Pathanamthitta District Co-operative Bank, Rep. by Its General Manager, Pathanamthitta and Another Vs. K. Pappan and Others - Court Judgment

The first and second opposite parties in C.C. 59/07 before the CDRF, Pathanamthitta are the appellants herein who are aggrieved by the order dated 14.10.2010 of the Forum below. By the impugned order, the second opposite party is under directions to pay to the complainant a sum of Rs. 25,000/- as compensation with interest at 8% per annum from the date of compensation till payment along with cost of Rs. 2,000/- The amounts are directed to be paid within one month from the date of receipt of the order failing which the interest rate is enhanced to 12% from the date of order till payment.

The complainant has approached the Forum stating that he had availed a loan of Rs. 1,00,000/- from the second opposite party and that the second opposite party made him believe that the loan would be covered under Insurance policy taken from the 3^rd opposite party and that an amount of Rs. 972/- was collected from him towards the premium for the policy. It is submitted by him that on 23.1.2007 theft had occurred in his shop and he had sustained a loss to the tone of Rs. 1,08,000/- and though he made a claim for the said amount the opposite parties rejected the same on untenable grounds.

The first and second opposite parties filed a joint version stating that the complaint was not maintainable and that the complainant was at fault in not taking Insurance Policy at the time of availing the loan. However it was admitted that they had released the loan amount to the complainant. It was further submitted that as per Condition 9 of the Loan Agreement, the complainant ought to have produced the Insurance policy covering his stock in trade and after the theft, taking caution, they had suomottu taken a policy on 17.2.2007 by remitting Rs. 537/- It is their case that it was obligatory on the part of the complainant to insure his stock in trade before obtaining the loan. Contending that there was no deficiency in service on the part of the first and second opposite parties, they prayed for the dismissal of the complaint with cost.

The 3^rd and 4^th opposite parties filed version stating that the complaint was not maintainable as against them. It was submitted that no policy had been issued either infavour of the complainant or to his concern. It was also stated that no premium had been received either from the party or from the bank and hence at the time of theft there was no Insurance coverage for the stock in trade of the complainant. They also prayed for the dismissal of the complaint.

The evidence consisted of the oral testimony of the complainant as Pw1 and Exts. A1 to A6 on his side. On the side of the opposite parties, the second opposite party was examined as Dw1 and documents B1 to B8 were marked. On the side of the 3^rd and 4^th opposite parties, the 3^rd opposite party filed proof affidavit in support of their contentions. It is based on the said evidence that the Forum below passed the order under challenge.

The learned counsel for the appellants/opposite parties 1 and 2 submitted before us that the Forum below had gone wrong in allowing the complaint even to a certain extent as it was the bounden duty of the complainant to insure his stock in trade before availing the loan. He has also advanced the contention that for the default of the complainant, the opposite parties could not be saddled with the payment of compensation. It is his very case that the Forum below ought to have found that the complainant had approached the Forum with unclean hands and hence the complaint was only to be dismissed with costs.

On the other hand, the learned counsel for the first respondent/complainant opposed the contentions of the learned counsel for the appellant. It is his case that the Forum below had rightly appreciated the facts and circumstances of the case and has ordered only a nominal compensation for the lapse of the second opposite party. It is submitted by him that the opposite parties did not have a case that no theft had occurred on 23.1.2007. He had also submitted that the second opposite party made the complaint believe that insurance covering an amount of Rs. 1,00,000/- would be taken by the second opposite party and it is evident from the act of the opposite party in taking Insurance Policy after the theft had taken place. Contending that the order is only to be upheld, the learned counsel argued for the dismissal of the appeal with compensatory cost.

Having heard both sides and also on perusing the records, we find that it is the admitted case of both the parties that the complainant had availed a loan of Rs. 1,00,000/- from the second opposite party and that the theft had taken place on 23.1.07 in the complainants shop. It is also not disputed that the loan amount was released to the complainant without obtaining the insurance policy covering the stock in trade of the complainant. The opposite parties/appellants would admit that as per Clause 9 of Ext. B2, the loan sanctioning letter, it is clear that for amounts over Rs. 25,000/- the loanee is liable to submit the policy covering the stock in trade before withdrawing the loan amount from the bank. On a perusal of the said clause it is found that the complainant is duty bound to produce the insured policy and also to be found that the first and second opposite parties are liable to obtain the same before withdrawal of the amount by the complainant from the bank. In the instant case it is the admitted fact that the opposite party failed in obtaining the policy covering the stock in trade before releasing the amount from the bank. The complainant is also at fault in not producing the policy covering the stock in trade. The Forum below has appreciated this fact in its correct perspective and has awarded only Rs. 25,000/- as compensation for the lapse of the second opposite party. We find no reasons to interfere with the said direction of the Forum below.

In the result, the appeal is dismissed. The order dated 14.10.10 of the CDRF, Pathanamthitta in C.C. 59/07 is confirmed. In the facts and circumstances of the present appeal the parties are directed to suffer their respective costs.

The office is directed to send back the L.C.R. along with a copy of this order to the Forum below.