Mohan And Ors. vs Ajmer Co -Operative Land Development Bank Ltd.

REVISION Petition No. 3590 of 2009 and Revision Petition No. 280 of 2010 have been filed against the common judgment and order dated 13.7.2009 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (''the State Commission'') in appeal No. 696 of 2004. Revision petition No. 3590 of 2009 has been filed by the original complainant Mohan, Ranjeet Chaggan Lal and Prabhu for enhancement of the compensation awarded by the State Commission. Whereas revision petition No. 280 of 2010 has been filed by the opposite party in the original complaint, i.e., Ajmer Cooperative Land Development Bank Ltd., Ajmer for setting aside the judgment and order dated 13.7.2009 passed by the State Commission in appeal No. 686 of 2004.

THE facts of the case as also the orders passed by the District Forum and the State Commission in both the cases are identical and hence, the facts of the case are being taken from R.P. No. 280 of 2010. The brief facts of the complaint filed by the respondents/complainants are as follows:

THE respondents/complainants had made an application for loan to purchase tractor on hire -purchase system for his livelihood, which was duly registered with Transport Department, Registration No. RJ 01 R 1806, endorsing hypothecation in favour of the respondent Bank. The respondents had taken loan and purchased the tractor. Thereafter the bank completed all its formalities as per banking rules and collected the miscellaneous expenses from the respondents and issued a receipt.

THE respondents have paid to the petitioners for insurance premium of Rs. 1477 for the tractor on hire purchase loan, other application process expenses Rs. 19,500 on 30.5.1997 and Bank issued the receipt for the aforesaid amount. The Bank has not deposited the insurance premium for tractor. In this way the Bank has neglected the responsibility and liability to depositing the premium for tractor, despite collecting the money of premium from the respondents. An accident occurred to the tractor and a claim was filed by Farida Khatoon and Ors. Case No. 539/1999 in the Hon''ble Court of MACT, Ajmer. The Hon''ble Tribunal has given judgment on 11.6.2003 which reads as follows: The compensation application of Farida Khatoon and Ors., is partly accepted and passed order that non -complainant (Mohan and Ors.) are jointly entitled to get Rs. 5,36,136. If any other amount received by them, may be deducted and balance may be paid w.e.f. 15.2.1999 along with 9% interest. Complainant (Mohan and Ors.) may deposited a cheque in favour of Smt. Farida Khatoon.

THE respondent filed a petition against Bank with the District Forum which was treated pre -mature and vide order dated 17.1.2001.

IN their written statement the petitioner/opposite party, i.e. the Bank while accepting that the respondents had purchased the tractor No. RJ 01R1806 after taking loan from the Bank on hire purchase, stated that the Bank''s name had been mentioned in RC book as they were the financier. The respondents Mohan, Ranjeet, Chhagan, Prabhu all sons of Shri Ram Pratap Jat resident of Ramner Dhani, Tehsil and District Ajmer are the members of the Bank. They had deposited Rs. 19,500 on 5/1997 which include penal interest of Rs. 78 and principal amount of Rs. 181 and plus interest of Rs. 17,764 and part of insurance premium of Rs. 1,477 for the period of 31.3.1996 to 30.3.1997. Whereas the insurance premium is Rs. 1,977 the respondents have deposited less amount of Rs. 500, which is due till date.

IT is quite clear that it is the prime responsibility of the respondents to pay insurance premium as debtors and within time. Amount deposited by the loanee member on 30.5.1997 is Rs. 19,500 has been credited, and Rs. 500 is still outstanding for the insurance period of 31.3.1996 to 30.3.1997, therefore, no amount has been paid by the respondent nor any such contract has taken place for depositing the insurance amount by the bank. It is also a fact that respondents have executed a bond in favour of the bank, in which in paragraph No. 4 it is clearly stated that the first responsibility is of loanee to insure the vehicle and if the bank gets insurance then premium liability is of loanee. In this case, however, previous insurance premium was outstanding and has not deposited till date. The respondents are also defaulters in repayment of loan instalments as per rules and time, hence, loanee is defaulter in paying the dues.

THE bank has not been made party before the Hon''ble MACT Court, Ajmer. If the Claim Tribunal found responsibility of the Bank then it would have made it a party. It is quite clear that the respondents avoided their liability and are now trying to defame the bank. The petitioner has not made any negligence and irresponsible act. It is the prime duty of the loanee members, i.e., the respondents to get the vehicle insured. Hence, it is abundantly clear that the respondents have been grossly negligent and irresponsible, for which they themselves are responsible.

THE District Consumer Disputes Redressal Forum, Ajmer (''the District Forum'') in their order dated 27.2.2003, after hearing the Counsel for the parties and going through the records of the case have observed that "from the perusal of the file we find this that non -applicant - Bank did not get done renewal of the tractor of the applicant/petitioner. Here issues under consideration are only two - -First, the responsibility of renewal of the insurance was of the bank of the applicants, second at the time of accident if the driver does not have driving licence then in the case of vehicle being insured whether vehicle owner would be responsible or the Insurance Company. In first issue even if this is accepted that the responsibility of getting the vehicle insured was that of the non -applicant bank because from it protection of interests of applicants would have been there, along with this non -applicant bank would have the convenience of receiving the loan. In the matter under question even if this is accepted for a moment that it was the responsibility of the non -applicant bank that it gets done insurance of the aforesaid tractor but it did not get done insurance due to this reasons instead of liability of Insurance Company liability fell on the owner of the tractor. But the second question is also main that whether the tractor driver had or did not have the driving licence at the time of accident, if he would have been in possession of the driving licence at the time of accident then in that condition the Insurance Company would have been liable for payment of the claim but in the aforesaid case the vehicle driver, at the time of accident, did not have any licence of any kind for driving the tractor. In such situation if the vehicle would have been insured even then after occurring of the accident the liability of paying the claim passed by the Court would have been on the vehicle owner instead of the Insurance Company. Therefore, keeping in view all the facts and circumstances the Forum has reached this conclusion that applicants are not entitled to receive any relief from the non -applicant bank."

Hence, the District Forum dismissed the complaint.

AGGRIEVED by the order of the District Forum, the respondents/complainants field an appeal before the State Commission. The State Commission after hearing the Counsel for the parties and perusing the records of the case observed mat, "in this case, so far as the fact that whether it was the duty of the respondent bank to get the insurance of the tractor in question done or not is concerned, the papers which were submitted clearly reveal that it was the duty of the respondent bank to get the insurance renewed and that is why the District Forum had held so. Therefore, this Commission is in agreement with it that it was the duty of the respondent bank to get the insurance of the vehicle in question renewed and failing which deficiency in service on the part of the respondent bank is well established. It is clarified here that on point of deficiency in service on the part of the respondent bank, the complainant/appellants are entitled to some sort of compensation.

It may further be stated here that the respondent bank had not filed any appeal against the impugned order dated 27.2.2004 passed by the District Forum, Ajmer and thus the findings recorded by the District Forum on point of deficiency in service on the part of the respondent bank had become final one.

It is also clarified here that the argument of the learned Counsel for the respondent bank that since the driver of the complainant/appellants was not having any licence, therefore, if the insurance of the tractor was not renewed, the respondent bank could not be held liable in any manner, could not be appreciated because of the simple reasons that here we are dealing with the aspect of deficiency in service on the part of the respondent bank and while dealing so, the question of licence does not arise at all.

For the reasons as stated above, so far as the merits of the case is concerned, the findings recorded by the District Forum by which the complaint was dismissed could not be sustained as they suffer from basic infirmity and illegality and this appeal deserves to be allowed so far as the merits of the case is concerned.

Taking into consideration that because of the fact that the insurance of the tractor in question was not got renewed by the respondent bank and because of that the complainant/appellants had to face a liability in MACT claim case above, therefore, the complainant/appellants would not be entitled to the decretal amount that had passed against the complainant/appellants in MACT Case, but for the deficiency in service on the part of the respondent bank for not getting the renewal of the policy the complainant/appellants are entitled to some sort of compensation and if a sum of Rs. 50,000 are ordered to be paid to the complainant/appellants by the respondent bank that could meet the ends of justice and that amount would be just, proper and equitable and to that extent this appeal deserves to be allowed.

Based on the above, the State Commission passed the following order:

For reasons as stated above, this appeal filed by the complainant/appellants is allowed, impugned order dated 27.2.2004 passed by the District Forum, Ajmer, is set aside and the complaint of the complainant/appellants is allowed in the manner that the respondent bank would pay a sum of Rs. 50,000 as amount of compensation to the complainant/appellants with interest @ 9% per annum from the date of filing of the complaint along with Rs. 3,000 as amount, of cost of litigation.

Against the order of the State Commission the petitioner has filed a revision petition No. 280 of 2010 for setting aside the order of the State Commission. The main grounds of the revision petition are as under: As per the mortgage deed (Bandhnama) executed in favour of the revisionist Bank by the Debtor - Respondents it was duty of the first party loanee to keep the vehicle insured.

As per the mortgage deed (Bandhnama) executed in favour of the revisionists Bank by the Debtor - respondents if in any case insurance is got done by the Bank then the debtor respondents were liable to pay its amount. However, despite the bank having got done insurance from 31.3.1996 to 30.3.1997 and having paid Rs. 1977 for the same the respondents - debtor after much delay on 30.5.1997 paid only a sum of Rs. 1477 towards the same. A sum of Rs. 500 out of the amount of Rs. 1977 paid by the bank for insurance for the above said period is still due towards the debtor respondents. Further, the respondents debtors are defaulters are never made payment of loan taken by them within time according to rules.

Complainant/respondents utterly failed to prove that the responsibility to get done insurance was that of the revisionists Bank. Moreover, no such finding was given by the District Forum and there was nothing on record to substantiate the same.

It was the responsibility of the complainant/respondents to keep the tractor insured and secure in a proper manner and condition.

There is no deficiency in service of any kind on the part of the revisionist bank. Responsibility to get done insurance was that of the complainant/respondents.

No such contract had been entered between the revisionists bank the respondent/complainants according to which revisionists bank was bound to get done the insurance of the tractor in question.

There is no deficiency in service of any kind on part of the revisionist bank. The responsibility to get done insurance was that of the complainant/respondents themselves and by not getting done insurance they have acted very irresponsibly and negligently for which they are themselves responsible.

RESPONDENT S /complainants filed revision petition No. 3590 of 2009 for enhancement of compensation. The main grounds for the revision petition are that: The District Forum as well as the State Commission observed that the respondent bank rendered deficiency in service in not getting the insurance cover note renewed within time and due to that when the tractor belonging to the petitioner met with an accident they could not prefer a claim before the Insurance Company and had to pay an amount of Rs. 5,36,136 against the liability that arose due to the award dated 11.6.2003 passed by the MACT, Ajmer in claim case No. 539 of 1999.

It is an admitted position that if the bank had got the insurance renewed within time then the respondent would not have been liable to satisfy the award dated 11.6.2003 and the liability which so arises on them was completely unwarranted and because of the deficiency in services on the part of the respondent bank, hence, on this ground also alone, they are entitled to get indemnification up to the extent of the liability fastened upon them because of the deficiency in services on the part of the respondent bank.

Therefore, in such circumstances the impugned order passed by the State Commission is liable to be modified and the amount so awarded is liability to be enhanced accordingly.

The Hon''ble Commission on the one hand has admitted this fact that due to negligence and deficiency in service on the part of the respondent bank they had to pay the amount of award passed by the MACT, Ajmer and on the other hand the amount so paid by them to satisfy the award, i.e., Rs. 5,36,136 has not been awarded and no reason whatsoever has been assigned for the same. Thus, the impugned order passed by the State Commission is liable to be modified and the amount so awarded is liability to be enhanced accordingly.

WE have heard the learned Counsel for the petitioner as well as the respondents and perused the records. The main ground advanced by the Counsel for the respondents in RP No. 280 of 2010 are that the Insurance Company has committed deficiency in service in not renewing the insurance policy whereby the amount awarded against the respondent by the MACT was Rs. 5,36,136 to Ms. Farida Khatoon had to be paid by the respondent and not by the Insurance Company. He also argued that as per the internal circulars of the bank, it was the responsibility of the bank to get the insurance policy and to ensure that it was renewed from time -to -time.

COUNSEL for the petitioner/Bank on the other hand drew our attention to the deed of hypothecation, hire purchase agreement (Bandhnama, Bandhkalp) of goods of agricultural, movable property, tractor, machinery, pump set and engine, etc., whereby as per the Clause 4 of the deed which reads as under: That the first responsibility to keep the property described in schedule completely free of tax, safe as it is and insured would be of the debtor and in keeping as aforesaid the necessary expense or cost etc., done by bank would also be considered part of aforesaid loan in the security of payment of which this deed of hypothecation (Bandhkulp) has been done.

THEY emphasized that the first responsibility with regard to the insurance was that of the debtor. He also argued that even if there was a valid insurance policy, the Insurance Company would not have paid as the driver did not have valid driving licence. It is an undisputed fact that the respondents had purchased the tractor after taking loan from the petitioner on hire purchase basis. The respondents had deposited Rs. 19,500 on 30.5.1997. The respondent had deposited Rs. 500 less than the amount due for insurance. It is also a fact that thereafter the respondents have not paid the balance amount of Rs. 500 nor any premium for the insured period.

IT is also a fact not denied by the learned Counsel for the respondents that the respondents had executed the bond in favour of the bank in which it was clearly stated that the first responsibility is of the debtor with regard to the insurance of the said vehicle. Further, even if there was any direction or any instructions by the debtors that the bank should pay and renew the policy from time -to -time the necessary expenses and costs would be considered as part of the loan.

THE Counsel for the respondents, however, could not produce any document or contract between them and the petitioner with regard to the payment of premium from time -to -time for renewing the insurance policy. He also could not bring on record any instructions or directions given by the respondents to the petitioner in this regard. In view of the fact that there was a valid agreement between the respondents and they have executed the bond, it would appear from the same that the respondents were careless and negligent with regard to insurance of the vehicle and now they are seeking to put the entire onus and blame on the petitioner for non renewal of the insurance policy. Hence, we do not support the decision of the State Commission that any case of deficiency in service can be held against the petitioner, i.e., Ajmer Co -operative Land Development Bank Ltd. Hence, RP No. 280 of 2010 is allowed and the order of the State Commission is set aside. RP No. 3590 of 2009 filed by the respondents/complainants is dismissed. As a result, the original complaint filed by the respondents/complainants is also dismissed.