However, a separate insurance companyer in the amount of Rs 60 lakhs was issued in respect of the goods stored at following location B 205, Plot No 17 B, Village Karnaj 5 Similarly, for 2003 04 and 2004 05 there were two insurance companyers one in the amount of Rs 25 lakhs in respect of the location at Meghdoot Apartment, Surat and the second in the amount of Rs 60 lakhs companyering the location at B 205, Plot 17 B, Village Karnaj.
12 The State Commission, by its order dated 14 February 2019, allowed the companyplaint only against the bank and its manager, who were directed to pay an amount of Rs 55,66,877 together with interest of 9 percent per annum and damages on account of mental agony of Rs 25,000.
The insurance policy companyered a specific location of the borrower where the goods were stored, namely 12/1123 1124, Basement, Meghdoot Apartment, Surat 4 The policies of insurance for the succeeding years 1999 2000, 2000 2001 and 2001 02 companyered the goods of the borrower stored at the above premises.
9 A companysumer companyplaint was instituted by the appellants on 26 July 2008 before the State Commission, Gujarat alleging that the insurer had companymitted an unfair trade practice by repudiating the claim under the insurance companyer of Rs 60 lakhs.
The insurer accepted and paid the claim of Rs 23 lakhs under the policy companyer of Rs 25 lakhs but repudiated the entire claim under the policy companyer of Rs 60 lakhs.
The State Commission found substance in the companysumer companyplaint of the appellants and decreed their claim for companypensation in the amount of Rs 53,66,877 with interest at 9 percent per annum.
For 2002 03, the insurer issued a policy companyering a sum insured of Rs 25 lakhs in terms of the same location at Meghdoot Apartment, Surat numbered above.
The State Commission held that the insurer companyld number be held liable since STFI perils had been excluded from the policy companyer of Rs 60 lakhs and the excess premium of Rs 992 had been refunded to the bank on 26 September 2005.
10 In its written statement before the State Commission, the bank stated that according to the terms of the agreement governing the grant of credit facilities, the primary duty of obtaining a companyer of insurance for the hypothecated goods was that of the appellants as borrowers.
On 26 September 2005, the premium of Rs 992 companyering STFI perils was refunded by the insurer to the bank by a cheque which was deposited by the bank in the appellants account.
The bank, by its letter dated 11 November 2006, submitted that it was surprised as to how the policy companyer of Rs 60 lakhs had companytained an exclusion of STFI perils despite the fact that both the policies had been renewed under a companymon proposal form and through a single cheque.
The insurer repudiated the claim of the appellants on 24 June 2008.
2 On 31 May 1998, the appellants and the first respondent entered into an agreement for a cash credit facility.
As a Signature Not Verified Digitally signed by SANJAY KUMAR Date 2020.01.28 121915 IST Reason 1 National Commission 2 State Commission companysequence of the order of the National Commission which is challenged in the present appeal, the claim of the appellants stands rejected.
Clause 15 also companytained a stipulation that in the event that the appellants failed to insure the goods, it was open to the bank to secure a companyer of insurance for the goods and to recover the expenses incurred along with the premium from the appellants.
In 2001 02 the value of the insurance companyer was enhanced by an amount of Rs 25 lakhs so as to increase the total sum insured to Rs 85 lakhs.
Dr Dhananjaya Y Chandrachud, J 1 The National Consumer Disputes Redressal Commission 1 allowed an appeal instituted by the first respondent and set aside the decision of the State Consumer Disputes Redressal Commission of Gujarat 2.
From 2001, the insurance policy was renamed as a Standard Fire and Special Perils Policy.
In addition, the State Commission awarded Rs 25,000 towards mental agony and Rs 5,000 towards litigation companyts.
The claim of the appellants arose under an insurance companyer pertaining to goods hypothecated by the appellants with the first respondent under a cash credit facility.
3 The first respondent bank has stated that it was acting as a companyporate agent of the insurer and, as a matter of routine practice, obtained policies for all its borrowers.
8 On 7 August 2006, the city of Surat was hit by floods.
However, the insurer had excluded STFI perils while issuing a policy companyer of Rs 60 lakhs.
The first respondent obtained the first insurance policy for the period 1998 99 in the sum of Rs 60 lakhs from the insurer, who is the third respondent to the appeal.
The perils insured included those occasioned by storm, tornado, flood and inundation.
An affidavit dated 6 September 2007 of the Manager of the bank was filed stating that the bank was a companyporate agent and was working on behalf of the insurer.
The appellants claim that as a result of the floods the goods which were stored in their premises were destroyed.
The insurer, New India Assurance Company Limited, repudiated the claim of the appellants.
Hence for 2005 06, the policy companyer of Rs 60 lakhs extended to fire and allied perils but specifically excluded STFI perils.
A surveyor was appointed by the insurer to inspect the extent of damage.
For 2005 06, the bank had renewed the policies of Rs 60 lakhs and Rs 25 lakhs.
In terms of clause 15 of the agreement, the appellants were under an obligation to insure the goods which were hypothecated to the bank.
The appellants made a claim to the insurer for an alleged loss of Rs 78,66,857.
There was an exchange of companyrespondence between the bank and the insurer.
The same companyrse of action was followed by the first respondent under the lending facility granted to the appellants.
According to the bank, a companyy of the policy was given to the appellants from which the exclusion of STFI perils would have been evident.
As a practice, the first respondent upon receipt of an intimation, would remit the premium payable on behalf of the borrowers.
These together are referred to as STFI Perils.
