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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION (DIVISION BENCH)
R.K. Agrawal, M. Shreesha, JJ.
NEW INDIA ASSURANCE CO LTD - Appellant
Vs.
NEW PADMA ENTERPRISES AND OTHERS - Respondent
First Appeal No. 45 of 2015
Decided On : 06-02-2019
I. Maamu Vani, Adv., Ch R Vasantha Kumar, Adv., Vamaraju Sri Krishnudu, Adv.
The Bank, as an Agent of the Insurance Company, is responsible for processing insurance claims on behalf of the insured party.
Headnote:
Insurance Company - Consumer Dispute - Consumer Protection Act, 1986 - Section 19
Fact of the Case:
The Complainant-Firm availed a loan from the Bank, with the Bank acting as an Agent of the Insurance Company. A fire accident occurred, causing significant loss. The Bank and Insurance Company failed to process the claim, leading to a dispute.
Finding of the Court:
The Court found the Bank and Insurance Company liable for not processing the claim and directed them to forward and process the claim. The Complainant was awarded compensation and costs.
Issues: Failure of the Bank and Insurance Company to process the claim, liability for the loss incurred, and entitlement to compensation.
Ratio Decidendi: The Bank, as the Agent of the Insurance Company, was responsible for processing the claim. The failure to do so constituted deficiency in service. The Insurance Company was not held liable due to the claim being time-barred.
Final Decision: The Appeal was allowed, and the Bank and Insurance Company were directed to process the claim and pay compensation to the Complainant.
JUDGMENT/ORDER :
M. Shreesha, Member
1. Aggrieved by the order dated 17-11-2014 in CC No.173 of 2013, passed by Andhra Pradesh State Consumer Disputes Redressal Commission (hereinafter referred to as 'the State Commission'), the Opposite Party No.3 (hereinafter referred to as 'the Insurance Company') preferred this Appeal under Section 19 of the Consumer Protection Act, 1986.
2. Vide the impugned order, the State Commission has allowed the Complaint in part directing the Opposite Parties Nos.1 & 2, namely, the State Bank of India (hereinafter referred to as 'the Bank') to forward the Complainant's claim to the Insurance Company and the Insurance Company to process the claim, in accordance with law. The Insurance Company shall also pay a sum of Rs.50,000/- towards compensation together with costs of Rs.7,000/-. The time for compliance of the order was four weeks.
3. The facts, in brief, are that the Complainant-Firm, engaged in the distribution of edible oil, availed a loan of Rs.20,00,000/- from the Bank, with cash credit limit, which was, subsequently, enhanced to Rs.25,00,000/-. It was averred that the Bank was an Agent of the Insurance Company and it used to debit the premium amount from the loan account of the Complainant, to obtain Insurance Policy on their behalf. It was stated that the Bank did not furnish copy of the Insurance Policy to the Complainant. It was pleaded that the Complainant maintained stock worth Rs.25,00,000/- to Rs.30,00,000/- in order to supply it to retail shops. While so, on 15-02-2007, between 10:30 P.M. to 11:00 P.M., a fire accident occurred due to which the entire stock, namely, oil packets, plastic cans and bottles were burnt and damaged and oil worth Rs.21,97,235.61/- was destroyed. Furniture, electrical fittings and service meter worth Rs.30,000/- were also destroyed. Immediately, the Complainant informed the Bank about the fire accident and the loss. The Bank, represented by the Assistant General Manager, Chief Manager and the Field Officer, inspected the premises, estimated the loss and informed the Complainant that there was nothing to worry since the stock was insured for an amount of Rs.25,00,000/-. On the date of inspection i.e.16-02-2007, the Chief Manager and the Field Officer took a statement from the Complainant that the stock for Rs.21,97,235.61/- and furniture & fittings worth Rs.30,000/- were damaged. They also took the stock statement as on 14-02-2007 and submitted the same to the Bank. On 17-02-2007, the Complainant gave a representation to the Bank and again, on 23-02-2007, wrote to the Bank requesting it to settle the claim with the Insurance Company. It was averred that the certificates given by AP Fire Department, SHO II Town, Vishakhapatnam and certificate of APEPDCL dated 16-02-2007 were enclosed with the claim letter. It was averred that the Bank did not give the Complainant the Policy details but only informed them that an amount of Rs.15,043/- was debited to the Complainant's Account towards the insurance premium and gave assurance that the claim amount would be given within fifteen days. Despite repeated requests and also the registered letter sent on 18-01-2008, requesting the Bank to intimate the claim and the settlement details, there was no response from the Bank. The Complainant, further, submits that she received a notice from the Bank demanding her to pay the loan amount with interest, and, despite running from pillar to post i.e. from the Branch Office to Zonal Office, no details regarding the settlement of the claim were given to her. Subsequently, the Bank filed a suit against the Complainant and her husband for recovery of the loan vide OA No.178 of 2008 on the file of Debts Recovery Tribunal, claiming the loan amount from the Complainant. It was pleaded that whenever the Complainant requested the Chief Manager of the Bank, she was informed that 100% claim would come from the Insurance Company and postponed the matter on one pretext or the other. Subsequent to
