STATE BANK OF INDIA Vs. MARIYARAJ

JUDGEMENT

(1.) This Revision Petitioner has been filed by the State Bank of India, the petitioner against the order dated 23.06.2008 of the State Consumer Disputes Redressal Commission, Chennai (for short, "State Commission").

(2.) Facts of the case are that the Respondent Mariyaraj took loan for financing the tractor from the petitioner in the year 1995. The respondent took the insurance policy from National Insurance Company Ltd on 01.12.2001 by paying Rs.2084/- through cheque. The Insurance Premium of Rs.2790/- was paid on 26.03.2003. Meanwhile the tractor met with an accident on 24.03.2003 and one lady Valliammai was killed in this accident. The Respondent settled with the family members of the deceased Valliammai for Rs.1,20,000/- as he could not get the claim from the National Insurance Company, because there was no insurance cover on the date of accident. Respondent filed consumer complaint before the District Consumer Disputes Redressal Forum, Pudukkottai (for short, "District Forum") for deficiency in service by the petitioner State Bank of India. The Respondent claimed that there was an arrangement of paying the regular premium to the insurance company by the petitioner on behalf of the respondent and the same was to be debited to the loan account of the respondent. As the petitioner did not pay the premium due in December, 2002 and the premium was ultimately paid on 26.03.2003, the tractor remained without any valid policy for some time. During this time, the tractor met with an accident and respondent had to pay Rs.1,20,000/- to the family members of the deceased Valliammai. Due to delay in payment of premium, this loss has occurred to the respondent due to deficiency in service on behalf of the petitioner, State Bank of India. The district forum vide its order dated 06.12.2005 accepted the consumer complaint and ordered the petitioner to pay Rs.1,20,000/- towards compensation for the deficiency in service, a sum of Rs.10,000/- towards compensation for the mental agony and other expenses, Rs.500/- towards costs, aggregating Rs.1,30,500/-. The petitioner filed an appeal before the State Commission which was dismissed vide its order dated 23.06.2008. Against this order of the State Commission, the present Revision Petition has been filed.

(3.) We heard the Ld. Counsels of both the parties and perused the records carefully. Ld. Counsel for the petitioner stated that there was no arrangement for payment of insurance premium to the insurance company by the petitioner bank and there were no permanent instructions of the respondent in this regard. The premium paid on 26th March 2003 was paid on the verbal instructions of the Respondent. As the policy was taken from 01.12.2001, the next premium was due in December, 2002. However, the Respondent did not pay the premium in time and it was only on 26.03.2003 that the respondent asked the bank to pay the premium from the loan account on his behalf to the insurance company and the same was paid and debited to the loan account of the respondent. The policy itself was in physical possession of the respondent and therefore the petitioner had no knowledge of the dates of premium due. As per the Motor Vehicle Act, 1988, the responsibility of the third party insurance rests solely with the vehicle owner. The fora below have given reference of para 9 of the loan agreement entered between the petitioner and the respondent. The District Forum has mentioned as follows: