State Consumer Disputes Redressal Commission
Odisha Gramya Bank, (Erstwhile ... vs The Divisional Manager, United ... on 18 May, 2023
Cause Title/Judgement-Entry IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION ODISHA, CUTTACK Complaint Case No. CC/3/2006 ( Date of Filing : 25 Jan 2006 ) 1. Odisha Gramya Bank, (Erstwhile Dhenkanal Gramya Bank), Head Office at: Gandamunda, P.O/P.S: Khandagiri, Bhubaneswar. Represented through its Chairman. Khurda ...........Complainant(s) Versus 1. The Divisional Manager, United Insurance Company Limited, At/P.O: College Square, District: Cuttack 2. Sr. Branch Mnager, United India Insurance Company Limited, Branch Office No-II, At/P.o: Link Road, District: Cuttack -753012 ............Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE Dr. D.P. Choudhury PRESIDENT HON'BLE MR. Pramode Kumar Prusty. MEMBER HON'BLE MS. Sudhiralaxmi Pattnaik MEMBER PRESENT: M/s. S.K. Ghose & Assoc., Advocate for the Complainant 1 M/s. R.C. Sahoo & Assoc., Advocate for the Opp. Party 1 Dated : 18 May 2023 Final Order / Judgement
Heard learned counsel for both the parties.
2. This Complaint case is filed U/S-17 of erstwhile Consumer Protection Act, 1986 (herein-after called the Act) read with Section-12 of the Act.
FACTS
3. The case of the complainant, in nutshell is that the complainant is a banking company constituted under the Regional Rural Banking Act, 1976. The complainant has hired the service of OP by purchasing the policy under Banker's Indemnity Insurance Policy bearing No.034003/46/04/00016 for making payment of Rs.1,03,265.00. As per the complaint the money and securities sustained the loss, destroyed or otherwise damaged away with by fire, riot and strike, burglary or house breaking, theft, robbery etc. The petitioner-bank insured for Rs.2,30,00,000.00 It is alleged inter-alia that on 21.09.2004 there was burglary attempt in the complainant-bank by unknown culprit and they burnt the lock and opened the wooden door in the similar way, they caused damaged to the 513 loan documents and securities like NSCs, KVPs, LIC policies etc. by causing fire. The unknown culprits damaged the locking system of the safe and tried to unlock the same by pressure. On the other hand, the FIR was lodged on 21.09.2004 at Purunakote Police Station under Angul Districts and the case was registered U/S 457/436/427 of IPC and the matter was also informed to the OP-Insurer on 22.09.2004. The insurer allegedly deputed Mr. S.K. Sahoo, as Surveyor but the surveyor found that some of the documents have been recovered but for other documents he has sought for the intimation from the complainant. In spite of all support the surveyor reported as 'no claim'. Challenging same as deficiency in service on the part of the OP, the complaint case was filed.
4. The OP filed the written version admitting that they have issued the policy to the complainant on payment of due premium. They admitted to have issued the policy to the complainant. After receiving the claim they have already engaged the surveyor who reported that for the amount claimed, there is no direct loss to the securities concerned and the surveyor has performed the job properly. They averred that there was no cause of action to file complaint. Instead of settled the claim he has repudiated as no claim. Therefore, there is no deficiency in service on the part of the OP.
5. In view of the pleadings of both the parties, the following issues are framed for decision.
(i) Whether the complainant has proved the deficiency in service on the part of the OP.
(ii) Whether the complainant is entitled to any compensation. If so, the quantum of compensation.
This issue is taken for discussion at first:-
ALALYSIS ISSUE No, (i)
6. It is admitted fact that the complainant has purchased the Banker's Indemnity Insurance Policy from the OP for sum assured of Rs.2,30,00,000.00 covering the period from 01.04.2004 to 31.03.2005. It is also not in dispute that the complainant informed the OP as to the burglary attempt continued at their Jagannathpur Branch in the early hours of 21.03.2004 and the damages thereto caused by unknown culprits by fire to the strong room of the Jagannathpur branch of the bank. It is also not in dispute that the FIR has been lodged on the same day and the matter was informed to the OP. It is also not in dispute that the OP has deputed the surveyor who had made survey.
7. Complainant, in order to prove his case and the deficiency in service on the part of the OP has examined one witness and produced the documents. The complainant has filed the complaint with affidavit which shows that the complainant has requested to indemnify the loss of Rs.78,71,010.00 sustained due to damages of securities of 513 nos. of loan documents, to pay Rs.8,000.00 towards vault repairing, to pay Rs.10,000.00 towards repairing of doors, windows and almirah, to pay Rs.20,000.00 towards fees for obtaining of duplicate documents and follows up expenses, to pay interest on the aforesaid amounts. It reveals from the evidence of CW1 that the surveyor has asked for the documents and he has submitted documents time to time. It reveals that on 11.07.2005 the Op was requested by complainant-bank to reconsider the genuine claim that the bankers cover the loss. The securities are well defined in the said banker's indemnity insurance policy allowing loan documents and other securities as discussed above. He also verified that 513 nos. of loan account became unsecured and unsafe due to fire caused by the unknown culprits and these are direct loss to the bank. Surveyor has not taken such with proper perspectives. After the letter was replied by the complainant, the Senior Officers of the OP visited with their General Manager of the complainant's bank and assured for review of the matter but the matter was not reviewed. Since, the claim was not settled, they have finally filed this complaint case. In the cross examination he stated that he has not been posted in the bank at the time of incident and he has no knowledge about claim made by the complainant. Thus, it is clear that the CW1 has stated basing on the documents filed by the complainant. However, the documents show that the repudiation of the claim was made solely on the ground that the policy condition does not support their claim due to lack of direct loss to the alleged fire in question. The CW1 has proved 13 nos. of documents and all related to the concerned policy. The policy in question contains the definition of securities which is as follows:-
"The term "Securities" as used in the policy shall be deemed to mean Acceptances, Air/Consignment Notes, Bank Mone Orders, Bills of Exchange, Bills of Lading, Bonds, Certificates of Deposits, Certificates of Shares, Stock, Cheques, Coupons, Debenture, Demand Drafts, Express Postal Orders, Fixed Deposit Receipts issued by the Insured. Lorry Receipts, Lottery Ticket, Postal Receipts, Promissors Notes, Railway Receipts, Time-Drafts, Warehouse Receipts, Mail Transfers, Travelers, Cheques and drafts and all other instruments of a negotiable character in respect of which, if negotiated by any holder, the Assured would have no recourse against the innocent holder thereof."
8. The above definition clearly covers the certificate of deposit, loan documents and other securities. Further the policy shows that the company shall not be liable in respect of losses resulting indirect destruction of any other valuable sureties. It appears that from the insurance policy that it covers burglary or house breaking and fire if direct loss caused to money or securities due to such incident. The direct loss has not been defined in the policy itself. On the other hand, learned counsel for the OP submitted that direct loss amounts to loss caused to cash or any securities directly damaged by fire. The statement of CW1 show that the culprits set ablaze to the strong room where 513 nos. of different documents of securities have been stored. Although CW1 has no direct knowledge of occurrence but the observation of the surveyor about the loss by fire does not reveal any circumstances which would go to show that damage to securities due to fire is a indirect loss. Apart from this the police report is also available. The police report clearly reveals that burglary attempt and also the culprits set fire to the securities kept in strong room etc. 'Direct loss' means the loss caused by culprits with deliberate act to cause damage to properties by fire. Hence, it is clearly proved. Moreover, the policy is a contract of insurance which is based on ubrima fides and in good faith insurance of all securities against risk purchased by complainant.
9. In view of aforesaid discussion, it is proved by the CW1 and the documents that the culprits directly caused fire to the securities kept in the strong room and these have been damaged.
10. The OP in order to rebut the evidence of the complainant has examined one witness OPW1. It appears from statement of OPW1 that on 24.09.2004 they have appointed Mr. S.K. Sahoo, Surveor- cum- loss assessor who made survey and submitted that various latches on the part of the complainant. According to OPW1 surveyor was appointed and he found that the details of KVPs and NSCs are not mentioned in their official registers of branch in course of business. Though the incident of fire was intimated to Cashier-cum-Clerk of the branch at 5 AM, he came to spot at about 6 AM but fire was extinguished at about 11.30 AM. So, no steps were taken to extinguish fire to minimize the loss. The surveyor has obtained a statement in writing from the Cashier-cum- Clerk. On 29.09.2004 a claim form was issued to complainant with a request to submit claim form along with detailed particulars of lost securities and the complainant submitted claim on 12.10.2004. The surveyor has witnessed the spot in the month of January and February,2005 and held meeting with the Chairman and other officers, modality for rebuilding of loss documents was chalked out and complainant have successfully built-up 50% to 60 % of lost documents The OPW1 for rebuilding of loss could not build up loss documents.
11. OPW1 also stated that loss computed as made therein in indirect loss which was not covered up the policy. After receiving the surveyor's report they have repudiated the claim because of the fact that the policy does not cover the said losses. He has been cross examined. In the cross examination he admitted that there was fire caused to the jagannathpur branch. He submits that the statement made by him is based on record. He admitted to have not gone through the policy. It appears that OPW1 is equally has no direct knowledge but stated basing on the facts as revealed from the documents earlier to his policies. He has proved the documents B to Z. The aforesaid evidence of OP along with documents clearly show that the surveyor has made survey finally. The surveyor's report which is admitted by both the parties clearly states that burglary and house breaking had happened and damaged was also caused by fire. Finally he has reported that the insurer is not liable for two reasons.
(i) Since, there was no direct loss to the banker, the insurance company will not be held liable.
(ii) if the damages for failure of the bank, the insurance company shall not liable in direct loss. Learned counsel for the OP stressed on the point that the report of the surveyor since found, the loss was not direct one, the complainant has no cause of action to receive any compensation amount. The report of the surveyor is strongly relied on by the learned counsel for the OP. He also contended that Section-45-A of the Negotiable Instrument Act and Order-7, Rule-16 are clear to show that the direct loss must be made to the satisfaction of the Court. If the plaintiff will not produce the proper documents then the question of loss does not arise. He submits that since the documents of 513 nos. have been rebuilt to the extent of 50-60%, the direct loss by FIR to these documents is not proved.
12. Learned counsel for the complainant submitted that when there is fire caused by miscreants and such damage caused to the documents, the surveyor's report without going to the actual allegation unnecessary observed that there is no direct loss.
13. After going through the evidence of both parties and argument of both the parties, we are of the view that there is direct loss of securities due to the incident occurred by fire as per allegation of the complainant. These value of such documents may be rebuilt from certain other documents but the fact remains that the insurance covers direct loss caused to the securities as defined in the policy etc. When we found from the evidence of both the parties, there is miscreants caused damage of certain securities of strong room by fire, same is covered as direct loss to the complainant's bank. Therefore, the question of rebuilt does not arise. Since, the surveyor has the responsibility to assess the loss by going through the points as per the risk in policy involved, the OP is negligent to compute the loss as per the policy condition. Therefore, the complainant is found to have proved the deficiency in service on the part of the OP. Issue no.1 is answered accordingly.
ISSUE NO.ii
14. In view of the finding of the issue no.1 the complainant is entitled to get compensation for recovering the claim. In this regard, we found that the complainant had stashed the claim at Rs.78,71,010.00 but the exact amount has not been proved by any evidence by the complainant and the OP in this regard has clearly proved the letter of the Chairman of the complainant-bank which is shows that there are process of rebuilt of same. Since, the surveyor has not complied the task we can address by directing the surveyor to compute the loss in the proper manner. Further in computing loss, the complainant would be only entitled for compensation. When documents of depositors/loanees are destroyed by fire and OP repudiates, complainant for those persons are entitled to compensation for mental agony and harassment to customers who trusted to complainant. Issue No.2 is answered accordingly.
CONCLUSIONS
15. In view of aforesaid discussion, we allow complainant and hereby direct the OP to depute the surveyor other than present surveyor to compute the loss and settle the claim of the complainant within a period of 60 days from the date of order and the complainant is directed to render all the necessary assistance by showing the required documents as asked for by the OP. Further the OP is directed pay compensation of Rs.5,00,000/- towards securities to the complainant for unsuccessful survey and harassment to the complainant for their customers. Further the complainant is entitled to Rs.50,000/- towards litigation cost. All the payments would be made by the OP to the complainant within a period of 60 days from the date of receipt of the order.
The complaint case is disposed of accordingly.
Free copy of the order be supplied to the respective parties or they may download same from the Confonet or website of this Commission to treat same as copy of order received from this Commission. [HON'BLE MR. JUSTICE Dr. D.P. Choudhury] PRESIDENT [HON'BLE MR. Pramode Kumar Prusty.] MEMBER [HON'BLE MS. Sudhiralaxmi Pattnaik] MEMBER