Hyderabad: Forum asks bank to pay borrower for fire loss

Hyderabad: The Telangana State Consumer Disputes Redressal Commission announced that obtaining insurance policy for the protection of interests of the assured or goods should be treated as service only, but not for commercial purpose.

It confirmed that a consumer can complain before it over negligence of any such service by the insurer or the third party, if it affects the consumer.

While dealing with a peculiar case in which a borrower complained that the bank that lent him loan was responsible to pay for losses sustained by him on damage of goods in a fire incident, saying the banker was entitled to pay insurance premium, the state commission held that the banker was liable to pay relief to the lender for its failure to discharge its duties with all diligence.

A bench comprising Commission president Justice M.S.K. Jaiswal and another member was dealing with the complaint by a Khammam-based printing press proprietor, who sought a direction to Canara bank, which had lent him a loan, and to an insurance company to make good the loss sustained by him – to the tune of Rs 42,00,000, with interest – because of a fire accident at a commercial space. He asked for damages of Rs 5,00,000 for causing him mental agony.

The petitioner’s contention was that at the time of lending money, the banker obtained insurance policy on his commercial activity for the safety of the goods, and the banker was paying the premium after deducting money from his bank account. The same went on consecutively for five years before 2015, But the bank staff did not pay the premium to the insurer when the fire accident caused him heavy losses. He claims the banker should pay the relief.

But the banker objected to it, saying the complainant was doing a commercial activity and the complaint was not to be maintained, as only a consumer can complain to the commission. He argued that they were not liable to pay insurance premiums.

After considering the facts, the state commission held negligence by bank officers for not paying the premium and directed Canara Bank to pay Rs 7 lakh towards losses sustained by the complainant, together with interest of nine per cent per annum on the cost.