Tamil Nadu

South Chennai

CC/294/2006

Shriram credit Company Ltd., - Complainant(s)

Versus

National Insurance Co Ltd ., - Opp.Party(s)

S.Raghavan

20 Aug 2015

ORDER

                      Date of complaint   : 12.05.2006

                      Date of Order          : 20.08.2015

 

DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI(SOUTH)

2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

      PRESENT:   THIRU.B. RAMALINGAM, M.A.M.L.,                   : PRESIDENT

                TMT. K.AMALA, M.A.L.L.B.,                                : MEMBER I 

                TR. T.PAUL RAJASEKARAN, M.A PGDHRDI, AIII,BCS : MEMBER II

                        

C.C.NO. 294/ 2006

THURSDAY THIS  20^TH  DAY OF AUGUST  2015

Shriram Credit Company Limited,

Rep. by its Director.

2A Prakasam Road,

T.Nagar,

Chennai – 2.                                                  ..Complainant

                                                      .. Vs ..

 

National Insurance Company Limited,

Rep. by Divisional Manager,

Divisional Office III,

751, Anna Salai,

Chennai 600 002.                                             .. Opposite party.

 

For the complainant                     :   M/s. S.Raghavan & another

  

For Opposite party                        :  M/s. Nageswaran & Narichania

 

 

        This complaint is being filed by the complainant u/s 12 of the C.P. Act 1986 for a direction to the opposite party to pay a sum of Rs.5,91,019/- to the complainant with interest and also to cost of the complaint to the complainant.     

ORDER

 

THIRU. B. RAMALINGAM,  PRESIDENT        

 

         

1.The case of the complainant is briefly as follows:-

The complainant’s  company is Finance Company running several group of companies and having branch office at Pudukottai had taken a Fidelity Guarantee Policy with the opposite party insurance company ever since 1991 and was in force for the relevant period 1.4.1998 to 31.3.2000.  The complainant company is one such company covered by the said Fidelity Guarantee Policy.    Under the terms  of the said policy, the opposite party has agreed to indemnify the complainant against any direct pecuniary loss sustained by reason of any act of fraud / dishonesty committed by its employees during their uninterrupted service.  As per the terms of the policy, the fraud / dishonesty should be discovered during the continuance of the policy or within 12 months  from the date of expiration of the policy.    

2.     In the instant case one G. Swaminathan was working as the office superintendent of the Branch office of the complainant at Pudukottai.  In April 1999 during the course of verification of the accounts of Pudukottai Branch it was found that a fixed deposit No.8710 in the name of N.Shantha Natarajan, which was already under security to the complainant for a loan, had been refunded and it was found that the said employee had committed defalcation to the tune of Rs.5,91,019/-.     On 16.8.99 a complaint was lodged with the police.  By letter dated 30.8.1999 the opposite party was informed of the said misappropriation of the employed.   A preliminary claim dated 28.12.1999 was lodged with the opposite party.   

3.     In  January 2000, Srivatsan Surveyor (P) Ltd., has been appointed to be the Surveyor by the opposite party for investigation of the claim preferred by the complainant.  By letter dated 31.1.2000 the said surveyor Srivatsan Surveyor (P) Ltd., was requested to contact the Assistant  Executive regarding the investigation of the claim.    By letters dated 29.4.2000 and 13.5.2000 the Surveyor was requested to inspect the documents of the complainant.  By July 2000 all the details required by the Surveyor were furnished to the Surveyor.   Again by letter dated 25.9.2000 further documents were furnished to the surveyor.  

 

 

4.     In the mean time, on the basis  of the complaint lodged by the complainant the police initiated Criminal action in CC.156/02 against G.Swaminathan before the Court of Judicial Magistrate, Pudukottai.   Before the Criminal Court, the delinquent employee G.Swaminathan accepted guilt.   Since the opposite party did not settle the claim a legal notice dated 17.4.2001 was issued to the opposite party, a reply dated 23.5.2001 was sent by the opposite party enclosing a status report regarding the claim of the claimant.   According to the said status report the report of the Surveyor was awaited, till date the opposite party has neither settled the claim nor repudiated it.  Hence there is deficiency of service on the part of the opposite party.   Hence the complaint.  

Written version of  opposite parties  is  as follows:-

5.      It denies all the averments and allegation contained in the complaint except those that are specifically admitted herein.  It is true that the complainant obtained Fidelity Guarantee insurance policy from the opposite party.   The period of the policy is from 1.4.1998 to 31.3.2000.  The said policy was issued subject to the terms and conditions.    The complaint filed by the complainant is beyond the period of limitation prescribed under section 24A of the Consumer Protection Act of 1986.    The complainant has not taken proper steps intime and not fulfills the terms and conditions   of the said policy as such the complainant is not entitled for the settlement of claim asked for in the complaint.  As such there is no deficiency of service on the part of the opposite party  and prays to dismiss the complaint.  

 

6.     Complainant has filed his Proof affidavit and  Ex.A1 to Ex.A10 were marked on the side of the complainant.    Opposite party have filed their proof affidavit and Ex.B1 to Ex.B3  were marked on the side of the opposite party.  

 

7.         The points that arise for consideration are as follows:-

1. Whether the complaint filed by the complainant is barred by limitation?
2. Whether the complainant is entitled for the claim sought for in the complaint against the opposite party and what relief ?

 

8.      POINTS -1 & 2:

        Perused the complaint filed by the complainant, written version filed by the opposite party  proof affidavit of both parties  and documents Ex.A1 to Ex.A10  filed on the side of the complainant and the documents Ex.B1 to Ex.B3  filed on the side of the opposite party  and considered the both side arguments.     There is no dispute between the parties that the complainant company is Finance Company running several group of companies and having branch office at Pudukottai had taken a Fidelity Guarantee Policy with the opposite party insurance company ever since 1991 and was in force for the relevant period 1.4.1998 to 31.3.2000.  One G. Swaminathan working as the office Superintendent of the Branch office of the complainant at Pudukottai has refunded the fixed deposit amount of One N.Shantha Natarajan which was already under security to the complainant for a loan and consequently on a full scale inspection and it was found that the said employee had committed defalcation to the tune of Rs.5,91,019/-.  The police complaint was lodged against the said delinquent on 16.8.1999 and the opposite party was informed by letter dated 30.8.1999 and preliminary claim of the complainant dated 28.12.99 was lodged with the opposite party.   In the month of January 2000 Srivatsan Surveyors Private Limited has been appointed to be the Surveyor by the opposite party for investigation of the claim.  In the mean time the criminal case in CC. 156/2002 against the said G.Swaminathan / the delinquent employee was convicted by the court of Judicial Magistrate, Pudukottai on 5.5.2003.

9.     The complainant case is despite of the particular documents called for by the surveyor were promptly furnished to the surveyor and the surveyor also filed Preliminary report the opposite party has not settled the claim of the complainant for the complaint mentioned claim as per the said Fidelity Guarantee Policy.  The legal notice Ex.A8, dated 17.4.2001  also issued by the complainant and the opposite party has issued reply letter Ex.A9 dated 23.5.2001, have not settled the claim so far which amount to deficiency of service as such the complaint filed by the complainant against the opposite party. 

10.    Whereas the opposite party has resisted the complaint stating that the complainant has not taken proper steps in time and not fulfilled the terms and conditions   of the said policy as such the complainant is not entitled for the settlement of claim asked for.

11.    There is no dispute between the parties that under the terms of the said policy the opposite party has agreed to indemnify the complainant against any direct pecuniary loss sustained by reason of any act of fraud / dishonestly committed by the employees of such companies during their uninterrupted service with such companies.  As per the terms of the policy, the fraud / dishonesty should be discovered during the continuance of the policy or within 12 months from the date of expiration of the policy. 

12.    On perusal of the terms and conditions attached to the policy as mentioned above the insurer agreed to indemnity the complainant against any direct pecuniary loss sustained by reason of any act of fraud / dishonesty committed on or after the date of commencement of this policy and during uninterrupted service with the insured and discovered during the continuance of this policy or within twelve calendar months of the expiration thereon which reveals that the alleged misappropriation of the amount or loss caused by the employee of the insured must be within the relevant period of policy in force and this has to be discovered within 12 months from the date of expiration of the said policy. 

13.    The complaint mentioned misappropriation to the tune of Rs.5,91,019/- alleged against the delinquent employee G.Swaminathan is not disputed by the opposite party and the complainant sent a letter for claim of the said amount as per Fidelity Guarantee Policy  for reimbursement of the said amount from the opposite party by letter Ex.A2 dated 30.8.1999 is also not  disputed.  After  that the opposite party has appointed as a surveyor to estimate for the assessment of loss and surveyor has filed Survey report Ex.B2, dated 23.11.2001.  As per the said report filed by the surveyor out of the claim made by the complainant the loss of a sum of Rs.1,22,913 pertaining to the policy period 1.4.1997 to 31.3.1998 was not discovered within time as such the said amount not payable by the opposite party to the complainant.   Whereas the loss of amount Rs.2,08,714/- pertaining to the policy period 1.4.1998 to 31.3.1999 and the sum of Rs.2,58,273/- pertaining to the policy period 1.4.1999 to 31.3.2000 are payable to the complainant by the opposite party under the said policy.  It has been very clearly mentioned in Column No.7 of the survey report Ex.B2.    Therefore as per the above survey report Ex.B2 filed by the opposite party / insurance company is liable to pay a sum of Rs.2,08,714/- + Rs.2,58,273/- = Rs.4,66,987/-.  Even as per reply notice  23.5.2001 issued by the opposite party to the complainant which is filed as Ex.B3 in which the opposite party in the last paragraph of the said notice has stated as follows:

        From the status report of claim pertaining to Mylapore, Mysore and Pudukottai office of your client please note that they shall be dealt with on merits on receipt of survey reports / instructions from the competent authority.   In respect of the other claims, unless your client is in a position to furnish satisfactory information / documents, in consonance with the terms and conditions of the policy, no amount is payable.  Please take notice.

 

As per the reply notice given by the opposite party, as mentioned above as admitted that they will  pay the amount in respect of the present claim mentioned in this complaint and will be settled after getting necessary report from the surveyor. 

14.    As mentioned above the said survey report Ex.B2 was received by the opposite party  on 23.11.2001 which is subsequent to the issuance of the said notice Ex.B3.  It is also pertinent to note that despite of receipt of the survey report the opposite party has not taken any steps to settle the amount to the complainant and not even sent copy of the survey report  to the complainant.   Therefore even after receipt of the survey report the opposite party have not taken any steps to settle the complaint mentioned claim of the complainant and even not taken any further steps in this regard.  It may amount to deficiency of service on the part of the insurance company.

15.    However as stated above though the opposite party have not come forward to settle the claim as per the survey report to the complainant, the complainant has not taken proper legal steps to cover the said claim amount against the opposite party in time.  The last attempt made by the complainant towards the said claim against the opposite party is the issuance of legal notice Ex.A8 dated 17.4.2001.   After that the complainant has remained silent without taking any steps against the opposite party for the recovery of the amount towards the claim made under the said Fidelity Guarantee Policy against  the opposite party.  The complaint filed by the complainant before this forum is on 12.5.2008 i.e. after lapse of five years from the date of issuance of legal notice. 

16.    The main contention of the opposite party in this case is that the complaint filed by the complainant is not in time  as per Sec.24 (A) of the Consumer Protection Act 1986.   As such the complaint is barred by limitation and the complaint is to be dismissed.  Whereas the complainant has contended that the insurance company neither settled nor repudiated the claim made by the complainant as such the complaint filed by the complainant is not barred by limitation. 

The said contention of the complainant is not sustainable and relying upon the decision the Hon’ble National Commission rendered in the case 

Ganpat Rama Madhavi

Versus

New India Assurance Company Ltd.,

 

Published in IV (2011) CPJ 210 (NC)  and the decision rendered by Hon’ble Supreme Court in the case

Kandimalla Raghavaiah & Co.,

Versus

National Insurance Company Ltd.,

 

Published in III ( 2009) CPJ 75 (SC)

Further the decision rendered by the Hon’ble The Tamil Nadu State Consumer Disputes Redressal Commission, Chennai in CC.No.55 / 2005 dated 8.3.2012 which is relied upon by the learned counsel appearing for the opposite party in support of their contention is also squarely applicable for the present case. 

17.    The contention of the opposite party is that this complaint ought to have been filed by the complainant within two years from the date of actual cause of action  as per Sec. 24 (A) of the Consumer Protection Act 1986 is acceptable.

18.    Therefore we are of the considered view that though the complainant is entitled to receive a sum of Rs.4,66,987/- from the opposite party towards the claim made under the Fidelity Guarantee Policy for the said grievance this complaint filed  by the complainant before this forum is not in time.  As such the complaint is filed by the complainant is barred by limitation as contented by the opposite party  is acceptable.   Therefore the complaint is liable to be dismissed and as such the complainant is not entitled for any relief sought for in the complaint  against opposite party.  Considering the facts and circumstances parties have to bear their own cost of litigation and as such the points 1 & 2 are decided accordingly.

        In the result this complaint is dismissed. No costs.  

Dictated to the Assistant transcribed and typed by her corrected and pronounced by us on this  20^h   day of August  2015.

 

MEMBER-I                                   MEMBER-II                                                    PRESIDENT.

Complainant’s Side documents :

Ex.A1-  26.7.1999  - Copy of Report of the Accounts officer.

Ex.A2- 30.8.1999   - Copy of letter to the opposite party.

Ex.A3- 28.12.1999  - Copy of  Preliminary claim.

Ex.A4- 31.1.2000    - Copy of letter to the Surveyor.

Ex.A5- 13.5.2000   - Copy of letter to the Surveyor.

Ex.A6- 4.8.2000      - Copy of letter to the Surveyor.

Ex.A7- 25.9.2000   - Copy of letter to the surveyor.

Ex.A8- 17.4.2001  - Copy of Legal notice. 

Ex.A9- 23.5.2001  - Copy of reply notice.

Ex.A10- 5.5.2003 – Copy  of order of the Jidicial Magistrate, Pudukottai.

Opposite party’s Side documents :

Ex.B1-        -          -   Copy of Policy terms and conditions.

Ex.B2- 20.10.2001    - Copy of Survey Report.

Ex.B3- 23.5.2001              - Copy of Advocates Reply.

 

MEMBER-I                                   MEMBER-II                                                    PRESIDENT.