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State Bank of Bikaner & Jaipur & Others v/s M/s. Jagdamba Eant Udyog & Others

    First Appeal No. 147 of 2010 in Complaint No. 27 of 2007
    Decided On, 22 August 2016
    At, National Consumer Disputes Redressal Commission NCDRC
    By, THE HONOURABLE MR. JUSTICE K.S. CHAUDHARI
    By, PRESIDING MEMBER & THE HONOURABLE MR. PREM NARAIN
    By, MEMBER
    For the Appellants: Vishnu Mehra, Advocate. For the Respondents: R1, Ex-parte, R2, Neha Dawar, Proxy for Niraj Singh, Advocates.


Judgment Text
K.S. Chaudhari, Presiding Member:

1. This appeal has been filed by the appellants against the order dated 08.04.2010 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (in short, ‘the State Commission’) in Complaint No. 27 of 2007- M/s. Jagdamba Eant Udyog vs. State Bank of Bikaner and Jaipur & Ors., by which, complaint was partly allowed.

2. Brief facts of the case are that complainant/respondent No.1 was sanctioned loan by Opposite Party Nos. 1 & 2/Appellants by letter dated 7.5.2003 and complainant executed various documents on 7.6.2003 and hypothecated/mortgaged property for repayment of the aforesaid loan. As per loan documents, property was to be insured by Opposite Party Nos. 1 and 2, but they failed to get it insured. Complainant availed term loan of Rs.5.20 lakhs and fixed loan of Rs.4.65 lakhs for establishing factory and started working. On 8.2.2005, due to heavy snow fall complainant’s Eant Bhatta was completely destroyed. Complainant intimated to opposite party on 9.2.2005 and opposite party, instead of paying claim, served notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, against which complainant filed writ before Hon’ble Rajasthan High Court but Hon’ble High Court dismissed writ petition vide order dated 22.2.2007. Complainant sustained loss of Rs. 15 lakhs due to damage of its properties and also suffered business loss of Rs. 12 lakhs. Alleging deficiency on the part of opposite parties, complainant filed complaint before the State Commission.

3. Opposite Party Nos. 1 & 2 resisted complaint and admitted grant of loan and execution of documents by complainant but submitted that complaint was barred by limitation, complainant was under obligation to get properties insured and opposite party was not under any obligation to get it insured and complainant was at fault in not getting property insured. It was further denied that on account of heavy snowfall, complainant’s property was damaged and sustained loss as claimed in the complaint and prayed for dismissal of complaint. Opposite party No. 3 resisted complaint and submitted that he has been impleaded party unnecessarily as no insurance cover was taken from him and prayed for dismissal of complaint.

4. Learned State Commission, after hearing both the parties, allowed complaint and directed opposite party Nos. 1 and 2 to pay Rs.4,80,000/- as compensation, Rs. 15,000/- towards mental agony and Rs. 5,000/- as litigation expenses with 9% p.a. interest and dismissed complaint against opposite party No. 3, against which this appeal has been filed.

5. None appeared for respondent No. 1 even after service of notice and he was proceeded ex-parte.

6. Heard learned counsel for the parties and perused record.

7. Learned counsel for Appellants submitted that inspite of complaint being barred by limitation and inspite of no obligation on the part of opposite party Nos. 1 & 2 to get complainant’s property insured, learned State Commission committed error in allowing complaint; hence appeal be allowed and the impugned order be set aside. Learned counsel for respondent No.2 submitted that no liability has been fastened on him.

8. Perusal of the record reveals that as per complaint, loss to the property occurred due to heavy snowfall on 8.2.2005 whereas complaint has been filed on 9.10.2007, meaning thereby complaint has been filed after 2 years and 8 months. In para-19 of the complaint, complainant has mentioned that complaint has been filed within limitation from the date of order passed by Hon’ble High Court giving liberty to the complainant to recover its loss from opposite parties.

9. Hon’ble High Court in D.B. Civil Special Appeal (W) No. 248 of 2007- M/s. Jagdamba Eant Udhyog vs. State Bank of Bikaner and Jairpur & Ors. , passed order on 12.7.2007 with direction to the petitioner (complainant) that if they want to sell the property in the market to the buyer of this choice, they may do so within three months. In respect of not taking Insurance Policy by opposite party only it has been observed that it is an independent obligation and complainant may pursue his remedy. Nowhere any specific liberty has been given to complainant to file complaint before consumer fora and no delay in filing complaint has been condoned by Hon’ble High Court. Thus, it becomes clear that complaint has not filed complaint within a period of two years from the date of loss and as such complaint was barred by limitation. Complainant admittedly has not filed any application for condonation of delay under Section 24(A) of the Consumer Protection Act before learned State Commission. Learned State Commission has simply observed that cause of action arose when proceeding was taken by opposite party under Securitisation Act on 25.8.2006, so complaint is within limitation. We do not find any justification for holding complaint within limitation by learned State Commission and clearly complaint is barred by limitation, which was liable to be dismissed by learned State Commission.

10. As far as merits of the case is concerned, learned Counsel for Appellants submitted that as per terms and conditions of agreement of loan, complainant was under obligation to get his property insured in joint names of complainant and opposite party Bank. Clause-31 of the Agreement runs as under:

'All goods book-debts movables and other assets hypothecated, pledged, mortgaged or otherwise charged to the Bank as security for any of the aforesaid credit facilities and also all immovable properties given as security for all such facilities or any of them as may be required by the Bank shall be kept at the Borrower’s risk and expense in good condition and fully insured against loss or damages as may be required by the Bank due to any reason whatsoever and particularly the machineries hypothecated and/or pledged to the Bank against fire and/or such other risk(s) as the Bank may from time to time stipulate in the joint names of the Borrower and the Bank with an insurance company approved by the Bank and for such amount as the Bank may consider necessary and that the insurance policies shall be delivered to the Bank when required by the Bank to do. If the Borrower failed to effects such insurance, the Bank may, but without being obliged to so, insure the said goods movables and other assets and moveable properties against fire and/or such risk(s) in such joint names and debit the premium and other charges to any account of the Borrower opened or to be opened'.

Perusal of aforesaid condition clearly reveals that complainant was under obligation to get property in question insured in the joint name of complainant and the Bank and Bank was not under any obligation to get it insured though the liberty was given to the Bank that if complainant fails to effect such insurance, the Bank may, but without being obliged to do so, get the property insured. Thus, it becomes clear that learned State Commission has committed error in holding that opposite party was under obligation to get property insured. No doubt, opposite party got property insured after the incident after deducting premium amount from complainant’s account, but by no stretch of imagination, it can be presumed that opposite party was under obligation to get property insured at the time of incident and failure on the part of the opposite party amounting to any deficiency on its part.

11. Learned counsel for the Appellants has also placed reliance on judgment of Hon’ble Apex Court in (1999) 6 SCC 361-Pradeep Kumar J

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ain vs. Citi Bank & Anr., in which it was held that when the obligation was upon the appellant to obtain Insurance Policy, merely by passing of a cheque to be sent to the Insurance Company would not obviate his liability to obtain such policy. In the case in hand, even no premium has been deducted by opposite party from complainant’s account for getting property insured at the time of incident and in such circumstances, learned State Commission has committed error in allowing complaint partly and appeal is to be allowed. 12. Consequently, appeal filed by appellants is allowed and the impugned order dated 8.4.2010 passed by the learned State Commission in complaint No. 27 of 2007 - M/s. Jagdamba Eant Udyog vs. State Bank of Bikaner and Jaipur & Ors. is set aside and complaint stands dismissed. Parties to bear their own costs.
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