Delhi

StateCommission

A/07/142

ORIENTAL INSURANCE COMPANY L.T.D. - Complainant(s)

Versus

M/S/ PROFIN CAPITAL SERVICE L.T.D. - Opp.Party(s)

26 Sep 2018

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

                                                             Date of Decision: 26.09.2018

First Appeal No. 142/2007

(Arising out of the order dated 23.01.2007 passed in Complaint Case No. 302/2006 by the District Consumer Disputes Redressal Forum (North) Tis Hazari Delhi)

In the matter of:

Oriental Insurance Company Ltd.

Oriental House, Asaf Ali Road

New Delhi-110002                                       .........Appellant

 

Versus

 

Profin Capital Services Ltd.

202, Nidhi House, B-2/1B

Safdarjung Enclave

New Delhi-110029                                       ..........Respondent

                                                                  

CORAM

N P KAUSHIK                         -                  Member (Judicial)

 

1.         Whether reporters of local newspaper be allowed to see the judgment?                   Yes

2.         To be referred to the reporter or not?                                                                  Yes

 

N P KAUSHIK – MEMBER (JUDICIAL)

 

JUDGEMENT

1.      Present appeal is directed against the orders dated 23.01.2007 passed by Ld. District Forum (North) Tis Hazari Delhi. Vide impugned orders appellant herein i.e. Oriental Insurance Co. Ltd. was directed to pay to the respondent/complainant Profin Capital Services Ltd. an amount of Rs. 8,55,869/- alongwith compensation to the tune of Rs. 20,000/-. Litigation charges of Rs. 5,000/- were also awarded.
2.      Facts as are necessary for adjudicating upon the present appeal are that the respondent obtained a ‘Trading Members Indemnity Insurance Policy’ of the National Stock Exchange of India Ltd., Bombay. The same was valid for the period from 01.06.1995.  Policy covered the risk of shares being forged/stolen/counterfeit and ‘signatures differ’. Respondent claims to have made a payment of Rs. 24,98,056.92/- during the period from August 1995 to January 1996 to M/s Sethi Stock Invest. It also suffered a loss of Rs. 23,75,794/- on account of counterfeit physical securities delivered by M/s Sethi Stock Invest. Claim was lodged with the appellant.
3.      Appellant appointed an investigator who assessed the loss of the respondent to the tune of Rs. 12,00,000/-. Payment of the same was made. Feeling dissatisfied, respondent filed the complaint before the District Forum seeking payment of balance amount of Rs. 9,55,879/-. It is also an admitted case of the parties that a sum of Rs. 65,000/- was deducted by the appellant herein towards self incurred expenses. Deductions of Rs. 1,00,000/- from the second claim and of Rs. 42,577/- from the 3^rd claim were also made.
4.      Appellant submits that the amount of Rs. 1,00,000/- was deducted because respondent came to know about the bad delivery on or before 08.01.1996. Despite this the respondent made the payment of Rs. 1,00,000/- on 10.01.2006.
5.      Another grievance of the appellant is that it is not liable to make payment in respect of the shares returned with the remarks, ‘signatures differ’ without any supporting documents to show that the shares were fake/forged. Contention of the appellant is that such a loss was not covered as per terms of the policy. Merely because an FIR was lodged, does not show that the documents in question were forged/fabricated.
6.      I have heard at length the arguments addressed by the counsel for Appellant Sh. S K Pandey Advocate and Counsel for Respondent Sh. Chetan Joshi Advocate.
7.      As per rules and regulations of the National Stock Exchange, any money due to the client cannot be withheld by the member for a bad delivery. NSE gives 14 days’ time for rectification. Therefore, the debit to the client can be made only if he fails to rectify the defect within the said time period.
8.      Coming to the case in hand perusal of the policy shows that the counterfeit securities are indicated in Section 3 of the policy:

“indemnity is afforded to the Assured under this Section for losses sustained by reason of the Assured having in good faith acted upon written instructions or advices or having received Securities which are or become the property of the Assured which prove to be:

 

1. Counterfeit; or
2. Forged as to signature; or
3. Fraudulently altered; or
4. Lost or stolen

 

9.      Present appeal has been filed on the grounds of limitation too. Contention of the appellant is that the cause of action is arose in 1998 when the appellant made payment for an amount of Rs. 7,79,777/- to the respondent. An amount of Rs. 1,00,000/- was deducted in the year 2000. Present complaint was filed in April 2006. On the contrary, the contention of the respondent/complainant is that it lodged the complaint after 30 days of its coming to the knowledge. Hon’ble Supreme Court recently in the case of National Insurance Company Ltd. v. Hindustan Safety Glass Works Ltd. & Anr. in Civil Appeal No. 3883 of 2007 dated 07.04.2017 held that the provision of ‘limitation’ in the Act cannot be strictly construed to disadvantage a consumer in a case where a supplier of goods or services itself is instrumental in causing a delay in the settlement of the consumer’s claim.
10. Appellant too had taken a long time in repudiating the claim of the respondent herein. In the circumstances, I am inclined to agree with the contention of the appellant that the complaint was barred by limitation.
11. Before parting it may be mentioned here that a counter appeal preferred by the respondent herein was disposed of by this Commission vide orders dated 21.05.2007.
12. This Commission dealt with the point whether the grounds, ‘signatures differ’ are covered under the policy or not. It is held that these grounds come within the ambit of the terms ‘forged/stolen/counterfeit/share certified’.
13. In view of the reasons given above, appeal is devoid of merits. The same is dismissed.
14. Copy of the orders be made available to the parties free of costs as per rules and thereafter the file consigned to record room.

 

(N P KAUSHIK)

MEMBER (JUDICIAL)