Delhi

StateCommission

CC/11/107

SECURITRANS INDIA PVT. LTD. - Complainant(s)

Versus

UNITED INIDA INSU. CO. LTD. - Opp.Party(s)

04 Nov 2015

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

 

                                                                 Date of Decision: 04/11/2015

 

Consumer Complaint No. 107/2011

 

In the matter of:

 

1. M/s Securitrans India Pvt. Ltd.

A-27/1, Mahipalpur Extension

New Delhi-110037

 

2. M/s A.P.Securitas Pvt. Ltd.

265, Satya Niketan

Ring Road

New Delhi-110021                                                          Complainants

 

Versus

 

The United India Insurance Co. Ltd.

Through: Divisional Manager

D.O.18, A-11, First Floor

Sector-19, Noida-201301                                               Opposite Party

 

CORAM

SH N P KAUSHIK                -                  Member (Judicial)

SH. S.C. JAIN                      -                  Member

 

1.     Whether reporters of local newspaper be allowed to see the judgment? Yes

2.     To be referred to the reporter or not? Yes

 

N P KAUSHIK – MEMBER (JUDICIAL)

 

JUDGEMENT

 

1.     Facts in brief of the complaint are that the complainant No. 1 a Private Limited Company registered under the Companies Act, 1956 is engaged in the business of providing specialized services relating to sorting cash, collecting and transportation of cash intercity or intra-city or any other valuable documents, cash replenishment for offsite ATMs etc. door to door delivery/pick up of time sensitive and other valuables and receiving, vaulting and delivery of cash and bullion to most of the leading banks all over the country. Complainant No. 2 again a Private Limited Company registered under Companies Act, 1956 is engaged in the business similar to one in which complainant No. 1 is engaged. Complainant No. 1 & Complainant No. 2 both are insured with the United India Insurance Company Ltd. (hereinafter referred to as the ‘insurance company’).
2.     Admittedly the insurance company issued to the complainants a Special Contingency insurance Cover note No. 659109 for a period from 18.09.2007 to 17.09.2008 for a sum insured of Rs. 12 Crores. Insurance premium was Rs. 2,26,293/-. It may be mentioned here that the sum insured was enhanced to Rs. 17 Crores w.e.f. 01.10.2007 on payment of additional premium of Rs. 87,507/-.
3.     On 19.02.2008 complainants deputed their cash custodian Sh. Raj Kumar with another cash custodian Sh. Rajesh with the armed Guard Sh. Harish Chand and Driver Sh. Sanjeev Kumar in its vehicle for carrying cash to the tune of Rs. 91 lacs. The complainant’s vehicle started its journey from complainants Currency Chest at Nagla Raya, New Delhi for the purpose of loading cash in various ATMs in Delhi. The said ATMs belonged to HDFC Bank, Karnataka Bank and Axis Bank. After replenishing an amount of Rs. 21 lacs in other ATMs, the team went to replenish cash in ATM centre of Karnataka Bank at G.T.Karnal Road, Delhi.The Guard and the driver continued sitting in the vehicle. At about 13:45 hours, it was discovered by custodian Sh. Raj Kumar that the bag containing Rs. 65 lacs was missing from the vehicle. Matter was reported to the police by dialling the number ‘100’. An FIR bearing No. 44 dt. 19.02.2008 was lodged in Police Station Kingsway Camp/Model Town, Delhi. An amount of Rs. 5 lacs was also recovered from the vehicle after the matter was reported to the police. Complainant’s case is that cash custodians Sh. Raj Kumar, Sh. Rajesh, Sh. Harish Chand and Sh. Sanjeev Kumar were responsible for misappropriation of money amounting to Rs. 65 lacs.
4.      Complainant submitted that he paid an amount of Rs. 50 lacs to Axis Bank for compensating the loss of money and another amount of Rs. 15 lacs to HDFC Bank.
5.     All the abovesaid employees of the complainant were placed under suspension. A domestic enquiry was held against them. Two of such employees were found guilty by the enquiry officer. Complainants disclosed in its complaint that even in a span of nine months, police failed to complete the investigation.
6.     During the course of arguments, counsels for the parties present have taken us through the report filed by the police station concerned in the Court of a Metropolitan Magistrate showing the case as ‘untraced’. The report was filed in the Court on 24.07.2010.
7.     Insurance company appointed a surveyor who submitted its report running into fifteen pages. Opinion of the surveyor appears at the end of the report and the same is reproduced below:

 

•  

  Based on our verification of records and documents provided by the insured, they have incurred a loss of Rs. 64,84,700.00. However based on the above conclusion, we are of the opinion that the involvement of the employees was not proved till date. Moreover the circumstances of loss explained in the FIR, it seems to be a mysterious disappearance and the final liability of underwriters is depending upon the Final Police Report/Charge Sheet/Court Order.”

 

8.     Insurance Company in its defence has relied upon its letter dt. 14.01.2011 vide which it had sought certain informations from the complainants. The relevant portion of the letter is reproduced below:

“RE: Claim no: 221800/46/07/08

Date of loss: 19.02.2008

With reference to above and as requested earlier also, please provide the following:

1. Final report issued by Police Authorities.
2. FIR was lodged by Sh. Raj Kumar who as per your application filed to SHO was one of the accused persons. Whether you have lodged any Fresh FIR against the persons responsible for misappropriation and criminal breach of trust, if yes, kindly provide the copy of the same.
3. FIR lodged under section 379 of IPC is not in concurrence with the above act and there is no mention of Rs. Five lacs which were recovered from cash carrying vehicle, Kindly clarify.
4. Please also substantiate the fact that Rs. Five lacs were recovered from the vehicle whereas the cash was kept in locked box which is allegedly missing.
5. You have not conducted the pre employment verification of all the four accused employees which proves gross negligence and lack of reasonable care on your part. Kindly give reason for same.

Kindly provide the above clarifications/documents at the earliest.

9.     With the aforesaid factual matrix, we are confronted with the question as to whether the complainant is entitled the recovery of the amount claimed. Let us examine the circumstances in which the insurance company is liable to make good the loss suffered by the insured as per terms and conditions of the policy.

The cover note dt. 18.09.2007 issued by the insurance company in favour of the complainant refers to the risk covered and terms. Such risk and terms are reproduced below:

“Special Contingency/Package Policy

 On Money Insurance Policy for AOY basis for Rs. 12 Crores and fidelity guarantee on floating basis to cover 2000 employees of either company like vault officers, cash custodians/ATM custodians, cash officers, sorter etc. who are deployed on such cash handling duties.

10. Cover note is amongst various details, indicates the description of the money insured. The said description of money is reproduced below:

DESCRIPTION OF MONEY TO BE INSURED

Carry Cash/Foreign Exchange/Traveller Cheque/Credit Cards/Debit Cards/Recharge Card/Drafts/Cheques/Financial Documents, Bullions (gold/silver) in any form of valuable of any type whilst in transit in safe/boxes or vaults collected, delivered carried or stored in safe/vaults of the company at Delhi or its Branches nation-wide. The movement is from/to client sites of Bank companies Branches or its clients, own vaults or bank or salary payments to employees. The movement can be in company or employee owned/public (hired exclusively), hire conveyance train or acceptable mode of transportation. Cash delivered/pick up two-wheeler may belong to company’s employees. The transit will be un-named, unlocked on two wheeler single custody cash movement on vehicle. Transit in cash van with one guard/armed guard in suitcases bags boxes, trunks/safe custody of cash officer. Risk covered fire, theft, BHB dacoity snatching RSD/MD/FRAUD/CHEATING/forgery/terrorist risk, natural calamities or other means of loss whilst in transit (or safe/vaults/ATMs & Kiosks.) Loss payee can be party to the cash/financial documents, belongs after no objection is given by the insured party loss payee can be client, which is foreign organization/person.

In addition to above, the following contingencies are also included.

Intra-city Cash-in-transit between Bank Branches/Currency chest, Inter-city Cash in Transit between Bank Branches/Currency Chest, Cash in transit between the offsite ATMs and Bank Branches/Currency Chest, Cash in transit between the Bank Branches/Currency Chest at our offices, Cash in transit between the Bank Branches/Currency Chest and the client and the Clients office. In transit movement of unopened and unchecked envelopes, collected from clients, overnight vaulting Cash at our premises or Loaded (into ATMs/Cash lying in kiosks/ATMs, which is the responsibility of the insured’s cash custodians/ATMs (both on site and off site). Overnight vaulting of counted cash collected from clients, overnight vaulting of unopened, unchecked and un-counted cash and cheque”

11. Ld. Counsel for the complainant has submitted that it was a case of misappropriation and fraud committed by its employees who formed part of the team on the fateful day. The loss in question was covered under fidelity guarantee to cover two thousand employees like vault officer, cash custodians, ATM custodians, cash officer and sorter etc. who are deployed on such cash handling duties. Ld. Counsel further submitted that the case is also covered under description of money insured when the cash movement is on vehicle in suit case, bags and boxes.
12.  Before proceeding further, it may be mentioned here that there is no letter of repudiation as such issued by the insurance company. The only objection raised by the insurance company finds a mention in its letter dt. 14.01.2011 (reproduced above). Coming to the objections one by one, admittedly the final report furnished by the police authority is a report, ‘untraced’. Insurance Company has raised an objection that Sh. Raj Kumar got the report lodged who was one of the accused and no FIR was lodged against him. Even after the FIR has been lodged at the instance of Sh. Raj Kumar, it is the duty of the police to investigate the matter and arraign Sh. Raj Kumar. Complainant could simply assist the police and could not dictate its terms. Insurance company has referred to the recovery of the amount of Rs. 5,00,000/- from the cash carrying vehicle after the report of the matter to the police. The said discovery of Rs. 5,00,000/- is a part of circumstances of the case of theft, misappropriation or whatsoever. Lastly the insurance company has raised an objection that the character and antecedents of the above referred employees of the complainant were not carried out before giving them employment. On a query by this Commission, Ld. Counsel for the OP Sh. Navdeep Singh has failed to take us through any terms of the policy making it incumbent on the part of the complainant to recruit only those employees whose character and antecedents stood verified. We, therefore, do not find any merit in the objection raised by the OP. The policy which was issued in favour of the complainants covering a sum insured of Rs. 12,00,00,000/- (Rs. Twelve Crores Only) is not in dispute. The nature of the policy and the description of the money insured are also not in dispute. Surveyor appointed by the insurance company has simply opined that it seems to be a case of ‘mysterious disappearance’. Be that as it may, it is not the case of the insurance company that the claim was either false or not covered under the terms and conditions of the policy. We, therefore, direct the insurance company (OP) to pay to the complainant as under:-

Pay an amount of Rs. 59,84,700/- (64,84,700-5,00,000) alongwith interest @ 6% p.a. from 19.06.2008 till date.

 

Insurance Company (OP) shall pay the aforesaid amount within a period of ninety days from today failing which the insurance company/OP shall be liable to pay interest @ 12% p.a. on the amount accruing after the expiry of the period of ninety days from today. Complaint is accordingly disposed of.

13.  Copy of the orders be made available to the parties free of costs as per rules and thereafter the file be consigned to Records.

 

(N P KAUSHIK)

MEMBER (JUDICIAL)

 

 

(S C JAIN)

144616126.