West Bengal State Commission Upholds Canara Bank’s Appeal, Finding Bank’s Role Limited to Financing with No Established Deficiencies

The Siliguri Circuit Bench of the State Consumer Disputes Redressal Commission, West Bengal, chaired by Mr. Kundan Kumar Kumai (Presiding Member) and Mr. Swapan Kumar Das (Member), upheld an appeal by Canara Bank. The Commission found no deficiency in service on the part of the bank, which had acted solely as the financier for the complainant’s motorcycle, stolen thereafter. The State Commission noted that the complainant’s dispute was primarily with the insurance company, which had rejected his claim, and Canara Bank could not be held responsible for such issues.

Summary of Facts

The complainant purchased a Hero Super Splendor motorcycle financed through Canara Bank (“Bank”) and insured by United India Insurance Company Ltd. (“Insurance Company”). On July 20, 2017, the motorcycle and its documents were stolen from outside Natabari Hospital, located under Tufangunj Police Station, while the complainant was having tea at a nearby stall. The complainant filed a written complaint at Tufangunj Police Station, but did not specify the date of the incident as July 20, 2017, in the First Information Report (FIR).

On July 21, 2018, the Bank was notified about the theft. Subsequently, on August 14, 2017, the complainant received a letter from the Insurance Company, asking for documentation to clarify the delay in reporting the incident to the police. Upon receiving this letter, the complainant visited the police station and found that the case had been officially registered on August 1, 2017, despite having verbally reported the incident on July 20, 2017.

On October 9, 2017, the Insurance Company rejected the complainant’s claim. In response, the complainant sent a letter explaining that the complaint had been filed on July 20, 2017, but did not receive a reply. Feeling aggrieved, the complainant filed a consumer complaint with the District Consumer Disputes Redressal Commission, Cooch Behar, West Bengal (“District Commission”), naming both the Insurance Company and the Bank as respondents.

The Insurance Company asserted that the complainant breached the insurance policy’s terms by not promptly reporting the theft, claiming they were informed by the Bank rather than the complainant, rendering the complainant ineligible for the claim.

The Bank did not appear before the District Commission. Nonetheless, the District Commission upheld the complaint and instructed the Insurance Company to release the insurance amount. Additionally, it directed both the Insurance Company and the Bank to jointly and severally pay Rs. 10,000 for mental anguish and Rs. 20,000 for service deficiencies. Dissatisfied with this decision, the Bank appealed to the State Consumer Disputes Redressal Commission, Siliguri Circuit Bench, West Bengal (“State Commission”).

The Bank argued that its role was strictly limited to financing the complainant, a fact clarified prior to the complaint being filed. The District Commission, in the Bank’s view, erroneously implicated it in the order without providing justification for its involvement.

Commission’s Findings

The State Commission noted that the complainant’s original complaint sought compensation solely from the Insurance Company, with no claims made against the Bank. Therefore, the District Commission should have justified why it included the Bank in its joint order with the Insurance Company. However, the District Commission’s order lacked any rationale linking the Bank to the alleged service deficiencies or mental distress suffered by the complainant.

Moreover, it was evident that the Bank’s role was confined to financing the vehicle purchase for the complainant. The dispute over claim repudiation was strictly between the complainant and the Insurance Company, with no direct involvement of the Bank.

Based on these findings, the State Commission concluded that the District Commission’s order required revision regarding the directives issued to the Bank. Consequently, the Bank’s appeal was upheld.

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

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

Date of Decision: June 21st, 2024

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

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