District Consumer Disputes Redressal Forum
Civil Station, Palakkad – 678 001, Kerala
Dated this the 18th day of December, 2010
Present: Smt.Seena.H, President
Smt.Preetha.G.Nair, Member
Date of filing: 14/12/2009
CC. No.165/2009
Rajinamary
W/o.Muthuswamy
Kozhippara
Chittur Taluk
Palakkad - Complainant
(By Adv.S.Saviour)
Vs
The Branch Manager
Indian Bank
Vadakarapathy Branch
Vadakarapathy Panchayath
1st Floor, Anu Shopping Complex
Kozhinjampara
Chittur Taluk
Palakkad. - Opposite party
(By Adv.S.M.Unnikrishnan)
O R D E R
By Smt.SEENA.H, PRESIDENT
Case of the complainant:
Complainant and 9 other members are running a unit named Gomatha Dairy Unit under the control of Palakkad District Kudumbasree unit. Complainant and her unit has availed a loan amount of Rs.1,68,000/- from the opposite party bank. From the total amount of Rs.1,68,000/-, Rs.84,300/- was Government subsidy, Rs.16,800/- was Panchayat subsidy and Rs.8,430/- was the beneficiary portion. Opposite party has given a sum of Rs.59,010/- as loan amount. At the time of granting loan, opposite party deducted from each member an amount of Rs.1,000/- for the purpose of covering insurance for the cows which are insured with the United India Insurance Ltd., Nemmara Branch. On 14/04/2009, complainant’s cow bearing tag No.97086/UII101200 XB/HFC died due to sun stroke. The same was informed to opposite party. Complainant preferred a claim form before the Insurance Authorities claiming insurance amount, but the Insurance Company replied orally that cows were not insured with the opposite party. Complainant immediately contacted the opposite party bank to know the real facts but the opposite party behaved very rudely. Complainant repaid Rs.59,000/- to the opposite party. Due to the act of opposite party, complainant lost the insurance claim. Hence the complaint. Complainant prays total amount of Rs.60,000/- as compensation.
Opposite party filed version contending the following.
Opposite party admitted availing of loan by the complainant along with the other members, but denied the say of the complainant that an amount of Rs.1,000/- was collected from each member towards the insurance premium. Opposite party submits that they are not bound to pay the insurance premium. It is for the complainant to pay the same. According to opposite party the death of the cow was due to the negligence of the complainant. Complainant and Gomatha Dairy Unit has to repay the loan of Rs.1,68,000/- and opposite party issued a lawyer notice dtd.2/11/2009 demanding repayment. Complainant replied stating false contentions. A suit numbered OS.652/2009 was filed against the complainant and other members before the Principal Subordinate Court, Palakkad and it is pending even now. This complaint is filed as a counterblast to the above suit. Opposite party has waited till last moment to file the above stated suit, giving time to settle the account. As per the terms of the loan Gomatha Dairy unit will be entitled to get subsidy only if the installments are paid properly. According to opposite parties the case of the complainant is without any bonafide and hence it has to be dismissed.
Both parties led evidence in the form of affidavits. Ext.A1 to A9 marked on the side of the complainant. Ext.B1 and B2 marked on the side of opposite party. Opposite party cross examined as DW1.
Issues that arise for consideration are;
1. Whether there is any deficiency in service on the part of opposite party?
2. If so, what is the relief and cost?
Issues 1 & 2:
Availing of loan by the complainant is admitted. The crucial question to be decided is whether the opposite party has deducted Rs.1,000/- by way of premium of insurance and after deducting the same whether opposite party failed to pay and avail the insurance policy and whether it is the duty on the part of opposite party to avail insurance policy on behalf of the complainant?
We heard both parties at length and perused relevant documents on record.
Complainant is seen to have availed loan on 14/11/2006. Ext.B1 statement of account produced by the opposite party evidences the fact that opposite party bank has not collected any amount towards the insurance policy. So the say of the complainant that an amount of Rs.1,000/- was collected from each of the unit members towards premium turn out to be false.
Now the next question is that whether it is the duty of the bank while disbursing loan to ensure adequate indemnification in case of unexpected contingencies.
It is the usual practice of the bank to avail the insurance policy while sanctioning loan. Clause 2.14 of Ext.B2, the general terms and conditions while sanctioning credit reads as follows:
“All assets charged to the bank (except for the assets exempted from insuring in certain loan products/schemes) shall be adequately insured against all attendant risks at the expense of the borrower(s). The insurance policy with bank clause (viz bank as mortgage, hypothecate or pledge as the case may be) shall be lodged with the bank”.
On going through this clause, we are of the view that it is the bounden duty of bank to
get the cow insured to cover risks. This has to be done at the expenses of the complainant.
Opposite party has a duty to make aware of the complainant the need for taking insurance and compel her to avail insurance policy. Any ordinary person will agree for the same because he very well knows that in the absence of the policy, the burden will be upon him. With regard to this aspect we find that opposite party is negligent in their service towards the complainant.
Another point which substantiate the case of the complainant is that subsequent to this complaint, opposite party insured the cows of the other 7 members of the unit. DW1 the Bank Manager has deposed that insurance was subsequently taken at the request of the parties and that too on oral request.
We have also a genuine doubt that whether any bank will act upon on such oral request. Again a specific question was put to DW1 while cross examining as to how the said premium amount was collected from the unit members, for which DW1 has answered as follow “R§Ä loan amount Iq«n account te¡v tNÀ¯mWv ]n¶oSv insurance amount deduct sNbvXXv”
It is seen that the unit members has not themselves insured the cow and the policy lodged with the bank. But the opposite party has done the same as per their procedure. The deposition of DW1 will gives us an impression that it is the duty of the opposite party bank to compel the parties to avail insurance. There is also no evidence as to the oral request made by the unit members for insuring the cows. Ext.A4 which is report of the Veterinary Doctor for claiming livestock claim amount shows the genuine belief on the part of the complainant that the cow has been validly insured with United India Assurance Company Ltd.
Opposite party has contented that a suit for recovery of dues against the complainant has been filed before the Principal Sub Court Palakkad. No documentary evidence for the same is adduced by the opposite party. Since parallel proceedings with regard to this issue is pending before another court, we have not gone through the said issue.
In view of the above stated facts and circumstances of the claim, we find that the act of opposite party amounts to deficiency in service on their part and the complainant has to be adequately compensated for the loss and sufferings.
In the result complaint allowed. Opposite party shall pay complainant an amount of Rs.15,000/- (Rupees Fifteen thousand only) as compensation and Rs.1,000/- (Rupees One thousand only) as cost of the proceedings. Order to be complied within one month from the date of receipt of this order failing which the whole amount shall carry interest @ 9% p.a from the date of order till realization.
Pronounced in the open court on this the 18th day of December, 2010
Sd/-
Smt.Seena.H,
President
Sd/- Smt.Preetha.G.Nair,
Member
Appendix
Witnesses examined on the side of complainant
Nil
Witnesses examined on the side of opposite parties
DW1 – Shri.C.Abdul Gafoor
Exhibits marked on the side of complainant
Ext.A1 – Photocopy of letter dt.18/08/2006 sent by Kudumbasree Charge Officer to opposite
party
Ext.A2 (Series) – Photocopy of pass book
Ext.A3 – Photocopy of claim form submitted by complainant
Ext.A4 – Photocopy of veterinary certificate
Ext.A5 – Copy of lawyer notice sent by opposite party to complainant
Ext.A6 – Reply notice sent by complainant to opposite party
Ext.A7 (Series) – Photos
Ext.A8 – Photocopy of letter sent by Veterinary surgeon
Ext.A9 – C.D
Exhibits marked on the side of opposite parties
Ext.B1 – Statement of account
Ext.B2 – Photocopy of terms and conditions of loan
Cost (allowed)
Rs.1,000/- (Rupees One thousand only) allowed as cost
