JUSTICE SUDIP AHLUWALIA, MEMBER

This Consumer Complaint has been filed under Section 21 read with Section 22 of the Consumer Protection Act, 1986 by the Complainant Company against the Opposite Party/Insurance Company due to repudiation of their Claim vide Letter dated 12th September, 2018, and deficiency in services.

2. The brief facts of the case are that the Complainant Company is an integrated cash-management Company since 2001 providing a range of ATM management services to its customers starting from ATM site selection to currency forecasting and reconciliation to cash replenishment services.  It has over 900 vans, more than 60 vaults and a team of over 6000 employees/staff to deliver cash-management services to its customers.  It provides cash pick-up, currency processing and cash remittances for over 20000 ATMs and 14000 points for various Banks and retailers in India.  It deals with the cash to the tune of Rs. 3,500 Crores on a daily basis.  It strictly follows the internationally accepted Standard of Procedure (SOP) for all these activities. It is also stated in the Complaint that no Bank or Financial Institution has ever alleged breach of terms and conditions of any arrangement entered into with the Company till date.

3. The present Complaint is in connection with the Special Contingency Policy bearing No. 240400/46/14/9500000089 (‘Insurance Policy’) for a period starting from 29.10.2014 to 28.10.2015, issued by the Opposite Party/Insurance Company covering risks arising in the business of cash-management service.  Prior to the issuance of this Policy, a detailed Service Agreement dated 16th May, 2006 (‘Service Agreement’) was entered into between the Complainant Company and Diebold Systems Pvt. Ltd. (‘DSPL’).  As per this Service Agreement, the Complainant Company was providing services in relation to the ATMs of the Bank of Baroda in Lucknow.

4. On 17th January, 2015, when the custodian of the Complainant Company were loading the cash inside the ATM located at Vidhan Sabha Marg, Qaisharbag, Lucknow, some 5-6 unknown persons got the security guard engaged in heated arguments.  Seeing this, the Driver of the van, after locking the van, went to help the security guard, and at that very moment some culprits broke the knob of the vehicle door, and ran away with the cash box in an auto rickshaw.  FIR No. 5/2015  was lodged in the Police  Station  Qaisharbag, for  the  stolen  amount  of  Rs.1.33 Crores.  On 19th January, 2015, the Complainant Company informed about the cash loss of Rs.1.33 Crores to its Insurance Broker.  On the same day, the Insurance Broker through Email lodged a claim of Rs.1.33 Crores with the Opposite Party/Insurance Company.  Through Email dated 28th January, 2015, the Insurance Broker enquired about the Surveyor appointed for the Claim lodged.  On 3rd March, 2015, Mr. Ashok Kumar Srivastava, Chartered Accountant was appointed as a Surveyor to assess the loss.  Correspondence was exchanged between the parties.  The Complainant Company lodged a Money-in-Transit Claim Form with the Opposite Party on 30th June, 2015 showing that it was a case of major cash robbery of Rs.1.33 Crores by unknown miscreants and that the cash box was taken by break-opening the knob of the vehicle.  The Claim Form further records that the Police came to the conclusion that a criminal gang from Trichanapalli, Tamil Nadu, was involved in the cash robbery.  On 1st July, 2015, the Complainant Company provided several documents to the Surveyor.  Subsequently, on 28th July, 2015, the Surveyor sought some more information and/or documents which were immediately provided by the Complainant Company. The Surveyor submitted his Final Survey Report on 3rd September, 2015.    The Opposite Party did not settle the Claim of the Complainant.  Instead, on 2nd November, 2015, the Surveyor once again sought some clarifications from the Complainant Company.  The Complainant Company, on 13th November, 2015, provided further informations/clarifications.  The Opposite Party then repudiated the Claim vide its Repudiation Letter dated 12th September, 2018.

5. It is further stated in the Complaint that the Opposite Party unilaterally and arbitrarily repudiated the Claim under the guise of Condition No. 3 of the Insurance Policy and Exclusion Clause No. 3 of the Insurance Policy.   The Complainant Company wrote a detailed letter dated 10th October, 2018 to the Opprosite Party to re-call its Repudiation Letter and to settle the Claim.   The Opposite Party refused to recall the repudiation. Hence, the present Complaint.

6. The Opposite Party filed its Written Version to resist the Complaint.  It has, at the outset, denied all the contentions and averments in the Complaint and raised various contentions from its side, such as; That the Complainant has filed this Complaint with false and frivolous contentions and has deliberately concealed material facts; That the Complainant is a commercial entity not a ‘Consumer’ for the purposes of the Consumer Protection Act, as it had taken the Insurance Policy for business and commercial purpose, on account of which the Complaint is not maintainable; That there is no deficiency of service or unfair trade practice on its part; That the Claim lodged by the Complainant has not been found admissible and payable as per the terms and conditions of the Insurance Policy; That the decision of the Opposite Party was based on various documents, observations of the Surveyor appointed, and also on other factors relevant to the Claim; That without admitting any liability, it is submitted that if at all this Commission arrives at the conclusion that the Complainant is entitled to any Claim, then the liability of the Opposite Party is restricted to the loss as mentioned in the FIR dated 17th January, 2015; That despite official instructions, the cashbox was not tied with the chain and chain was not locked in cash van; That there was a ‘complete lack’ of caution, total lack of reasonable care, and negligence in handling the cash-in-transit by the employees concerned’ and the money had been taken away from an ‘unattended vehicle’; That in para 20 of the Complaint, the alleged loss is quantified at Rs.1.33 Crores whereas the FIR annexed to the Complaint says Rs.1.33 lac only and the latter should be taken as the correct amount lost by the Complainant;  That the decision to repudiate the claim was taken only after consideration of all facts, circumstances, documents/submissions of the Complainant and the allegations of ‘unilateral and arbitrary’ repudiation are false and denied; 

Hence, the Opposite Party contends that the Complaint is liable to be dismissed with costs.

7. Rejoinder has been filed on behalf of the Complainant Company.  It is stated that the averments/contentions raised in the Written Statement, which are inconsistent with and/or contrary to the contentions/averments/submissions in the Complaint may not be deemed admitted unless specifically admitted in the Rejoinder and the contents of the Consumer Complaint may be deemed part and parcel of the Rejoinder and the same are repeated for the sake of brevity. 

8. Affidavit in Evidence has been filed on behalf of Complainant by Mr. Kenneth D’souza, Senior Manager (Finance), Writer Safeguard Pvt. Ltd. and on behalf of Opposite Party by Mr. Jaisurya Gupta, Asst. Manager, National Insurance Co. Ltd.

9. Heard Ld. Counsel of the Parties and perused the material available on record.

10. After having conducted his Survey-Cum-Investigation, the Surveyor had categorically opined that the Claim of the Insured was correct and admissible. It was nevertheless repudiated by the Insurance Company on the following grounds –

“1. Complete lack of caution and exhibition of negligence in handling cash in transit by employees of the insured i.e. non-exercise of reasonable care – Breach of General Condition – 3 of the policy.

2. Exclusion No. 3 – Theft of money from unattended vehicle.”

 

11. It would be apposite at this stage, to consider the relevant observations of the Surveyor in the Survey-cum-Investigation Report dated 3.9.2015, which are set out below –

“12. THE INCIDENT

As per preliminary investigation by police it was observed that when the custodian were loading the cash inside the ATM located at Vidhan Sabha Marg, Qaisharbag, Lucknow, some 5 to 6 unknown persons (later revealed as culprits) came near gunman Mr. Gyanendra Singh who was standing outside the ATM engaged in a hot argument, stating that how much time it will take for the loading to take place and they needed to withdraw cash on urgent basis, on seeing the guard rounded by these me, the driver came out of the vehicle to see what hot argument was happening, before he could intervene, few more persons approached him and started asking him some location address and directions, and tried to keep him engaged in some other discussion.  In the meantime other culprits came broke the knob of the vehicle door removed the cash box swiftly and fled in an auto-rickshaw…..

 

14. OBSERVATIONS

On the basis of above survey-cum-investigation my observations in this case are as under:

1- That the insured was issued special contingency policy for the purpose belonging to their business and suffered the losses under Sec-1 of the policy.

2- That the insured had suffered the said loss during the cash carrying and to be loaded in the ATMs allocated in different places and covered under the policy.

3- That the amount of Rs. 1,90,00,000/- was properly collected and kept in Cash Van for loading in the specific ATM and that was checked from the available records and found in order.

4- That persons who were carrying Cash in Cash Van were of authorised employees and their identity were verified from the HR Deptt. of the insured in all respect and found no lapses in their existence at the time of incident.

5- That the insured had paid off the amount of Rs.1.38 crore to M/s. Diebold Systems Pvt. Ltd as per master agreement made with them on 16/05/2006 as against the lost amount of Rs.1.33 crore and the rest of the amount as saved of Rs. 5,00,000/- are in custody of police. Further, NOC were collected from Diebold Systems Pvt. Ltd. For not lodging any claim with any of the agency in future….

 

16. ADMISSIBILITY OF CLAIM 

As has been stated earlier that cause of loss was apparent to all and occurrence of incident at affected location is established through documents attached and the same is beyond control of the insured, thus above is within purview of the policy…..

 

19. CONCLUSION

Prima facie  I  am  of  the  opinion  that insured had suffered a loss of Rs.1,26,35,000/- which is payable as per terms & conditions of the policy and subject to submission of Police Final Report.”

 

12. Two months later, obviously on instruction of the Insurance Company, the Surveyor vide his letter dated 2nd November, 2015, wrote to the Complainant seeking certain clarifications/explanations. The full text of such letter (Annexure C/11) is reproduced below –

“Dear Sir,

Based on the survey report submitted to your insurer, I have been advised to clarify on the following points tantamount to be necessary before completing the assessment proceedings in respect of above.

1- That no CCTV footage was provided as yet in order to know the physical appearance of the incident by the unknown persons.  Whereas the incident report submitted by you reveals that the incident was examined by the Police Authority based on the CCTV Footage.

2- To provide the diagram showing the distance of ATM machine and cash VAN wherein incident took place.

3- To provide the written instruction issued by the insured’s office to its employee for safeguarding the cashbox as in FIR it is mentioned that office had instructed its employee to tie the cash box with chain and locking the chain too, but on enquiry it was disclosed that the instruction was not followed, kindly explain why not condition No. 3 of the policy has been followed which says that “all reasonable step to safeguard the subject matter of the insurance against incident, loss or damages” be applicable.

Kindly submit your reply with proper explanations and evidences wherever necessary to support our reply submitted to the insured on 19.10.2015.”

 

13. The Complainant responded to the aforesaid letter of the Surveyor vide its reply on 13th November, 2015 (Annexure C/12), in which it was firstly stated that the CCTV footage recovered by the Police was in their custody, and the Complainant had no domain over, nor any access to the same. Regarding the second requirement in the Surveyor’s Letter, the Complainant provided the requisite rough sketch map of the scene. In response to the queries raised in Clause 3 of the Surveyor’s letter, the Complainant submitted its detailed explanation in which it was emphasised that there was no breach of any Policy condition, on account of which the loss would not fall under Exclusion No. 3 of the Policy. The Complainant’s reply to this detailed query No. 3 of the Surveyor is as follows –

“Regarding written instructions, the instructions are always parted to trainees during our training.  Regarding chaining of cash box it is extra to that of Required as “Reasonable care” depicted in the policy.

 

We would like to draw your attention to the following facts.

1. Maximum crew of 2 custodians, 1 armed guard and driver were present with the vehicle,

2. Gunman was standing safeguarding the vehicle.

3. Cash van was locked,

4. The main door of the cash van was also locked,

5. Cash trunk inside the cash van also locked,

6. The money was in the cash van, fabricated as per specifications.

The incident took place on a very populated main commercial road where the associates of the accused as part of their plan got themselves into a heated argument with the gunman who was standing between the cash cabin door of the cash van and the ATM observing both.  The associate accused persons rounded the gunman and started arguing with him.  Seeing the gunman being rounded the driver responsibly locked the vehicle and went to assist the gunman.  Over here the main accused persons diverted his attention and their other associates broke opened the lock of the cash van and took away the locked cash box from the cash van.

 

We further state that the company has also taken reasonable care by deputing 2 custodians, a driver and armed guard the crew which is required for the consignment of more than 4 crs, that too in a secured 4 wheeler cash van and not in any type of 4 wheeler. If this care taken by Co is read in view of condition no. 3 of insurance policy, it can been seen that company had taken more than reasonable care.  The instructions of chaining the cash box are in addition to the said reasonable care.  Further the position of gunman and driver will also show that they were near the cash van and the cash van was within their sight and thus it will show that cash van was well within their eyesight until the Gunman was made to enter into an argument and his attention was diverted by the miscreants as it was their conspired plan to rob the vehicle by diverting attention of security.

 

With reference to Exclusion 3, while the policy specifies controls like number of employees/ gunmen to accompany the transits, there is no reference in the policy for the cash box to be chained.  Chaining the cash box, therefore is a good to do precaution, not a must and not warranted under the policy.

 

Hence the loss will not fall under exclusion no. 3 of the policy.”

 

14. In the backdrop of such correspondence exchanged between the parties as well as the Surveyor, this Commission is to now determine whether there was any violation of Condition No. 3 of the Policy, on the basis of which the claim was repudiated. For that purpose, it would be appropriate to take note of the aforesaid Condition/Clause No. 3, which is set out below- 

“EXCLUSIONS: The Company shall not be liable in respect of-  

 ……..

   3. Money from unattended vehicle.”

 

15. Now in its cryptic Repudiation Letter, the Insurance Company did not explain what exactly was the “lack of caution and exhibition of negligence in handling cash in transit by employees of the insured i.e. non-exercise of reasonable care, or in what manner there was any Breach of General Condition 3 of the policy.”

16. In this regard, the submission raised on behalf of the Opposite Party/Insurance Company is that in the FIR lodged on behalf of the Complainant/Insured (Annexure C/3) itself, it had been mentioned that the staff/custodians of the cash being carried by the vehicle had been asked by the office, “to tie the cash box with chain and locking chain too. But on enquiry it was disclosed that the instruction was not followed.” Hence according to the Opposite Party, such failure to follow the office instructions on the part of the staff concerned amounts to such lack of caution and negligence/non-exercise of reasonable care.

17. On the other hand, it has been stressed on behalf of the Complainant, that according to the Exclusion No. 3, there is no requirement in the Policy conditions that the Cash box is to be “chained”. Such chaining of the Cash box can in itself be a good precaution, but it is neither a must, nor warranted under the Policy. The Complainant Side has further emphasised that the conditions as specified in the Policy guidelines concerning the cash in transit were fully met from its side in this case, on account of which it is incorrect to contend that there was any lack of caution on its part.

18. As seen from the specified Cash Carrying Guidelines issued by the Insurance Company itself, the requirements are as follows-

 

19. It is clear from the contents of the FIR lodged by the Complainant, and relied upon by the Opposite Party itself, that the stolen cash at the relevant time was being taken by the vehicle, of which the Driver was one Ram Pyare, and he was accompanied by custodians-Himanshu Sonkar and Anurag Tiwari, apart from a gunman namely Gyanendra Singh. The amount of cash being carried originally was Rs.1.90 crores, out of which Rs.52.00 lakhs had been loaded in the ATM of the Bank of Baroda, while Rs.5.00 Lacs were in the suitcase with custodian-Himanshu Sonkar, and the balance of Rs.1.33 crores was carried away by the thieves.  Considering the  manpower  requirement in terms of Serial Nos. 2 and 3 of the Guidelines Table reproduced above, clearly the requisite manpower had been provided along with the cash carrying vehicle. In fact, at the time of the theft, the total cash available was less than Rs.1.50 crores, on account of which there was actually more manpower available than that required according to the guidelines. In such circumstances, when the specified guidelines issued by the Insurer were followed by the Insured, it cannot be said that there was the breach of any Policy conditions, on the pretext that the Cashbox was not chained locked, as no such requirement was mentioned in the Policy guidelines. It is settled law that the terms and conditions of an Insurance Policy are to be strictly applied, and a Court cannot reinterpret or assign any new meaning to the words used in the Policy conditions. This position has been laid down by the Hon’ble Supreme Court in various decisions, some of which are referred to in the succeeding paragraphs.

20. In “Shree Ambica Medical Stores Vs. The Surat People’s Co-operative Bank Limited & Ors., (2020) 13 SCC 564”, the Hon’ble Supreme Court had held as under –

“The Court through its interpretative process cannot rewrite or create a new contract between the parties.  The court has to simply apply the terms and conditions of the agreement as agreed between the parties.”

 

21. Similarly, the Hon’ble Supreme Court’s Constitution Bench in “General Assurance Society Ltd.  Vs. Chandumull Jain, AIR 1996 SC 1644; and a plethora of other judgments has repeatedly held that there must be strict compliance with the terms and conditions of an insurance policy.  The relevant extracts from the decision are –

“a. In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves.”

b. “The terms of the policy have to be construed as it is and we cannot add or subtract something.  Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended.”

 

22. Again, the Hon’ble Apex Court in “Suraj Mal Ram Niwas Oil Mills (P) Ltd.  Vs. United India Insurance Co. Ltd. (2010) 10 SCC 567”, has, after discussing a catena of judgments in respect of insurance contracts, held as under :

“a. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the Court to add, delete or substitute any words.  It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer.  Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.”

b. It is trite that in a contract of insurance, the rights and obligations are governed by the terms of the said contract.  Therefore, the terms of a contract of insurance have to be strictly construed, and no exception can be made on the ground of equity.”

 

23. The Opposite Party has nevertheless sought to argue by citing some selective portions of the statements given by the staff accompanying the vehicle at the relevant time to the Police, to contend that there was lack of even basic care in protecting the Cash box, as it was neither chained, nor locked, as also that the Channel door and backdoor of the vehicle were open, which was an open invitation to anyone, and a cake-walk for the robbers to pick up the Cash box from the open and unattended van. This Commission is however not convinced by such arguments. The fact of the matter is that, it was an instance of theft on the part of an organised professional gang of criminals, who appear to have meticulously planned their operation by way of consciously distracting the cash carrying staff who were present at the scene, and at the van itself, at the relevant time. In his report, the Surveyor had taken note of the facts that 5-6 culprits had first come near the gunman-Mr Gyanendra Singh who was standing outside the ATM, where the cash was being loaded, and motivatedly picked up a heated argument by saying that it was taking too long for the loading, and they needed to withdraw their cash on an urgent basis. At this juncture, seeing the Guard surrounded by those men, the Driver came out to see what argument was happening, but before he could intervene, some more persons accosted him and started asking him some location address and directions motivatedly with a view to keep him engaged and distracted in such discussion, and thereby enabled the other culprits/gang members to break the knob of the vehicle door, and flee away with the Cash box. In such circumstances, it cannot be held that there was any lack of caution on the part of the concerned staff, as they could not have been expected to be aware in advance of such a meticulously planned operation of the criminals in this manner.

24. Consequently, this Commission is of the opinion that repudiation of the Insurance Claim, which was even found correct and admissible by the Surveyor/Investigator, was not justified. This is so firstly, because there was no violation of the Policy conditions since the requisite number of staff to accompany the vehicle was provided by the Insured at the relevant time, and secondly, the conscious distractions caused to those staff members by the culprits were very well capable of causing any other person(s) of ordinary prudence to act in the same manner as done by those staff(s) in the given circumstances.

25. For the aforesaid reasons the present Complaint is allowed with a direction upon the Opposite Party/Insurance Company, to pay the amount of Rs.1,26,35,000/- as determined by the Surveyor after deducting 5% of the total claimed amount of Rs.1.33 crores, in terms of the Policy conditions, within 02 months from the date of this Order, along with interest @ 6% per annum w.e.f. 45 days after the date of submission of the Complainant’s explanation letter dated 13th November,  2015 (Annexure C/12). 

26. Any delay in making such payment within the time specified shall result in enhanced interest @ 8% per annum on any outstanding amounts, till the date of final realisation.

27. Parties to bear their own costs.

28. Pending application(s), if any, also stand disposed off as having been rendered infructuous.