Punjab

Moga

CC/17/46

The Moga Central Co-operative Bank Ltd. - Complainant(s)

Versus

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

Sh.Rajvinder Singh

13 Sep 2017

ORDER

THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MOGA.

 

 

                                                                                      CC No. 46 of 2017

                                                                                      Instituted on: 11.05.2017

                                                                                      Decided on: 13.09.2017

 

The Moga Central Co-operative Bank Ltd., Head Office, G.T. Road, Moga, through its Manager.

                                                                                ……… Complainant

 

Versus

1.       United India Insurance Company Ltd. 6-7, Shaheed Bhagat Singh Market, G.T. Road, Moga, through its Senior Divisional Manager, Moga.

 

2.       Senior Divisional Manager, Moga United India Insurance Company Ltd. 6-7, Shaheed Bhagat Singh Market, G.T. Road, Moga

 

                                                                           ……….. Opposite Parties

 

 

Complaint U/s 12 of the Consumer Protection Act, 1986.

 

 

Quorum:    Sh. Ajit Aggarwal,  President

                   Smt. Bhupinder Kaur, Member

 

Present:       Sh. Rajvinder Singh, Advocate Cl. for complainant.

                   Sh. Jasvinder Singh, Advocate Cl. for opposite parties.

 

 

ORDER :

(Per Ajit Aggarwal,  President)

 

1.                Complainant has filed the instant complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the "Act") against United India Insurance Company Ltd. 6-7, Shaheed Bhagat Singh Market, G.T. Road, Moga, through its Senior Divisional Manager, Moga and others (hereinafter referred to as the opposite parties) directing them to pay a sum of Rs.7,00,000/- alongwith interest @ 18% p.a. from the date of loss i.e. 7.11.2013. Further opposite parties may be directed to pay Rs.2,00,000/- as compensation on account of harassment and financial loss and Rs.10,000/- as litigation expenses to the complainant and any other and further relief which this Forum deems fit and proper under the circumstances of the case be granted.

2.                Briefly stated the facts of the case are that the complainant has obtained an insurance policy namely 'Bankers Indemnity Insurance Policy' from opposite party nos.1 & 2 on dated 5.4.2013 under policy no.201200/45/13/62/00000007 against the miss happening or any kind of damge to the money of the complainant due to any kind of act of forgery, theft, fraud, cheating etc. A culprit got issued a demand draft no.138796 of Rs.1000/-  on 04.09.2013 from the Punjab State Co-operative Bank Ltd. Chandigarh in favour of Ramesh by signing it as Anil. After getting the said demand draft, he tampered its serial number by 158096 and tempered its date by 01.11.2013. He also altered the amount of demand draft from 1000/- to 7,00,000/-. Moreover he changed the name from Ramesh to Ravi. After making all these alterations with clever mind and sharp edge like a professional culprit, he presented the DD on 6.11.2013 to SBI Moga for clearing. On receiving the DD from SBI, the complainant cleared the same in good faith as the amount was to be directly transferred by the SBI to his account. The advice for taking credit was also sent to Punjab State Co-operative Bank, Chandigarh on 7.11.2013. On 19.11.2013, a telephonic message received to the complainant from Additional Managing Director, The Punjab State Co-operative Bank to check the record of Draft paying as the culprits are making frauds with different banks in different districts by making alterations in the DD's. The officials of the complainant by taking quick action checked the record and found a shocking fact that a payment of Rs.7,00,000/- has been done by the bank against a forged and fabricated DD through SBI, Moga.  When the complainant got the clarification from SBI Moga about it, the SBI Moga after perusing the record affirmed the information that in which account the said amount is credited, is of one Ravi s/o Hari Singh, whose date of birth is 5.3.1985 and his address is 18/2, Mahavir Upwan, Tundia, District Firozabad, Branch Code is 5892 and its IFSC is SBIN0005892 and MICR Code is 283002002. Upon checking the details and account statements, it has found that the said person namely Ravi has withdrawn all the amount from different places under different names through ATM and cheques which clearly shows that the said culprit succeed in his malafide motive and took a huge amount of Rs.7,00,000/- against a forged DD and played a fraud with the complainant. All the acts and alterations done by the said culprit were so sharp which could not be detected in general checking. After taking all necessary measures and investigations, the complainant lodged an FIR on 21.11.2013 and by acting upon the contents of the FIR, Police Officials conducted the inquiry. After so many proposals FIR no.22 dated 12.02.2015 under section 420, 465, 468, 471 IPC, Police Station City –I, Moga has been entered against Ravi s/o Hari Singh. The said FIR was under consideration in the Court of Mrs. Deepti Gupta, Chief Judicial Magistrate, Moga under title "State Versus Ravi". As the accused has not yet traced out, the Hon'ble Court disposed the case and consigned the same after proceedings under section 299 of Cr.P.C. on 26^th April- 2017. The original DD is in judicial file of the said criminal case. From all these facts and circumstances, it is clear that fraud has been took place by the culprits with the complainant and a great loss has been suffered by the complainant. As per the policy terms, the complainant is legally entitled for the amount he suffered being insured with opposite party nos.1 & 2, but the opposite parties has wrongly and illegally declined the legal claim of the complainant under letter Ref. No. DOM:MS21/2016-5289 dated 16.02.2016 as "No Claim". The complainant issued a legal notice to opposite parties on 13.09.2016 to disburse the claim amount of Rs.7,00,000/-, but they instead of paying the same to the complainant issued a vague reply to the notice of the complainant on 19.10.2016, which is quite unjustified and illegal and clear deficiency in service on the part of opposite parties. Due to the act of opposite parties, the complainant has suffered mental tension, agony and harassment and financial loss. Hence this complaint.

3.                Upon notice, opposite parties appeared through counsel and filed written reply taking certain preliminary objections that the complaint is not maintainable; that the complainant has got no locus-standi; that no deficiency in service has been attributed to the opposite party and from the allegations in the complaint no deficiency in service is made out; that the complainant is not covered under the definition of a 'Consumer', therefore, the instant complaint is liable to be dismissed; that the complaint is absolutely false and frivolous. True facts of the case are on receipt of intimation from the complainant bank, the matter was got investigated through independent surveyors M/s Mittal Independent Insurance Surveyors & Loss Assessors (P) Ltd. Bathinda, who after thorough investigation of the matter has concluded that the claim may not be payable as per exception of the policy with regard to negligence or omission of the insured employee, which read as under:-

"The company shall not be liable in respect of losses resulting wholly or partially from any negligent act or omission of the insured employee.

However, this exception does not apply to section B I.E. in transit, covers when losses resulting wholly or partially from wrongful act or default of any director or partners of the insured other than salaried.

Whereas under the circumstances of the loss, there was negligence of the officer/employee of bank by clearing the draft and ignoring number of alterations/manipulations in the draft.

In the light of above, the loss is not payable under the above policy. Hence, your above referred claims is being filed as 'no claim'.

                   Accordingly, the claim was filed as 'no claim' and the complainant was duly informed vide letter dated 18.02.2016, through registered post. In his final survey report the Mittal Independent Insurance Surveyors & Loss Assessors Pvt. Ltd. has clearly concluded as under:-

          a) "It is important to note that the loss is not covered under the policy.

"By reason of the payment made in respect of bogus or fictitious or forged cheques and/or drafts and/of genuine cheques and/or traveller cheques and/or gift cheques and/or drafts and/of fixed deposit receipts (excluding bills of discount and other credit facilities) issued by the insured bearing forged endorsement of providing of any credit to any customer on the faith of such documents whether received over the counter or through the clearing house or by mail." As per above only the forged drafts issued by the insured are covered under the policy. Whereas, in the present case the draft was issued by The Punjab State Cooperative Bank, Chandigarh. Thus it is not covered under the policy.

b)      The Insured branch has cleared the forged draft issued by Punjab State Cooperative Bank Ltd, Chandigarh, therefore instead of Moga Bank Branch, the loss is of Punjab State Co-operative Bank, Chandigarh which has issued the draft. The insured bank have made payment on behalf of draft issuing branch. At the time of clearance of the Draft the clearing Bank debited the amount of the draft to the issuing branch. Under the circumstances the insured bank has not suffered any monetary loss. The monetary loss is of draft issuing branch.

In this connection we have also asked the insured in various letters to clarify how they are responsible for the financial loss suffered by Manipulation of the draft. Till date the insured has not given any clarification instead they are saying that there is no responsibility of Moga Branch, Punjab State Co-operative Bank Ltd, or State Bank of India as culprit cheated every one.

c)       The claim may not be payable as per exception of the policy with regard to negligence or omission of the insured employee.

Under the circumstances of the loss, there was negligence of the officer/employee of the bank by clearing the draft and ignoring number of alterations/manipulations in the draft.

Further more the verification of the forged draft it is observed that the draft was not punched at the proper places for the amount for which it was issued. Inspite of repeated written request, the insured has not provided the copy of the Circular for the instructions of the bank/RBI which are to be followed while passing the draft received in clearing from other banks. Thus, insured has also concealed information. Therefore, it is concluded that there was negligence while clearing the draft. In light of the above points the lass is not payable under the policy."

                   In light of the above recommendations the claim of the complainant has rightly been filed as 'No Claim' and the instant complaint is liable to be dismissed. On merits, all other allegations made in the complaint have been denied and a prayer for dismissal of the complaint has been made.

4.                In order to prove the case, complainant tendered in evidence affidavit of Sh. Sarabjit Singh, Manager, The Moga Central Co-operative Bank Ex. C-1 alongwith copies of documents Ex.C-2 to Ex.C-17 and closed the evidence. 

5.                On the other hand, opposite parties tendered in evidence affidavit of Sh.R.N. Bansal, Divisional Manager, United India Insurance Company Ltd. Ex.OP-1 and copies of documents Ex.OP-2 to Ex.OP-18 and closed the evidence.

6.                We have heard ld. counsel for the parties and have very carefully gone through record placed on file.

7.                The learned counsel for the complainant submitted that complainant bank obtained a ‘Bankers Indemnity Insurance Policy’ Ex.C-2, which covers the insurance of the basic sum of Rs.10 lac covering transit, forgery and alteration in respect of cheque / demand draft, for the period 5.4.2013 to 4.4.2014 from the opposite parties. The complainant bank received a draft bearing no.158096 dated 1.11.2013 for Rs.7,00,000/- for clearance. Said demand draft 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 opposite parties, it lodged claim with the opposite parties for indemnication of loss suffered by it. However, the opposite parties, vide letter dated 16.2.2016 have wrongly rejected the claim as 'No 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 OPs 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 opposite parties argued that on receipt of intimation from the complainant bank, the matter was got investigated through independent surveyor, who after thorough investigation of matter has concluded that the claim may not be payable as per exception of the policy with regard to the negligence or omission of the insured employee, the opposite parties 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 opposite parties had issued Banker Indemnity Policy No.201200/45/13/62/00000007, Ex.OPs-18 in favour of the complainant bank for the period from 5.4.2013 to 4.4.2014. The insurance cover which was provided was as under: Basic cover for Rs. Rs.10,00,000; Additional cover for money in premises for Rs.2,00,00,000 Additional cover for money in transit for Rs.2,00,00,000/- The basis cover of Rs.10,00,000/- 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: …………”.

10.              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 : -6- b) ‘losses resulting wholly or partially from any negligent act or omission of the insured’s employee (s)’……….”. It may be stated that on one hand, as per clause (a), the opposite parties 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 opposite parties are liable to indemnify the complainant for the said amount alongwith interest. Accordingly we allow the complaint and opposite parties are directed to pay a sum of Rs.7,00,000/-(seven lakhs) to the complainant alongwith interest @ 9% per annum from the date of repudiation i.e. 18.02.2016 till realization. The opposite parties is further directed to pay Rs.5000/-(Five thousand only) to the complainant as litigation expenses. Compliance of the order be made within 30 days of the receipt of copy of this order, failing which, the complainant shall be entitled to initiate proceedings under section 25 & 27 of the Consumer Protection Act. Copy of the order be supplied to the parties free of cost. File be consigned to record room.

Announced in Open Forum.

Dated: 13.09.2017.

 

                                                 (Bhupinder Kaur)                    (Ajit Aggarwal)

                                                       Member                                President