Tort Case Law Presentation

Tort case law presentation
TOPIC- Pradeep Kumar Jain v. Citibank , AIR 1999

SC 3119
PRESENTED BY- Yashoswini Mishra
Petitioner : Pradeep kumar Jain
v.
Respondent: Citibank & ANR.
Date of judgment: 12/08/1999
Bench: S.R Babu, S.Saghir Ahmad
Judgment: RAJENDRA BABU , J
Citation
 Deficiency in service- vehicle purchased under hire and
purchase – bank promising to renew insurance policy of
vehicle – vehicle owner giving cheques for its banker-
banker failed to renew policy vehicle met accident-
award for damages passed against owner
 Since obligation to obtain policy was on owner of
vehicle and merely giving cheques for premium owner
could not be said to have discharged all his duties in
matter of obtaining policy.
 For deficiency of service , banker cannot be saddled
with liability to pay entire damages
 Consumer Protection Act
Facts
 Pradeep Kumar Jain (appellant) borrowed money for payments of car from
first respondent bank citi bank also obtained policy of insurance from
Oriental Insurance Company covering period from Jan 21, 1989 to Jan 20
1990 policy endorsed indicate subject of hire purchase payable by bank
 Appellant issued 36 cheques in favour of bank each of Rs 2,316/- towards
monthly instalments to pay entire loan also issued to two cheques in favour
of Oriental Insurance Company Limited towards premium for two years
beyond Jan 20, 1990
 Appellant took delivery of car on March 8, 1989 but on Aug 15, 1990 when
appellant driving car along five inmates met with an accident on Delhi-
Jaipur national highway not only the car was damaged but the occupants
suffered from injuries. The bank did not reply.
 The appellant claims that the Bank had grievously neglected duty in insuring
the vehicle. The appellant made a claim before the National Consumer
Disputes Redressal Commission (for short the Commission) covering the loss
of the car as well as damages payable towards those who died in the accident.
 The complaint before the Commission was based on the
deficiency in service on the part of the first and second
respondents inasmuch as he had suffered a loss to the
extent of Rs. 1,55,000/- being the market value of the
car on the date of the accident and he was likely to be
fastened with the liability of the third party claims to the
tune of Rs. 18 lakhs filed by the legal representative of
the deceased occupants of the car before the Motor
Accident Claims Tribunal, Rewari and to keep the
appellant indemnified against all such claims. He also
claimed a sum of Rs. 1 lakh for mental agony and
suffering caused to him due to gross negligence of the
opposite parties to discharge their services
Judgment
 The Commission, however, felt that the question of payment of
compensation arising out of fatal accident would fall within the ambit
of Section 165 of the Motor Vehicles Act, 1988 . The Commission also
noticed that a claim by the legal heirs of the deceased occupants had
already been made before the appropriate Tribunal. Thus the Commission
refrained from going to the liability of the insurer for the third party
claims or grant any relief to the appellant.
 Therefore, the Commission took the view that the loss payable by the
insurer arising out of the accident to the vehicle is Rs. 76,990/- on the
basis of the sum assured for the first year less 10% depreciation for one
year and ordered accordingly. The Commission proceeded on the basis
that if the first respondent had not neglected in its duty to take the renewal
of the policy for the next year and had, in fact, got the policy renewed then
the insurance company would have settled the claim within a reasonable
period and thus the concession made by the first respondent would have to
be taken to its logical end. The Commission passed an order to that effect.
 In this Court the contention put forth before us now in this appeal is that the
Commission should have proceeded further and held that the Bank is liable for
damages payable by the appellant for want of insurance of the vehicle as
determined by the Motor Accident Claims Tribunal. Inasmuch as insurance policy
had not been taken out, the appellant has been left high and dry and, therefore, he
had to meet that damage.
 In the case of a motor vehicle, the risk to be covered is not only in respect of a
vehicle but also towards the injury to others or damage caused to the property
arising out of an accident. In such an event, when the policy is renewed or a fresh
policy is applied for, an application has to be given and it is to be indicated
whether any claim had been made in the previous year or not and to furnish
appropriate material as regards the valuation of the vehicle. It can also be made
clear as to the nature and extent of the risk covered whether it is only third party or
comprehensive or otherwise. The obligation under the Act is only at least to cover
third party risk. Thus mere payment of premium could not result in an automatic
renewal of the policy. In the circumstances, we find that the appellant also had
certain duties to discharge in the matter of obtaining insurance policy and cannot
merely put the blame on the first respondent.
In the circumstances of the case, we find that there is
not enough material to grant relief sought for by the
appellant and, therefore, we reject the claim made by
the appellant in so far as payment of damages
awarded by the Tribunal in the accident claim is
concerned. In so far as the claim made and settled
before the Commission is concerned, the same
proceeded on the basis of concession and, therefore,
we do not think that can be made the foundation to
grant the relief as sought for by the appellant. Thus
appeal stands dismissed without any order as to costs.

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TOPIC- Pradeep Kumar Jain v. Citibank , AIR 1999

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