Branch Manager, State Bank of India vs RAM SEVAK

THIS is an appeal against the judgment and order dated 15.2.1993 passed by District Consumer Forum, Etawa in Complaint Case No. 388/1992.

THE facts of the case stated in brief are that the complainant took a loan of Rs. 3,500/- from State Bank of India, opposite party on 11.5.1988 for purchase of she-buffalo and got it insured with the Oriental Insurance Company Limited on 20.7.1988. This insurance was got done by the Bank for the purposes of safety of animal. THE complainant had to pay a sum of Rs. 140/- per year as premium of insurance. Inspite of this fact the Bank has debited this amount on 20.7.1988 and 30.6.1989. At the time of inspection a tag number was issued. On 21.9.1991 the she-buffalo suddenly died on account of some ailment. THE intimation about the death of she-buffalo was sent to the State Bank of India but when it did not respond then he visited the office and came to know that the State Bank of India had not deposited the premium of the year 1991 for the insurance of she-buffalo, therefore, the she-buffalo was not insured. According to the complainant this was a deficiency of the staff of the Bank and as such he could not get the money from the Insurance Company. THE complainant has prayed for the amount which was insured for the she-buffalo. The State Bank of India in its written version has alleged that it cannot be said in view of the sufficient evidence whether the she-buffalo of the complainant died or not. It has also been alleged that the Insurance Company has not been made a party.

The parties led evidence in support of their respective contentions before the learned District Forum, who after considering the evidence on record, came to the conclusion that the Bank had been getting the insurance done of the she-buffalo and it has failed to get the insurance done in the prevalent year, therefore, the Bank is liable to pay the insured amount. With this finding the learned District Forum, decreed the claim of the complainant for payment of Rs. 3,500/- after adjusting the amount which has remained unpaid along with interest at the rate of 12% per annum.

AGGRIEVED against this order, the opposite party, State Bank of India has come in appeal and has challenged the correctness of the order passed by learned District Forum. Notices were sent to the parties but none was present from the side of the opposite party on the date of hearing. The arguments of the learned Counsel for the appellant has been heard. The learned Counsel for the appellant has argued that according to the terms and conditions of the loan, the complainant was bound to pay the amount of the insurance premium. No doubt there exists a clause in the agreement which is Clause No. 13 which says that : "The Borrower(s) shall keep the said crops/herd/birds/movables as are of insurance nature, insured to the joint name of the Borrower(s) and the Bank against loss or damage by fire and other risks as may be required by the Bank from time to time on the basis of replacement cost or such other basis or value satisfactory to the Bank with such insurance office of repute to be approved of in writing by the Bank and the Borrower(s) shall pay all premia for renewal of such insurance and shall deliver to and leave with the Bank all policies of such insurance and all receipts of premia therefor and any such case it shall be lawful for but no obligatory upon the Bank to insure and keep insured by debit to the said Account of the Borrower(s) which until payment shall be a charge on the said crops/herd/birds/movables hypothecated as aforesaid the said crops/herd/birds/movables as are of the insurable nature as aforesaid covered by this security on the basis of their replacement cost or such other basis satisfactory to the Bank and for such time as the Bank shall deem proper and in case of any claim arising under such insurance, the proceeds of such insurance shall at the option of the Bank either be applied towards replacement thereof, as far as possible or towards the satisfaction of the Bank''s dues hereunder."

A perusal of this clause goes to show that the insurance has to be done by the borrower but the Bank can also get the insurance done. In the present case, evidence on record clearly goes to show that when the loan was advanced in the year 1988, the Bank paid the premium to the Insurance Company and as such she-buffalo was insured. Thereafter for the next year the insurance was also got done by the Bank and premium amount of the insurance was debited to the account of the complainant. When the Bank was continuously getting the insurance done, it was the duty of the Bank to have got the insurance done or to have intimated the complainant well in time that this time he has to get the insurance of the she-buffalo done by paying the premium. When no such intimation was sent to the complainant, the complainant was under impression that the Bank will get the insurance done. Therefore, in view the facts of the case, it is clear that in the present case, the liability was of the Bank who should have got the she-buffalo insured by paying the premium for the renewal of the policy. As the Bank has failed to do so, it is liable to pay the amount of the insurance. However, the Bank may realise this amount from the employees concerned who was negligent in not getting the insurance done. Thus, we find that there was deficiency on the part of the Bank and the learned District Forum was perfectly justified in decreeing the claim of the complainant. No interference is called for. The appeal is, therefore, liable to be dismissed. ORDER The appeal is dismissed. The judgment and order of the learned District Forum are cofirmed. Let copy of this order be made available to the parties concerned as per rules. Appeal dismissed.