Per Mr.Justice S.B.Mhase, Hon’ble President

Heard Mr.Khan Javed Akhtar-Ld.counsel for the complainant.

This complaint has been filed by the complainant claiming compensation of 35 lakhs with interest @ 18% p.a. from the date of filing of the complaint till adjusting the payment. 

Complainant is a purchaser of flat no.504, Hazelnut, Hiranandani Meadows, Pokhran Road no.2, Thane (W) 400 610. The said flat was purchased by the complainant from the promoters M/s.Hiranandani Properties Pvt. Ltd. for consideration of `22,27,750/- and the said flat is duly registered in the name of the complainant with the Sub-Registrar of Assurances.  In order to purchase the said flat, complainant has taken a loan of `22 lakhs as against the said flat on 15/6/2004.  Repayment schedule is of 120 months at EMI of `25,943/-.  In the loan agreement, which was executed between complainant and opponent, there is a condition in 5.1 (g) it is as follows:-

“Insurance : The free insurance offered presently by the Bank is valid only for a three year period, and is valid and effective from the date mentioned on the policy.

The Borrower will be solely responsible for renewal of the said insurance policy as and when it becomes due for payment of premium and renewal.  Also, in the event of claims, if any, the borrower shall comply with all necessary formalities and liase directly with the Insurance Company.”

Thus, according to complainant the free insurance for a period of three years was offered by the opponent and the said insurance was renewable at the end of three years.  This was an insurance which was required to be taken by the bank for the purpose of indemnifying either bank and/or the complainant in case of any mishap. It is a case of the complainant that on 08/11/2008 said flat was involved in a fire and as a result of which the flat suffered damage. It is her case that apart from the damage to the flat, the electrical fittings windows, door, flooring, ceiling, etc. were damaged.  It appears that the said damage was assessed by the Fire Brigade officers of Thane and, accordingly, said Fire Brigade Officer has issued a certificate on 25/11/2008. On going through the said certificate, it appears that the total loss or damage sustained by the complainant is `23,77,400/-.  The particulars of the list of those damages are annexed along with the said certificate.  We need not make a reference to it at this stage. Therefore, in order to claim these damages and additional damages, the complaint has been filed claiming total damages of `35 lakhs with interest @ 18% p.a.

We are not inclined to admit this complaint for the following reasons.

Even assuming that the free insurance policy was given by the opponent bank, since the loan document is of 15/06/2004, such policy will come to an end by 14/06/2007.  Thereafter, renewal responsibility of the said policy is of the complainant. Grievance of the complainant is that after the incidence of fire and assessment of the damages by the Fire Brigade officers, the complainant made a claim with the opponent bank on the basis of the clause referred to above. However, it was found that the bank has not taken insurance policy and, therefore, further the insurance claim cannot be processed and, thus, Ld. counsel for the complainant submitted that there is deficiency on the part of the bank and, therefore, complaint be admitted.  What is important to be noted is that had the incident of fire taken place within a period of three years that is 15/6/2004 to 14/6/2007, the ground raised by the complainant would have been valid one, because the assurance which was given by the bank that the free insurance policy for a period of three years being offered by the bank would have created responsibility on the bank to take such a policy.  But unfortunately, for the complainant in this matter, incidence of fire has taken place on 08/11/2008 i.e. beyond the period of three years and/or subsequent to 14/6/2007.  Therefore, this incidence is not covered in a period of free policy, which was offered to the complainant by the opponent-Bank.  It is important to be noted that in fact on completion of three years period i.e. on or about 14/6/2007 complainant ought to have approached the opponent bank for the purpose of further renewal.  Even if we assume that there may be grace period for renewal as is usually for one month after policy lapses in that circumstances before 14/7/2007 the complainant should have approached the bank for renewal. However, complainant has not approached to the bank for the renewal. The above referred clause specifically states that the borrower will be solely responsible for the renewal of the said insurance policy  whenever it becomes due for payment of premium and renewal.  Therefore, the responsibility to renew the policy after the period of three years is over, is on the complainant and the complainant has not discharged said obligation by approaching the opponent bank.

It is interesting to note that the Ld.counsel submitted that since free policy was not taken it was futile for the complainant to approach for the purpose of renewal, but we find that fact that free policy was not taken was not known to the complainant till the complainant made claim to the bank.  On the contrary, complainant was under impression that free policy was taken by the bank and the complainant was/is protected.  If this was/is the apprehension/impression of the complainant, then the complainant was under obligation to approach the bank on completion of period of three years and/or within grace period thereafter.  Unfortunately, complainant for the best reasons known to the complainant has not approached to the bank.  Complainant approached to the bank after completion of three years after fire had taken place. Had the complainant approached bank immediately after three years, it would have been known to the complainant that the bank has failed in taking free insurance policy as was stated in the agreement. In that eventuality, it would have been possible for the complainant to take a fresh policy and/or insist to the bank for taking fresh policy. However, that is also not done by the complainant.  Resultantly, on the date when incidence of fire took place i.e. on 08/11/2008, there was no insurance existing and, therefore, bank has rightly not processed the claim of the complainant with any insurance policy.  Question for our consideration in these circumstances is whether there is deficiency in service on the part of the bank.  Had the incidence of fire would have taken place during the period of three years, when the free insurance policy was offered by the bank and it is found that bank has actually not taken the policy then the bank would have been liable for deficiency in service and for payment of compensation in favour of the complainant.  But however incidence has not taken place during the period of three years, which is covered under the free policy offered by the bank.  Incidence has taken place beyond that period and liability or responsibility to extend the policy and renew the policy beyond the period of three years is of the complainant and, therefore, there was no responsibility on a bank to get the policy extended for a further period and, therefore, ultimately, we come to the conclusion that there is no statutory responsibility of the bank and/or contractual responsibility of the bank to renew the policy and/or to take fresh policy after a period of three years and, resultantly, we come to the conclusion that there is no substance in the complaint.

There is one more aspect.  The bank has advanced a loan. While advancing loan offer for free insurance policy was given. Therefore, said policy was not for consideration.  Complainant has not availed or hired service for consideration.  Therefore, there is no question of deficiency of service. Complaint deserves to be rejected in limine.  Hence the following order:-

                                      ORDER

Complaint is rejected.

Copies of the order be furnished to the parties.

 Pronounced Dated 19th January, 2011