CONSUMER DISPUTES REDRESSAL FORUM – X
GOVERNMENT OF N.C.T. OF DELHI
Udyog Sadan, C – 22 & 23, Institutional Area
(Behind Qutub Hotel)
New Delhi – 110 016
Case No.632/2007
M/S JALLUNDAR MOTOR AGENCY (DELHI) LTD.,
458-1/16 SOHNA ROAD, (OPP. NEW COURT),
GURGAON-122001, HARYANA
…………. COMPLAINANT
Vs.
M/S UNITED INDIA INSURANCE COMPANY LTD.,
2/27, SARAI JULLENA,
OPP. HOTEL SURYA SOFITEL,
OKHLA ROAD, NEW FRIENDS COLONY,
NEW DELHI-110025
…………..RESPONDENT
Date of Order: 03.11.2015
O R D E R
A.S. Yadav, President
In brief the case of the complainant is that he took a policy known as Money Insurance Policy from OP in respect of cash and currency notes at its various branch in upcountry locations. The policy was valid for a period of one year from 03.04.2004 until 02.04.2005. The policy covered the complainant in respect of money in transit from office to bank and vice versa from all business locations within the city/state/interstate including infidelity of employees, riots and strikes, money in till/counter disbursement of wages overnight keeping not exceeding 48 hours, in briefcases, bags on employees vehicle, company vehicle.
It is further stated that during the period from April 2004 to August 2004, an incident gave rise to a claim under the aforesaid money policy issued by OP. Complainant was having a petrol pump in the city of Amritsar. One of the employees of complainant namely Mr. Iran Kumar was posted at the said petrol pump as sales officer. He defalcated a sum of Rs.937098/- while the said amount was under his custody/charge for the purpose of depositing in the bank. He did not deposit the amount in the bank and misappropriated the same for his personal and illegal gains.
It is further stated that thereafter complainant lodged a police report against the aforesaid employee and a FIR No.378 dated 07.12.2004 u/s 406/408 IPC was registered at Civil Lines Police Station at Amritsar. The accused was arrested by the police and ultimately a charge sheet was filed in the court.
It is further started that since the aforesaid financial loss of complainant was covered under policy of insurance issued by OP, the complainant lodged its claim for the loss suffered by it due to embezzlement by the employee. OP appointed Mr. Sumant Sood as surveyor and assessor to carry out the necessary survey and assessment of the loss. The surveyor carried out the assessment and recommended the claim for settlement of Rs.8,68,239/-.
It is further stated that the aforesaid claim of the complaint was wrongly repudiated by OP on the ground that said claim was for loss due to misappropriation of money by the employee of the complainant and claim for misappropriation of money does not fall under the coverage of money in transit insurance policy.
It is stated that the repudiation was unjustified, illegal and against the terms and conditions of policy.
It is prayed that OP be directed to pay Rs.868239/- alongwith interest @ 18% and also to pay Rs.10,000/- towards compensation and Rs.10,000/- towards litigation expenses.
OP in the reply took the preliminary objection that the insurance policy issued by OP does not cover “Infidelity” under it hence the claim put up by complainant for the loss of cash due to misappropriation by one of their employee during a considerable period does not come under its scope and not held covered. The peril is excluded under the policy as mentioned below:-
“Exclusions: The company shall not be liable in respect of:-
- Loss of money where the insured or his employee is concerned as principal or accessory, except loss due to fraud or dishonesty of the cash carrying employee of the insured, occurring whilst in transit and discovered within 48 hours.”
It is further stated that complaint has not been filed in compliance with the disclaimer clause of the policy which is as under:-
“…if the company shall disclaim the liability to the insured for any claim hereunder, an such claim shall not, within 12 calender months from the date of such disclaimer have been made the subject matter of a suit in a Court of Law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.”
The repudiation was conveyed on 26.05.2006 and this complaint has not been fled within 12 months thereafter as such the complaint is liable to be dismissed for this reason
It is submitted that complainant have admitted that their employee Sh. Iran Kumar has been misappropriating the cash at the aforesaid petrol pump from 01.04.2004 to 17.08.2004 and on the basis of the complaint police registered a case of breach of trust against the accused. The police complaint was lodged on 07.12.2004 by OP ie. after more than 3 ½ months of the discovery of the defalcation by concerned employee.
It is further stated that the aforesaid loss of cash due to embezzlement by one of their employee of OP during the working hours at petrol pump is not covered under the policy. The complainants have failed to prove that the money misappropriated by their employee was during the transit. In fact the money was never taken to bank for depositing and taken to elsewhere. The policy specifically covered money in transit for wages, salaries etc. or petty cash from bank to insured’s location or vice-versa where any employee of complaints is involved in the incident, while the money is in transit and the incident is discovered within 48 hours of the occurrence.
It is further stated that the discovery of incident was not within the period of 48 hours as mentioned on the policy in case of involvement of the employees of complainant, therefore, the claim was not within the scope of policy, hence not payable. The late reporting to the police even after the discovery of the incident on 19.8.2004 has helped the accused to dispose of the defalcated money easily as he got sufficient time to do so. It is submitted by OP that repudiation was within the scope of the policy therefore legal and justified.
We have hard Ld. Counsel for the parties and carefully gone through the records.
It is not in dispute that the policy was regarding “money in transit from office to bank vice versa all business locations within city/state/interstate including infidelity of employees, Riot and strike, money in till/counter disbursement of wages over night keeping not exceeding 48 hours in brief cases, bags on employee’s vehicle company vehicle. All locations as per list to be considered for insurance purpose.
Now the question whether aforesaid policy covered the risk of infidelity of employees of OP at insured locations. The exclusion clause of the policy is stated as under:-
“Exclusions: The company shall not be liable in respect of:-
Loss of money where the insured or his employee is concerned as principal or accessory, except loss due to fraud or dishonesty of the cash carrying employee of the insured, occurring whilst in transit and discovered within 48 hours.”
It is apparent form the Exclusion Clause that company was not liable for loss of money where the insured or his employee is concerned as principal or accessory, except loss due to fraud or dishonesty of the cash carrying employee of the insured, occurring whilst in transit and discovered within 48 hours.
It is an admitted fact that the employee of the complainant Iran Kumar has been misappropriating the cash at the aforesaid petrol pump from April 2004 to August 2004 and on the basis of the complaint police registered a case of criminal breach of trust against the accused. The police complaint was lodged on 07.12.2004 by OP after more than 3 ½ months of the discovery of the defalcation by concerned employee.
It is settled law that the terms of the insurance agreement have to be strictly constructed to determine the extent of liability of the insurer. In this case as per the exclusion clause company was liable only when loss is due to fraud or dishonesty of the cash carrying employee of the insured, occurring whilst in transit and discovered within 48 hours.
There is nothing to suggest that the misappropriation was made by Iran Kumar while carrying the cash and the same was discovered within 48 hours. The claim procedure described in the policy is as under:-
“4. Claim Procedure: Upon happening of any event giving rise or likely to give rise to a claim under this policy coming to the knowledge of insured
- The insured shall give immediate notice to the Police and to the policy issuing office of the company and take all practicable steps to discover the guilty person or persons and to recover the cash lost.”
As per this the insured was under obligation to give immediate notice to the police and office of OP.
The information was given to the police after more than 3 months and thereafter the matter was reported to OP and the surveyor. It really does matter that the surveyor has recommended for payment of Rs.868239/- to the complainant. As discussed above the claim of the complainant was not covered under the policy and the same justifiably repudiated.
Copy of order be sent to the parties, free of cost, and thereafter file be consigned to record room.
(D.R. TAMTA) (A.S. YADAV)
MEMBER PRESIDENT
