A bank that exercises its liberty to insure hypothecated assets on behalf of a borrower is obligated to provide comprehensive coverage; failure to include essential risks previously covered, without notifying the borrower, constitutes a deficiency in service.

Appearance at the time of arguments:

For the Petitioner : Mr. Arun Aggarwal, Advocate (VC).

For the Respondents : Mr. Bharat S Sharma, Advocate.

JUSTICE ANOOP KUMAR MENDIRATTA

O R D E R

1. Present revision petition preferred on behalf of the revisionist/petitioner/OP-2 in the complaint, assails Order dated 20.09.2017 passed by the learned State Consumer Disputes Redressal Commission, Haryana, Panchkula, whereby FA No.732/2016 preferred by petitioner/OP-2 was dismissed. Order passed by the leaned District Forum partly allowing the complaint thereby directing OP-2 (Bank) to pay Rs.3 lakhs along with interest @ 9% per annum after three months from the date of theft i.e. August 15/16, 2007 was upheld.

Petitioner and respondent No.1 are hereinafter referred to as OP-2 and complainant respectively, as appearing in the complaint for sake of convenience. Respondent No.2 Oriental Insurance Company is further referred to as OP-1 as appearing in the complaint.

2. In brief, complainant M/s Dutta Welding and Repair Works got sanctioned cash credit facility to the tune of Rs.5 lakhs from OP-2 (erstwhile Dena Bank) subject to insurance to the full extent of the value of the hypothecated premises against all possible risks by the borrower/complainant in terms of agreement of hypothecation dated July 12, 2007. Initially, OP-2 got the premises of the complainant insured from Oriental Insurance Company/OP-1 for the period 01.04.2006 to 31.03.2007 against risks of burglary and housebreaking. The insurance was further got renewed by the Bank for the period 28.03.2007 to 27.03.2008 and premium was debited to account of complainant.

3. As per the complainant, on the intervening night of August 15/16, 2007, a tractor trolley bearing registration no. UP11-M-2948 Eicher 380 was standing in front of the shop of the complainant for repair work and someone after breaking the locks and shutter of the shop had removed the battery of the tractor and committed theft of welding set, three drill machines, grinder, raw material and documents etc. Consequently, FIR No.247 at 16.08.2007 under Section 457/380 IPC was lodged at PS: Farakpur, District Yamuna Nagar. A claim was lodged by the complainant with the Insurance Company/OP-1.

4. However, the claim was repudiated vide Order dated 25.10.2007. As per the stand of the Insurance Company/OP-1, a Standard Fire and Special Perils Policy for the period 28.03.2007 to 27.03.2008 was obtained by Dena Bank, Yamuna Nagar on account of Dutta Welding (complainant) but cover for theft or burglary was not obtained, either by the complainant or by the Bank (OP-2). It was further submitted that an independent Investigator was appointed by the Bank but in the absence of any cover for theft and burglary, the claim file was closed on „no claim basis‟. Any deficiency in service on the part of OP-1 was accordingly denied.

5. On the other hand, OP-2/Dena Bank claimed that in terms of the agreement, if the borrower fails to take the insurance, the bank may without being bound to do so, insure the hypothecated premises against all risks in such joint names and debit the premium to the complainant. It was submitted that insurance of hypothecated premises is not obligated on the Bank/OP-2 but the hypothecated premises and stocks being prime and collateral securities were insured by the Bank. The insurance for burglary and theft was stated to be never agreed by the Bank a