Judgment (Oral)

Sanjay Dhar, J.-Appellant has filed the instant appeal under Section 17 of the J&K Consumer Protection Act challenging order dated 02.08.2018 passed by the J&K State Consumer Disputes Redressal Commission [‘the Commission’ for short hereinafter], whereby an award in the amount of Rs.20.00 lacs along with interest and litigation costs has been passed by the Commission in favour of the respondent herein (hereinafter referred to as the complainant) and against the appellant (hereinafter referred to as the opposite party).

2. The facts leading to the filing of the instant appeal are that the complainant filed a complaint before the Commission against the opposite party alleging deficiency of service on the part of the opposite party and claimed compensation in the amount of Rs.22,20,000/ along with interest.

3. The case set up by the complainant before the Commission was that his house was mortgaged and the stocks in trade were also hypothecated with the opposite party as the complainant had availed cash credit facility from the opposite party. It was contended before the Commission that on account of floods which wreaked havoc in Srinagar City in September, 2014, the house and the business premises of the complainant suffer extensive damage. It was the further case of the complainant that the opposite party used to insure the house and the stocks in trade regularly and when the complainant approached the opposite party for indemnification of the loss caused to the house and the stocks in trade, he was directed to approach National Insurance Company. But to his dismay, the complainant was informed by the Insurance Company that his stocks were not insured by the opposite party and only the mortgaged house had been covered by the insurance policy. According to the complainant, it was responsibility of the opposite party to insure the mortgaged property as well as the hypothecated stocks in trade and its failure to do so has amounted to deficiency in service and resulted in loss of stocks in trade amounting to Rs.20.00 lacs.

4. The opposite party resisted the claim of the complainant by filing its written version. In its written version, the opposite party, while admitting that during the previous years, the house of the complainant as well as stocks in trade were being regularly insured by it with National Insurance Company Private Ltd. and the policy was jointly being issued in the name of the complainant and the opposite party, claimed that in the year 2014, only the mortgaged house had been insured with the Insurance Company whereas the stocks in trade were left uninsured. According to the opposite party, it is the obligation of the borrower to seek insurance of his goods and that the bank has no obligation to do so.

5. Record of the Commission shows that after filing of its written version, the opposite party chose not to appear before the Commission and it did not lead any evidence in support of its version. As against this, the complainant filed evidence by way of affidavits in support of the case set up by him.

6. The learned Commission relying upon its judgment in the case titled ‘City Hardware Store & Ors. Vs. J&K Bank Ltd.’ decided on 28.02.2018, took a view that the bank is obliged to insure the stocks in trade of the borrower and in case it does not do so, it has to inform the insured-borrower. It was held that the opposite party cannot be absolved of its responsibility to insure the goods which it had been doing in the previous past. Accordingly, after taking into account the evidence led by the complainant, the Commission proceeded to award compensation in the amount of Rs.20.00/ lakhs along with interest and litigation costs in favour of the complainant and against the opposite party. It is this order of the Commission which is under challenge before us in this appeal.

7. We have heard learned counsel for the parties and perused the record of the case including the impugned order and the grounds of the