At, National Consumer Disputes Redressal Commission NCDRC
By, THE HONOURABLE MR. JUSTICE V.K. JAIN
By, PRESIDING MEMBER
For the Petitioner: Sanjay Kr. Ghosh, Rupali S. Ghosh, AdvocateS. For the Respondents: R1-R2, Yogesh Malhotra, R3, Jai Mohan, Advocates.
The complainant M/s Goodwill Leather Art had taken credit facility from the respondent State Bank of Mysore. For the year 2007-08, the above-said bank had taken an insurance policy for the benefit of the complainant and the said policy covered risk against fire as well as risk against burglary, which according to the learned counsel for the bank was taken by them as per the instructions of the complainant. For the year 2008-09, no policy covering risk against burglary was issued by the insurer – National Insurance Co. A burglary happened in the factory of the complainant in which goods worth Rs.884337/- were allegedly stolen. The matter was reported to the police as well as to the bank. The bank was asked by the complainant to take necessary steps to get the insurance claim paid. No claim was lodged by the complainant directly with the insurer. The insurer did not pay the claim claiming that no insurance policy against burglary had been obtained from them for the year 2008-09. Since nothing was paid to the complainant, they filed a consumer complaint impleading the insurer as well as the bank as parties to the complaint.
2. The complaint was resisted both by the insurer as well as by the bank. In its written version, the bank took the stand that they had requested the insurer to issue policy covering the risk of fire as well as of burglary but the insurer refunded the excess premium after two months and 10 days and did not cover the risk against burglary. The insurance company denied having received any instructions from the bank for issuance of a policy covering the risk of burglary. The case of the insurer was that they had received instructions from the bank through an agent for issuance of a policy against the risk of fire and had issued the policy accordingly.
3. The District Forum vide its order dated 22.2.2012 directed the insurer to pay a sum of Rs.442169/- to the complainant alongwith compensation quantified at Rs.10,000/- and the cost of litigation quantified at Rs.5,000/-. Interest @ 9% p.a. was also awarded if the amount was not paid within 45 days. Being aggrieved from the order passed by the District Forum, the insurer approached the concerned State Commission by way of an appeal. Vide impugned order 31.7.2012, the State Commission allowed the appeal and set aside the order passed by the District Forum. Being aggrieved, the complainant is before this Commission by way of this revision petition.
4. The learned counsel for the complainant has drawn my attention to a letter dated 21.2.2009 sent by the Chief Manager of State Bank of Mysore to the insurer. The aforesaid letter to the extent it is relevant, reads as under:-
“(a) Premium of Rs.2107.00 was deposited with you alongwith other accounts for covering Rs.10.00 lacs for the above account.
b) Again on 06.12.2008, we had deposited Rs.4216.00 towards above account for covering additional limit of Rs.10.00 lacs, i.e., totally for Rs.20.00 lacs for Fire and Burglary alongwith other accounts as calculated by your representative Smt. Suman Bhattacharya.
c) Till today we have not received the policy for any of the account deposited that day.
d) In the meantime, the account holder reported that there was theft in his factory/premises on 15.2.2009 night. The same has already been informed to your office on 16.2.2009 by the beneficiary in person.
e) We forward herewith his letter Police Complaint (FIR) copy and request you to settle the claim immediately and also send us the copy of policies for the account and all other accounts for which premium paid on 6.12.2008.”
It is evident from the aforesaid letter that the bank had deducted the premium which could cover risk against fire as well as against burglary from the account of the complainant and according to the bank it had requested the insurer to issue a policy covering the risk against fire as well as against burglary. The onus was upon the bank to prove that it had actually requested issuance of a policy which covered the risk against fire as well as against burglary. But, the evidence on record is to the contrary. The affidavit of Shri Yoginder Paul, Manager of the National Insurance Co. would show that no proposal form was received from the bank for issuance of a policy in the name of the complainant. The affidavit also shows that as per the instructions of IRDA, if a proposal is not obtained from the insured, the information given by the insured is to the recorded by the concerned agent or Development Officer in the cover note or otherwise and the policies are issued accordingly on the basis of such recorded information. The affidavit also shows that normally the polices are taken by the banks with respect of stock of various borrowers which are hypothecated to them and such policies are issued as per the instructions given by the bank. Normally the proposal forms are not submitted by the banks which give instructions either to the company or to the agent and such information is recorded. The affidavit shows that the banks normally give a consolidated cheque for various policies. This is also stated in the affidavit that State bank of Mysore had not been submitting the proposal form so far as its Rash Behari Branch was concerned. As per the affidavit, one Ms. Suman Bhattacharya agent was communicating with the bank for collecting premium and delivery of policy documents. As per the instructions given by the bank to her and forwarded by her to the insurer, a fire policy and burglary policy was issued for the year 2007-08. However for the year 2008-09, the bank did not give any instructions for issuing a burglary policy and it was for this reason that the burglary policy was not issued and only a fire policy was issued for the period from 28.7.2008 to 27.7.2009 against a consolidated premium received from the bank in respect of 12 insurance covers.
5. The affidavit of Smt. Suman Bhattacharya has also been filed by the insurer. The said affidavit fully corroborates the case of the insurer. In her affidavit she had stated that she was an interlink between the bank and the insurance company and that no proposal forms were given to her by Rash Behari Branch of State Bank of Mysore. According to her, no instructions or proposal for insurance policy alongwith cheques of premiums was received. She has stated in her affidavit that the premium of Rs.56519/- paid by State Bank of Mysore included a sum of Rs.2108/- towards fire insurance to be issued in the name of State Bank of Mysore, A/c of the complainant. She also stated that there was no burglary policy on the date of enhancement of Rs.10 lakhs to Rs.20 lacs from December 2008 and no proposal or instructions was received from the bank for the burglary policy.
6. Despite the agent having clearly stated in favour of the insurer and against the bank, no attempt was made by the bank to impeach her testimony by her cross-examination. Even a request for her cross-examination by the bank was not made. Therefore, her affidavit remains practically unrebutted. The deposition of the agent and the insurance officer leaves no doubt that no instructions by the bank were given for issuance of burglary policy despite premium payable for insurance cover against burglary, having been debited in the account of the complainant. Therefore, there was a deficiency on the part of the bank in rendering services to the complainant in as much as the bank did not request the insurer to issue a policy which would cover burglary despite the bank having debited the premium to the account of the complainant. Since no oral instructions were received by the insurer for issuance of the policy covering the risk of burglary, the State Commission was fully justified in dismissing the consumer complaint against the insurer.
7. Since the bank was deficient in rendering services to the complainant
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it has to reimburse the complainant for the amount which the complainant would have received from the insurer had a policy covering the risk of burglary being taken by the complainant. It is therefore, directed that the amount awarded by the District Forum shall be paid to the complainant by respondent No.3 State Bank of Mysore which has since been merged with the State Bank of India and not by the insurer. The payment in terms of this order shall be made within two months from today failing which, it shall carry interest in terms of the order of the District Forum. At this stage, the learned counsel for the bank submits that the copies of the affidavits of the insurance officer and the agent were not supplied to them. Such a plea cannot be allowed be raised at this stage of revision and therefore is rejected. 8. The revision petition stands disposed of.