UNION BANK OF INDIA Vs. ANNU VASTRALAYA

JUDGEMENT

(1.) -Challenge in this revision is to the order dated 19.4.2007 of M.P. State Consumer Disputes Redressal Commission, Bhopal, allowing appeal against the order dated 2.12.2004 of a District Forum with direction to the petitioner to pay amount of Rs. 1,00,000 to respondent No. 1 within 45 days failing which this amount has to carry interest @ 9% from the date of order. The District Forum had dismissed the complaint.

(2.) In nutshell, the facts leading to the filing of complaint by respondent No. 1/complainant are these. Respondent No. 1, a cloth merchant had taken loan from the petitioner/opposite party No. 1 - Bank against hypothecation of stock of cloth of Rs. 1,00,000. Since 1998 onwards, the petitioner had been taking shopkeeper's insurance policy on behalf of respondent No. 1 from respondent No. 2/opposite party No. 2- Insurance Company for a sum of Rs. 1,00,000. Insurance was lastly taken on 15.2.2003 for a period of one year upto 13.2.2004. Insurance for the previous year 2002-2003 had expired on 16.1.2003. It was alleged that during the period from 17.1.2003 to 14.2.2003, theft took place in respondent No. 1's shop and cloth worth Rs. 1,25,000 was stolen. On claim not being settled, alleging deficiency in service the respondent No. 1 filed complaint against both the petitioner and respondent No. 2-Insurance Company. Petitioner alleged that under the hypothecation agreement it was the responsibility of respondent No. 1 - borrower to get the hypothecated stock insured regularly and petitioner was not liable to pay the amount claimed. On interpretation of the relevant clause of hypothecation agreement and considering the ratio in Allahabad Bank v. J.D.S. Electronic Co., I (2007) CPJ 270 (NC), the State Commission made the award in question in favour of respondent No. 1 and against the petitioner bank.

(3.) Contention advanced by Mr. M.P. Acharya for the petitioner was that under the hypothecation agreement, it was the primary responsibility of respondent No. 1 to get the hypothecated stock of cloth insured and in view of the judgment in Pradeep Kumar Jain v. Citi Bank & Anr., II (1999) CPJ 7 (SC)=VI (1999) SLT 550=(1999) 6 SCC 361, Allahabad Bank's case (supra) requires re-consideration. Relevant clause of the hypothecation agreeement which has been set out in the order of State Commission, reads as follows: