RAMESH CHANDER AGARWAL Vs. STATE BANK OF HYDERABAD
LAWS(APCDRC)-2008-12-2
ANDHRA PRADESH STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Decided on December 24,2008

RAMESH CHANDER AGARWAL Appellant
VERSUS
STATE BANK OF HYDERABAD Respondents

JUDGEMENT

M.SHREESHA, J. - (1.) AGGRIEVED by the order in C.C. No. 179/2008 on the file of District Forum -III, Hyderabad, the complainant preferred this appeal.
(2.) THE brief facts as set out in the complaint are that the complainant is a self -employed person operating a small scale unit under the name and style of M/s. Andhra Metal Box at Mahaboobnagar District. The complainant submitted that he availed working capital loan of Rs. 5,00,000 by hypothecating stocks and security of immovable property for his business in the year 2005 vide A/c. No. 62002630944. The complainant submitted as per Clause 5 of the terms and conditions of document No. 1, a preliminary responsibility of obtaining insurance policy is fixed on the borrower. Considering the long distance from the office of opposite parties, it is orally agreed that opposite party No. 1 shall complete the insurance formalities. The complainant submitted that the working capital loan was released on 8.12.2005 but no insurance policy was taken till 29.3.2006 due to which the complainant was at risk, as such, after oral adjustment of taking policy by opposite party No. 1, it has debited on 29.3.2006 to the account of the complainant a sum of Rs. 4,250 towards insurance premium and the same is done by way of transfer entry and no cheque was issued by the complainant, which goes to show that the bank has agreed to obtain the insurance policy. Under the working capital loan, the complainant is required to submit monthly stock statement and extract copies of account books periodically. The ceiling of quantum of loan is very limited and the financial requirements of the complainant have become more and considering these factors, the complainant requested opposite party No. 1 to increase the loan amount but opposite party No. 1 has expressed its inability and suggested to submit an application for mortgage loan against more valuable property and the same shall be forwarded to opposite party No. 2. If the same was approved, the outstanding amount of working capital loan account shall be adjusted from the mortgage loan amount and balance will be released to the complainant. The complainant agreed and accordingly submitted an application to opposite party No. 1 on 26.4.2007 and the same was forwarded to opposite party No. 2 through opposite party No. 1. Opposite party No. 2 sanctioned mortgage loan on 27.4.2007 and upon intimation by opposite party No. 1, the complainant paid Rs. 5,960 dated 10.5.2007 to Sub -Registrar, Dood Bowli, Hyderabad towards registration fee and got executed the Mortgage deed in respect of immovable property worth more than Rs. 25,00,000 which is a pre -condition for release of mortgage loan. After completing all formalities, opposite party No. 1 opened new mortgage loan account No. 62031958557 on 14.5.2007 and debited a sum of Rs. 4,54,773 to the new account and credited the same into the old account of the complainant (working capital loan) A/c. 62002630994 and closed the old account. On 17.8.2007 mid -night a burglary took place in the factory of the complainant in which raw material worth Rs. 2,75,000 was stolen. The complainant lodged a complaint on 19.8.2007 and informed orally opposite party No. 1 on 20.8.2007 about the theft and requested to provide a copy of insurance policy, which was supposed to have been taken by opposite party No. 1 on 31.3.2007. The complainant submitted that he was surprised to know that the bank has miserably failed to take the insurance policy on 31.3.2007 and did not bother to inform the same to the complainant so as to take steps to ensure the stocks are insured and submitted that this amounts to negligence leaving the complainant wide open the risk on his business, which constitutes deficiency in service.
(3.) THE complainant got issued a notice to opposite party No. 1 dated 23.1.2008 and he received a reply notice on 8.2.2008. The complainant submitted his application for mortgage loan on 26.4.2007 and the insurance policy is due for renewal on 31.3.2007. Opposite party No. 1 failed to explain 26 days for non -renewal of the insurance policy or for non communication which amounts to deficiency in service and as such both opposite parties are jointly and severally liable to keep the complainant indemnified for the losses incurred and consequences thereof. Hence the complaint for a direction to the opposite parties to pay a sum of Rs. 2,75,000 for indemnifying the losses suffered due to deficiency is service caused by opposite parties, Rs. 10,000 per month from 17.8.2007 towards monthly income due to closure of business, Rs. 50,000 towards mental agony and Rs. 5,000 towards costs. Opposite party filed its counter contending that the complainant has suppressed the material facts. The complainant availed working capital loan in the year 2005 for a Small Scale Industry set up at IDA, Kothur, Mahaboobnagar District. The loan application of the complainant contains that the preliminary responsibility of obtaining insurance policy is fixed on the borrower on his own at his costs for which opposite party is not at all responsible. Opposite party No. 1 has insisted the complainant to take insurance policy but he did not take the same on one pretext or the other and finally requested him to get insurance policy by debiting Rs. 4,250 towards the insurance premium from his account. Accordingly, opposite party No. 1 has debited the amount and obtained the insurance policy in the name of M/s. Andhra Metal Box vide 431301/11/2007/39 valid from 19.4.2006 to mid -night of 18.4.2007 against stock and machinery and Smt. Lakshmi Agarwal policy No. 431301/11/2008/24 valid from 19.4.2006 to mid -night of 18.4.2007 for building and furniture.;


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