(Per Shri Narendra Kawde, Hon’ble Member)
(1) Complainant, VNS Finance & Capital Services Ltd. (for the sake of brevity ‘complainant company’) registered under Companies Act, 1956 has filed this consumer complaint against the opponent, The New India Assurance Co.Ltd. (for the sake of brevity ‘opponent insurance company’) and others alleging deficiency in service for not settling the claim payable under the insurance policy, claiming an amount of `9,30,600/- along with an interest @15% p.a. and `1,00,000/- on account of damages and further amount of `15,000/- as costs of litigation.
(2) The salient facts giving rise to file this consumer complaint are :-
The complainant company subscribed to the policy, namely, ‘Stock Brokers Indemnity Policy’ for trading members issued by opponent No.1 & 2 insurance company valid for a period from 01/06/1999 to 31/05/2000 with an indemnity limit of `1,00,00,000/- with certain terms & conditions as agreed upon. On 14/02/2000 at about 9.58, one of the clients, Shri S.K.Gupta instructed telephonically to buy 2000 shares of Zenith Exports from the open market, but mistakenly booked 2000 shares of Zenith Infotech which were listed for the first time. Face value of the shares was high as `1,999/- per share as against market price of `300/- to `400/-. On realizing the error, attempt was made by them to cancel the entire transaction as such facility was available on NEAT trading system. But by the time i.e. 10.00.53 a.m., 1700 Zenity Infotech shares were already purchased and rest of 300 shares were not availed. In this transaction, it the case of the complainant company that they incurred loss of `9,99,999/- as they were required to pay the abnormal face value of mistakenly booked Zenith Infotech shares. They had sincerely admitted the error to Capital Market Operation Department of National Stock Exchange, but they did not cancel the same. Immediately they informed the loss sustained due to mistaken transaction to the opponent No.1& 2. They have tried to minimize the loss at least by canceling balance 300 shares as the order was for 2000 shares. On intimation to the opponent No.1 & 2 of the loss due to mistaken booking of the shares (not as per the request of their client), the opponent insurance company appointed authorized surveyor, who visited the office of the complainant company and also gathered required information for the purpose of investigation. Thereupon, the delivery of the shares of 1700 by investing an amount was required to be taken on 15/02/2000 and complainant company disposed these unwanted shares was continuously informed to the opponent insurance company. The falling/declining price of the said shares was also intimated diligently to the opponent No.1 & 2 insurance company and finally 1700 shares were sold at revised price of `299/- per share by incurring total loss of `9,30,600/- in the said transaction. The complainant company filed insurance claim under the policy. No response came forward from the opponent No.1& 2 insurance company, in spite of constant persuasion. Ultimately, on 22/11/2000, the opponent insurance company repudiated the insurance claim on the ground that the transaction undertaken by the insured or his employee is not covered under the policy and the alleged loss debited to the ‘V’ account code of the complainant company and closed the file as Non-claim. Aggrieved by the repudiation, the consumer complaint has been filed by the complainant company before this Commission claiming the amount of loss together with interest @15% p.a. thereon and damage `1,00,000/- together with cost of `15,000/- for this litigation.
(3) The complaint was admitted and after issuing notice to the opponent No.1 & 2, they filed written version and affidavit evidence denying the claims of the complainant company stating that the ‘Stock Brokers Indemnity Policy’ for the trading on NSE issued by them did not cover the loss as claimed by the complainant company, since the transaction for purchase of shares was undertaken by the complainant company in their name and not in the name of their client. Therefore, loss occurred on account of such an event is excluded under the provisions of Insurance Policy vide General Exclusion Clause (A)6. The opponent insurance company tried to defend their action of repudiation of claim under the insurance policy.
(4) This is an old complaint placed on board for hearing and disposal. Though notices were served on the opponents, none of the opponents remained present and at the time of hearing on 12/07/2011, 13/09/2011, 16/02/2012, 03/07/2012, 26/07/2012. Finally on 27/07/2012, the case was proceeded against the opponents as they have failed to file the evidence as ordered. When the case was finally heard on 27/07/2012, the learned counsel for the complainant was present, however none of the opponents or their advocates were present. Therefore, the case was heard and it was pronounced on dais dismissing the complaint for the reasons to be recorded separately.
(5) The learned advocate for the complainant submitted that it was a bonafide mistake on the part of the complainant company to buy shares of Zenit Infotech instead of Zenith Exports as instructed by their client, Shri S.K.Gupta on phone. Though, sincere efforts have been made to cancel the transaction immediately by intimating the opponent No.1 & 2 and more particularly the opponent No.3, all the efforts, however, proved futile. To minimize the loss, the complainant company after due information to all the opponents, sold 1700 shares of Zenith Infotech @ `299/- per share (at reduced price) which were bought at face value of `1,999/-, thereby incurring loss of `9,30,600/-. Although, the authorized surveyor was appointed who has submitted his report, but did not supply the copy of the survey report to the complainant company, the opponent insurance company rejected the claim under the policy on the ground that Exclusion Clause (A)6 of the insurance policy which according to the opponents does not cover loss arisen out of transactions in the complainant company’s name or their employees.
(6) On perusal of the record placed before us, we find that the complainant company has admitted their own mistake of booking shares of company other than the one is required by their client. Also according to them, they have tried to cancel the transaction by approaching opponents as fast as they could and all their efforts to cancel the transaction did not yield the desirable results. It is admitted that the six-digit code in their back office software was difficult to punch immediately and therefore, for safety and convenience, they developed a software to convert the six-digit code in one or two-digit code. Instead of pressing button ‘T’ for S.K.Gupta, it was pressed button ‘V’, the code ‘V’ as admitted is used for arbitration and not for complainant company. Thus, the complainant company committed mistakes on two occasions. Firstly they booked shares of wrong company at higher rates and even at the time of punching committed mistake by pressing code ‘V’ instead of pressing code ‘T’.
(7) The opponent No.3 i.e. National Stock Exchange did not appear though served. The request to cancel the said transaction instantly made by the complainant company was not entertained by the respondent No.3 and therefore claimed `9,99,999/- against the opponent No.1 & 2 insurance company. We do not find documentary evidence as required to support the submission of the complainant company to establish that the said transaction was undertaken in good-faith for their client as there is no conclusive proof/evidence as claimed by the complainant company. On going through the terms & conditions of the insurance policy, such a transaction as claimed by the complainant company is not covered under Chapter 5, especially there is nothing on record to show that the transaction on behalf of the complainant company was operated by experienced staff only and this being a major order was re-confirmed by calling the client prior to execution of such order. The loss suffered has not been assessed and reported by the surveyor stating whether it was judgement of error or whether it was genuine or not. The survey report, however, is not available on the record though the opponent No.1 & 2 appeared and filed written version together with affidavit evidence. It is the grievance of the complainant company that the survey report is not on record and though constantly demanded the copy thereof was not issued to them by the opponent No.1 & 2 insurance company. Issue of copy of survey report to the complainant company is a mandatory requirement under the provisions of Insurance Act, 1938. However, we do not find any justification on the part of opponent insurance company to comply with these statutory provisions to issue a certified copy of survey report. The survey report cannot be called confidential or inaccessible document as it is an important piece of evidence to be placed on record and copy thereof must be supplied to the aggrieved complainant.
(8) In the facts & circumstances, we do not find any merit in the complaint. Therefore, repudiation of the insurance claim by the opponent no.1 & 2 insurance company cannot be faulted with and cannot be an arbitrary one. Therfefore, no deficiency in service can be attributed to the opponent insurance company. No relief whatsoever has been prayed or sought against the opponent No.3, National Stock Exchange. We hold accordingly and pass the following order.
ORDER
(1) Complaint stands dismissed.
(2) Under the circumstances, parties shall bear their own costs.
(3) Inform the parties accordingly.
Pronounced on 27th July, 2012.
