Legal Question in Banking Law in India

1. I was having a Cash Credit account in a bank from last 3 years.

2.Bank every year make the insurance of the stock and deduct the insurance premium charges from my account.

3. For 4th year neither bank made the insurance nor did it informed us regarding the insurance.

4. I had a theft at my shop.

5. We informed the bank with documents regarding the theft and asked them to further notify the insurance company.

6. As soon as the bank got the news of the theft, it deducted the 4th year insurance premium from my account.

7.We went to consumer court against the bank.

8.Bank argued in the court that he is not responsible for making the insurance and showed a condition having my signature.

9.(i).Acc to bank condition 7A account holder has to make the insurance and has to submit the insurance premium receipts in the bank.

(ii).On the demand of the bank if consumer does not submit insurance receipts, then bank has the authority to make the insurance of the stock on the risk and reposibility of consumer, but bank is not bound to make the insurance.If the bank misses to make the insurance then it is not bank's responsibility.

10. Acc to us, the bank has not complied 7A, as bank has neither informed the customer to make the insurance nor demanded insurance premium receipts from us, and by this acc to 7A bank becomes bound to make the insurance.

11.Forum on assuming that the bank is not bound to make the insurance, declined our complaint with penalty.

12. Acc to you should we go further in appeal against the forum or not?

Thanks in advance for your valuable suggestions.


Asked on 6/24/12, 10:17 am

3 Answers from Attorneys
J. Radhakrishnan independent Practice

In view of the clauses protecting the bank and putting the onus on you to make the insurance, I feel further appeal to appellate consumer forum may not be sucessful. However you can try, stating that the bank by its conduct put you in a state of comfort by taking insurance policy in the past and you hoped that they would continue doing it and appeal for reversal of the lower consumer forum's verdict or at least that part of the verdict which has saddled you with costs(Penalty)

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Answered on 6/24/12, 8:52 pm
Devansh Bhardwaj Devansh Bhardwaj

I feel it is a good case and you should proceed further and file an appeal.

FOR FURTHER DISCUSSIONS IF ANY, FEEL FREE

TO CONTACT ON 09415109404, 09670339282, [email protected]

DEVANSH BHARDWAJ

ADVOCATE, LUCKNOW

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Answered on 6/25/12, 2:39 am
Aniruddha Pawse Aniruddha.P.Pawse Advocates

i agree with Adv Radhakrishnan

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Answered on 7/16/12, 10:57 pm


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