Mr. Justice M.B. Shah, President—The complainant, M/s. Teja Poultry Farm, filed O.P. No. 53 of 1997, before the District Forum, West Godavari, Eluru, against the petitioners and the New India Assurance Co. Ltd. praying grant of Rs. 3,85,015/- towards damages with interest at the rate of 12% p.a. for the damages suffered by it because of cyclone which occurred on 6.11.1996 and 7.11.1996 damaging the sheds constructed for maintaining the live stock (poultry birds). The complainants have also prayed for a compensation of Rs. 50,000/-.

2. It is submitted that on the basis of the application of the complainant Godavari Grameena Bank (petitioner) sanctioned a loan of Rs. 11,30,000/- covering a unit of 10,000 birds and that the complainant received an advance loan of Rs. 5,00,648.50 ps. from the Bank; as per the terms of the loan the Bank was required to take a comprehensive policy to cover the risk to sheds in which the poultry farm was established and that the Bank undertook to pay the premium towards the sheds and the live stock. For this purpose, the Bank deducted an amount of Rs. 5,810/- on 7.5.1996 and paid the same to the Insurance Company. The insurance cover was obtained on 16.10.1996. The sheds and the live stock were blown away by the cyclonic wind on 6th and 7th November, 1996. The sheds were completely damaged. For the live stock the Insurance Company paid Rs. 60,000/- as damages but repudiated the claim for the sheds.

3. It is the contention of the petitioner Bank that the comprehensive policy was taken to cover the risk of the sheds in which the poultry farm was to be located. Undisputedly, at the time of giving loan an amount of Rs. 5,810/- was deducted on 7.5.1996 towards premium for the live stock and that it was paid to M/s. New India Assurance Co. Ltd. On 16.10.1996 a further sum of Rs. 848/- was debited to the account of the complainant towards premium for the sheds. On 6.11.1996 the sheds were damaged due to the cyclone. That occurred on the intervening night of 6th and 7th November, 1996 damaging the live stock and the sheds completely. It is also contended that the petitioner Bank had entered into ‘Grameena Package Master Policy Agreement’ with the Insurance Company on 11.4.1996, and as per the terms of Clause 7 of the said agreement, the Bank debited the insurance premium of Rs. 848/- to the account of the complainant on 16.10.1996 and sent it to the Insurance Company on 4.11.1996 along with the other premium.

4. The main defence of the Insurance Company is that the statement dated 31st October, 1996 was received by the Dowleswaram Branch on 18.11.1996, i.e., after the cyclone and that the premium was sent in the monthly statement dated 25.11.1996. As there is non-compliance of specific condition in the agreement and also non-compliance of Section 64VB of the Insurance Act, the Insurance Company is not liable to pay any amount.

5. The District Forum found that there was deficiency in service on the part of the Bank in not sending the premium account as per the clause in time, hence, the Bank (petitioner) was directed to pay Rs. 3,85,015/- with interest at the rate of 12% p.a., and compensation of Rs. 10,000/-. It was also held that there was no deficiency in service on the part of the Insurance Company.

6. It is also not disputed that the amount of Rs. 3,85,015/- is directed to be credited in the account of the complainant on the basis of the loss to the sheds suffered by the complainant, as assessed by the Surveyor appointed by the Insurance Company. Before the District Forum, admittedly no dispute was raised with regard to the assessment of loss. But, the dispute was ‘whether the bank was liable to pay the damage or the Insurance Company’ as it was contended by the Insurance Company that it had not received the premium.

7. The main contention of the Insurance Company is that the Grameena Bank (petitioner) has not complied with the Grameena Package Master Policy Agreement, particularly, Clause