Delhi

New Delhi

CC/1038/2011

Farsight Securites Ltd. - Complainant(s)

Versus

M/S. New India Assurance Company Ltd. - Opp.Party(s)

07 Feb 2023

ORDER

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-VI

(NEW DELHI), ‘M’ BLOCK, 1^STFLOOR, VIKAS BHAWAN,

I.P.ESTATE, NEW DELHI-110002.

Case No. CC/1038/2011

 

IN THE MATTER OF:

 

M/S FARSIGHT SECURITIES LTD.

17-A/55, TRIVENI PLAZA,

 GURDWARA ROAD, KAROL BAGH,

NEW DELHI-110005                                                                             …. Complainant

VERSUS

 

M/S NEW INDIA ASSURANCE COMPANY LTD.

N-BLOCK, BOMBAY LIFE BUILDING,

TAJEEV CHOWK,

NEW DELHI-10001

ALSO AT:-

M/S NEW INDIA ASSURANCE COMPANY LTD.

UNIT NO.112700,

COOPERATIVE INSURANCE BUILDING,

4^TH FLOOR, SIR P.M. ROAD,

ABOVE KASHMIR ART EMPORIUM,

MUMBAI-4000001                                                             .... Opposite Party

Quorum:

 

Ms. Poonam Chaudhry, President

Mr. Bariq Ahmad, Member

Mr. Shekhar Chandra, Member

 

                                                                                                                  Date of Institution:- 20.10.2011                                                                                                                                                                            Date of Order     :-  07.02.2023

 

ORDER

BARIQ AHMAD, MEMBER

(COMPLAINT UNDER THE PROVISIONS OF CONSUMER PROTECTION ACT 1986 AS AMENDED UP TO DATE)

 

 

1. Briefly stated the facts of the case are that complainant is a trading member of National Stock Exchange of India limited. It is registered with SEBI and is covered under the stock Brokers Indemnity Insurance Policy.  It is stated that the complainant company has a list of reputed-sub brokers with high net-worth empaneled with it who are spread all over India as well as individuals with considerable/private means on its client list.  It is stated that complainant company was one of the Top 10 companies on the basis of turnover in Northern India.  The OP (the Insurer)  is a public sector insurance company and used to provide different types of insurance services.  Complainant is holder of policy under the stock broker and indemnity policy issued by the opposite party-insurer vide policy No.4611270001204. The insured/indemnity limit amount of Rs.50,00,000/-
2. It is stated that a claim with OP was lodged vide number 112700/46/99/00031 for loss suffered by it on account of manipulation in sauda by some employees of the complainant. In the month of March 1999 complainant company observed substantial differences in some of accounts and on a detailed investigation, the various defalcations and embezzlements made by the employees came to light, such as physical removal of securities from strong room, manipulation id sauda, manipulation and distortion of accounts by Mr. S.K. Jain resulting in mis-appropriation due to collusion and connivance by 3 staff. A loss incurred by the complainant company due to defalcation & manipulation by the staff a sum of Rs.17,91,680.65.
3. It is stated that  pursuant to the claim lodged by the complainant company with OP, M/S Parimal R. Shah & Co. was appointed as surveyor to acess the loss., documents were supplied. However vide letter dated 15.05.2000 the OP insurance company repudiated the claim of the complainant in terms of the policy terms and conditions with the observations:-

 “we observe that in all the different amounts of losses for various scrip claimed under the above policy, either you could not substantiate the loss the said losse does not fall within the scope of cover granted under the policy.’

It is stated that the complainant had made so many letter for indemnification of losses, but to no avail.

4. It is contended the opposite party did not allow  the claim of the complainant, arbitrarily and only due to malafide intentions, without disclosing any reason and with ulterior motives, hence this complaint. Complainant claimed Rs.19.99.000/- as compensation with interest @24% per annum from the date of order till realization. Further compensation towards mental agony, harassment as a result of deficiency of services with litigation charges.
5. Notice of the complaint was issued to OP who entered appearance and filed written statement. It is stated that during the subsistence  of the policy the loss was reported by the complainant as the in all the different amounts of losses for various scrip claimed under the above policy, either the complainant could not substantiate the loss the said lose does not fall within the scope of cover granted under the policy.
6. It is contended that indemnity policy which has been provided by the OP was tailor made policy and was subject to terms and conditions of the policy. It is stated that admittedly the loss has accrued due to the activities of the employees of the complainant company who was not authorized to deal with securities and has malafide manner and without any authority has made the transactions. The terms of the policy clearly stipulated that loss caused by an identifiable employee of the insured or by a person of persons in collusion with any employees of the insured. Prior knowledge by an employee that a fraudulent act by a person or persons, not in the employee of the insured, has been or will be perpetrated, shall for the and purpose to be deemed to be around said employee willfully or deliberately withhold this knowledge from the insured.
7. It is contended that the complainant company has failed to file any record and as also made any averment that the account as covered under the transactions was paid to the respective persons.
8. It is stated that the present complaint is not maintainable as the complaint involves the complex question of law and facts which can not be decided on summary basis. Therefore, the complaint is not maintainable and is liable to be dismissed. It is prayed that the complaint be dismissed.
9. Complainant filed rejoinder and evidence reiterating the facts made in the complaint.  Complainant filed the copy of the insurance policy, copies of various bills.
10. On the other hand, OP filed  evidence by way of affidavit. We have heard the AR of the complainant and Ld. Counsel for the OP, perused the record.
11. It is not in dispute that complainant had taken the policy from OP and manipulation in sauda and distortion of accounts resulting in mis-appropriation was done. The claim was processed and investigated by surveyor and repudiated by the OP vide letter dated 15.05.2000. It has been stated that as soon as the letters/claim of the insured was received, insurer appointed the surveyor, for survey and assessment of loss. After receiving the reports of the surveyor, entire papers were examined by the competent authority, who found that the claim was failing in exclusion clauses of the policies, as such, the claim was repudiated. The losses occurred as the insured had failed to observe reasonable care in trade and also failed to take steps to minimize the loss. After verification of the documents and other details, the surveyor confirmed that the cause of loss to the insured was due to the act of infidelity i.e. dishonestly committed by the employees as they had committed forgery, misused company`s properties and embezzled the company`s funds and shares.
12.  We observed that there is great deal of controversy involved in the present complaint. Along with the complaint total pages (1-140) there are as many 120 documents. Hon`ble National Commission in case titled  Integra Securities Ltd. Vs The Oriental Insurance Company decided on 21 December 2001 hold  “that Hon’ble National commission has no case involving complex and complicated question of law and facts and there are numerous of them but considering the lack of staff and poor infrastructure resulting in huge pendency it is not possible for this Commission to add to its list more such cases. Otherwise it will defeat the very purpose and object of the Act. In cases involving medical negligence which required full scale trial including cross examination of experts this Commission invariably entertains these complaints but a case like the present one complainant can certainly knock at the doors of a Civil court or any other Forum”.
13. We are in considered view that the present complaint involves the complex question of law and facts which can not be decided on summary basis. This complaint is returned to the complainant for presentation before the appropriate Commission/Tribunal/Court, if so advised, as per law.

The order be uploaded on the website of the Commission.

File be consigned to record room with a copy of the order.

Announced in open Forum on 07/02/2023.

 

(POONAM CHAUDHRY)

President

 

 

 

        (BARIQ AHMAD)                                             (SHEKHAR CHANDRA)

                  Member                                                               Member