Debasis Bhattacharya:- PRESIDING MEMBER

 The instant consumer case filed under section 12 of the Consumer Protection Act 1986 originates from the grievances of the complainant arising out of denial of the OP Bank to renewal of an insurance policy and resultant failure to lodge a claim before the OP Insurance Company. The petition was admitted as the Commission was satisfied that the business under the trade name ‘Barnamala’ of which the Complainant was the proprietor was his sole profession for the purpose of earning his livelihood by means of self-employment.

Brief facts of the case:- To depict the case as presented in the complaint petition in a nutshell, the complainant, Proprietor of a concern which deals in educational items and allied stationeries, having a go down at Kalipur, Garalgacha, Dankuni for keeping materials, had a Cash Credit account in the Dankuni Branch of Bank of Baroda.

The Cash Credit A/C with a loan facility of Rs.5,00,000/- was allowed to be opened in favour of the Complainant by the Bank on 28.11.08 against (i) hypothecation of stock as primary security, (ii) against lien of fixed deposit and (iii) against an Insurance Policy of OP Insurance Company as collateral security. In this connection, it may be mentioned here that the Complainant was also a beneficiary of a shop-keeper Insurance Policy (Not Life Insurance policy as stated by the Complainant) with sum assured of Rs.6,50,000/- of National Insurance Company Ltd. since 28.11.08 on the basis of the hypothecated stocks in the aforementioned go down. The said scheme interlinking the Cash Credit A/C with the Insurance Policy is reported to have been floated by Bank of Baroda being a Corporate Agent of National Insurance Company Ltd and it was the Bank who deducted the premium against the Insurance Policy, from the Cash Credit A/C of the Complainant. It is claimed that in this way the policy was renewed from time to time and no prior intimation or approval by the Complainant was required for such renewals.

However, reportedly, goods lying in the go down which was covered by the Insurance Policy were ‘drenched and damaged’ because of some accident which destroyed the roof of the go down. The developments were instantaneously intimated to the Bank authority and the Bank authority was requested to arrange an inspection so that the respective compensation claim could be lodged against the Insurance Policy. However there was no response from the OP Bank.

On 07.06.12 the Complainant came to know that the said policy was not renewed and the same expired on 27.11.11 and simply for that reason the possibility of any sort of compensation from the Insurance Company was ruled out.

The Complainant claims that since 2008 the Bank by virtue of the tie-up with the Insurance Company has been deducting the premium from the Cash Credit Account of the Complainant. But the Policy was not renewed for the material period in which the claim for compensation arose.

The Complainant further brings attention to the fact that the Policy was automatically renewed in August 2012 and further renewals were made for certain subsequent periods in spite of non-submission of stock statements since November 2011.

The Insurance policy is claimed to have been renewed assessing the stock value at Rs.6,50,000/- though the Complainant himself admits that at that point of time there was no stock in hand because of the accident which occurred on 06.06.12.

The complainant claims that by virtue of the arrangements of the scheme, it was the bank who was supposed to remit the requisite premium to the said Insurance Company periodically by debiting the amount from the beneficiary’s Cash Credit account. But surprisingly the arrangements for renewing the policy for the period 28.11.11 to 27.11.12 were not made by the Bank.

The complainant claims that neither The OP bank nor the OP Insurance Company asked him for his willingness or unwillingness to renew the policy.

The complainant further points out that in the instant case, where there was an apparent tie-up between Bank of India and National Insurance Company in the matter of the insurance scheme in question, the insurance company cannot shrug off their vicarious liability.

All these resulted in huge financial loss and loss of goodwill for the Complainant.

Initially to get proper remedies, the Complainant filed a writ petition before the Hon’ble High Court at Calcutta on 16.12.13. However, Hon’ble Justice Debansu Basak dismissing the petition, observed in his order dtd. 29.08.18, that the quantum of damages to be awarded is an issue of fact which is complex in nature and need not be gone into by a writ Court. However the order of the Hon’ble Court was to be construed to mean that the limitation stood condoned. Hon’ble Court allowed the petitioner to initiate appropriate proceedings if it was entitled to in law at that stage.

On application, the certified copy of the order was received on 13.09.18.

And at this juncture, the instant consumer complaint came up.

The complainant along with his petition has made exhaustive submission of copies of supporting documents viz. 1) certified copy of the order of the Hon’ble High Court at Calcutta, 2) Statement of the Cash Credit Account, 3) Insurance policy documents, 4) letter addressed to OC Chanditala P.S., 5)Communications made to the OP Bank, 6) Communications received by him from the OP bank and 7) Copy of stock statement.

The complainant filed the complaint petition seeking direction upon the opposite parties bank and Insurance Company to pay Rs.6,50,000/- towards cost of stock destroyed due to accident with interest @12% p.a.for the period from 06.06,12 to the date of ‘actual payment’, to pay Rs.8,00,000/- to compensate the loss in business, to pay Rs.1,00,000/- for causing mental pain and agony and to pay Rs.30,000/- towards litigation cost.

  The complainant, who is apparently a consumer in terms of the relevant provision laid down under the Consumer Protection Act 1986 and OP 1 are resident/having their office address within the district of Hooghly. The claim preferred by the complainant does not exceed the limit of Rs.20,00,000/-. Thus this Commission has territorial as well as pecuniary jurisdiction to proceed in the instant case.

The opposite parties no.1 to 3 belonging to the same organization i.e. Bank of Baroda and opposite parties 4 and 5, belonging to National Insurance Company contested the case by filing written versions denying therein the allegations leveled against them. All the OPs prayed for treating their respective written versions as evidence on affidavit.

However the rebuttals have been made in a stereotype manner and no parawise counter arguments and corresponding corroborating documents could be placed so far the evidence on affidavit filed by the Complainant is concerned.

In fact it is confusing to identify which one is the written version of the OP Bank and which one is the written version of the OP Insurance Company.

 The written version filed the OP Insurance Company is almost a replica of the written version filed by the OP Bank.

The written versions which are treated as evidence on affidavit on prayer, simply decorates the Complaint petition with certain adjectives like ‘not maintainable’, ‘bad by the principles of estoppels, waiver and acquiescence’ etc. But no reasons are assigned for such routine decorations.

In the written versions the OPs have gone even to the extent of claiming that this Commission has no territorial jurisdiction to try this case.

However no reason could be assigned by the OPs to substantiate their allegations.

However in the written versions focus has been made on the sole issue that in respect of the particular period, when the claim was raised by the Complainant, the policy was not renewed.   

The OP insurance company harps on the same string that as there was no policy at the material time of accident the OP Insurance Company has no liability to indemnify the loss.

The OP Bank on the other hand claims that as the petitioner had not paid any payment and did not even follow up the same with the Bank in spite of repeated reminders and requests, no premiums were paid by the Bank in absence of specific instruction from the petitioner.

Decision with reasons:-     Materials on records are perused.                  

 The first issue which is clear that the indemnification of the loss was out of question at the material point of time as the policy itself was not renewed at the appropriate juncture. Now the question is that, who was actually responsible for non-renewal of the policy. So far as the written versions and brief notes of arguments of the opposite parties are concerned, it transpires that the opposite parties desperately try to establish that it is the complainant’s reluctance for which the policy could not be renewed.

However, the contents of the written versions (considered as evidence on affidavit also) of all the opposite parties are hollow, superficial and made in a lackadaisical, indifferent and shoddy manner.  The allegations made in the representations are not accompanied by material evidences. It is nowhere substantiated by enclosing documentary evidences that the complainant expressed his reluctance to renew the policy. The bank does not appear to have sent any communication in the form of requests and reminders to the complainant by any postal means or by any electronic means seeking his consent for renewal of the policy. Besides, it is also nowhere established that the consent by the complainant was required at the time of first renewal of the policy and also the subsequent renewals of the policy and the same was obtained by the OPs from the complainant. And here lies the crux of the case.

The circumstantial aspects firmly indicate that for renewal of the policy, arrangements were made in such a way that premium amount would be debited from the complainant’s cash credit account and would be transferred to the Insurance company with a proposal for renewal of the policy from the bank’s end. As regards the documentary evidences submitted by the complainant, the first renewal of the policy was made in that manner.

It transpires that the policy of the Complainant was automatically renewed on 18.08.12 by payment of requisite premium debiting the Complainant’s Cash Credit Account and the renewals continued till the period 25.08.14 to 24.08.15, in spite of non-submission of stock statement by the Complainant since November 2011.

When enquired about such deductions of premiums and renewal of the policy, the OP Bank clarified that since the cash credit facilities had been extended to him in order to meet the shortfall of working capital fund in the business to purchase stocks, so the stocks became the primary security for the credit facility which was hypothecated to the Bank and the same was required to be insured against eventuality of any loss.

 The OP Bank further clarified in their letter dtd.29.11.14 that such insurance of stocks is a mandatory requirement stipulated by the RBI and Credit facility guidance of Nationalized Banks.

Thus it is established that in the instant case the account holder’s approval was not a precondition for renewal of the policy.

Considering all the aspects of the issue it transpires that it is just because of the negligence and indifference of the OP bank, the renewal of the policy was not made at the appropriate point of time. And when the negligence became conspicuous, all the opposite parties tried to pass the bucks to the complainant by hook or by crook. For this negligence and indifference the complainant is not supposed to suffer.     

        Now, in view of the discussion made hereinabove and considering the facts and circumstances of the case, this commission is of the view that there was gross deficiency of service on the OP bank’s part and as the insurance scheme was a product of the tie-up between the OP bank and OP insurance Company, the insurance company cannot shrug off their vicarious liability in this matter.

Now the Complainant has prayed firstly for imposing direction upon the OPs to pay Rs.6,50,000/- to the Complainant i.e. the cost of stocks destroyed due to accident.

Here the fact remains that neither on the fateful day nor within one week of the incident, actual quantification and valuation of stock were assessed by any competent authority. 

It transpires from the records that the Complainant enclosed a purchase sale vis-à-vis stock statement with the General Diary lodged with the concerned Police station but the authenticity of the same is apparently questionable as firstly the same is not supported by the copies of the corresponding tax invoices and secondly the same is not authenticated by any auditor.

Thus this Commission is not in a position now to quantify the damages and determine the compensation against the damages eleven years after the incident.

Hence, it is

ORDERED

that the complaint case no.160/2018 is allowed on contest but in part.

The OP bank and the OP insurance company will be jointly and severally liable to make arrangements for renewal of the policy retrospectively with effect from the appropriate date i.e. from the very date on which the preceding policy expired. This renewal will have to be done within 45 days from the date of this order. Consequent upon the renewal, the OP insurance company will be at liberty to call for the required authenticated documents to assess the loss, examine the same and grant compensation accordingly in terms of the policy with 9% interest for the period from the date of first intimation of the incident to the OP Bank to the date of this order.

 The assessment of loss and grant of compensation will have to be done within 45 days from the date of the production of the required authenticated documents regarding the existing stock on the fateful day.

 Apart from the above, the OP bank will be liable to pay Rs.1,00,000/- to the complainant as compensation for his mental agony, pain and harassment and Rs.20,000/- towards litigation cost within 45 days of this order. This will not depend upon the production of documents by the Complainant as mentioned in the earlier part of this order. In case of non-compliance of this order within the stipulated date as mentioned in this order, the opposite parties will be jointly liable to pay Rs.25,000/- towards the Consumer Legal Aid Account.

 Let a plain copy of this order be supplied free of cost to the parties/their Ld. Advocates/Agents on record by hand under proper acknowledgements/sent by ordinary post for information and necessary action.

The final order will be available in the respective website i.e. www.confonet.nic.in.