SAHDEO RAM vs STATE BANK OF INDIA

BEING aggrieved by order dated 31.12.2012, passed by Chhattisgarh State Consumer Disputes Redressal Commission, Raipur (for short, ''State Commission '') petitioner/complainant has filed this revision petition.

BRIEF facts are that petitioner purchased a tractor and trolley which was financed by Respondent/Opposite party in year 2004 and for which a loan account was opened. It is stated that loan repayment was being done and as per the terms of loan agreement, respondent had been insuring the tractor and trolley every year. It is further stated that tractor and trolley met with an accident on 24.4.2010 resultantly the same got fully burnt, whereby no physical loss was there. A report was made to the Police and intimation was given to the respondent. Thereafter, petitioner filed claim with the respondent. However, he was informed that insurance of the tractor and trolley for the relevant period from 2009 to 2010 was not done by the respondent. It is alleged that the act of respondent in not getting petitioner ''s tractor and trolley insured, amounts to deficiency in service. A survey was got done by registered Surveyor who assessed the complete loss for Rs.3,65,000/-. Thereafter, petitioner filed a complaint before District Consumer Disputes Redressal Forum, Sarguja-Ambikapur(for short, ''District Forum '') seeking direction to the respondent to pay compensation of Rs.3,65,000/- and not to charge interest on his loan account for the period after 24.6.2010. Compensation towards mental and physical harassment for Rs.50,000/- and interest @ 9% p.a. on the total amount together with cost of litigation, was also sought. Respondent in its written statement has stated that petitioner was not regular in repayment of the loan installments due from 18.09.2007 and Rs.2,49,448.85 was outstanding in his loan account. Hence, the loan account became "Bad Debt " which came in the category of ''Non Productive Account '' (for short, ''N.P.A ''). Thus, in accordance with Bank Rules, insurance was not done thereafter. It is further stated that petitioner was intimated to the effect that his loan account became N.P.A. So, as per Bank Rules it was his duty to get the insurance done. As loan account became a bad debt on 29.05.2010 so insurance for the relevant period from 2009 to 2010 was not done by the respondent. Thus, petitioner has not come with clean hands, as such he is not entitled for any compensation.

DISTRICT Forum, vide order dated 30.8.2011 allowed the complaint and passed following directions; "(i) Non-applicant will pay an amount of Rs.2,73,750/- (Rupees two lac seventy three thousand seven hundred fifty only) to the complainant within 1 (one) month from the date of order and will pay simple interest @ 6% (six percent) from 16.11.2010 i.e. the date of institution of the dispute till the date of payment of entire amount. ii) Non-applicant will pay to the complainant an amount of Rs.2,000/-(Rupees two thousand only) in respect of the physical and mental trouble and inconvenience suffered by the complainant. iii) Non-applicant will bear its own expenses and Rs.1,000/-(Rupees one thousand only) towards expenses of the dispute of the complainant in which fee of the advocate has also been included. iv) Complainant will give salvage of the vehicle Tractor No. CG 15A 3324 and trolley No.CG15A 3325 to the non-applicant within 1 (one) month from the date of the order and non-applicant bank can use/utilize the same ".

BEING aggrieved, respondent filed an appeal before the State Commission which allowed the same, vide impugned order and dismissed the complaint of the petitioner. Hence, this revision petition.

WE have heard the learned counsel for petitioner and gone through the record.

IT is contended by learned counsel for the petitioner that as petitioner ''s account was converted into a ''Non Productive Account '', thus respondent was under lawful duty to continue or renew the insurance policy from 27.10.2009 to 26.10.2010 which was never been done by it nor it was conveyed to the petitioner. Thus, there was severe lapse on the part of the respondent, which amounts to breach of contract and deficiency in service. The State Commission in the impugned order observed ; "The only question to be decided is whether the appellant Bank was deficient in providing Banking service in not insuring the questioned tractor and trolley at the relevant time and could be held liable to pay compensation to the respondent/complainant for the loss caused to the questioned tractor and trolley due to accident?. Defence of the appellant bank is that it was the duty of the respondent/complainant to get his tractor and trolley insured and then to ply the same on road as per provisions of Motor Vehicle Act. Appellant bank had in initial few years got the tractor and trolley insured but since the respondent/complainant defaulted in repayment of loan installments so his loan account acquired states of ''Bad Debt '' as such insurance was not done by it for the year 2009-2010 and more over it was not obligatory on its part to get the insurance of secured property under finance as per terms and conditions of the agreement. We find that condition no. 5 of the first schedule of Hypothecation Agreement (document no./2 at pages no. 60) stipulates as following: "That the borrower(s) shall at all times keep such items of security as are of insurable nature, insured against loss or damage by fire and other risks as may be required by the bank and shall deliver to the Bank all such policies. It shall be also lawful for but not obligatory upon the bank to insure by debit to the borrower(s) account(s) in respect of the security as are of insurable nature. The proceeds of such insurance shall at the option of the bank either be applied towards replacement of the security or towards the satisfaction of the bank ''s dues ".

Thus the position is clear that it was lawful but not obligatory upon the appellant bank to insure the financed tractor and trolley by debiting the borrower ''s account. Appellant bank had in initial few years continued to insure the questioned tractor and trolley so long the respondent/ complainant was regular in repayment of loan installments but when he defaulted in repayment of further loan installments, it stopped to insure the questioned tractor and trolley. As per settled law position, the terms and conditions of the contract are binding on the respondent/complainant so if the appellant bank did not insure the questioned tractor and trolley then it can not be held to have committed deficiency in service in terms of loan agreement. Otherwise also the respondent/ complainant being the owner of the questioned tractor and trolley had the primary duty to insure that the questioned tractor and trolley were properly insured since he could not ply the same on road without being insured. The respondent/ complainant, as per version of the appellant bank, supported by affidavit dated 24.08.2012 of Shri Ved Parkash Agrawal its Branch Manager, had been in default in repayment of loan installments as such he owed overdue amount to the appellant bank so should not have expected insurance of the questioned tractor and Trolley to be done by the appellant Bank. Respondent/ complainant did neither mention in his complaint about his defaulting conduct in regular repayment of loan installments in terms of loan agreement nor by way of affidavit in rebuttal of the version of the appellant bank. When debit balance of the respondent/complainant started growing due to defaults in loan repayment of installments then appellant Bank as per trade norms was not expected to enhance further debit in his loan account by insuring the financed vehicle further. In case of default in repayment of loan installments, obviously it was the duty of the respondent/complainant to get his tractor and trolley insured and not to shift his financial burden over the appellant Bank. The respondent/ complainant was very well aware of his defaulting status, so there was no necessity of the appellant Bank to give a notice about further insurance to the respondent/ complainant. Respondent/ complainant being owner of questioned tractor and trolley ought to have taken steps to renew insurance after its expiry i.e.26.10.2009 (document no.A-5) but he continued to be negligent about the same for a further period of about 8 months till occurrence of the accident of questioned vehicle on 04.06.2010, so he cannot derive benefit of his own neglectful conduct. If the appellant bank had done earlier insurance on behalf of the respondent/ complainant then it was just to safeguard mutual interest against unforeseen event but only so long repayment of loan installments were regularly received but it was not obligatory on its part. Learned District Forum has drawn an erroneous conclusion in its impugned order about holding the appellant Bank of having committed deficiency in service and directing it to pay compensation as has been awarded therein. In the facts of the case and foregoing discussion, the appeal finds substance to succeed therefore, it is allowed. The impugned order of learned District Forum, being not sustainable, is set aside and the complaint of the complainant is also dismissed. No order as to cost ".

AS per averments made in the complainant, petitioner has simply stated that he has been paying the installments of the loan on time to time basis. However, petitioner has nowhere stated as to for which period he had paid the installments and what was the number of installments due at the time of filing of the complaint.

ON the other hand, defence of the respondent is that petitioner was not paying installments on time and as such his loan account became debt and a sum of Rs.2,49,448.45P are due from the petitioner. Petitioner has approached the District Forum by concealing the material facts with regard to the loan amount due against him on the date of filing of the complaint. Since, petitioner is a defaulter in this case, the respondent was not obliged to renew his insurance policy. Moreover, a defaulter cannot get any discretionary relief and for its own fault, petitioner can not shift burden upon the respondent.

IN our view, the order of the State Commission cannot be termed as erroneous as the same is based on correct analysis of the facts and evidence produced in this case. Consequently, we do no find any infirmity or ambiguity in the impugned order passed by the State Commission. Present revision being without any legal basis and having no merit is hereby dismissed.

NO order as to cost.