complainant categorically made reference to insurance policy No. 21443/11/92/00071 while seeking appointment of a Surveyor to assess the loss and processing of the claim. In other words, he was having the relevant policy details and may be having insurance policy with him. The insurance company gave response to his letter on 17.01.1992 (Anx. A-4). By that letter, the Oriental Insurance Company Ltd., informed him that the said insurance policy referred in his letter was not for purpose of covering damage caused due to ‘theft’ or ‘burglary’. The insurance company, therefore, repudiated the claim. The complainant thereafter took no further steps till he wrote letter dated 07.09.1992 to the appellant – Bank. The delay of about 8 (eight) months’ and odd is not satisfactorily explained by the complainant. The very fact that he gave the policy number while addressing communication to the Manager of the Oriental Insurance Company Ltd., on 14.01.1992, goes to show that copy of the policy was available with the complainant. 10. We are of the opinion that after repudiation of his claim by the insurance company, the complainant issued the letter dated 07.09.1992 to the appellant Bank in order to create ground for building up of his case. The appellant Bank gave response to his letter and made it clear that, earlier, the fire policy was arranged when ODH facility was obtained by the complainant and that as a gesture of goodwill, it was being renewed. The appellant Bank also informed the complainant that if the customer desired to cover the burglary clause, it was necessary for him to inform the Bank in writing. It is pertinent to note that the complainant had not given any specific instruction to the appellant Bank to insure the goods to cover risk of loss caused due to ‘theft’ or ‘burglary’. The appellant – Bank has placed on record copy of the sanction letter dated 06.10.1987 (Page 103) which shows that all the previous limits of overdraft/advance, existed earlier, had been cancelled, and, there was renovation of the agreement. The terms and conditions appended at the foot of the sanction letter are important. Term No. 3 reads as under :- “3. Fire Insurance including strikes and riots, etc., for the full value of the stock-in-trade hypothecated/pledged to us should be arranged with the Bank clause”. 11. Perusal of the terms and conditions will make it amply clear that the sanction of the over-draft facility was not within the ‘term’ or ‘condition’ for the Bank to secure the insurance, to cover loss caused by incident of ‘burglary’ or ‘theft’. What appears from the record is that the complainant placed on record, the earlier insurance policies pertaining to the year 1979 to 1984, but did not place any other policy to show that after 1984 till 1992, the same practice was continued and, therefore, the Bank was under obligation to obtain insurance against the risk of ‘theft’ or ‘burglary’. In absence of any specific agreement between the parties, the appellant Bank had no reason to extend the service beyond the terms of the sanction letter. As pointed out earlier, the Bank had no insurable interest when the account was only ODD (Over-draft against Deposits) because the stocks were not subjected to hypothecation with the Bank. Considering the relevant record and the reasons discussed herein above, we are of the opinion that the State Commission committed error while holding the appellant – Bank responsible on account of so-called ‘deficiency’ in rendering the service to the complainant. It follows, therefore, that the appellant Bank could not be held liable to pay compensation to the complainant. 12. Taking over all view of the matter, we are inclined to hold that the findings of the State Commission are improper, incorrect and unsustainable. Hence, we allow the appeal. The impugned judgment and order is set aside. No order as to cost. The statutory amount deposited by the appellant-Bank, be released in favour of the appellants, along-with accruals, if any, without any delay. |
