JUSTICE J. M. MALIK, PRESIDING MEMBER

1.      The facts of this case are these.  Kashmir Singh, the complainant purchased a tractor in the year 1994 by raising loan from Punjab National Bank.  The tractor was hypothecated with the Bank to secure repayment of the loan amount and was insured by the Bank w.e.f. 24.7.1995 to 24.7.1999 regularly.  It was assumed that the vehicle was again insured w.e.f. 29.1.2000 to 28.1.2001.  The tractor met with an accident on 28.1.2000 while being driven by one Ram Pal, causing death of Shri Sumer Chand and injuries to Shri Jagir Singh.  The MACT held the complainant as well as driver Ram Pal of the tractor liable to pay compensation to the claimants as the tractor in question was not insured at the time of accident.

2.      The District Forum came to the conclusion that the Bank was bound to get the vehicle in question insured as the premium was being received by debiting the same in the account of the complainant.  The District Forum also held that the Punjab National Bank should pay a sum of Rs.2,78,000/- as awarded by the MACT, Jagadhri vide order dated 7.10.2003 to the complainant as per terms of the award of MACT with interest @9% per annum from the date of institution of the Motor Accident Claims Tribunal petition till realization and to pay a sum of Rs.50,000/- as compensation for deficiency in service and harassment.  However, the State Commission placed reliance on clause (10) of the insurance policy which runs as follows:

“10.The hypothecated goods/machinery of market value sufficient to cover the outstanding dues to the Bank shall at all times during the currency of this security, be maintained in good and saleable conditions and insured by and at the expense of the Borrower against Fire and such other risks as may be required by the Bank or be required by law, to the full extent of the value thereof with an insurance Office approved by the Bank in the name of the bank or in the joint name of the Bank and the Borrower and in either case the policies and receipt(s) for premia shall be delivered to the Bank.  The Borrower shall duly and punctually pay the premia due on the policies at least one week before the same shall have become due or payable and hand over the receipts to the Bank and the Borrower agrees not to raise at any time and dispute as to the amount of the insurable interest of the Bank.  If the Borrower shall make a default in effecting such insurance, as aforesaid, or in renewing any policy or in payment of such premia or in keeping the hypothecated premises so insured or in delivering to the Bank the policies or receipts for the premia it shall be lawful (but not obligatory) for the Bank itself to effect such insurance of to renew of to pay such premia and to keep the hypothecated goods insured and to debit the expenses incurred by the Bank to the Borrower’s account and the same shall be treated as advances secured by this Agreement and recoverable accordingly…..”

          and accepted the appeal with payment of costs of Rs.25,000/-.

3.      We have heard the learned counsel for the parties.

4.      The first point raised by learned counsel for the bank was that the case is barred by time.

5.      The record reveals that the accident took place on 28.1.2000.  The case was filed before the MACT.  The learned MACT vide his order dated 10.7.2003 decided the case on merits.  Thereafter the matter went to the Hon’ble High Court.  The High Court passed the following order on 15.1.2004:

“The learned counsel for the appellant has contended that as the tractor in question had been hypothecated with the Bank, it was the liability of the Bank to have the tractor insured and as the insurance policy was not existence on the date of accident i.e. 28.1.2000, the appellant could not be held liable.  We find absolutely no merit in this plea.  Admittedly, on the date of the accident, there was no insurance policy covering the tractor in question.  In case the appellant feels aggrieved by the neglect on the part of the bank in having the tractor insured, it would be open to the appellant to claim the compensation from the Bank by any means open to him.

                             Dismissed with the above observations.

                                                                             Sd/- H. S. Bedi

                                                                               Judge

                                                                             S/- Kiran Anand Lall,

                                                                               Judge.”

          The complaint was filed before the consumer fora on 29.12.2003 prior to passing of the said order. 

6.      The District Forum answered this question as follows:

“The last contention of OPs is that the complaint is hopelessly time barred.  On perusal of judgment dated 7.10.2003 passed by Motor Accidents Claim Tribunal, Jagadhri, it is clear that the liability of complainant was held on 7.10.2003 and the complainant has filed the complaint in this Forum on 29.12.2003.  Though the accident took place in the year 2000 but the liability of complainant was held in October, 2003 from where the cause of action accrued.  Therefore, the complaint has been filed within limitation.”

7.      We also find that the complaint was filed within time because the liberty was granted by the Hon’ble High Court to claim the compensation from the Bank by any other means open to him.  At that time, the complaint before the fora had already been filed in the year 2003.  There is no clear evidence to the effect as to when did the complainant come to know that the bank did not renew the insurance policy.  The case of the complainant is that he came to know about his liability when the proceedings were pending and order was passed by MACT.  We see no reason to disbelieve this version.  Consequently, it cannot be said that the case is barred by time.

8.      The second submission raised by the counsel for the respondent was that since the matter has been decided by MACT, this parallel proceeding is not maintainable.

9.      This argument is bereft of force.  The entire proceedings have to be read in conjunction with the order of the Hon’ble High Court before 15.1.2004.     The complainant was given liberty to claim the compensation from the Bank by any means open to him for which he has filed the complaint.

10.    Moreover, the cause of action had arisen when the order was passed against the complainant.

11.    Learned counsel for the bank argued that according to Clause 10 quoted above, the bank is not liable to pay the amount.

12.    We are unable to locate any substance in this faint argument.  This Commission in the case of Allahabad Bank vs. J.D.S. Electronic Company I (2007) CPJ 270 (NC), held:

“It is admitted case of the parties that for preceding two years the stocks and equipments, etc. were got insured by the petitioner bank and premium amount debited in the account of respondent.  It is not the case of petitioner that any notice was given calling upon the respondent to get the hypothecated stocks and equipment, etc. insured directly by it for the subsequent year in which occurrence took place.  In that backdrop, we do not find any illegality or jurisdictional error in the orders passed by Fora below holding the petitioner bank deficient in service on ground of its not having got insured the hypothecated stocks and equipments, etc. and paying the said amount to the respondent.  Revision is without merit.  Dismissed as such with cost of Rs.3,500/- to the respondent.”

13.    In another case i.e. Union Bank of India vs. Annu Vastralaya and Anr. IV (2007) CPJ 187 (NC), it was held:

“It is not the case of petitioner that any notice was given to respondent No. 1 to get the hypothecated stock insured directly from the Insurance Company for the said period.  Considering these facts including that the insurance was being taken since 1998 onwards by the Bank, no fault can be found in the impugned order.  Allahabad Bank’s case (surpa) had been rightly decided and does not require reconsideration.  Revision petition, therefore, deserves to be dismissed being without any merit.  Dismissed as such.”

14.    In this case, it must be borne in mind that the petitioner is an illiterate person.  He resides in small village.  If the Bank was in no mood to furnish the insurance amount, it should have notified to the complainant about the same.

15.    The facts and circumstances of the case clearly go to reveal the negligence, inaction and passivity on the part of the Bank. They were supposed to do the needful but now they want to put the blame on other party.  The bank is terribly remiss in discharge of their duties.   Moreover, the premium was to be debited from complainant’s account only.  He was not required to pay the premium.

15.    Consequently, we allow the revision petition, set aside the order passed by the State Commission and restore the order passed by the District Forum.