NATIONAL TRADING CORPORATION Vs. UCO BANK

JUDGEMENT

(1.) THE Complainant had obtained cash credit facilities from the Opposite Party No. 1, UCO Bank against hypothecation of its goods. The Opposite Party No. 1-Bank, in turn was insuring the hypothecated stocks of the Complainant with the Opposite Party No. 2 the New India Assurance Company. The existing Insurance Policy, which was a shop-keepers Insurance Policy, for a sum of Rs. 5 lakhs, expired on 20th December, 1990. On the same date viz,, 20th December, 1990, the Opposite Party No. 2, the New India Assurance Company, wrote to the Bank for renewal of the policy by payment of premia on behalf of various insured parties including the Complainant.

(2.) ON 12th January, 1991, the Petitioner informed the Bank that ''we are taking the matter into our hands, so you are kindly requested not take any steps for the same" (godown insurance). Thereafter, according to the Petitioner, he wrote to the Bank on 7th March, 1991, to arrange for insurance cover for 22 lakhs. The opening sentence of this letter reads: "You are requested earlier and many times for "insurance of stocks,,, we hereby request you to please arrange an insurance cover for 22,00,000/- from New India Assurance Company, Bhadrak, against fire, theft, burglary, looting etc. on the basis of our stock hypothecated to you against cash credit account with your branch." A zerox copy of the stock statement for the month of February, 1991 was also enclosed. Referring to the letter of 7.3.1991 the petitioner on 20th March, 1991 informed the Bank of "our discussion with the above Assurance Company,, and requested the Bank to debit the cash credit hypothecation account for Rs. 11,495/- on account of insurance premium cover policy against fire, theft, looting etc. and credit the same amount to the account of the New India Assurance Co. The Bank by its letter dated 13.4.1991 informed the Insurance Company that the godown of the petitioner, National Trading Corporation had been insured for 22 lakhs on 15.3.1991 for which the Insurance Company had issued the money receipt of 9th April, 1991. At this stage, it informed the Insurance Company that the godown insured had been looted and set on fire in the evening of 24th March, 1991.

(3.) EARLIER by its letter dated 23rd March, 1991, the Bank informed the National Trading Corporation that their account had been debited with the premium of Rs. 11,491/- on 22nd March, 1991 and the credit for the same has been afforded in the account of New India Assurance Company on 23rd March, 1991.