NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
(Wholly owned by State of
Regd. Office at R.T. Bhawan
Baldev Bhawan Path
State Bank of
State Bank of
C/o Chief Manager
P.O. Bettiah Distt.
State Bank of
Regional Manager, Region V
HONBLE MR.JUSTICE M.B. SHAH, PRESIDENT
MRS. RAJYALAKSHMI RAO, MEMBER
For the Complainant : Mr. D.N. Goburdhan, Advocate
For the Opp. Party : Mr. Ramesh .N. Keswani, Advocate
The Bihar State Sugar Corporation Ltd. has filed this complaint against the State Bank of India with a prayer that the Bank be directed to pay a sum of Rs.68.35 lacs to the complainant along with interest @ 24% per annum for the negligence and deficiency in service for dishonouring the cheque dated 22.3.1997 which was drawn in favour of the Oriental Insurance Company Ltd. The cheque was issued towards the premium for obtaining the insurance coverage to the various items as mentioned in the policy annexed with the complaint.
is the contention of the Complainant that the Bihar State Sugar Corporation
Ltd. is wholly owned by the State of
On 17.4.1997 at about molasses tank No.2 of Lauriya unit got burst accidentally which resulted into loss of molasses and also affected the sugar products which were stored in the adjacent and nearby places. The loss of molasses was to the tune of Rs.29 lakhs. For reimbursement of the loss Complainant filed a claim with the Insurance Company on 11.4.1997.
On 6.5.1997 Complainant got
information on telephone that the cheque which was issued by the Corporation
for the premium was returned by Bettiah Branch of the
State Bank of
It is contended that as the claim made by the Complainant is repudiated on the ground that there was no subsisting policy, and as the cheque was wrongly and negligently dishonoured the Complainant is entitled to claim the amount of Rs.68.35 lakhs along withy interest at the rate of 24% p.a.
Learned counsel appearing on behalf of the State Bank of
(i) Complainant never sought insurance for the molasses which was kept in the tank; and,
(ii) The tanks were outside the main factory building.
It is the contention of the Opp. Party that complainant has sought insurance coverage for various items including items worth only Rs.25,000/- and yet there is no specific proposal for taking the insurance cover for three mollases tanks worth Rs.75 lakhs, which are situated outside the factory premises and there was no insurance cover for the molasses.
To find out the truth, we have given various opportunities to the learned counsel for the complainant and inquired whether mollases were included in the proposal form for getting insurance cover. On this point, no specific statement is made. However, learned counsel appearing on behalf of the complainant submitted that when plant and machinery is covered, it would include insurance cover for molasses tanks wherein molasses worth Rs.75 lacs was stored.
is not in dispute that one of the mollases tanks was
exploded on 7.4.1997 and that the mollases worth
Rs.25 lacs was lost due to the explosion of the
tank. It is also not disputed that the Insurance
Company repudiated the claim on the ground that the cheque for premium issued
by the complainant was dishonoured by the State Bank
Dishonour of cheque:
the deficiency in service by the Opp. Party, State
In our view, for this negligent discharge in service, the complainant is entitled to get sufficient and reasonable damages including punitive damages as provided under Section 14(1)(d).
But, the first question would be whether complainant is entitled to the reimbursement as claimed?
In our view, for the loss suffered by the complainant, there is no insurance coverage. So dishonur of cheque by the Bank has not resulted in loss of reimbursement from the Insurance Company.
Various insurance policies are produced on record. No policy covers the damage to molasses kept in the tank. Relevant portion of the policy covering perils for the items which are mentioned in the schedule annexed to the policy, thereof are as under:-
1. With regard to building(s) including 12,84,000
plinth and foundation
2. Plant and Machinery 2,74,12,000
.3. Building(s) including plinth and
.4. Stocks (Gunnies)(loose), Lime,
Unslaked, Sulphur 91,25,000
Stocks (Wood) (Warranty for open 25,000
Open storage) 85,000
Stocks (Coal & charcoal (including
Warranty for open storage) 50,000
Plant and machinery 1,23,500
These items are under Special Peril, namely,Earthquake Fire & Shock Flood (Flood & Inundation etc..)
Nowhere the details of the said policy given above indicate that for mollases, complainant has applied for the policy. Therefore it would be difficult for us to arrive at the conclusion that complainant is entitled to recover the damages suffered by it from the Bank which has negligently dishonoured the cheque despite sufficient funds in the account of the complainant.
However, learned counsel for the complainant Mr.Goburdhan submitted that one of the terms of the policy, inter alia, provides Explosion/implosion but excluding loss of or damage to boilers (other than domestic boilers) economizers or other vessels, machinery or apparatus in which steam is generated or their contents resulting from their own explosion/implosion, therefore, he contended that explosion in the mollases tank would be covered. In our view, this submission is without any basis. Explosion or implosion cover is with regard to the items for which insurance coverage is sought; and for the mollases tank wherein mollases worth Rs.75 lakhs was stored, insurance coverage was not sought.
The learned counsel for the Opp. Party has pointed out that the mollases tanks were in a different premises. In our view, whether it was in different premises or not, is not required to be decided in this compliant because we have held that molasses was not sought to be covered by the insurance policy.
Further, by exclusion clause, under Fire Policy A, loss or damage to property occasioned by its own undergoing any heating or drying process which is the case in the present case, reimbursement is excluded.
Considering this aspect, in our view, complainant is not
entitled to be reimbursed by
For the time being if we assume that the insurance policy covers the damage to the molasses and if the cheque for the premium is dishonoured, the Insurance Company would not reimburse the Complainant. That means a wrongful dishonour of the cheque would result in loss to the Petitioner for more than Rs.25 lakhs. Keeping this aspect in view, in our view, it would be just and reasonable to award punitive damages (as provided under Section 14(1)(d) of the Consumer Protection Act, 1986) for a sum of Rs.5 lakhs so that the banks in general would keep in mind the statutory norms before dishonouring the cheque of verifying properly, particularly, cheque of reputed bodies, including the Government and semi-government bodies.
our view, this is a fit case in which the law laid down by the
.. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil. It may result in improving the work culture and help in changing the outlook.
In the present case, it was known to the officers of the State Bank that the cheque was issued by the Corporation owned by the State Government. Before dishonouring the same, minimum care ought to have been taken not only by the concerned clerk but also by the higher officers.
Further, in the aforesaid Lucknow Development Authority (Supra) case, the
Accordingly, we direct that the Opposite Party State Bank of
The complaint is disposed of as above.