State Consumer Disputes Redressal Commission
Vikas Sahakari Bank Ltd. vs National Insurance Co.Ltd. on 28 January, 2008
CONSUMER DISPUTES REDRESSAL COMMISSION CONSUMER DISPUTES REDRESSAL COMMISSION MAHARASHTRA STATE, MUMBAI FIRST APPEAL NO.1039 OF 2007 Date of filing : 17/08/2007 IN CONSUMER COMPLAINT NO.295 OF 2006 Date of order : 28/01/2008 DISTRICT CONSUMER FORUM, SOLAPUR Vikas Sahakari Bank Ltd. R/o.Arvind Commercial Complex Budhwar Peth, Bali Ves, Solapur Through its Manager Shri Pandurang Shrirang Mantri R/o.Solapur Appellant/org.complainant V/s. The Divisional Manager National Insurance Co.Ltd. 4th floor, Shubhrai Towers Dutta Chowk, Solapur Respondent/org.O.P. Corum: Justice Mr.B.B.Vagyani, Honble President Smt. S.P. Lale, Honble Member
Present: Mr.L.A.Gavai-Advocate for the appellant Mr.S.K.Shetty-Advocate for the respondent : ORAL ORDER:
Per Justice Mr.B.B.Vagyani, Honble President
1. This appeal filed by org.complainant in consumer complaint no.295/06 is directed against dismissal order dated 18/7/07 passed by District Consumer Forum, Solapur. Forum below dismissed the complaint filed by the insured. Hence this appeal.
2. Heard Mr.L.A.Gavai-Advocate for the appellant and Mr.S.K.Shetty-Advocate for the respondent/Insurance Co.
3. Appellant had taken Bankers Indemnity policy for the period 1/4/04 to 30/3/05. The basic sum insured was to the extent of Rs.10 lakhs. Appellant paid Rs.40,300/- by way of premium. At the instance of some of the customers, bank issued in all six cheques worth of Rs.10,290/-.
Those six cheques were encashed. However it was found that on the basis of forgery, initial figures of the cheques were changed. On the basis of forged cheques, a sum of Rs.24,13,932/- was siphoned by the holder of cheques. A criminal complaint is lodged. Crime is registered against the concerned persons and it is under investigation.
4. Insured submitted its claim on 11/6/04.
Insurance Co. appointed Mr.J.C. Bhansali & Co. as surveyor. Surveyor assessed the loss at Rs.7,53,322/-. During investigation of the criminal offence of forgery, the Investigating agency recovered Rs.2,46,678/- from the culprits. Entire money was with the police agency. Entire money along with other material stored in the police station were gutted in fire on 22/2/05. Therefore appellant bank could not get anything from the police agency. After having considered the recovery of partial amount from the culprits, the surveyor deducted amount recovered by police from the basic sum insured. The Insurance Co. paid Rs.7,53,322/- to the insured by cheque. The insured accepted the partial amount of the claim under protest on 4/10/05. According to the insured, he is entitled much more than the amount paid. The insured has also made serious grievance about delay in payment. Insured therefore filed consumer complaint.
5. Said complaint was resisted by the Insurance Co. Forum below after hearing both the sides and taking into consideration material placed on record, came to the conclusion that there is no deficiency as such on the part of Insurance Co. and consequently dismissed the complaint.
6. Ld.Advocate Mr.L.A.Gavai brought to our notice the terms and conditions of the Bankers Indemnity policy and submitted that the insured is entitled to get twice the sum insured i.e. Rs.20 lakhs. In order to support his submissions, he mainly relied upon the following clause in the Bankers Indemnity policy.
THE INDEMNITY GRANTED UNDER THIS POLICY IN RESPECT OF SUCH DIRECT LOSSES WILL NOT EXCEED :
(a) the Sum Insured hereby:
(i) in respect of any losses by acts and/or commission of any Employee (s) of the Insured either singly or jointly with other Employee(s) or acts/and or omission 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;
(ii) in respect of any one casually or event
(b) Subject to (a) above twice the sum insured hereby in respect of all losses in any one period of insurance.
7. On the other hand, Ld.Advocate Mr.S.K.Shetty vehemently argued that the insured is not at all entitled to get twice the sum insured. For this purpose he relied upon relevant clause of the Bankers Indemnity policy.
REINSTATEMENT:- At all times during the period of insurance of this policy, the insurance cover will be maintained to the full extent of the respective sums insured, in consideration of which upon the settlement of any loss under this policy, pro-rata premium at the basic rate for the unexpired period for the amount of such a loss paid (not exceeding the respective sum insured) shall be payable by the insured to the Company. The additional Premium referred to above shall be deducted from the net claim amount payable under the policy. This continouous cover to the full extent will be available, notwithstanding any previous loss of which the company may have paid hereunder and irrespective of the fact whether the additional premium as mentioned above has been actually paid or not following discovery of a loss. The intention of this clause is to ensure continuity of the cover to the insured subject only to the right of the complainant for deduction from the claim amount when settled of pro rata premium to be calculated from the claim amount when settled, of pro rata premium to be calculated from the date of discovery of each independent loss till expiry of the policy under which the loss falls. Provided that the liability of the company will be limited to twice the respective sum insured during the entire period of the policy in respect of any loss or losses caused by the acts and/or omission of any person.
8. There is special clause for forgery in the Bankers Indemnity Policy, which runs as under:-
FORGERY OR ALTERATION:
By reason of the payment made in respect of bogus of fictitious or forged or raised cheques and/or drafts and/or genuine cheques and/or travellers cheques and/or drafts and/or gift cheques and/or drafts and/or fixed deposit receipt (excluding Bills of Discount and other credit facilities) issued by the Insured bearing forged endorsement or the establishment of any credit to any customers on the faith of such document whether received over the Counter or through the Clearing House or by Mail.
9. It is not disputed that in case of forgery of cheque protection is given. In case of forgery, Insurance Co. is bound to indemnify the loss sustained by the insured. Admittedly basic sum insured was to the extent of Rs.10 lakhs. Bank suffered loss to the extent of Rs.24,13,932/-. As per quantum of basic sum insured, the insured is entitled to get Rs.10 lakhs, provided actual loss sustained exceeds basis sum insured. In the instant case, actual loss sustained by the bank exceeds basic sum insured. Therefore insured is entitled to get Rs.10 lakhs.
10. From the record, it is seen that after registration of crime, Investigating agency recovered a sum of Rs.2,46,578/- from the culprits. Entire amount was in the custody of police. When there was a demand from the insured, the police agency informed him that the amount recovered from the culprits and other material stored in the police station were gutted in fire. The insured did not get anything from the police agency. As per terms and conditions of the policy, Insurance Co. is liable to indemnify the loss sustained by the insured to the extent of basic sum insured. Insurance Co. cannot be permitted to avoid payment of Rs.2,46,578/- on the ground that the police agency recovered that certain amount from the persons, who committed offence of forgery. It is admitted fact that the insured did not get anything from the police agency. The insured sustained loss more than basic sum insured and therefore, Insurance Co. is very much liable to pay Rs.2,46,578/- to the insured. Insured was not at fault. Under the circumstances, insured cannot be asked to sustain a loss of Rs.2,46,578/- when in law he is entitled to get Rs.10 lakhs. Approach of the Forum below therefore is erroneous. Dismissal order therefore suffers from illegality.
11. Ld.Advocate Mr.Gavai is swayed away because of wrong interpretation of the clause in the policy with regard to twice the sum insured. Clause of reinstatement, which has been rightly highlighted by Advocate Mr.S.K.Shetty is required to be read along with other terms of the policy. In case of recurrence of instances of forgery, during subsistence of insurance policy, the entire loss sustained during one year is safeguarded. In the instance case, there is no recurrence of forgery other than claim submitted by the insured on 11/6/04. The intention of introduction of reinstatement clause in the policy is to ensure continuity of the cover to the insured subject only to the right of the complainant for deduction from the claim amount when settled of pro rata premium to be calculated from the claim amount when settled. In case of recurrence of instances of forgery or dishonesty, the liability of the company will be limited to twice the sum insured during the entire period of the policy in respect of any loss or losses caused by the acts and/or omission of any person. By clause of reinstatement, the recurrence of loss is contemplated. Only in case of reinstatement, concept of twice the sum insured is to be invoked and not in any other case. We, therefore, reject the claim for twice the basic sum insured.
12. This takes us to consider the prayer with regard to compensation for delayed payment. Claim was submitted on 11/6/04. Insurance Co. settled the claim and paid partial amount after one year and 4 months. Insurance Co. is expected to settle the claim within reasonable period of three months from the date of receipt of the claim. There was delay for more than one year in settlement of the claim. Therefore insured is entitled to get interest on the delayed payment. In the result, we pass following order:-
ORDER
1.
Appeal is partly allowed.
2. Dismissal order passed by the Forum below is set aside.
3. Complaint is partly allowed.
4. Respondent/Insurance Co. is directed to pay Rs.2,46,578/- to the appellant/org. complainant together with interest @ 9% p.a. from 11/6/04 till the date of realization.
5. Respondent/Insurance Co. is further directed to pay interest @ 9% p.a. on Rs.7,53,322/- for a period of one year to the appellant/org. complainant.
6. Respondent/Insurance Co. is directed to pay Rs.3000/- to the appellant by way of cost of the litigation.
7. Pronounced and dictated in the open court.
8. Copies of the order herein be furnished to the parties.
(S.P.Lale) (B.B.Vagyani) Member President Ms.