NEW INDIA ASSURANCE CO. LTD. Vs. PANKAJ KAPOOR

JUDGEMENT

(1.) Appellant which was Opposite Party Nos.1 & 2 before the State Commission has filed this Appeal against the judgment and order dated 15.01.07 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, 'the State Commission') in Complaint No. C-121/1998 wherein the State Commission allowing the complaint has directed the Appellant to pay a sum of Rs.8,00,000/- to the Respondent/Complainant along with compensation of Rs.50,000/- for mental agony and harassment.

(2.) Complainant/Respondent No.1 (hereinafter to be referred to as "the Complainant") had set up a plastic factory. He was sanctioned and disbursed a loan of Rs.7,50,000/- by the Haryana Financial Corporation, Respondent No.2 & 3 herein (for short, 'the HFC"). He executed a mortgage deed dated 10.02.95 in favour of the HFC which contained the various terms and conditions on which the loan was granted and the schedule of repayment. Complainant took a Burglary Insurance (Business Premises) policy for Rs.8,26,000/- from the Appellant Insurance Company for the period from 8.8.96 to 7.8.97.

(3.) Complainant failed to repay the installments and the loan amount. HFC took steps for recovery of the loan amount. In spite of several reminders sent for repayment of the loan, Complainant did not pay the same. HFC issued a recall notice dated 03.02.97. When no response came from the Complainant, another notice dated 19.3.97 was sent wherein it was mentioned that if the Complainant did not pay the loan amount, action would be initiated for recovery of the loan amount under Section 29 and 31 of the State Financial Corporation Act, 1951. Loan amount was not re-paid. HFC in exercise of its power u/s 29 and 31 of the State Financial Corporation Act, 1951, took the possession of the factory premises, machinery and plant on 8.4.97. HFC issued another notice dated 29.10.97 to the Complainant regarding sale of property and when no response was received, the factory premises, machinery and plant were sold and the proceeds of the sale were adjusted against loan amount.