MORION CHEMICALS LTD. Vs. UCO BANK AND ANOTHER

JUDGEMENT

(1.) Complainant/Appellant has filed this Appeal against the judgment and order dated 22.11.2007 passed by the State Consumer Disputes Redressal Commission, Chandigarh UT (in short, the State Commission) in Complaint Case No. 64/06 wherein the State Commission has dismissed the complaint filed by it. Facts:

(2.) Complainant/Appellant, a chemical manufacturing company, got sanctioned a term loan of Rs. 2.25 crores from the Respondent No. 1 Bank (opposite party No. 2 before the State Commission) on 22.8.2005 by hypothecating movable property including machinery vide hypothecation deed dated 2.5.2004. In order to secure the term loan, Respondent No. 1 Bank (hereinafter to be referred to as the "Respondent Bank") without the knowledge of the Appellant obtained a "Standard Fire and Special Perils Policy" from the Respondent No. 2 Insurance Company (opposite party No. 1 before the State Commission) to insure the hypothecated building and stocks for a sum of Rs. 30,00,000 and Rs. 1.22 crores respectively against the risks of earthquake, fire and shock. The policy was valid from 28.6.2004 to 27.6.2005. On 3.8.2004, due to heavy rains in Chandigarh, there was accumulation of water in the factory premises as a result of which the machinery, material and other property lying thereon was completely damaged. Intimation was given to the Respondent Bank and the Insurance Company. However, the Respondent Insurance Company vide letter dated 20.9.2004 repudiated the claim of the Appellant on the ground that the risk for flood and cyclone group of perils was excluded from the policy. Complainant, being aggrieved, filed the complaint before the State Commission.

(3.) On being served, Respondent Bank entered appearance and filed its written statement taking the preliminary objection that the complaint was maintainable as the resolution passed by the Appellant Company did authorise Jai Bhagwan to file the same. On merits, it was pleaded that the complaint was barred by limitation as the cause of action had arisen on 3.8.2004 whereas the complaint was filed by the Appellant on 26.9.2006; that since the Appellant Company had failed to got insured the hypothecated machinery and stock, the policy was got issued by the Bank to secure its term loan.