Andhra Pradesh

East Godwari-II at Rajahmundry

CC/37/2015

The Aryapuram Co-Operative Urban Bank Ltd., - Complainant(s)

Versus

The United India Insurance Co, Ltd., - Opp.Party(s)

T. Veerendra Nath

31 Mar 2016

ORDER

                                                                                                    Date of filing:   11.06.2015

                                                                                                    Date of Order: 31.03.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

                         PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

                   Thursday, the 31^st day of March, 2016

 

C.C.No.37 /2015

Between:-

 

The Aryapuram Co-Operative Urban Bank Limited,

Having its Head office at D.No.20-23-8,

Near Gokavaram Bus Stand, Rajahmundry, Rep. by its

Secretary and Chief Executive Officer, Challa Venkata

Satya Subrahmanyam, S/o. late Veerabhadra Rao,

aged 56 years, employment, resident of Rajahmundry                               …   Complainant

 

                                    and

 

United India Insurance Company Limited,

Represented by its Divisional Manager, Rajahmundry.                             …   Opposite party

 

 

            This case coming on 17.03.2016 for final hearing before this Forum in the presence of Sri Tavvala Veerendra Nath, Advocate for the complainant and Sri M. Sambasiva Rao, Advocate for the opposite party, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Smt. H.V. Ramana, President (FAC)] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the opposite party to pay Rs.4,36,214/- together with interest thereon at 18% p.a. thereon from the date of the complaint till payment; award damages of Rs.1,00,000/-  together with interest at 18% p.a. from the date of complaint till payment and award costs of Rs.1,00,000/-.

2.         The case of the complainant is that it has obtained “Bankers Indemnity Policy bearing No.151100/46/10/62/00000014 valid from 1.4.2010 to 31.3.2011 from the opposite party. The complainant submits that as per the policy obtained by it from the opposite party, any loss arising out of theft of cash from the complainant bank is insured and the opposite party by and under the insurance policy agreed to indemnify the complainant against such losses. On 9.10.2010, when the policy issued by the opposite party was in force, theft took place in the premises of the Head office at Rajahmundry. The complainant submits that on 9.10.2010, KSVV Sudhakar was the Manager and Boddu Nageswara Rao was the Head Cashier in the Head office of the bank. The Manager and Head Cashier are the senior officers of the bank and during their service, no complaint regarding their negligence in their duties is reported/ recorded. The complainant submits that on 9.10.2010 after the head casher received cash from the currency chest, he kept the cash in his counter and gave a part of the amount to the cashier manning cash counter number 1. The banking transactions start from 10 AM. Hence, the staff manning the cash, including head cashier and the Manager who are the joint custodian of the cash chest, have to report to duty before 10 AM, open the chest and receive the cash. At the end of the day, while closing the accounts, the head cashier found a shortage of Rs.2,50,000/-. The Manager, Head Cashier and cashiers have thoroughly checked and verified the entire days transactions and found that there is a shortage of Rs.2,50,000/-. A required under the internal procedures, the shortage of cash has been reported to the Chief Executive Officer of the bank and he in turn intimated the same to the management. The complainant submits that a report also has been given by the Head cashier to S.H.O., III Town CCS, Rajahmundry.  The S.H.O., III Town CCS, Rajahmundry registered a case in Crime No.114 under Section 380 of I.P.C. The complainant has also given information to the opposite party by the letter dt.9.10.2010 regarding the theft and lodged a claim. Subsequently, the opposite party required the complainant to submit the claim forms and accordingly the claim forms have also been submitted. During the course of investigation, the S.H.O., III Town CCS apprehended the second accused and received Rs.26,200/- from him on 24.12.2010. The complainant submits that on 5.8.2011, the Police Inspector, Devaraja PS of Mysore city arrested 29 persons in Crime No.160/2011 on its file. During the interrogation of such accused persons, two of them confessed to have committed the offence in the present case along with some others. Thereupon S.H.O., III Town CCS arrested the accused 1 and 3 and produced them before the III Addl. J.F.C.M., Rajahmundry. The complainant has filed an appropriate application before III J.F.C.M., Rajahmundry for return of cash of Rs.26,200/- and the same has been returned by the learned magistrate to the complainant on 4.7.2012. The complainant informed all these facts to the opposite party. However, the opposite party without settling the claim of the complainant went on postponing the same on one pretext or other. The opposite party repudiated the claim of the complainant. Hence, the complaint.

3.         The opposite party filed its written version and denied all the allegations made by the complainant and the complaint is not maintainable either under law or on facts. Except the fact that the complainant obtained “Bankers Indemnity Policy bearing No.151100/46/10/63/ 00000014, valid from 1.4.2010 to 31.3.2011, the rest of the allegations in the complaint are not true and correct. It is denied that the complainant has been and is observing the various guidelines/instructions prescribed and given by Reserve Bank of India and also denied that the complaint has framed rules and regulations for the internal management of the banking transactions by its staff.  It is true that the complainant sent the claim intimation dt.9.10.2010. Immediately, after receipt of the claim intimation, the opposite party requested the complainant to submit the claim form, FIR and all the relevant documents. This opposite party submits that inspite of repeated requests by it; there is an inordinate delay on the part of the complainant in submitting the claim form and the relevant documents. On its part, the opposite party appointed as investigator to cause investigation and submit report. This opposite party submits that one of the conditions clearly mentioned in the insurance policy i.e. Condition No.3 is “Reasonable Care: The insured shall take all reasonable steps to safeguard the property against any accident, loss or damage and to secure all doors, windows and other opening and all safes, store rooms etc”. This opposite party further submits that one of the exceptions mentioned in the policy i.e. (b) is “Losses resulting to wholly or partially from any negligent act of the insured’s employee, is excluded. This opposite party submits that after the complainant submitted the claim form and other relevant documents after inordinate delay, it has carefully and objectively scrutinized the claim. This opposite party also obtained the certified copies of the preliminary court proceedings such as FIR, etc. After careful consideration of the claim form and documents submitted by the complainant and the certified copies of the criminal court proceedings, the opposite party found that at the material time, the concerned cashier kept the door of the cash counter open. As stated supra, condition No.3 and exception ‘b’ clearly stipulated that the risk, if any, arising out of keeping the door open and negligent and careless act are not covered and excluded. This opposite party submits that as per the guidelines prescribed by the Reserve Bank of India and also the internal guidelines framed by the complainant, cashier manning the cash counter should keep the door of the closed/locked.  However, at the material time the concerned cashier kept the door of the cash counter open enabling the culprits to commit the theft. This opposite party submits that the above conduct is directly responsible for the loss/theft of the cash. Hence, as per the terms and conditions of the insurance policy, the theft of cash, in the circumstances mentioned above, is not covered and is excluded. A bare perusal of the criminal court records clearly establish that at the material time the cashier manning the cash counter kept the door open. This opposite party submits that after considering the entire material in an objective manner, it has decided to repudiate the complainant’s claim. The opposite party repudiated the claim on valid grounds. The complainant is not entitled to recover any of the amounts mentioned in the complaint.  Hence, this opposite party prays the Hon’ble Forum to dismiss the complaint with costs.  

4.         The proof affidavit filed by the complainant and Exs.A1 to A12 have been marked for the complainant. The proof affidavit filed by the opposite party and Exs.B1 to B5 have been marked for the opposite party.

5.         Heard both sides.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite party?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

 

7.  POINT Nos.1 & 2:   The admitted facts of this case are that the complainant is doing banking business under license given by Reserve Bank of India and the provisions of Banking Regulation Act. The complainant submitted that as per the regulations framed by R.B.I., they provided protection to its assets, movable and immovable, cash in bank, cash in transit and gold ornaments kept in the head office and its branches by obtaining insurance policy from time to time. The head office of this bank is located in the predominant commercial and residential area, the daily transactions are large in number. The working hours of this bank is from 10 AM to 5 PM and the banking transactions take place from 10 AM to 4 PM and 4 PM to 5 PM non-banking transactions take place. The employees of the Head Office at Rajahmundry who are assigned the cash transactions such as Manager, Head cashier and cashiers are to attend daily duty at 9-30 AM. The Head cashier and the Manager who are the custodians take cash from currency chest for the day’s transactions. These persons will disburse a part of it to the other cashiers who are working in the other cash counters. This bank obtained Bankers indemnity policy bearing No.151100/46/10/62/ 00000014 valid from 1.4.2010 to 31.3.2011 from the opposite party vide Ex.B1 and the said policy was in force. The Manager and Head cashier are custodians of currency chest. On 9.10.2010 after the head cashier received the cash from the currency chest, he kept the cash in the counter and gave a part of the amount to the cashier who is the manning cash counter No.1. The complainant submitted that on the end of the day, while the closing the account, the Head cashier found shortage of Rs.2,50,000/-and also stated that they thoroughly checked and verified the entire day transactions and the same is reported to the Chief Executive of the bank and the also to the management. A report has been given by the head cashier to the S.H.O., III Town, CCS, Rajahmundry and registered a case in Crime No.114 under Section 380 of I.P.C. and also informed the same to the opposite party vide Ex.A1. The S.H.O. started conducting investigations. The S.H.O., III Town CCS completed the investigation and identified the culprits apprehended them and produced them before the competent court. During the course of investigation, apprehended the second accused and recovered Rs.26,200/- from him on 24.12.2010, the said information also given to the opposite party vide Ex.A2.  Later the second accused was released on bail. The opposite party wrote a letter to the complainant for submission of required documents vide Ex.A3. They also wrote another letter to the complainant for submission of documents vide Ex.A4 and A5. The complainant wrote a reply letter to the opposite party with regard to the theft done by gang members and the case was pending before the police. The opposite party gave a reply to the complainant vide Ex.A8. The complainant wrote another letter to the opposite party that an amount of Rs.26,200/- was recovered and the same was returned by the Hon’ble I Addl. Magistrate, Rajahmundry and deposited in the bank. The complainant requested the opposite party to settle the balance amount vide Ex.A7. The complainant wrote a letter and sent a claim form to the opposite party vide Ex.A9. The opposite party sent a letter to the complainant along with subrogation letter and letter of indemnity vide Ex.A10. The opposite party also wrote a letter that the claim of the complainant was repudiated vide Ex.A11. The complainant filed mediators report vide Ex.A12. The complainant submitted that on 5.8.2011, the police inspector, Devaraj P.S. of Mysore city arrested 29 persons in Crime No.160/2011 on its file. During the interrogation, two of them confessed that they committed an offence in the present case along with some others. Thereupon, the S.H.O., III Town CCS, Rajahmundry arrested accused 1 and 3 and produced them before the III Addl. J.F.C.M., Rajahmundry. On the investigation, it came to know another eight persons committed theft in the present case along with three accused who are arrested. They also mentioned in their charge sheet that they arrested three persons and the other eight persons were absconded as and when they are arrested, a charge sheet will be filed. The complainant informed all these facts to the opposite party, but the opposite party postponing the settlement of claim on one pretext or the other. Non-settlement of the claim by the opposite party amounts to deficiency in service. The complainant received a letter dt.4.12.2013 from the opposite party, but they cannot entertain the claim as the condition No.3 of the Bankers Indemnity policy has been violated.

The opposite parties admitted that the complainant obtained the Bankers Indemnity Policy vide Ex.B1 and the same is in force. They also admitted that the complainant informed with regard to the theft of the cash from their bank on 9.10.2010. The opposite party submitted that the complainant’s not submitted the claim form inspite of repeated requests. They also submitted that they appointed an investigator to investigate the theft and submit his report. The opposite party filed F.I.R. vide Ex.B2 and also filed remand report vide Ex.B3. The opposite party filed another letter written by the Sub Inspector of Police, III Town CCS, Rajahmundry to the III Addl. Judicial First Class Magistrate is herewith marked as Ex.B4. The charge sheet/case disposal report marked as Ex.B5. The main contention of the opposite party is that the complainant has not taken care of the condition No.3 is “Reasonable Care: the Insured shall take all reasonable steps to safeguard the property against any accident, loss or damage and to secure all doors, windows and other opening and all safes, store rooms etc.”  The opposite party also submitted that the exemption under the policy i.e., (b) is “losses resulting to wholly or partially from any negligent act of the insured’s employee is excluded.” The opposite submitted that after careful consideration of the claim form and other documents submitted by the complainant and the certified copies of the criminal court proceedings, the opposite party found that the concerned cashier kept the door of the cash counter opened. Therefore, the condition No.3 and exemption No.(b) clearly stipulated that the risk if any arising out of the negligent and careless act are not covered and excluded. As per the R.B.I. guideless and also the internal guidelines framed by the complainant, the cashier manning the cash counter should keep the door closed. Basing on the criminal records and the material available on hand, this opposite party repudiated the claim.

After perusing the material on record and other documents filed in this case, it is very much evident that Rs.2,50,000/- was stolen some unidentified people and the same is informed to the police and also to the opposite party. The complainant submitted that the end of the day while closing the accounts, the head cashier found the shortage of Rs.2,50,000/-. The opposite party is relying on Ex.B2 i.e. F.I.R. in which it is mentioned that Rs.2,50,000/- was stolen by some unknown people from the partially opened door of the cash counter, while the bank staff were engaged in their respective business. In fact, in all most all the banks free access will not be allowed into the cash counters by the general public, only the staff of the bank will move for their routine banking activities behind the counter and no bank will have doors from outside the counters more particularly the cash receipts and disbursement wing.  F.I.R. means the first information report, which is prepared on the first instant when a complaint is given to the police, but the complainant stated that they have given the report to the police that an amount of Rs.2,50,000/- was stolen only after verification of cash at the end of business transactions. While the case is under investigation, as per the remand report, the accused was confessed that he and some of his associates committed theft of cash from the bank at Rajahmundry in the month of October, 2010 and they shared the amount and his share of stolen cash was in his possession when the police arrested him. As per his confession, the theft was done along with his associates by name Jairaj, Sathivelu etc. Therefore, basing on Exs.B3 and B4, it is evident that a gang of people entered into the bank and stolen the cash. The main contention of the opposite party is that the complainant has not taken the due care that has to be taken, therefore they repudiated the claim. Basing on the investigation, charge sheet and other documents, police inspector Devaraja P.S. of Mysore City arrested a total of 29 accused persons and interrogated them. Accused A1, A3 confessed their involvement in theft case of the complainant’s bank and shared the stolen amount among them. Therefore, it is clearly showing that a gang of people entered into the bank and stolen the amount. The F.I.R. is prepared by the police and on investigation, they came to know that the amount was stolen by a group of people. The complainant contended that there is no negligence on the part of their staff i.e. the Manager, Head Cashier and Cashier. The opposite party is relying on the column No.12 of F.I.R. filled by the police. They are not based on facts established by them during the course of investigation.

The opposite party stated that they appointed the surveyor who surveyed and investigated the matter, but they have not filed the report before this Forum. As per the material filed by both the parties, it is clearly showing the amount was stolen by a group of thieves and shared the amount amongst them.

Basing on the above discussion, it is very clear that an amount of Rs.2,50,000/- was stolen from the complainant’s bank. The police recovered Rs.26,200/- from the accused and the complainant is entitled for the claim from the opposite party for the balance amount with interest as per the available material on record.      

 

8.   POINT No.3:  In the result, the complaint is allowed in part, directing the opposite party to pay the claim amount of Rs.2,23,800/- with interest @ 9% p.a. from the date of repudiation i.e. 04.12.2013 till realization to the complainant. We further direct the opposite party to pay Rs.3,000/- towards the costs of the complaint to the complainant.  Time for compliance is two months from the date of this order.   

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the 31^st day of March, 2016.

    

                Sd/-xxx                                                                                       Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                         FOR OPPOSITE PARTY: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANT:

Ex.A1    dt/9.10.2010     Office copy of the claim intimation sent by the complainant to the

                     opposite party.

Ex.A2    dt/18.3.2011     Office copy of the letter addressed by the complainant to the

             opposite party.

Ex.A3    dt/22.3.2011     Letter sent by the opposite party to the complainant.

Ex.A4    dt/9.6.2011       Letter sent by the opposite party to the complainant.

Ex.A5    dt/19.7.2011     Letter sent by the opposite party to the complainant.

Ex.A6    dt/1.8.2011       Office copy of the letter sent by the complainant to the opposite

                      party.

Ex.A7    dt/17.7.2012     Office copy of the letter sent by the complainant to the opposite

              party.

Ex.A8    dt/18.7.2012     Letter sent by the opposite party to the complainant.

Ex.A9    dt/24.8.2012     Office coy of letter sent by the complainant to the opposite party

            along with enclosures.

Ex.A10  dt/20.12.2012   Letter sent by the opposite party to the complainant along with

                                    enclosures.

Ex.A11  dt/4.12.2013    Letter of repudiation sent by the opposite party along with

                    enclosures.

Ex.A12  dt/  -                Certified copy of the mediators report showing the arrest and seizure

                     of the cash from A2.

 

FOR OPPOSITE PARTY:-          

 

Ex.B1    True copy of the insurance policy bearing No.151100/46/10/63/00000014, valid

      from 1.4.2010 to 31.3.2011.

Ex.B2    Attested coy of FIR in Crime No.114/2010 of III Town CCS PS.

Ex.B3    Certified copy of the remand report in Crime No.114/2010.

Ex.B4    Certified copy of the request for prisoner transit warrant made by SHO, III Town

     CCS in Crime No.114/2010.

Ex.B5    Certified copy of the final report in Crime No.114/2010 of III Town CCS PS.

 

                Sd/-xxx                                                                                        Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)