IN THE CONSUMER DISPUTES REDRESSAL FORUM, PATHANAMTHITTA, Dated this the 14th day of October, 2010. Present : Sri. Jacob Stephen (President). Smt. C. Lathika Bhai (Member) N. Premkumar (Member) C.C. No. 59/07(Filed on 03.05.2007)Between: K. Pappan, aged 50, Kappil House, Thannithodu P.O., Pathanamthitta District. (By Adv. R. Gopikrishnan) .... Complainant. And: 1. Pathanamthitta District Co-operative Bank, represented by its General- Manager, Pathanamthitta District- Co-operative Bank, Pathanamthitta. 2. Pathanamthitta District Co-operative- Bank, Thannithodu Branch, represented by its Branch Manager, Thannithodu P.O. (By Adv. Bejoy Varghese Koshy) 3. National Insurance Co. Ltd., Pathanamthitta Branch, represented by its Branch Manager, Kallumkathara Buildings, Pathanamthitta. 4. National Insurane Co. Ltd., Divisional Office, represented byits Divisional- Manager, Thiruvananthapuram. .... Opposite parties. ORDER Smt. C. Lathika Bhai (Member): The complainant has filed this complaint against the opposite parties for getting a relief from the Forum. 2. The facts of the complaint is as follows: The complainant is conducting a rubber shop named as Kappil Rubber Agencies. For the establishment of his shop, he availed a loan of ` 1,00,000 from the second opposite party after complying all the formalities for getting the loan. At the time of availing the loan, the second opposite party made to believe the complainant that they would insure the shop with 3rd opposite party under the shop insurance policy and the insured value is ` 1,00,000. As such, the second opposite party collected ` 972 from the petitioner’s account No.113 as the premium amount. As per the conditions of the loan agreement, the petitioner paid loan instalments daily. On 23.01.2007, a theft was done by the miscreants in the complainant’s shop during the midnight and near about 1200 kilograms dry rubber sheets were taken away. The complainant had suffered a loss of ` 1,08,000. In this regard, Thannithodu Police has registered a crime as 4/07 and the investigation is going on. 3. The above said incident was properly intimated to the second opposite party and requested to do the needful for realising the loss amount from the third opposite party. The second opposite party assured that they will do everything for getting the insured amount. After that, the complainant approached the second opposite party several time for enquiring the matter. But they did not do anything. The second opposite party is liable to indemnify the loss occurred to the complainant. The opposite parties are not taken any steps to redress the grievances of the complainant. The acts of the opposite parties amounts to a deficiency in service. Hence the complainant filed this complaint for getting an order for directing the opposite parties to pay the insured amount of ` 1,00,000 with interest along with compensation and cost. The complaint prays for granting the reliefs. 4. The first and second opposite parties have filed a common version raising the following contentions: The complaint is not maintainable either in law or on facts. The complainant had availed the loan as DILT A/c. No.76/2006-07 on 18.12.2006. From 2005 onwards, he had the licence to conduct the rubber agencies. The above said loan sanctioned to the complainant as per the Head Office sanction order No.ILS/DILT/2527/2006-07 dated 8.12.2006 subject to 14 general conditions to be satisfied by the complainant. As per the condition No.9 it is the obligation of the complainant/customer get his stock in trade insured in his name and in the name of bank and to present the same before the bank before withdrawing the loan amount. But here the complainant has availed the loan without submitting the policy and thereby committed breach of agreement condition. As per Sec.12 of the condition the complainant has to remit the tax and to renew the insurance policy in time. The complainant has also undertaken that he would obtain necessary licence lease agreement insurance policy and keep it renewed from time to time till the termination of loan. The 2nd opposite party has collected from the complainant an amount of ` 537 on 17.2.07 by cheque No.149670 in A/c.No.113 of the Pathanamthitta Dist. Co-operative Bank, Thannithodu Branch and the 2nd opposite party has paid the above said amount to the 3rd opposite party for availing insurance coverage. It is an obligatory on the part of the complainant to insure the same and submit the policy to the bank. The complainant with malafide intention to deceive the 1st and 2nd opposite parties have subsequently submitted the cheque after the date of the alleged theft knowing that he had no insurance coverage on the day of alleged theft. The theft alleged by the complainant has not been properly intimated to these opposite parties in time. The 1st and 2nd opposite parties have no obligation or duty to insure the business of the complainant. The inordinate delay in insuring the business, the matter came to the notice of this opposite parties. Then the bank suomoto took initiative and insured his business. These opposite parties are not bound to indemnify the loss of the complainant. The loss is incurred due to the breach committed by the complainant. Hence this opposite parties prayed for the dismissal of the complaint with their cost. 5. The 3rd and 4th opposite parties have filed a version stating the following contentions: The complaint is not maintainable either in law or on facts. These opposite parties are totally unnecessary parties to this case. No policy has been issued either in favour of the complainant or his concern. They have not made any promise or undertaking to issue insurance policy either to the complainant or to opposite parties 1 and 2. No premium has been received from any of the party or no policy certificate has been issued. These opposite parties are not aware of any theft as alleged in the complaint. These opposite parties are not liable to compensate the loss sustained to the complainant. Therefore, they prayed for the dismissal of the complaint. 6. On the basis of the above pleadings of the parties, the following points are raised for consideration: (1) Whether the complaint is maintainable before the Forum? (2) Whether the complainant is entitled to get a relief as prayed for in the complaint? (3) Relief and Costs? 7. The evidence in this case consists of the oral evidence of the complainant as PW1 on the basis of the proof affidavit filed by him and Ext.A1 to A6. For the opposite parties 1 and 2, 2nd opposite party adduced oral evidence as DW1 and Ext.B1 to B8 were marked. For opposite parties 3 and 4, 3rd opposite party has filed a proof affidavit stating their contentions. There is no oral or documentary evidence from the part of them. After closure of the evidence, both sides heard. 8. Point Nos. 1 to 3:- The complainant’s case is that he had availed a loan for an amount of ` 1 lakh from the 2nd opposite party for establishing his business concern. At the time of taking the loan, the 2nd opposite party made to believe the complainant that the shop will insured with 3rd opposite party for 1 lakh and as such the premium amount of ` 972 has been received by this opposite party from the complainant. The complainant used to pay the loan amount without any delay. On 23.1.07 a theft had done in the complainant’s shop and nearly 1200 kg dry rubber sheets were taken away by the miscreants. From this the complainant had sustained the loss for an amount of ` 1,08,000. He approached the 2nd opposite party for processing the claim for getting compensation from 3rd opposite party. But 2nd opposite party has not take any action to processing the claim. On enquiry the complainant came to know that the 2nd opposite party has not remit the premium amount and they could not insure the shop in proper time. The above said act of the 2nd opposite party amounts to a deficiency of service. Hence the complainant filed this complaint for getting the relief as sought for in the complaint. 9. In order to prove the complainant’s case, the complainant adduced oral evidence as PW1 and Ext.A1 and A6 marked. Ext.A1 is the passbook of the A/c. No.113 in the name of the complainant. Ext.A2 is the FIR prepared by the Thannithode Police in Crime No.4/07. Ext.A3 is the passbook of the A/c.No.112 in the name of Gopinathan Nair. Ext.A4 is the reply dated 24.4.2010 from the Appellate Authority RTI Act Section, Pathanamthitta Dist. Co-operative Bank, on the application of the complainant dated 29.03.2010. Ext.A5 is the circular dated 25.10.04 issued by from Pathanamthitta Dist. Co-operative Bank, relating to the DILT loan. Ext.A6 is the Circular dated 11.04.2005 issued by Pathanamthitta Dist. Co-operative Bank relating to the DILT. The opposite parties counsel has been cross-examined PW1. 10. The opposite parties 1 and 2 contended that the DILT A/c.No.76/2006-07 was sanctioned to the complainant as per the head office sanction order subject to the 14 general conditions to be satisfied by the complainant. As per condition No.9 of the agreement it is the obligation of the complainant get his stock in trade insured in his name and in the name of the bank and to present the same before the bank before withdrawing loan amount. But here the complainant availed the loan without submission of the policy. The 2nd opposite party has collected the insurance premium from the complainant, an amount of ` 537 by cheque No.149670 dated 17.2.07 in A/c.No.113 of the Pathanamthitta Dist. Co-operative Bank Thannithodu Branch. It is an obligation on the part of the complainant to insure the same and submit the policy to the bank. The 1st and 2nd opposite parties have no obligation or duty to insure the business of the complainant. The inordinate delay in insuring the same noticed the bank and suomoto took initiative and insured his business. The complainant filed this complaint with malafide intention to deceive this opposite parties by knowing well that he had no insurance coverage for his shop on the day of the alleged theft. 11. In order to prove the contentions of 1st and 2nd opposite party, 2nd opposite party adduced oral evidence as DW1 and Ext.B1 to B8 were marked. Ext.B1 is the copy of the loan application form of the complainant dated 4.12.2006. Ext.B2 is the attested copy of the sanction order. Ext.B3 is the letter dated 6.2.07 issued by the 2nd opposite party to the complainant. Ext.B4 is the attested copy of the cheque dated 17.2.07 No.149670 issued by the complainant. Ext.B5 is the attested copy of the insurance policy certificate of the complainant’s shop. Ext.B6 is the attested copy of the cheque issue register of the 2nd opposite party. Ext.B7 is the attested copy of the account register of the complainant. Ext.B8 is the attested copy of the loan agreement between the complainant and 2nd opposite party. The complainant’s counsel has been cross-examined DW1. 12. The third and 4th opposite parties contended that they have not issued any policy in favour of the complainant or his business concern. They have not made any promise or undertaking to issue insurance policy either to the complainant or to the opposite parties 1 and 2. They are not aware of the theft alleged by the complainant. No premium has been received from any of the party. These opposite parties are not liable to compensate the loss sustained to the complainant. 13. In order to prove the contentions of 3rd and 4th opposite parties, 3rd opposite party filed a proof affidavit stating their contentions. There is no oral or documentary evidence from the part of these opposite parties. 14. There is no dispute regarding the DILT loan availed by the complainant from 2nd opposite party bank. The question raised in this complaint is whether the bank is liable for the deficiency of service in non-taking of insurance policy in the circumstances when under loan agreement loanee himself is required to take insurance on hypothecated shop and produce the copy of policy before the bank? The opposite parties have no dispute regarding the theft happened in the complainants rubber shop. Their contention is only that the complainant did not inform the theft to them. The main fact of this complaint is that at the time of theft the stock in trade of the complainant has not been insured. 15. On going through the evidences in this case, Ext.A1 passbook shows that the withdrawal of loan amount and the remittance of loan instalment is through this account. On a perusal of it, it is seen that on 18.12.04 the complainant had withdrawn the loan amount through cheque No.149669 issued by the 2nd opposite party. The 2nd opposite party had admitted that at the time of availing loan they have issued four cheques to the complainant. As per Ext.B6, they have issued cheques leaves Nos.from 149669 to 149672 to the complainant. The complainant had availed the loan on 18.12.2006 and the theft happened on 23.1.07. The opposite parties contention is that as per Clause No.9 of the loan agreement it is the obligation of the complainant to get his stock in trade insured in his name and in the name of the bank and to present the same before the bank before withdrawing loan amount. Both the bank and the complainant has not complied this condition. The complainant has not taken the policy and without presenting the copy of insurance policy the 2nd opposite party released the loan amount to the complainant. At the time of cross-examination, DW1 deposed as follows: “Insurance FSpt¡Xv ]m#171;n Xs¶bmWv. Clause 9- ]dªn«pv ”. Then the complainant’s counsel put another question which is as follows:-“Ext.B11 Clause 9 lnI£n ]men¨n«nsæn tem¬ \nckn¡m³ _m¦n\v A[nImcaptm? Dv. F¶m ]pXnb {_m©pIfn NnÃd hn«phogvNI\evImdpv ”. At the time of cross-examination, PW1 stated as follows:- “Agreement {]Imcw Rm\mWv stockw ISbpw C³jzsNbvXv t]mfnkn _m¦n lmPcmt¡Xv. Manager bank/span> \n¶pw t\cn«v ASbv¡psa¶v ]dªXv ImcWw premium amount Ign¨pÅ amount BWv withdraw sNbvXXv”. Further he adds: Bank/span> \n¶pw insurance policy submit sN¿m³ ]dªn«nÔ. From the evidence it can be seen as per Ext.B3, on 6.2.07 the 2nd opposite party demanded the complainant to produce the insurance policy of his stock in trade within seven days. Ext.B3 was issued only after the occurrence of theft in the complainant’s shop. It is pertinent to note that no notice was issued by the 2nd opposite party calling upon the complainant to get the stock in trade insured directly till the occurrence of the theft. 16. On a perusal of Ext.A4, reply to the application filed by the complainant under the Right to Information Act about the DILT loan dated 24.4.2010 it is replied that “11.4.05 e k#161;pe{]Imcw Hcpe£w cq]hscbpÅ hmbv]I#161;v 150 {]XnZn\ Xncn¨Shv XhWI#161;v Xpeyamb XpIbv¡pÅ aq¶p sN¡pIqSn _m¦nsâ t]cn FÃm hmbm]¡mc\pw \ÂtIXmsW¶v \n±in¨n«pv”. The circular dated 25.10.2004 and 11.4.2005 i.e. Ext.A5 and A6 are also produced by the complainant. It is to be noted that as per this direction the complainant had entrusted the remaining three cheques to the 2nd opposite party as a security to the loan amount at the time of availing the loan. But they contended that these cheques were issued to the complainant for withdrawing the loan amount. Opposite party further contended that they have collected the insurance premium of ` 537 from the complainant by cheque No.149670 dated 17.2.07 from A/c.No.133 of the complainant. On a perusal of Ext.B6 the cheque No.149670 was issued by the opposite party to the complainant at the time of availing the loan and it might been entrusted as a security of the loan to the bank as per Exts.A5 and A6 Circular. That cheque was used for the remittance of insurance premium and the amount was debited from the complainant’s account. It clearly shows that the bank has the right to recover the insurance premium amount from the complainant’s account. But there is a clear laches from the part of second opposite party. From the deposition of PW2, it is also brought out that the opposite party bank had debited the insurance premium amount from his account without his written request or as per any cheque issued by him. 17. As per the loan agreement it is the responsibility of the complainant to take insurance policy of the stock in trade of the shop. Insuring of hypothecated stock is in the interest of both the complainant as well as the bank. The bank should take initiative to obtain insurance to the stock in trade of the borrower. Both the bank and borrower had joint responsibility to insure the hypothecated stock in trade. If the borrower failed to insure the shop it is the duty of the bank to inform the complainant to take the policy and to get the stock in trade insured. In this case, the bank demanded the complainant to produce the policy only after the theft occurred and after that they have taken the policy in favour of the complainant by deducting the premium amount from the complainant’s account. Besides, the 2nd opposite party paid the loan amount without producing the policy before them by the complainant as per the loan agreement. From the over all facts and circumstances of this case clearly shows that there is laches from the part of 2nd opposite party in taking initiative to insure the complainant’s hypothecated stock in trade, as part of the loan transaction. According to the complainant, he had sustained a loss of ` 1,08,000 due to the theft. The loss suffered by the complainant had no insurance coverage. Without insuring the shop the 3rd opposite party is not liable to compensate the loss sustained to him due to the theft occurred in his shop. Non-insuring the complainant’s hypothecated shop despite sufficient funds in the complainant’s account and the non-intimation for taking the policy is a clear deficiency in service and is a laches from the part of 2nd opposite party. It resulted in a loss to the complainant for about ` 1 lakh. It is therefore just and reasonable to pay punitive compensation to the complainant by the 2nd opposite party. In the circumstances, we find a negligence from the part of 2nd opposite party and the 2nd opposite party is liable to pay compensation of ` 25,000 to the complainant as punitive damages for the loss sustained to him. Therefore, the complainant’s prayer can be allowed with modifications. 18. In the result, the complaint is allowed thereby the complainant is allowed to realise an amount of ` 25,000 (Rupees Twenty five thousand only) as compensation for the loss sustained to him due to the laches of the 2nd opposite party with interest at the rate of 8% per annum from the date of filing of this complaint till this date along with a cost of ` 2,000 (Rupees Two Thousand only). The opposite party is directed to pay this amount within one month from the date of receipt of this order, failing which interest at the rate of 12% will follow from today till the whole payment. Declared in the Open Forum on this the 14th day of October, 2010. (Sd/-) C. Lathika Bhai, (Member) Sri. Jacob Stephen (President) : (Sd/-) Sri. N. Premkumar (Member) : (Sd/-) Appendix: Witness examined on the side of the complainant: PW1 : K. Pappan PW2 : Gopinathan Nair Exhibits marked on the side of the complainant: A1 : Photocopy of the Passbook of the A/c. No.113 in the name of the complainant. A2 : Photocopy of FIR prepared by the Thannithode Police in Crime No.4/07. A3 : Passbook of the A/c.No.112 in the name of Gopinathan Nair. A4 : Reply dated 24.4.2010 from the Appellate Authority RTI Act Section, Pathanamthitta Dist. Co-operative Bank, Pathanamthitta to the complainant. A5 : Photocopy of the circular dated 25.10.04 issued by Pathanamthitta Dist. Co-operative Bank, Pathanamthitta relating to the DILT loan. A6 : Photocopy of the Circular dated 11.04.2005 issued by Pathanamthitta Dist. Co-operative Bank, Pathanamthitta relating to the DILT. Witness examined on the side of the opposite parties: DW1 : M.R. Sobhana Exhibits marked on the side of the opposite parties: B1 : Copy of the loan application form of the complainant dated 4.12.2006. B2 : Copy of the sanction order dated 8.12.2006 of Pathanamthitta Dist. Co-operative Bank, Pathanamthitta. B3 : Letter dated 6.2.07 issued by the 2nd opposite party to the complainant. B4 : Photocopy of the cheque dated 17.2.07 No.149670 issued by the complainant. B5 : Copy of the insurance policy certificate of the complainant’s shop. B6 : Photocopy of the register of cheque book of 2nd opposite party. B7 : Photocopy of the account register of the complainant. B8 : Photocopy of the loan agreement between the complainant and 2nd opposite party. (By Order) Senior Superintendent Copy to:- (1) K. Pappan, Kappil House, Thannithodu P.O., Pathanamthitta District. (2) General Manager, Pathanamthitta District Co-operative Bank, Pathanamthitta. (3) Branch Manager, Pathanamthitta District Co-operative- Bank, Thannithodu Branch, Thannithodu P.O. (4) Branch Manager, National Insurance Co. Ltd., Pathanamthitta Branch, Kallumkathara Buildings, Pathanamthitta. (5) Divisional Manager, National Insurane Co. Ltd., Divisional Office, Thiruvananthapuram. (6) The Stock File.
| | HONORABLE LathikaBhai, Member | HONORABLE Jacob Stephen, PRESIDENT | HONORABLE N.PremKumar, Member | | 
