STATE CONSUMER DISPUTE REDRESSAL COMMISSION

BIHAR, PATNA

Appeal No. 226 of 2017

Central Bank of India, Kehunia Branch through its Branch Manager, at Kehunia, PO & PS- Narkatiaganj, District- Bettiah (West Champaran)

                                                                                                                                                      … Complainant/Appellant

Versus

Smt. Manju Verma, W/o- Late Amresh Kumar Verma, Resident of Village- Gokhula, at present Church Gata, Anand Bag, PO & PS- Shaikarpur, District- West Champaran

2.  Branch Manager, Oriental Insurance Company , PO & PS- Mathari, District- East Champaran.     

                                                                                                                                            …. Opposite Parties/Respondents

Counsel for the Appellant: Adv. Rakesh Ranjan

Counsel for the Respondent no. 1: Adv. Prakash Kumar

Counsel for the Respondent No. 2: Adv. Rajesh Chandra Narayan

Before,

Hon’ble Mr. Justice Sanjay Kumar, President

Mr. Ram Prawesh Das, Member

Dated 17.03.2023

As per Sanjay Kumar, President.

O r d e r

1. Present appeal has been filed on behalf of appellant central bank of India for setting aside the order dated 14.06.2017 passed by District Consumer Forum, Bettiah in Complaint Case no. 30 of 2007 whereby and whereunder the Ld. Forum has allowed the Complaint Case and directed appellant-bank to pay a sum of Rs. 1,65,352/- with interest @9% p.a from 23.10.2013 till date of payment as well as Rs. 3,000/- as cost of litigation.
2. Briefly stated the facts of the case is that husband of the complainant was a stamp vendor and in order to facilitate his business and for better prospect approached Central Bank of India (O.P. no. 1) for loan upon which Central Bank of India sanctioned loan of Rs. 3.5 lacs and for security of loan amount got the stock of stamp paper insured by the Oriental Insurance Co. Ltd. (O.P. no. 2) for the period from  21.03.2005 to 20.03.2006 under the standard care and special perils policy. The premium of insurance was paid by the Central Bank of India after deducting the premium amount from the loan account of loanee and the original copy of the insurance policy was also kept by the bank.
3. The husband of complainant was murdered on 24.04.2006 at about 7:00. P.M near Narkatiaganj Railway Station and stamp paper and other articles were looted for which FIR was lodged on 25.04.2006 under Section 302/34 of IPC. The Oriental insurance company (O.P. no. 2) as well as the Central bank of India (O.P. no. 1) was immediately informed of murder of husband of complainant.
4. Complainant thereafter, approached opposite parties and filed her claim for payment of sum assured amount but inspite of repeated request the claim was not settled. Aggrieved by which complainant filed a consumer complaint case before the District Consumer Forum, Bettiah for payment of insured amount of Rs. 4,59,000/- along with grant of adequate compensation and cost of litigation.
5. It is stated in the complaint petition that initially insurance cover was for the period 21.03.2005 to 20.03.2006 and  request was made by the deceased loanee to the bank to renew the insurance policy with insurance company, but same was not done by the bank. Insurance company had also reminded the bank to renew the insurance policy but still same was not done.
6. Notice were issued to both the parties and they filed their written statement before the District Consumer Forum. Opposite party no. 1 Central Bank of India stated in their written statement that complainant was a loanee of the bank and is not a consumer qua Central Bank of India as such present complaint case is not maintainable against the Opposite party no. 1-Central Bank of India.
7. It was further stated that the husband of complainant Amresh Kumar Verma had taken loan of Rs. 3,50,000/- against which land and building in the name of complainant were mortgaged in favour of bank on 25.02.2005.
8. Opposite party no. 2 Oriental Insurance company has stated in its written statement that complaint case was time barred. The husband of the complainant had taken an insurance policy for the period from 21.03.2005 to 20.03.2006 but thereafter it was not renewed.
9. It was further stated that opposite party no. 2 – Oriental Insurance company had asked opposite party no. 1 for the renewal of the policy but they failed to renew the policy for which opposite party no. 2 is not responsible.
10. The District Consumer Forum after hearing the parties and considering the materials  placed on record held that it is an admitted fact that opposite party no.1-Central Bank of India sanctioned loan of Rs. 3.50 lac to Amresh Kumar Verma, the husband of the complainant to facilitate the business which was insured by opposite party no. 2 – Oriental Insurance company for the period from 21.03.2005 to 20.03.2006. under the standard fire and special perils policy and description of property insured  included the non judicial government stamp and registration stamp paper etc.
11. The final form submitted by the police shows that FIR was lodged and registered under section 302/34 IPC stating therein that on 24.04.2006 when Amresh Kumar Verma the stamp vendor was returning from Shikarpur Registry office to his house at about 7:00 PM on his motorcycle, unknown miscreants fired upon him looted stamp paper and other articles from his possession and he died on the spot and after investigation police submitted charge sheet under section 302/120B/394 IPC against the accused named in the charge sheet. 
12. The district Consumer Forum further held that from the passbook it appears that on 17.03.2005 the premium of the insurance policy was debited by opposite party no. 1-Central Bank of India from the loan account of loanee Amresh Kumar Verma and during his lifetime loanee filed a petition requesting for renewal of policy with the insurance company. But the O.P. no. 1-Central Bank of India did not deduct the insurance premium for renewal of policy as such insurance policy was not renewed.
13. During investigation the police recovered the stamp to the tune of Rs. 1.70 lac and complainant received the stamp on the basis of order of the court. As such complainant is entitled to get the remaining insured amount of Rs. 1.80 lac and directed opposite party no. 2 – the oriental Insurance Company to pay the remaining amount of Rs. 1.80 lac with interest @10% p.a from the date of claim made till realization and further directed to pay Rs. 3,000/- as cost of litigation within two months and if opposite party no. 2 has not got the second premium the opposite party no. 2 will realize the premium from opposite party no. 1.
14. Against the order dated 23.03.2009 passed in complaint case no. 31 of 2007 fastening the liability to pay sum assured amount on Opposite party no. 2- Oriental Insurance company filed appeal before the State Commission giving rise to Consumer Appeal no. 261 of 2009 which was heard by this Commission and appeal was allowed by order dated 03.11.2016 and order dated 27.02.2009 was set aside and case was remanded to the District Consumer Forum to be heard afresh.
15. On remand notices were issued to all the parties but Oriental Insurance Company (opposite party no. 2) did not appear to contest the proceeding and proceeding remained ex-parte against them.
16. The District Consumer Forum in its subsequent order dated 14.06.2017 as impugned in this appeal has held that it was responsibility of the Central Bank of India (O.P. no. 1) to renew the insurance policy after deducting the insurance premium from the loan account of complainant in which they failed although deceased loanee as well as opposite party no. 2 – Oriental Insurance company had asked the Central Bank of India (O.P.no. 1) to renew the insurance policy and as such held Central Bank of India (O.P. no. 1) responsible for deficiency in service and liable to compensate the complainant by paying Rs. 1,65,352/- with interest @9% p.a from 23.10.2013 till the date of payment and further directed to pay Rs. 3,000/- as cost of litigation.
17. Aggrieved by order dated 14.06.2017 passed in Complaint Case no. 30 of 2007 passed by District Consumer Forum, Bettiah, Central Bank of India (O.P. no. 1) has filed this appeal.
18. It is submitted on behalf of counsel for the appellant that the District Forum has wrongly fastened the liability to pay the compensation on appellant Central Bank of India as they were not at fault for not renewing the insurance policy and it was for the complainant to renew the policy.
19. This court is not impressed by the submission of the counsel for appellant that they were not responsible for renewal of insurance policy. This court is of the view that after sanction of loan of 3.5 lacs the premium for insurance was deducted from the loan account of deceased loanee by the Central Bank of India and the stock of stamp paper remained hypothecated in favour of the bank as such it was responsibility of the bank to renew the insurance policy to keep the loan amount secured .It is also admitted fact that request was made by the deceased loanee as well as Oriental Insurance company for renewal of insurance policy but still the insurance policy was not renewed by the Central Bank of India by deducting the insurance premium from the loan account of deceased loanee as such, the District Consumer Forum has rightly found deficiency in service by the Central Bank of India and accordingly directed the Central Bank of India to pay the amount of Rs. 1,65,352/- with interest @9% p.a from 23.10.2013 till date of payment as well as Rs. 3,000/- as cost of litigation.
20. The National Consumer Disputes Redresssal Commission in case of Bajaj Life Insurance Company Vs. Parvati Bai since reported in 2019 CPJ (NC) 3 294 in paragraph no. 5 & 6 has held that if premium was not paid

5.    “It is not in dispute that the insurance premium for the year 2013 was payable on or before 6.8.2013. It is also not in dispute that the deceased husband of the complainant had died on 18.9.2013. It is also an admitted position that the premium to the insurance company was paid only on 25.9.2013 and that while remitting the premium, it was not informed to the insurer that the deceased had already died. It is thus evident that the insurance premium was not paid even within the grace period available for the purpose. Therefore,  the policy lapsed on 6.9.2013. The deceased insured having died on 18.9.2013, the no insurance cover on life was available on that date. Therefore, the petitioner company cannot be held liable to pay the sum assured to the complainant. The account value of Rs.34,344/- had admittedly been offered to the complainant but was not accepted by her. No further liability in my opinion can be fastened upon the petitioner company.

6.      However, respondent No.1 having not deducted and remitted the insurance premium, payable in respect of the insurance cover of the deceased husband of the complainant, even within the grace period which expired on 5th/ 6th September, 2013, it was clearly deficient and negligent in rendering services to the complainant. Had the insurance premium been deducted and remitted in time, the insurance cover would have been available at the time of the death of the deceased husband of the complainant. It was solely on account of the negligence on the part of respondent No.2 that the insurance policy which had been taken on the life of the deceased husband of the complainant lapsed on 5th/ 6th September, 2013. Therefore, it is only respondent No.2 which can be held liable to compensate the complainant for the loss suffered by her”.

21.  This Commission does not find any error or infirmity in the judgment and order passed by District Consumer Forum, Bettiah requiring any interference by this Commission in appeal.
22. Appeal is devoid of any merit and is accordingly dismissed.

(Ram Prawesh Das)                                                                                                                         (Sanjay Kumar,J)

       Member                                                                                                                                           President

Md. Fariduzzama