State Consumer Disputes Redressal Commission
Amaravati District Central Co-Op Bank ... vs United India Insurqnce Co Ltd on 25 February, 2015
CC/94/124 1/9
CC-94-124-25022015
ORDER
(Passed on 25.02.2015) Per Mr B A Shaikh, Hon'ble Presiding Member
1. This complaint is filed seeking direction to the opposite party (for short the O.P.) Nos.2 & 3 to pay to the complainant Rs.5,03,530/- with interest of Rs.75,528/- towards the loss sustained by the complainant and further to pay Rs.1,25,800/- towards the compensation with cost of the complaint.
2. The case of the complainant as set out in the complaint in brief is as under.
The complainant is a District Central Co-operative Bank (for short DCC Bank) and the O.P.Nos.1 & 2 are the officials of United India Assurance Co. Ltd. O.P.No.3 is New India Insurance Company Ltd., and O.P. No.4 is the Chairman / Managing Director of General Insurance Corporation of India. The complainant had obtained insurance policies known as "Bankers Indemnity Policy" from the O.P.Nos.1 & 2 on yearly basis for the period from 01.07.1988 to 30.06.1989, 01.07.1989 to 30.06.1990, 01.07.1990 to 30.06.1991 and lastly from 01.07.1991 to 30.06.1992. Thereafter, the same policy was obtained from O.P.No.3 on yearly basis for the period from 01.07.1992 to 30.06.1993 and then from 01.07.1993 to 30.06.1994. The complainant sustained loss of Rs.5,03,530/- due to misappropriation of that amount by its employees during CC/94/124 2/9 the period of the said policies. Therefore, the complainant submitted claim proposal to O.P.Nos.1 & 2 on 31.05.1993 claiming Rs.5,03,530/- with interest. O.P.Nos.1 & 2 refused to entertain the claim on the ground of retroactive clause of the policies. The complainant served legal notice to O.P.Nos.1 & 2 but of no response. Therefore, the complainant filed consumer complaint, claiming aforesaid amount of Rs.5,03,530/- with interest of Rs.75,528/- and compensation of Rs.1,25,000/- from the O.P. Nos. 1 & 3.
3. The O.P.Nos.1 & 2 filed common written version and thereby resisted the complaint. They admitted issuance of the policies by them for aggregating period from 01.07.1988 to 30.06.1992 and misappropriation of the monies by the employees of the complainant. They submitted that the said misappropriation of monies was discovered after expiry of the period of the policy i.e. after 30.06.1992. They further submitted that the said loss was not sustained within a retroactive period of two years during the period of enforcement of the policy. Thus, they contended that in view of the exclusion clause of the policy, they are not liable to pay the loss sustained by the complainant. They, thus, supported their action of repudiation of the claim of the complainant and submitted that the complaint may be dismissed.
4. The O.P.No.3 also resisted the complaint by filing written version. It admitted that policies were issued for aggregating CC/94/124 3/9 period from 01.07.1992 to 30.06.1994 by it to the complainant. It submitted that the misappropriation of the huge amount of monies took during the period from 01.07.1988 to 30.06.1992 and as the policies issued by it, were for the period from 01.07.1992 to 30.06.1994, entire claim cannot be granted which pertains to the period prior to inception of the policies issued by it. It also submitted that even if the policies were continuously in force, retroactive period of loss does not extend beyond two years of occurrence i.e. loss sustained within two years from the date of discovery is only covered. Therefore, it claimed that the complaint may be dismissed.
5. The O.P.No.4 also resisted the complaint by filing its written version. It submitted that it is not a necessary party to the complaint. It also supported the stand taken by the O.P.Nos.1, 2 & 3 in their written version and submitted that the complaint may be dismissed.
6. Following issues arise for our consideration. We record our findings against each of them for the reasons given next there under.
Sl.
No. Issues Finding
i. Whether the complainant has proved
that the O.Ps have rendered deficient
service to it by repudiating its claim of
Rs.5,03,530/- ? No
CC/94/124 4/9
ii. Whether it is proved by the complainant
that the repudiation of the complaint of
Rs.5,03,530/- by O.P Nos.1 & 2 is against
terms & conditions of the policies? No
iii. Whether the complainant is entitled to relief sought for ? No iv. What order ? As per final order below.
REASONING
7. It is worthy to note that initially this complaint was filed before the State Commission, Mumbai and then it was transferred to this State Consumer Disputes Redressal Commission, Circuit Bench, Nagpur for disposal according to law. This Circuit Bench had dismissed the said complaint in default on 18.10.2012 as none had appeared for the complainant on that date for hearing. Feeling aggrieved by the said order the complainant filed first appeal bearing No.FA/13/70 before Hon'ble National Commission, Delhi. The Hon'ble National Commission after hearing advocates of both the parties passed order on 26.08.2014 in that appeal and thereby set aside the order dtd.18.10.2012 passed by this Commission and directed both the parties / their counsels to appear before this Commission on 30.09.2014 for further proceedings. The Hon'ble National Commission directed this Commission under order dtd.
CC/94/124 5/926.08.2014 passed in that first appeal to decide the complaint on merits. However, when the complaint was taken up before this Commission on 30.09.2014 for hearing, none had appeared for the complainant on that date. Adv. Mr W G Paunikar had appeared for O.P.Nos.1 & 2 and Adv. Mr C B Pande appeared for O.P.No.3 on 30.09.2014. None had appeared for O.P. No.4 also on that date. Therefore, complaint was adjourned till 02.12.2014 for filing Written Notes of Arguments and for final hearing. On 02.12.2014 also none had appeared for the complainant. The advocates appearing for O.P.Nos.1, 2 & 3 filed their respective Written Notes of Arguments on that date. None had appeared for O.P.No.4 on that date also. The complaint was adjourned till 09.01.2015 for final hearing and thereby opportunity was given to the complainant for final hearing. On that date though advocates of O.P.Nos.1, 2 & 3 were present, none had appeared for the complainant and O.P.No.4. To meet the ends of justice, again the complaint was adjourned till 06.02.2015. On that date also none had appeared for the complainant and O.P.No.4. Therefore, the complaint was reserved for judgement till this date after hearing advocates of O.P.Nos.1, 2 & 3.
8. The learned advocates of O.P.Nos.1 & 2 advanced arguments on the lines of defence taken by O.P.Nos.1 & 2 in their written version, reproduced as above. The learned advocate of O.P. No.3 besides reiterating the defence of O.P.No.3 also submitted that in the complaint itself the complainant stated in CC/94/124 6/9 Para 4 that the O.P.Nos.3 & 4 have been made formal parties. The learned advocates of O.P.Nos.1, 2 & 3, thus submitted that as the complainant has failed to prove that the O.P.Nos.1, 2 & 3 rendered deficient service to the complainant, the complaint may be dismissed.
9. It is seen that no relief is claimed by the complainant against O.P.No.4 in the prayer clause of the complaint and therefore it is a formal party and complaint as against it deserves to be dismissed.
10. The following conditions of the policy are not disputed.
"The Company shall not be liable,
i) for losses not discovered within the period of the insurance.
ii) In the event of non renewal or cancellation of the policies for losses not discovered within six calendar months next following the date of expiry or the date of cancellation as the case may be (provided only that if there be any other insurance in force during the said six calendar months whether affected by the insured or otherwise this policy shall not cover or contribute to any loss covered by such other insurance). The reinstatement provision will not apply to such losses discovered within six calendar months from the date of non renewal or cancellation.CC/94/124 7/9
iii) For losses not sustained within a retro-active period not exceeding 2 years from the date of discovery of any such loss or losses. Provided that in such retro active period the insurance was continuously in force but in no event the company shall be liable to pay any claim in respect of a loss or damage sustained prior to the inception of the original policy.
Further provided that losses which become payable under this clause shall be subject to the terms and conditions and exceptions of the policy currently in force on the date of the discovery."
The claim is repudiated by the O.P.Nos.1 & 2 on the ground that the aforesaid exclusion clause of the policy is attracted in the present case.
11. Now it is to be seen that whether the repudiation of the claim as above is justified.
12. It is pertinent to note that the complaint is silent as regards the period of the misappropriation of the money amounting to Rs.5,03,530/-. It is very vaguely stated in the complaint that the said misappropriation is made during the period of policies. There is no audit report showing actual dates on which misappropriation of total amount of Rs.5,03,530/- was done by the employees of the complainant. Neither the complaint shows CC/94/124 8/9 the dates of misappropriation nor there is any audit report to prove that the misappropriation took place during the period of the policies. Hence, it cannot be said that the repudiation of the claim, as above, is illegal.
13. Further more, if the averments made in the complaint are taken as it is, then also it is seen that admittedly period of policies issued by O.P.Nos.1 & 2 was from 01.07.1988 to 30.06.1992 and claim was submitted to the O.P.Nos.1 & 2 on 31.05.1993. Thus, it is clear that the losses were not discovered within the period of insurance from 01.07.1988 to 30.06.1992. Moreover, the policies were not issued by O.P.Nos.1 & 2 after 30.06.1992. In order to attract retroactive period of two years for making claim, it is necessary that the discovery of the loss should be made during the continuation of the policy. In the instant case, as noted above, when discovery was made and claim was submitted on 31.05.1993, the policies issued by O.P.Nos.1 & 2 were not continued. Therefore, we accept the plea raised by O.P.Nos.1 & 2 and hold that O.P.Nos.1 & 2 rightly repudiated the claim.
14. So far as the liability of O.P.No.3 is concerned, we find that as misappropriation of the money took place prior to date of issuance of the policies by O.P.No.3, no claim can be made by O.P.No.3 to make good of the loss sustained by the said complainant. No claim was also submitted by the complainant to O.P.No.3. Hence, there is no question of holding liable O.P. CC/94/124 9/9 No.3 to make good of the loss sustained by the complainant due to misappropriation of the money by its employees. O.P.No.4 is a formal party and no claim is made against it in the complaint.
15. Thus, we hold that the complainant has not proved that O.P. Nos. 1 to 4 have rendered deficient service to it and therefore, the complainant is not entitled to any relief.
16. Issues No.1, 2 & 3 are decided in negative and following order is passed.
ORDER
i. The complaint is dismissed.
ii. No order as to costs.
iii. Copy of the order be furnished to both the parties free of cost.
[ B. A. SHAIKH] PRESIDING MEMBER sj