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HARYANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice R.C. Kathuria, President;
Mr. Banarsi Das and Mrs. Shakuntla Yadav, Members
ALLAHABAD BANK, KURUKSHETRA—Appellant
versus
ASHOK KUMAR KALRA—Respondent
First Appeal No. 2466 of 2003—Decided on 21.2.2006
Insurance - Loan Agreement - Act Section 146 of the Motor Vehicles Act, 1988 - Clause 10 of the agreement - D.Y. Akoob v. Nilgiris District Central Co-operative Bank Ltd., III (2003) CPJ 96 - Pradeep Kumar Jain v. Citibank and Another, II (1999) CPJ 7 (SC)=AIR 1999 SC 3119
Fact of the Case:
The complainant took a loan for a tractor, mortgaging his land. The tractor met with an accident, and the complainant had to pay compensation as it was not insured. He sought direction against the opposite party for payment of compensation and damages for mental agony.
Finding of the Court:
The court found that the bank was not obligated to insure the tractor, and it was the responsibility of the complainant to ensure the vehicle. Plying the vehicle without insurance cover violated Section 146 of the Motor Vehicles Act, 1988. The court held that the complainant failed to establish deficiency in service on the part of the opposite party.
Issues: The issues revolved around the liability for insurance of the tractor, the obligation of the bank, and the complainant's responsibility to ensure the vehicle.
Ratio Decidendi: The court's decision was influenced by the interpretation of Clause 10 of the agreement, the legal provisions of Section 146 of the Motor Vehicles Act, 1988, and the precedents of D.Y. Akoob v. Nilgiris District Central Co-operative Bank Ltd. and Pradeep Kumar Jain v. Citibank and Another.
Final Decision: The appeal was accepted, the impugned order was set aside, and the complaint was dismissed.
Mr. Justice R.C. Kathuria, President— This appeal is directed against the order dated 18.9.2003 passed by the District Consumer Disputes Redressal Forum, Kurukshetra whereby while accepting the complaint of the respondent-complainant direction has been given to the opposite party to pay Rs. 69,000 to the complainant with interest @ 10% per annum from the date of filing the complaint till its realization.
2. Put shortly, the facts of the case as set up in the complaint are that in the year 1995 the complainant took loan of Rs. 1,50,000 for the purchase of a tractor. He had mortgaged his land measuring 74 Kanals situated in Village Masana as per registered mortgage-deed dated 3.1.1995 with the opposite party. For the tractor the complainant was allotted Registration No. 07B-4574. According to the complainant it was envisaged in hypothecation agreement that the opposite party would pay the premium of the insurance in respect of the said tractor and the premium amount would be debited to the account of the complainant. On 5.9.1997 at 10.00 a.m. the aforesaid tractor met with an accident in which one Abudal Gani son of Shri Mishri Lal had died. The father of the deceased preferred claim petition before the Motor Accident Claims Tribunal which awarded a sum of Rs. 69,000 as compensation to him. The compensation so awarded was to be paid by the complainant as it transpired that he had not got the tractor insured nor paid the premium and for that reason there was no insurance cover on the date of the accident. Thereafter, the complainant invoked the jurisdiction of the District Forum seeking direction against the opposite party for payment of Rs. 69,000, the amount which was paid by him as compensation. In addition Rs. 50,000 as damages on account of mental agony and harassment suffered by him has been claimed. The claim was contested by the opposite party. In the written statement filed, they pleaded that they had advanced loan of Rs. 1,50,000 for the purchase of tractor to the complainant. The complainant was liable to pay interest @ 14% on the advanced amount. It was further pleaded by them that the tractor in question and the agricultural land measuring 74 Kanals situated in Village Masana was mortgaged in its favour and the same was registered in the office of the Sub-Registrar, Thanesar on 3.1.1996. It was further maintained that as per Para No. 9 of the agreement of the hypothecation dated 7.1.1996, it was the duty of the complainant to get the tractor insured and thus they denied the liability to pay the amount claimed in the complaint. On scrutiny of the pleadings of the parties and evidence adduced on record, the District Forum accepted the complaint and issued direction noticed earlier as per order dated 18.9.2003. It is against this order the present appeal has been filed.
3. Learned Counsel representing the parties have been heard at length.
4. There is no factual dispute between the parties. It is spelt out from the record that a sum of Rs. 1,50,000 was advanced as loan for the purchase of tractor for which the agreement of hypothecation dated 7.1.1996 was executed in favour of the opposite party. Clause 10 of the agreement reads as under:
“IX. That the Borrower(s) shall at all times keep such items of security as are of insurable nature, insured against loss or damage by fire and other risks as may be required by the Bank and shall deliver to the Bank all such policies. It shall also be lawful for but not obligatory upon the Bank to insure and keep insured by debit to the Borrower(s) accounts(s) the security as are of insurable nature. The proceeds of such insurance shall at the option of the Bank either be applied towards replacement of the security or towards the satisfaction of the Bank’s dues hereunder.”
5. From the above stated terms of the agreement it is clearly brought on record that option has been given to bank to insure and keep the insured by debit to the borrowers security as are of insurable nature. Meanin
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