K.K. Birla, J. - (1.) THIS appeal arises out of an order dated 26 -3 -90 passed by the 3rd Addl. Civil Judge, Ghaziabad rejecting the plaintiff's application for temporary injunction. In brief, Central Bank of India (hereinafter referred as the Bank) gave financial facilities to the M/s. American Data Processing Centre, respondent No. 2 (hereinafter referred as the borrower; as Term loan to the tune of Rs. 11,35,000/ - and cash credit limit to the tune of Rs. 3,00,000/ -. Necessary documents including the hypothecation agreement Annexure -1 to the supplementary affidavit dated 29.4.86 and hypothecation letter of the same date Annexure -4 of the paper book were executed by the borrower through its sole proprietor with regard to the loan. Besides hypothecation, personal guarantee and the guarantee of guarantors was also given. The parties also got insured the concerned goods against Fire etc. with the United India Insurance Company Limited, respondent No. 1 (hereinafter referred as the Insurance Company). There was one insurance to the extent of Rs. 60,00,000/ - with regard to the one BM system III model. The other policy was for Rs. 6,60,000/ - which has lapsed. The dispute relates to the Fire policy Cover note and 9.11.87 covering the risk up to Rs. 11,68,000/ - (Cover Note, Annexure -89 of the Paper book). On the same date to the extent of the same amount another policy covering burglary etc. with regard to the same articles was also taken. There was fire in the borrowers factory on 6.4.88 resulting in the loss of all the goods etc. The Insurance claim was preferred for the same. The Insurance Company settled the claim relating to the Fire policy of Rs. 11,68,000/ - (hereinafter referred as the policy under dispute) for Rs. 10,00,000/ -. According to the bank/plaintiff a cheque was prepared in the name of the Bank and handed over to the borrower to be paid to the Bank.
(2.) ACCORDING to the bank, under the agreement the bank was entitled to get this money towards the amount due from the barrower. But the borrower did not give the cheque to the Bank. Later on, the Borrower and the Insurance Company colluded and declined to give this amount to the Bank. On these allegations a suit for declaration that the Bank was entitled to the claim amount under the policy under dispute from the defendant No. 1 and for permanent injunction restraining Insurance Company to make this payment to the borrower and also for deposit of this amount in the loan account of the borrower with the Bank at Wrightganj, Branch, Ghaziabad was filed. An injunction application under Order 39 Rules 1 and 2 and Section 151 C.P.C. was also filed. This fire Insurance mainly covers six disk packs besides Air Conditioners etc. The case of the defendants was that the items covered under this policy were never hypothecated with the Bank, that unlike the other Insurance Policy the Bank was not a co -proposer of this policy. By mistake cover note and Insurance policy have been prepared jointly in the name of the Bank and the borrower. The bank was not entitled to any amount, there was no privity of contract between the Bank and the Insurance Company. It was further contended that the whole of the factory of the borrower had been burnt and the proprietor has to establish the business again. There is already another policy of Rs. 60,00,000/ - and as such the balance of convenience is not with the Bank nor the Bank is going to suffer any irreparable injury. It may be pointed out that there is no dispute that our of the claim of the Insurance policy of Rs. 60,00,000/ - the Insurance Company is willing to pay Rs. 23,00,000/ - to which the borrower is not agreeable and the matter for final settlement is still under consideration.
(3.) ACCORDING to the learned Addl. Civil Judge the Bank was not co -proposer. There is no privity of contract between the Bank and the Insurance Company. The bank may recover the amount out of the claim of other policy and from the guarantors. Accordingly, he was of the opinion that the plaintiff did not have any prima facie case, neither the balance of convenience was in his favour nor the bank was likely to suffer irreparable injury. Accordingly, he dismissed the temporary injunction application. Being aggrieved, this appeal has been preferred.;