UCO BANK Vs. GADADHAR MOHAPATRA

JUDGEMENT

(1.) THIS revision is directed against the orders of Consumer Disputes Redressal Commission Orissa, Cuttack dated 28. 2. 2002 dismissing appeal against the order dated 20. 1. 1998 of a District Forum and dated 31. 12. 2002 dismissing review application against the order dated 28. 2. 2002. The District Forum had directed the petitioner/opposite party, Bank to pay compensation of Rs. 67,500 and cost to the respondent/complainant.

(2.) FACTS giving rise to this revision lie in a narrow compass. Respondent was sanctioned term loan of Rs. 60,000 by the petitioner bank. A hypothecation agreement was executed on 3. 10. 1996 by the respondent in favour of the petitioner. Out of sanctioned amount, a total sum of Rs. 52,240 was disbursed by the petitioner to Shree Hanuman Store, Tulsi Store and Toran from whom the respondent had purchased textile goods. Respondent alleged that term loan of Rs. 20,000 was also taken on 21. 9. 1994 from the petitioner. At that time an amount of Rs. 534 was retained towards premium of a shopkeepers' insurance policy for a sum of Rs. 1 lakh by the bank. At the time of taking said term loan of Rs. 60,000 the bank did not obtain shopkeepers' policy. In the intervening night of 29/30. 12. 1996 some thieves after breaking open the front door of the shop committed theft of textile goods of approximately Rs. 70,000 and cash of Rs. 3,500. FIR with regard to incident was lodged with the police. Since the petitioner bank had not obtained shopkeeper's policy of Rs. 1,50,000 it being deficient in service was liable to pay the said amount. In the written version though sanction of loan of Rs. 60,000 was not denied but it was alleged that it was the responsibility of the respondent to have taken the insurance policy under Clause 6 of the hypothecation agreement. It was denied that petitioner was liable to pay the amount claimed on ground of its being deficient in not purchasing policy on behalf of the respondent.

(3.) PURSUANT to the order dated 13. 1. 2006 the Registry has secured the file from the concerned District Forum. Controversy between the parties mainly revolves around the interpretation of Clause 6 of the hypothecation agreement dated 3. 10. 1996 admittedly executed by the respondent in favour of the petitioner bank. Original hypothecation agreement is placed on the file of District Forum and Clause 6 thereof which is material, is reproduced below: "6. That the hypothecated goods shall be insured against Fire risk by the Borrowers in same insurance office or offices approved by the Bank and in the name and for the sole benefit of the Bank for their full market value and that the Borrowers will on demand deliver to the Bank all policies and the receipts for premia paid on such insurance endorsed and assigned with the full benefit thereof in favour of the Bank. Should the Borrowers fails to so insure or fail to deliver the policies or receipts for premia duly endorsed as aforesaid three days after demand the Bank shall be at liberty, though not bound to effect such insurance at the expenses of the Borrowers. The Borrowers further agree that the Bank shall be at liberty at any time at its discretion (without being bound to do so) to insure the securities for their full market value against riot and civil commotion risk or any other type of insurance risk at the expenses of the Borrowers with any Insurance Company. "