Canara Bank v. United Indian Insurance Corp.

Citation: CIVIL APPEAL NO. 1042 OF 2020.

Bench: J Deepak Gupta

Facts

• The claimants in the captioned appeal are farmers who had stored their produce in a cold store, during the year 2012-2013.

Contention by the claimants (farmers, cold store)

• The farmers contended that the cold store while levying general charges had also charges for the insurance premium to be paid to the insurance company, therefore, they were well within the ambit of filing, the cold store also pressed on the same fact
• The farmers also contended that they had entered into a tripartite agreement with the bank regarding their loan as the cold store had got the stocks insured from the insurance company and the stocks belonged to the farmers.

Contentions by the Insurance Company 

• The insurance company was of the view that farmers had no locus standi to make any claim as there was no privity of contract between farmers and the insurance company.
• The insurance company further contended that farmers were not ‘consumers’ under the Consumer Protection Act, 1986.
• They further went on to deny that the farmers had actually produced the agricultural produce and stored it in the cold store. They also contended that the fire was not accidental and hence they were not liable to pay any compensation for the same.

Issue

Whether in facts of the present case, the farmers/ beneficiaries could be defined as consumers?

Decision

The Supreme Court in consonance with the decisions made by the Hon’ble State Commission, Karnataka and Hon’ble National Commission held that the definition of ‘consumer’ under the Consumer Protection Act is very wide and not only includes a ‘person who hires or avails of the services for consideration’ but also includes ‘the beneficiary of such services ‘who may be a person other than the person who hires or avails of services. In the given set of facts, even though the farmers were not directly involved in undertaking the services of the insurance company, they were certainly the beneficiary to the same. The Hon’ble Court also disregarded the other claims of the insurance company including the claim that the fire was not accidental and was a result of human intervention.

The Supreme court held that beneficiaries are consumers under the act and the Supreme court while deciding the case also held that definition of ‘consumers’ is of very wide connotation and cannot be given a restrictive meaning.

Analysis

The Supreme Court in this case vide this decision has come to the rescue of farmers by giving a vivid and categorical representation to them within the definition of ‘consumer’ under the Consumer Protection Act, 1986. While the decision does not clearly categorize ‘farmers’ as ‘consumers’, it surely provides a way for them to be considered as ‘consumer’ when they are beneficiaries.