Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi
Complaint Case No.129/13.09.2018
M/s Scientific Security Management Services Pvt. Ltd.
E-1, Mansoravar Garden, New Delhi-110015
Also at- B-100, Second Floor, Naraina Industrial Area,
Phase-I, New Delhi-110028 …Complainant
Versus
OP1- Chairman
New India Assurance Co. Limited
New India Assurance Building, 87,
MG Road, Fort, Mumbai-400001
OP2-Senior Divisional Manager
New India Assurance Company Ltd.
4th, Floor, Channana Complex, 2213,
Gurudwara Road, Karol Bagh,
New Delhi-110005 ...Opposite Party
Date of filing: 13.09.2018
Coram: Date of Order: 08.02.2024
Shri Inder Jeet Singh, President
Ms. Shahina, Member -Female
ORDER
Inder Jeet Singh , President
1.1 (Introduction to case of parties) –The complainant has grievance of deficiency of services against the OPs that complainant took Fidelity Guarantee (unnamed floating) Policy no. 31130046110900000004 effective from 20.07.2011 to 19.07.2012 from OP2 (hereinafter referred as the insurance policy), however, on the eve of episode theft of Rs. lakhs on 05.01.2012 by infidelity by the employees of complainant during the period of policy, the claim was lodged, however, it was repudiated by the OPs on the pretext that two employees (i.e. a gunman and a driver) were not regular employees of the complainant and their services were hired for a single day i.e. 05.01.2012. That is why this complaint for claim of Rs. 10 lakhs along with @ 24%, cost of the complaint; legal expenses of Rs. 30,000/- for the present complaint, compensation of Rs. 5 lakhs for excessive delay besides other relief, since there were total five employees of the complainant found involved.
1.2. The complaint is opposed by the OP that there is no deficiency of services on the part of OP. The claim was not found within the purview of policy and that is why the claim was repudiated. It was also noticed during the survey that two persons namely Maruti Jagtap and Ram Naresh Pandey were not regular employees of complainant but they were engaged on the day, when episode occurred, it is not covered under the condition of policy, which mandates that “loss shall only be admissible, if any, fraud/dishonesty has been committed by a person. who are in uninterrupted service with the insured”. The aforesaid persons were not in uninterrupted service of the complainant, accordingly the claim was not admissible and the same was repudiated in terms of policy condition.
2.1. (Case of complainant) –The complainant is a private limited company incorporated under the Companies Act (vide CIN no.U74899DL1974PTC007333), having a resettlement project by the Ministry of Defence and in consultation with and under the instructions of Ministry of Home Affairs, Govt. of India. The paragraph-3 & 4 of complaint gives detail of services being rendered by the complainant on All India basis, which includes bank and ATM maintenance, ATM cash management, FLM, SLM and CIT services contractual labour, amongst other services. The complainant has been engaged in the business of cash management services with the operationalisation of cash in transit (CIT) and ATM replenishment services of the company, from the year 2007 to 2016. Because of ethical business services, it has earned name and fame and it has distinction as a respectable corporate entity in the business domain.
2.2. The complainant took the insurance policy from OP2 to cover risks of losses in business and the complainant paid premium of Rs.3,82,670/- for 1256 persons, subject to guarantee limit per person of Rs.50 lakhs and total guarantee amount of Rs. 5 crore and the person/cadre covered are for custodian/drivers/gunmen.
2.3 During the period of policy, an episode happened due to infidelity of the employees of complainant and a claim was lodged by the complainant with the OPs on account of loss of cash of Rs. 10 lakhs at Pune office on 05.01.2012, which was discovered on 06.01.2012.
On receipt of information of the occurrence, the OP2 deputed surveyor M/s Bhadra Insurance Surveyor and Loss Assessor Pvt. Limited. The surveyor had carried enquiries and thorough investigation, than submitted the report to the OPs on 06.03.2016. It is made out in the report by the surveyor that on 05.01.2012, the ECMC route was started in routine manner, a sum of Rs. 1.15 crore was being carried to be replenished in various ATMs, although a sum of Rs. 1.05 crore was loaded but Rs. 10 lakhs was not loaded, while returning at around 2.15am. On 06.01.2012 it was noticed that cash amounting to Rs. 10 lakhs was stolen.
2.4. The complainant has cooperated with the deputed surveyor and also with OP2, that the claim will be processed in time as well as the complainant will get its legitimate loss compensative since the claim was genuine. However, it surprised and shocked the complainant, since OP2 sent a letter on 27.03.2017 that the claim lodged stand repudiated on the pretext that two employees (i.e. a gunman and a driver) were not regular employees of the complainant but their services were hired for a single day on 05.01.2012.
Whereas, it is evident from the surveyor’s report that complainant’s claim is admissible but the OPs deliberately with mala-fide intensions repudiated the claim. Then complainant sent legal notice dated 21.04.2018 through its counsel, while calling upon the OPs to pay Rs. 10 lakhs in respect of valid claim within 60 days and the OPs vide their reply dated 19.05.2018 tried to shrugging their responsibility on flimsy ground. That is why the complaint for relief claimed and it is within limitation.
2.5 The complainant is accompanied with supporting affidavit, another affidavit u/s 65B of Indian Evidence Act, Board Resolution besides, copies of- repudiation letter, surveyor report, insurance policy, FIR, police report, legal notice, its reply besides all correspondence (including list of employees), documents with the surveyor report.
3.1 (Case of OPs)-The OP does not deny the policy or its tenure from 20.07.2011 to 19.07.2012, however, the original policy along with its terms and conditions was sent to the complainant company and admissibility of claim was subject to terms and conditions of the policy.
The complainant company notified OPs about loss of Rs. 10 lakhs mis-appropriated from its Pune office on 05.01.2012, thence on receipt of this information the OP appointed M/s Bhadra Insurance Surveyor and Loss Assessor Pvt. Ltd. for assessment of the loss; the surveyor made the enquiry and submitted its reported dated 26.03.2016. The report mentions about the departure of vehicle carrying cash, its route and its returning back around 2:15 pm, when it was noticed that cash amounting to Rs.10 lakhs was stolen. On that date of loss the persons in the vehicle were namely Vikram Prabhu Jadhav, Vikram Chandra Kant, Dhanraj Kallurkar besides Ram Naresh Pandey and driver Maruti Shrimant Jagtap, out of them Maruti Jagtap and Ram Naresh Pandey were not regular employees but both of them were engaged on the said date only. Whereas the insurance policy clearly stipulates that the loss shall only be admissible if any fraud/dishonesty has been committed by a person, who is in uninterrupted service with the insured. It is manifest that the said two persons were not in uninterrupted services, that is why the claim was not admissible and it was repudiated. No amount is payable to the complainant under the policy. The complaint is without merits.
3.2. The OPs also deny other allegations of the complaint or the averments with regard to agreement with M/s TCBIL to carry out cash replenishment of ATMs on behalf of various banks of Pune or other places on Pan India basis and such detail were not provided to the OPs at the time of seeking insurance coverage. The OPs also denies other averments in the complaint, while referring the report of surveyor vis-à-vis it involves complex question of law and fact, which cannot be determined in a summary way. The complaint is liable to be dismissed.
4.1. (Evidence)- The complainant led its evidence by filing detailed affidavit of Sh. Pawan Kumar, General Manager, with the support of voluminous documentary record, which was appended with complaint.
4.2. The OPs also led their evidence by filing detailed affidavit of Sh. Darbara Singh, Regional Manager, it is on the lines of /written statement, with documents fidelity guarantee unnamed (floating insurance) policy, surveyor’s report dated 26.03.2016, copy of legal notice and its reply by the OPs.
5.1 (Final hearing)- Both the parties have filed their written arguments in detail, however, they are replica of their pleadings and evidence. Moreover, both the parties were given opportunity to make oral submissions. Then, Sh. Sachin Dhamija, Advocate for complainant presented the case but no oral submissions on behalf of OPs for want of appearance. However, the written submission of OPs will be considered while appreciating the contentions of the parties.
5.2 It is material to mention additional points from the written arguments of complainant, that the OPs formed an opinion that simply hiring of temporary staff from the market attributes to the rejection of claim but OP failed to appreciate that complainant was into domain of cash in transit business and in certain exigencies, people were to be hired for a day. Had the police mentioned in the report that temporary staff exclusively involved then the plea of repudiation would have been justified but it is not so?. In fact, repudiation of the claim just on inclusion of temporary staff is unjustified, when there is legitimate claim of the complainant.
On the other side, the OPs also refer vehemently, that terms and conditions of the policy are binding on the complainant and the claim was properly repudiated that too when it came into the report of the surveyor that Maruti Jagtap and Ram Naresh Pandey were not the regular employees, both of them were engaged on the said date only. In New India Assurance Co. Ltd. Vs. Deepak Anand III 2014 CPJ 373, it was held that the rights and obligations under the policy are governed by terms of contract, which are binding upon the parties. For want of observation thereof, it can vitiate the policy and may absolve the company of its liability. In Punjab National Bank Vs. Tarun Printers III 2018 CPJ 581, it was also held that policy cannot be interpreted differently by the courts and they are to be interoperated in terms provided for.
6. (Findings)- The rival contentions are considered and assessed including evidence of parties, the documentary record besides case law referred. At the outset, the written arguments are blend of pleading and evidence, which have already been referred in the case of parties and addition aspects have also been referred in sub-paragraph 5.2 above, with case law. The other aspects presented orally on behalf of complainant will be referred appropriate, while dealing with the consumer dispute.
7.1. The OPs have taken preliminary objections that there is complex question of law and fact, it cannot be decided on summary basis and the complaint is liable to be dismissed. Whereas, Ld. Counsel for complainant counters this plea that there is nothing brought or highlighted or suggested on behalf of OPs to construe that there is any such question of law or fact or otherwise any question which cannot be determined by the present Commission. The OPs have taken the objection just for the sake of objections. There is no merit in such objection.
7.2. This plea is considered keeping in view the material on record. Although, the OPs have taken an objection that there is question of fact and law to be determined by the Civil Court. However, nothing has been substantiated as to what exactly the question of law and/or of fact which cannot be determined by the present Commission. Even that question has not been whisper at any place in the pleading, evidence or arguments. Moreover, it is not barred under the summary procedure to access the case of the parties (either in the form of pleadings or evidence inclusive of documentary evidence) by looking into the statutory provisions of law or case law etc. Even the insurance policy and its contents may also be looked into, to appreciate the rival contentions and decide them. Therefore, the present District Consumer Dispute Redressal Commission, Delhi is competent to decide the consumer dispute. This contention is disposed off against OPs.
8.1 The OPs also raised an objection that complainant's agreement details Pan India was not provided, while taking the policy, however, it is opposed by the complainant that before issuing the insurance policy, the OPs had satisfied with the requirements of policy, the nature of risks and perils, thence premium was accepted and insurance policy was issued. But now in order to avoid its liability, this objection is being taken but it would not help the OPs.
8.2. The documentary record carries answer to this issue; it needs a cursory reading of insurance policy and repudiation letter. Firstly, when the insurance contract entered between the parties, it was on the basis of proposal and its acceptance. Both the parties know the nature of insurance policy, risks involved etc. The OPs are professional insurance institution. Had that information was a condition precedent or requirement for entering into the contract of insurance, it could have asked by the OPs. But there is no requisition of such record, nor proof of any requisition.
Secondly, the OPs cannot travel beyond the ground of repudiation letter and the repudiation letter does not mention any such ground of want of copy of agreement or its details was not provided. This contention of OPs also stand disposed off.
9.1 . The other dispute is with regard to whether the complainant is entitled for the relief claimed vis a vis the repudiation of claim was rightly invoked. On the one side the complainant's case is it has a genuine and valid claim, the episode happened is covered under the terms and conditions of policy, especially the policy was taken and policy was issued under the Fidelity Guarantee (unnamed floating) insurance. The name of policy itself speaks that it is floating quality by unnamed, which means there may be change of numbers of employees but insurance policy will remain intact, however, it is subject to maximum number of persons covered upto 1256. It does not bar to hire the employees under contingencies, since it may happen in the organization that in the continuity of its working many employees may join as well as keep on leaving the organization. There were five employees and police had also investigated the matter after registration of FIR, all of them have been charge-sheeted, the record of charge-sheet has also been proved. The OPs repudiated the claim on simply and flimsy ground that two of the employees were not in uninterrupted services of complainant. This ground of OPs is not valid and acceptable.
But on the other side, according to OPs, the terms and conditions of the policy are to be complied-with, however, the stipulations do not make the claim admissible, consequently the claim was repudiated appropriately. The surveyor has also furnished the report which clearly depicts that the driver and gunman were engaged on the same very day. The claim was not covered under the policy.
9.2 In order to appreciate this core issue of the case, it needs to refer relevant extract from the insurance policy, inclusive of definition of the employee and the operating portion of repudiation letter, thence it will be dealt with the other material facts inclusive of surveyor’s report.
(a) Title of the Policy- The title of insurance policy is 'Policy Schedule for Fidelity Guarantee (Unnamed Floating) Insurance'. There are further covenant of number of employees/person of 1256, besides risk covered per person and total guarantee amount. The nature of policy and its name also elaborate that it is in respect of unnamed floating that person may keep on changing by admission or relieve from the employment subject to other covenant of number of person and sum insured.
(b) Proviso to clause (ii)- If this policy shall be continued in force for more than one period of indemnity or if any liability shall exist on the part of company under this policy and also under any policy in respect of fraud or dishonestly of the employees, the liability of the Company hereunder shall not be accumulated or increased thereby but the aggregate liability of the Company of the Company during any number of periods of indemnity and for any number of acts of fraud or dishonesty committed by the employee shall not exceed the sum insured hereunder or the sum insured under any other such policy as aforesaid whichever is greater.
(c) Definition- The terms “Employee” wherever appeared in this policy means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the insured’s trade or business) who has entered into a contract of employment with Insured whether such contract of employment is expressed or implied, oral or in writing.
(d) [the operating part of repudiation letter} - The OPs in its repudiation letter mentions that Mr. Maruti Jagtap was not a regular employee and Ram Naresh Pandey was an outsourced employee- “admittedly both the above employees were not under your uninterrupted service and are only employed on the particular date as such the money which has been lost and appropriated by the said persons is not payable under the terms of the policy. The breach as committed is fundamental in nature. Accordingly the claim is not admissible and it stands repudiated."
9.3 By taking into stock of facts, features and documentary record along-with the material mentioned, the following conclusions are drawn:-
(i) The insurance policy is in respect of in Fidelity Guarantee (unnamed Floating) policy and its name itself suggests that the persons covered are 1256 but the same is subject to unnamed floating, which means the number of persons may decrease or may increase, but subject to maximum number of persons will be 1256. There is no covenant in the policy that the complainant was obliged to inform the insurer/OPs in the eventuality of decreasing the number of employees or increasing such number of employees. Further, when some of the persons leaves of the organization or some other persons joins, the same will be covered under the policy subject to maximum limit of 1256 persons and sum insured.
(ii) The definition of employee in its scope includes the persons who have been given the employment expressly or impliedly, either in oral or in writing.
(iii) The OPs have proved the surveyor’s report and it came to the conclusion (page-15/para-18.10) after examining the list of employees as on 25.01.2012, wherein name of three employees Vikram Prabhu Jadhav, Vikram Chandra Kant and Dhanraj Kallurkar were discovered in the list vis-à-vis their names were also found in the police FIR but there were other two were guards. The surveyor mentions about the admissibility of claim under the policy, subject to final police report.
(iv). The complainant has also proved the list of employees. The surveyor has also considered the list of employee, while rendering its report. Moreover, the complainant has proved the charge-sheet of case FIR no. 13/12 dated 06.01.2012 P.S. Chatur Shringi, District Pune [which is in vernacular of local language along-with its true translation in English] in respect of Vikram Prabhu Jadhav, Vikram Chandra Kant, Ram Naresh Pandey, Dhanraj Kallurkar and Maruti Shrimant Jagtap. To say, all the five, who were on duty on that day in the vehicle, when episode had happened, have been charge-sheeted in the competent court of law.
(v) The surveyor furnished his report dated 26.03.2016 in respect of incident of theft loss of 05.01.2012 and admissibility of claim was stated to be subject to the police report. It is proved fact that police had filed the charge-sheet against all the aforementioned five persons. The surveyor also narrates the episode in paragraph-14.0/page-4 of his report besides other facts discovered by him. The para-16/page-9 of the report also mentions that all the said five persons were arrested by the police and they are facing criminal trial in the competent court of law.
(vi) There is no dispute in respect of three employees Vikram Prabhu Jadhav, Vikram Chandra Kant and Dhanraj Kallurkar, however, the OPs have reservation in respect of other two namely Maruti Jagtap and Ram Naresh Pandey that they were not in uninterrupted services of the complainant or they were engaged on that day of 05.01.2012. As per charge-sheet inclusive of statements of Ram Naresh Pandey and of Maruti Jagtap, being prima facie, they had joined the complainant organization and worked for them on the date of incident.
(vii) However, as per the definition of employee in the insurance policy, the employee ought to have been in un-interrupted services of the complainant, but it does not mention any specific period or days etc to be construed for the purposes of uninterrupted services. The three employees were custodian of cash. Thus, other two Maruti Jagtap and Ram Naresh Pandey are the covered person for the purposes of insurance policy because of their working with the company on that day as driver of vehicle and gunman that too for that trade and business of complainant company,
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(viii) There is no evidence by the OPs that Ram Naresh and Maruti Jagtap were not working in/for the complainant company vis-à-vis there is no contrary evidence by OPs from the facts emerged in the police investigation of their working with complainant was other than for the trade or business of complainant and
(ix) The complainant took fidelity guarantee (unnamed floating) insurance policy and there is nothing which bars to take services other persons other than regular employees, whose names are not mentioned in the list which was furnished at the time of taking policy.
9.4 The analysis and conclusions drawn from record, clearly establish that on 05.06.2012 the cash was handed over and collected by the custodians for its replenishment in ATMs and their names are Vikram Prabhu Jadhav, Vikram Chandra Kant, Maruti Jagtap, Ram Naresh Pandey, Dhanraj Kallurkar and out of them driver of the vehicle was Maruti Jagtap and gunman was Ram Naresh Pandey. An amount of Rs. 10 lakhs was not replenishment in the ATMs and that was to be returned, but it was stolen for which complainant had lodged the police report; all the said five have been charge-sheeted and criminal trial is pending against them. The complainant had also informed the episode to OPs. The episode happened is covered within the insurance policy, its definition and other covenants read with the circumstances collated by the surveyor in its report and the case proved by the complainant. Since there is valid and genuine claim of theft loss of Rs. 10 lakhs, but it was repudiated by OPs, it amounts to deficiency of services. The complainant has succeeded to establish the complaint and circumstances against OPs. Therefore, the complainant is entitled for claim of Rs. 10 lakhs, it is within the parameter of guarantee limit of Rs.5 lakhs person.
9.5. The complainant has claimed interest @ 24% pa, however, there is no agreed or concrete evidence to prove the rate of interest. However, had the complainant’s claim been settled in time, the complainant would have earned interest on that amount or to utilize it optimum? Therefore, interest @ 4% pa from the date of complaint till realization of amount would meet both ends.
10. The complainant has also sought compensation of Rs.5,00,000/- for inordinate delay in processing the claim by OPs, besides costs as well as legal expense of Rs. 30,000/- for filing the complaint. However, the compensation ought to be commensurate with the situation of a case, since the complainant’s claim was not settled and it felt harassment and delay, therefore, compensation of Rs. 50,000/- (being consonance to the situation) is allowed in favour of complainant and against OPs. The cost of litigation is also determined as Rs.15,000/-in its favour and against the OPs.
11. Accordingly, the complaint is allowed in favour of complainant and against the OPs to pay loss amount of Rs. 10 lakhs along-with interest at the rate of 4% pa from the date of complaint till realization of amount, besides to pay compensation of Rs.50,000/- & costs of Rs.15,000/- to complainant. OPs are also directed to pay the amount within 45 days from the date of this order. In case amount is not paid within 45 days from the date of order, then interest will be at the rate of 6% pa on amount of Rs. 10 lakhs (instead of 4%pa).
12. Announced on this 8th day of February 2024 [माघ 19, साका 1945]. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules and to upload it on the website of this Commission.
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