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| Consumer Commission can't pass interim award: HC | | | Early Times Report
Jammu, May 30: A high court division bench of Chief Justice N Paul Vasanthakumar and Justice Ali Mohammad Magrey today said that no interim award could be made by the state consumer commission.
The court directive came in a bunch of petitions filed by J&K Bank Ltd, SBI and PNB, questioning the September 24, 2015 common order of J&K State Consumer Disputes Redressal Commission, Srinagar, in the complaints filed by respondents, wherein the state consumer commission has passed an interim award, directing the banks to deposit half of amount of insurance policy or stock statement, whichever was lesser, in the commission for its disbursement in accordance with orders those may be passed within a period of two weeks during which period the complaints had also been directed to file their evidence by way of affidavits and other materials.
The appellants' grievance was that there was no provision in the J&K Consumer Protection Act 1987, empowering the state commission to pass an interim award of the said nature, therefore, the order passed was without jurisdiction.
It was contended that the banks were acting as corporate agencies of insurance companies and without considering the real issue between the parties and without considering the stand of banks before the commission and without recording any finding with regard to the liability of banks, interim direction was issued.
They contended that as the very maintainability of the complaints was raised by pointing out that it was the duty of the borrower of loan to get its hypothecated or mortgaged properties insured and providing insurance cover to the securities by bank was a matter purely within its discretion.
"The borrower cannot enforce any claim against the bank, seeking direction to provide insurance cover. The insurance companies are different and distinct companies having separate entities and it is not part of the service of the bank to provide insurance to the stocks of the loan borrower. It is stated that primary responsibility of liquidating the loan advanced is on the borrower or the guarantor. If borrower suffers loss on account of fire, flood or earthquake etc, his liability does not get extinguished unless he adopts means at his own level for his own security which means that he has to get the hypothecated goods insured against all insurance risks and in that case only the liability of the bank can be paid by the insurance company and the borrower is relieved of his obligations. Merely because the bank is helping borrower to get his hypothecated stocks insured, it cannot mean that it is rendering any services. The purpose of assisting the borrower to get insurance is to secure the loan which is advanced to him and relieve him of his liability to the bank on certain contingencies. Taking insurance of hypothecated goods or mortgaged property is a matter entirely at the discretion of the borrower and not of the banks. By taking the insurance, the borrower will get the benefits and not the bank. Thus the principal contention is that before determining the real issue raised in the complaints and getting the reply of the banks as well as the insurance companies, the commission erroneously directed banks to deposit half amount of the insurance policy or stock statement, whichever is lesser, for disbursing it to the complainants after determining the real issue," they said.
The bench said it was to be noted at this juncture that the complaints were filed and the liability on the part of the appellants was not determined in any manner. Thus passing an interim direction before considering the claim of the complainant was erroneous. As the liability of the appellants was not determined and the amount payable to the complainants, if any, having not been assessed by the state commission, giving direction to deposit half of the amount of the insurance policy or stock statement was unnecessary as the bank or insurance company would be in a position to deposit the amount to be determined in favour of each complainant and the said fact could not be denied by the complainants. In such circumstances, passing the interim award, without even determining the liability on the part of the appellants and arriving at a quantum of claim if any payable, was unsustainable and the interim order passed in the complaints, which were challenged in these appeals, was set aside, the bench directed. The bench observed that since the complaints, filed in January 2015, had been kept pending, the parties were directed to complete their pleadings within a period of one month from today and the state commission was directed to decide the complaints on merit finally within three months therefrom. When some counsels said that salary accounts of some officers of the banks and insurance companies had been attached pursuant to the state commission's impugned order, the bench directed that wherever attachment of salary accounts were ordered, it would stand released forthwith. (JNF) |
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