Mrs. C.G. Sethu Laxmi, Member—The case of the complainant is that under the inducement of the Branch Manager, Indian Bank, Karunagappally he purchased a fishing boat/financed by the Mattancherry Branch of the Indian Bank, who is the 2nd opposite party and the loan was under cronic default.

2. According to the complainant, the 2nd opposite party, the financing Bank is duty bound to insure the primary hypothecate with any insurance company, duly valued by their approved Surveyor Cum Valuator and this obligation is not only under international administrative instructions, but also under RBI directives. It was contended by the complainant that the 2nd opposite party had been debiting premium for ‘All risk Cover’ to his loan account, that a banking company is under the statutory obligation to insure their financial interest in the from of a primary/Collateral hypothecation since they should not expose themselves to financial jeopardy and other risks consequent even to Vis Major, and that in usual course the 2nd opposite party debited premium from his loan account and transmitted the same to the 1st opposite party to renew the insurance policy before due date and the 1st opposite party accepted the same and credited to their loan account.

3. On 1.7.91 while the fishing boat was on trial after repair work it sank into the sea due to some damages occurred in the body of the boat. Crew were saved by another boat. On the same day itself the complainant sent a telegraphic message to the 2nd opposite party and gave a written letter to the 1st opposite party on 3.7.91. On 4.7.91 the complainant was informed by the 2nd opposite party that the boat was not having a valid policy at the time of the accident. Neither the non-renewal of the policy nor the absence of the policy was informed to the complainant by the opposite parties and the complainant was not at all responsible for the non-renewal of the policy. It was further contended that it is self evident that the 1st opposite party had accepted the premium, by which renewal of the policy has taken effect and that the valuation of the fishing boat is only a minor formality and that is to be completed in due course and claim if any, would be based on such reports. It is alleged by the complainant that if the 1st opposite party had retracted the commitment, it was mandatory on the part of the 2nd opposite party to effect insurance with any other company to safeguard their interest and also to prefect the interest of the borrower, that the 2nd opposite party had committed gross negligence and dereliction of duty whereby causing loss to him and his family, that the 1st opposite party clandestively tried to evade their responsibility after their acceptance of the premium when the contract is fully concluded and completed, and that such unilateral action of the 1st opposite party is unconcionable and in violation of Sec. 23 of the Indian Contract Act. On these averments the complainant instituted this complaint for realising a sum of Rs. 3,00,000/- from the opposite parties.

4. The 1st opposite party filed a detailed version contending that the complaint is beyond the statutory jurisdiction of this Commission, and has to be dismissed in limini that the dispute raised in this complaint is outside the purview of the Consumer Protection Act, that there is privity of contract between the complainant and 1st opposite party, and that the 1st opposite party had not undertaken to perform any service to the complainant and hence the complainant has no cause of action against the 1st opposite party.

5. It was admitted by the 1st opposite party that the vessel ‘ MFV Venus’ was insured with the 1st Opposite Party vide Policy No. 440203/4/0/MH/8/19 valid from 6.5.89 to 5.5.90. The subsequent renewal of the policy fell due on 5.5.90. The 2nd opposite party, the financiers of the complainant remitted the renewal premium of Rs. 8,346,50/- vide their cheque No. 230061 dated 3.5.90 received by the 1st opposite pa