DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
PATIALA.
Consumer Complaint No. 126 of 15.6.2015
Decided on: 11.8.2016
The Patiala Central Cooperative Bank Ltd., Patiala through its District Manager.
…………...Complainant
Versus
- The New India Assurance Co.Ltd. Patiala through its Divisional Manager, Opposite Income Tax Office, Leela Bhawan, Patiala.
- Divisional Manager, the New India Assurance Co.Ltd., Opposite Income Tax Officer, Leela Bhawan, Patiala.
………Opposite Parties.
Complaint under Section 12 of the
Consumer Protection Act,1986.
QUORUM
Smt.Neena Sandhu, President
Smt.Neelam Gupta, Member
ARGUED BY
Sh.Manjit Singh,Advocate, counsel for the
complainant.
Sh.D.P.S.Anand,Advocate, counsel for the
Opposite Parties.
ORDER
SMT.NEENA SANDHU, PRESIDENT
The complainant i.e. Patiala Central Cooperative Bank Ltd., Patiala through its District Manager has filed this complaint under Section 12 of the Consumer Protection Act,1986 (hereinafter referred to as the Act) against the Opposite Parties (hereinafter referred to as the O.Ps.) praying for issuance of the following directions to them:-
- To pay a sum of Rs.7.00 lacs alongwith interest @ 18% P.A. from the date of loss,
- To pay a sum of Rs.2.00 lac as compensation on account of harassment and financial loss
- To pay a sum of Rs.50,000/- as litigation expenses.
- To award any other relief , which this Forum may deem fit.
2. In brief, the case of the complainant is that it obtained a policy namely ‘Bankers Indemnity Insurance Policy’, from the O.Ps. for the period from 1.5.2013 to 30.4.2014, for the basic sum of Rs.30.00 lac, covering the transit, forgery and alteration in respect of cheques, and drafts etc. It received a draft bearing No.838141 dated 24.10.2013 for an amount of Rs.7,00lac showing in favour of Ravi issued by the Punjab State Cooperative Bank, SCO 175-187 Sector 34-A,Chandigarh and it was made Collecting Bank for its payment. The State Bank of India, branch Patiala sent the draft for clearance which was cleared by the complainant / bank on 29.10.2013 for its payment
After 29.10.2013, it sent the claim for the payment of Rs.7.00lac from the Punjab State Cooperative Bank Ltd., Chandigarh. On 15.11.2013 Sh. Gurnam Singh, its employee visited the office of the Punjab State Cooperative Bank LTd., Chandigarh for reconciliation of the amount, which was cleared by it and came to its notice that draft No.838141 of Rs.7.00lac was not drawn/issued by Punjab State Cooperative Bank Ltd., Chandigarh and sought the copy of the draft from it On 16.11.2013, it received a telephonic message from the officer of the Punjab State Cooperative Bank Ltd. regarding the draft being fictitious one as the number of the draft did not tally.
It contacted State Bank of India, The Mall Branch, Patiala and it came to know that the amount of the draft was credited/deposited in State Bank of India Branch at Ferozabad (UP) in Account No.33318924305 in the name of Ravi R/o 24/3 Sohag Nagar, Ferozabad. The account was opened on 8.10.2013.
On 18.11.2013, the official of the complainant visited the Managing Director of the Punjab Cooperative Bank Ltd., Chandigarh alongwith the record and it was found that there was material alteration made in the draft for committing a fraud of Rs.7.00lacs. Sh.Rajesh Singla, appointed by it as Inquiry Officer, gave the report that originally draft was of Rs.1000/-on 24.7.2013 and the material alteration was made very carefully in sophisticated manner and fraud has been played with it. It ent a letter dated 19.11.2013 for registration of the criminal case to SSP, Patiala and an FIR No.120 dated 31.5.2014 was registered in P.S.Kotwali, Patiala under Sections 420,467,468 and 471 IPC against Ravi son of Teja R/o House No.24/3,Sohag Nagar, Ferozabad (UP). In the hand writing expert report dated 2.10.2014 got by it from Dr.Inderjit Singh, Hand Writing Expert, has given the opinion that the amount in digit was written as 1000/- and subsequently changed to 7.0 lacs and the word 7 has been written by erasing the letter “0” of one and the word “Thousand” with the use of chemical eraser and adding “Se” and the original digit in the date in the month ,portion has been cut from its top portion and its lower semi-curve is carefully joined and the word Raju has been firstly written in the first line of the draft was changed by Ravi by adding a stroke from the middle of the staff of letter “j”. The left leg of “u”.
It submitted the claim with the O.Ps. for an amount of Rs.7.00 lac. The O.Ps. appointed Sh.Rajiv Goyal, Chartered Accountant, as Surveyor and Loss Assessor. On the receipt of letter dated 13.2.2015, it explained him the system of clearing and reconciliation. Vide letter dated 11.6.2014, it also supplied to the surveyor, copy of FIR, internal report, clearing reconciliation draft and newspaper cutting but to the utter surprise of it, the O.Ps. vide letter dated 16.3.2015 wrongly rejected the claim as NO CLAIM stating the reason that the company shall not be liable in respect of the loss without any cogent reason, which amounts to deficiency in service on the part of the O.Ps. A legal notice dated 15.5.2015 sent on 16.5.2015 was also got served upon the O.Ps for the payment of Rs.7.00lac alongwith interest @ 18% per annum and Rs.2.00lac on account of harassment and financial loss caused to the complainant within 15 days from the receipt of the notice, but the O.Ps. failed to accede to its request. Hence this complaint.
3. On being put to notice, the O.Ps. filed written version through their counsel taking preliminary objection that the complaint is not maintainable as the complainant does not fall under the definition of consumer. On merits, it is stated that the O.Ps. have issued ‘Bankers Indemnity Insurance Policy’ in favour of the complainant, for the period 1.5.2013 to 30.4.2014, for a sum of Rs.30 lacs, as basic premium and additional cover was also issued for money in premises to the extent of Rs.27 lacs and Rs.30 lacs for money in transit. It is denied that policy covers forgery, alteration in respects of cheques & drafts and also dishonesty of others. On receipt of the intimation of loss, Sh.Rajiv Goyal, Charted Accountant, Surveyor and Loss Assessor , Patiala was appointed to survey and investigate the loss , who in his report dated 10.3.2015 found that there were number of deficiencies in the system which have not been followed regularly. The above said draft was altogether altered in respect of date, punching, amount changed in words and in figures also, draft No., cutting and new draft No., pasted.. It is stated that the report of Hand writing expert has been obtained by the complainant for its self serving purposes in order to create evidence and the loss was occurred due to the negligence of the employees of the insured for which the O.Ps. are not liable as per clause (b) of Exceptions of the policy issued and there is no deficiency of service on the part of the O.Ps. After denouncing all other averments made in the complaint, it was prayed to dismiss the complaint.
4. In support of the complaint, the learned counsel for the complainant tendered in evidence Ex.CA the sworn affidavit of Dr. Inderjit Singh, Handwring & Fingerprint Expert, Patiala, Ex.CB, the sworn affidavit of Sh.Gurnam Singh, Assistant Manager, The Patiala Central Cooperative Bank Ltd., Ex.CC, the sworn affidavit of Sh.Rajesh Singla, the then Sr. Manager, The Patiala Central Cooperative Bank Ltd., Ex.CD the sworn affidavit of R.K.Malhotra, District Manager, the Patiala Central Cooperative Bank Ltd.,Ex.C1 report of Dr.Inderjit Singh, Hand Writing and Fingerprint Expert, Ex.C2 to C6 , photographs of draft, Ex.C7 copy of enquiry report Ex.C8 copy of enquiry proceedings, Ex.C9 copy of letter dated 16.3.2015, Ex.C10 copy of Bankers’ Indemnity Insurance Policy, Ex.C11 copy of letter dated 11.6.2014, Ex.C12 copy of letter dated 23.5.2014, Ex.C13 copy of letter dated 19.11.2013, Ex.C14 copy of letter dated 16.11.2013, Ex.C15 copy of letter dated 18.2.2015, Ex.C16 copy of FIR, Ex.C17 copy of draft, Ex.C18 copy of letter dated 13.1.2014, Exc.C19 copy of Policy Schedule for Bankers Indemnity Policy, Ex.C20 copy of legal notice dated 15.5.2015, Exs.C21 & C22 postal receipts, Ex.C23 copy of letter dated 28.8.2014, Ex.C24 copy of Instrument Detailed Listing, Ex.C25 copy of clearing House Balance Register, Ex.C26 copy of extract of news paper ‘Patiala Kesri’, Ex.C27 copy of account opening form, Exs.C28,C29,C30, C31, C32, C33, C34, copies of computerized filled up forms, Ex.C35 copy of resolution ,Ex.C36 copy of survey report, Ex.C37 copy of resolution and closed the evidence.
5. The learned counsel for the O.Ps. tendered in evidence Ex.OPA, the sworn affidavit of S. Sidhu, Sr. Divisional Manage, New India Assurance Co., Ex.OPB, the sworn affidavit of Rajiv Goyal, Surveyor and Loss Assessor, Ex.OP1, copy of policy schedule for Bankers Indemnity Policy, Ex.OP2, copy of repudiation letter dated 16.3.2015, Ex.OP3, copy of draft, Ex.OP4 copy of Form-2-B, Ex.OP5 copy of Clearing House Balance Register, Ex.OP6 copy of Instrument Detailed Listing, Ex.OP7, copy of survey report, Ex.OP8 to OP10 copies of computerized forms, Ex.OP11 copy of letter dated 13.1.2014, Ex.OP12, copy of draft, dated 4.1.2014, Ex.OP13 copy of draft dated 28.6.2014 and closed the evidence.
6. We have heard the learned counsel for the parties, gone through the written arguments filed by the learned counsel for the complainant and also gone through the record on the file carefully
7. The learned counsel for the complainant submitted that complainant bank obtained a ‘Bankers Indemnity Insurance Policy’ Ex.C-10, which covers the insurance of the basic sum of Rs.30 lac covering transit, forgery and alteration in respect of cheque / demand draft, for the period 1.5.2013 to 30.4.2014 from the O.Ps. The complainant bank received a draft bearing no.838141 dated 24.10.2013, Ex.C17, for Rs.7 lac for clearance. Said cheque was cleared by the official of the Bank . Thereafter, complainant bank came to know that in the said draft alteration was made cleverly and fraud was played with the complainant bank. As the bank was duly insured with the O.Ps., it lodged the claim with the O.Ps. for indemnication of loss suffered by it. However, the O.Ps. vide letter dated 16.3.2015 Ex.C9/OP2 have wrongly rejected the claim on the ground that loss has occurred due to negligence and omission on the part of the employee of the insured, which amounts to violation of the terms and conditions of the policy. It is further submitted that the facts of this case are identical with the facts of the case titled as Jila Sahkari Kendriya Bank Maryadit Verus United India Insurance Company Ltd. 2011(2) CLT(1),wherein the Hon’ble State Commission Chhattisgarh has held that there is discrepancy in the terms of the policy. Such discrepancy leads to ambiguity. It is further held that the discrepancy in the policy is to be decided in favour of the complainant as specifically the Ops have undertaken to indemnity the loss , up to the sum insured caused by acts/ and or omissions of the employee(s) of the bank. The exclusion term of insurance policy must be read down so as to serve the main purpose of the policy. The words ‘acts and / or omissions’ used in the policy are very important and they cover the negligent, acts / and or omissions also. Hence the insurer can not be permitted to shirk from liability under the grab of exception (b) of the policy and as such the O.Ps. have committed deficiency in service by repudiating the claim. It is further held that the loss was actually caused by clearing of forged draft and as such the same would be securely covered under clause ( c) forgery or alteration. The learned counsel prayed that Ops be directed to indemnify the complainant for the loss suffered by it alongwith interest.
8. On the contrary, the learned counsel for the O.Ps. argued that bank has suffered the loss due to the negligence of its employee, therefore, as per exception clause (b) of the policy, the O.Ps. are not liable to indemnify the complainant. The complaint is devoid of any merit and the same is liable to be dismissed.
9. From the perusal of the policy schedule as well as the policy terms and conditions, it is apparent that the O.Ps. had issued Banker Indemnity Policy No.36150046130400000001, Ex.OP1, in favour of the complainant bank for the period from 1.5.2013 to 30.4.2014. The insurance cover which was provided was as under:
- Basic cover for Rs. Rs.30,00,000;
- Additional cover for money in premises for Rs.27,00,000
- Additional cover for money in transit for Rs.30,00,000/-
The basis cover of Rs.30,00,000/- was provided for the items mentioned in clause Nos. A-H , which are as under:
- ON PREMISES……….
- IN TRANSIT………..
- FORGERY OR ALTERATION……..
- DISHONESTY………….
- PLEDGED GOODS………
- REGISTERED POSTAL SENDING……
- APPRAISERS……..
- JANTA AGENTS/CHHOTI BACHAT YOJANA AGENTS/PAGMIE COLLECTORS”
While going through the policy document, it is noted that after the items mentioned under A - H ,It is also mentioned that -
“ THE INDEMNITY GRANTED UNDER THE POLICY IN RESPECT OF SUCH DIRECT LOSSES WILL NOT EXCEED:
- The sum insured hereby:
- In respect of any loss or losses caused by acts and /or omissions of any employee(s) of the Insured either singly or jointly with other employees, or acts and/ or omissions in which such a person is concerned or implicated either as a single act and/ or omission or a series of acts and/or omissions, during any one period of insurance:
- …………”
We have also gone through the exceptions clause of the policy, wherein it is mentioned that-
“The company shall not be liable in respect of :
b) ‘losses resulting wholly or partially from any negligent act or omission of the insured’s employee (s)’……….”
10. It may be stated that on one hand, as per clause (a), the O.Ps undertake to indemnify under the policy up to the limit of the insurance cover for acts and omissions of the employees, which also include negligent acts/ and or omissions, but on the other hand, under exceptions it excludes the liability caused due to ‘losses resulting wholly or partially from any negligent act of the insured’s employee(s)’. In view of the above circumstances, and the similarity to the facts of the cited case Jila Sahkari Kendriya Bank Maryadit Verus United India Insurance Company Ltd (supra), we tend to follow the decision rendered by the Hon’ble State Commission, Chhattishgarh in the case titled above. In the case of B.V.Nagaraju Vs. Oriental Insurance Co.ltd.1(1997) ACC 123 (SC), the principle of law has already been laid down by the Hon’ble Apex Court, that if, the contract is vague, benefit should be given to the insured.
11. In the present case, the complainant bank has suffered a loss to the tune of Rs.7 lac, therefore, the O.Ps. are liable to indemnify the complainant for the said amount alongwith interest. Accordingly we allow the complaint against the O.Ps and it is directed that the O.Ps shall pay a sum of Rs.7 lac to the complainant alongwith interest @ 8% per annum from the date of repudiation till realization . The O.Ps. shall also pay Rs.5000/- to the complainant as litigation expenses. The order be complied with by the O.Ps. within a period of 30 days from the date of receipt of the certified copy of the order.
Dated: 11.8.2016
Neena Sandhu
President
Neelam Gupta
Member
