Bank's Involvement Limited To Providing Finance, No Deficiency Proved: West Bengal State Commission Allows Appeal By Canara Bank

Brief Facts:

The Complainant had purchased a Hero Super Splendor motorcycle. It was financed from Canara Bank (“Bank”) and insured with United India Insurance Company Ltd. (“Insurance Company”). On July 20, 2017, the motorcycle, along with its documents, was stolen from the gate of Natabari Hospital under Tufangunj Police Station, while the Complainant was having tea at a nearby stall. The Complainant lodged a written complaint with the Tufangunj Police Station. However, he failed to mention the date of the incident as July 20, 2017, in the FIR.

On July 21, 2018, the Bank was informed about the theft. On August 14, 2017, the Complainant received a letter from the Insurance Company, requesting the filing of documents to explain the delay in notifying the police about the incident. Upon receiving the letter, the Complainant visited the police station and discovered that the case had been registered on August 1, 2017, despite his verbal complaint on July 20, 2017.

On October 9, 2017, the Insurance Company repudiated the Complainant's claim. In response, the Complainant issued a letter explaining that the complaint had been lodged on July 20, 2017. However, he received no reply. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Cooch Behar, West Bengal (“District Commission”) against the Insurance Company and the Bank.

The Insurance Company stated that the Complainant had violated the terms and conditions of the insurance policy by not immediately reporting the theft. It argued that they were informed about the theft by the Bank, not by the Complainant, thus making the complainant ineligible for the claim.

The Bank did not appear before the District Commission. The District Commission allowed the complaint and directed both the Insurance Company to disburse the insurance amount. It also directed the Insurance Company and the Bank to jointly and severally pay an additional Rs. 10,000 for mental pain and agony and Rs. 20,000 for deficiency in service. Dissatisfied by the order of the District Commission, the Bank filed an appeal before the State Consumer Disputes Redressal Commission, Siliguri Circuit Bench, West Bengal (“State Commission”).

The Bank contended that its role was limited to providing finance to the Complaint. The same was cleared before the filing of the complaint. The District Commission wrongfully passed an order against the Bank without prescribing any reasons for its involvement.

Observations of the Commission:

The State Commission observed that the complaint filed before the District Commission indicated that the Complainant had sought compensation from the Insurance Company only, without any prayer against the Bank. Therefore, when the impugned order was issued against both the Bank and the Insurance Company jointly, the District Commission was required to provide reasons for including the Bank in the order. However, the impugned order lacked any reasoning that pointed to the involvement of the Bank in causing a deficiency of service or mental agony to the Complainant.

The facts further showed that the Bank's involvement was limited to providing finance to the Complainant for purchasing the vehicle in question. The repudiation of the claim was solely between the Complainant and the Insurance Company, which led to the dispute in the instant case. There was no role attributed to the Bank in this dispute.

Given these circumstances, the State Commission concluded that the District Commission's order needed to be modified regarding the directions given to the Bank. Consequently, the Bank's appeal was allowed.

Case Title: The Branch Manager, Canara Bank vs Abanindra Barma and Anr.

Case No.: First Appeal No. A/25/2023

Date of Pronouncement: June 21^st, 2024