National Consumer Disputes Redressal
Sangrur Central Co-Operative Bank Ltd. vs Oriental Insurance Co. Ltd. on 31 October, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2234 OF 2013 (Against the Order dated 26/03/2013 in Appeal No. 973/2008 of the State Commission Punjab) 1. SANGRUR CENTRAL CO-OPERATIVE BANK LTD. THROUGH ITS DISTRICT MANAGER,
BRANCH PATIALA GATE, SANGRUR PUNJAB ...........Petitioner(s) Versus 1. ORIENTAL INSURANCE CO. LTD. THROUGH ITS DIVISIONAL MANAGER,
BRANCH OFFICE SHREE RAM BUILDING,
NEW COURT ROAD,
MANSA PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. DR. B.C. GUPTA,PRESIDING MEMBER HON'BLE MR. DR. S.M. KANTIKAR,MEMBER
For the Petitioner : For the Respondent :
Dated : 31 Oct 2017 ORDER
APPEARED AT THE TIME OF ARGUMENTS
For the Petitioner
:
Mr. Amarjit Singh Bedi, Advocate
For the Respondents
:
Mr. Sandeep Bisht, Advocate with
Mr. Rahul Kumar, Advocate
PRONOUNCED ON: 31st October 2017
ORDER
PER DR. B.C. GUPTA, PRESIDING MEMBER This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986, against the impugned order dated 26.03.2013, passed by the Punjab State Consumer Disputes Redressal Commission, (hereinafter referred to as "the State Commission") in First Appeal No. 973/2008, The Oriental Insurance Co. Ltd. vs. The Sangrur Central Cooperative Bank Ltd., vide which, while allowing the appeal, the order dated 30.07.2008, passed by the District Consumer Disputes Redressal Forum, Sangrur, partly allowing the Consumer Complaint No. 07/679, was set aside and the said consumer complaint was dismissed.
2. Briefly stated, the facts of the case are that the complainant, which is a Central Cooperative Bank for District Sangrur, Punjab obtained an insurance policy from the opposite party (OP), the Oriental Insurance Co. Ltd. valid for the period 01.07.2006 to 30.06.2007 for their 71 branches located in different parts of Sangrur District. A cover note to that effect was issued by the OP Insurance Company on 29.06.2006, after charging a sum of Rs. 1,49,934/- as premium for the said policy. The amount of cash insured at the premises was Rs. 10 crores and the amount of cash insured in transit was Rs. 5 crores for all the branches of the complainant Bank. It is stated that on 05.11.2006, a theft took place at Kalajhar branch of the complainant Bank for which, intimation was given to the OP Insurance Company on 06.11.2006, and an FIR No. 152 was also lodged under Section 457/380 IPC, read with Section 120B IPC with the police station at Bhawanigarh in District Sangrur. It is stated that the cash in Kalajhar branch was Rs. 8,68,337/- at the time of obtaining the insurance. The complainant Bank filed claim with the OP Insurance company and submitted the necessary documents to them, but the claim was repudiated on 30.03.2007 by the OP Insurance Company, taking the plea that the management of the Bank was found negligent in taking due care of the money stated to be lying at the premises in question. The OP Insurance Company stated that the complainant was supposed to provide two persons at the Kalajhar branch for handling the cash, but they had not done so. Moreover, the said branch was supposed to handle cash upto Rs. 3 lakhs only, as per the terms and conditions governing the insurance policy in question. On the other hand, the complainant Bank took the plea that the alleged circular attached with the letter of repudiation dated 30.03.2007 was not part of the agreement as the terms and conditions of the policy, including the exclusion clause etc. were never supplied to them.
3. In the written reply to the complaint filed by the OP Insurance Company, it was stated that the insurance policy alongwith the terms and conditions was immediately sent to the insured Bank. The cash retention limit of Kalajhar branch was Rs. 3 lakhs, which included balance of Rs. 1 lakh with other banks. The Insurance Company stated that on receipt of intimation about the incident, they had appointed a surveyor to assess the loss, who submitted his status report dated 11.11.2006 to the Insurance Company. Later, he submitted his final report dated 30.03.2007, as per which, the claim was not payable under the terms and conditions of the policy, as there was gross negligence on the part of the management of the Bank. The OP stated that only a single person had been deputed by the Bank to handle the cash. There was, therefore, no deficiency in service on the part of the Insurance Company.
4. The District Forum, after taking into account the averments of the parties, allowed the claim and directed the Insurance Company to pay a sum of Rs. 14,73,937/- to the Bank alongwith interest @ 9% per annum from the date of repudiation i.e. 30.03.2007 and Rs. 3,000/- as cost of litigation. It was observed in the order of the District Forum that from the final report of the surveyor, it was made out that on 04.11.2006, the Kalajhar branch of the complainant was in possession of the cash amount of Rs. 15,64,725/-. After the theft took place, the balance of Rs. 90,788/- was found in the safe and hence, the cash was less by an amount of Rs. 14,73,937/-. Being aggrieved against the said order of the District Forum, the OP Insurance Company challenged the same by way of an appeal before the State Commission, which was decided vide impugned order. The State Commission allowed the appeal, taking the plea that as per exclusion clause (b), losses resulting wholly or partially from the wrongful act or default of any Director or any partner of the insured were excluded. Being aggrieved against the said order of the State Commission, the complainant Bank is before this Commission by way of the present Revision Petition.
5. The arguments of the learned counsel for both the parties were heard. The learned counsel for the OP Insurance Company sought time to place on record documents/evidence/affidavit to show that the policy was duly sent by the Insurance Company to the petitioner. However, on the date of the final hearing, the learned counsel for the OP Insurance Company stated that they were unable to produce any documents/evidence to show whether the insurance policy was ever dispatched/sent to the complainant Bank. The learned counsel was specifically asked if there was any record showing dispatch or receipt from the postal department, or any entry in a messenger book etc. which could prove that the policy in question was duly sent/delivered to the Bank, but the learned counsel failed to produce any such document/proof in their favour. It was argued by the learned counsel for the petitioner/complainant Bank that the insurance policy in question was never received by the complainant and hence, the terms and conditions of the contract, if any, were not applicable in this case. The learned counsel stated that they had only received a copy of the cover note dated 20.06.2006 and they never received copy of the policy stated to have been issued on 30.06.2006. The contention raised by the OP Insurance Company regarding the cash retention limit or the number of persons handling the cash etc. were not relevant, therefore, for deciding the outcome of the case. The learned counsel has drawn attention, in support of his arguments, to an order made by the Hon'ble Apex Court in Modern Insulators Ltd. vs. Oriental Insurance Co. Ltd., (2000) 2 SCC 734, stating that in the absence of communication of the exclusion clause to the insured, the insurer could not claim the benefit of that clause. In the present case, therefore, the Insurance Company could not derive any benefit of any exclusion clause. The learned counsel stated that the order passed by the State Commission was contrary to the law laid down by the Hon'ble Supreme Court in the case, Modern Insulators Ltd. vs. Oriental Insurance Co. Ltd. (supra). The learned counsel further argued that criminal proceedings had been initiated against the officials of the complainant Bank, but as per the decision made on 16.02.2010 by the Court of Additional Chief Judicial Magistrate, the officials of the complainant Bank had been acquitted of the charge of having a criminal conspiracy in the matter.
6. On the other hand, the learned counsel for the OP argued that the cover note itself stated that the insurance was subject to the terms and conditions of the policy. The complainant Bank, therefore, could not take advantage of their assertion that the terms and conditions of the policy were not received by them. Moreover, there were standard terms and conditions, governing the issuance of such like policy in question. The learned counsel stated that the Bank had definitely sent the policy to the complainant Bank. The learned counsel has further drawn attention to an order passed by the Hon'ble Supreme Court in General Assurance Society Ltd. vs. Chandumull Jain & Anr. decided on 07.02.1966, (1966) 3 SCR, saying that since the cover note referred to a standard policy, the assured is taken to have accepted the terms of the policy. The learned counsel argued that the order passed by the State Commission was in accordance with law and should be upheld.
7. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.
8. The main issue involved in the matter is whether the terms and conditions governing the insurance policy in question were received by the insured Bank, and in case, they did not receive the same, whether the Insurance Company is liable to pay the claim or not. The main thrust of the arguments presented on behalf of the Bank says that since they were not made aware of the terms and conditions of the insurance policy, there was no question of any violation of such conditions on the part of the insured Bank. A surprising feature in the whole episode is that despite providing an opportunity to the Insurance Company, which is a prominent State-owned enterprise, they could not provide any proof or explanation about the mode of communication of the terms and conditions to the insured. The Insurance Company could have scrutinised the record available in their office and found out, whether the said terms and conditions were dispatched through post or courier or some special messenger. They are supposed to have particulars regarding dispatch number and date for every document, that is issued from their office. In the absence of any such material or proof, there is no alternative, but to accept the version of the complainant Bank that they never received the terms and conditions of the policy and hence, they are not guilty in any manner of not following the terms and conditions of such policy.
9. The learned counsel for the petitioner Bank has rightly placed reliance on the order passed by the Hon'ble Apex Court in Modern Insulators Ltd. vs. Oriental Insurance Co. Ltd. (supra). In the said judgment, the view taken by the National Commission that it was equally the responsibility of the insured to call for the terms and conditions from the insurer was found to be incorrect. The Hon'ble Apex Court reversed the finding of the National Commission in that case by observing that if the terms and conditions of the standard policy, wherein the exclusion clause was included, was neither a part of contract nor disclosed to the complainant, the respondent could not take benefit of the exclusion clause. The learned counsel for the respondent Insurance Company have tried to place reliance on the judgement passed by the Hon'ble Apex Court in General Assurance Society Ltd. vs. Chandumull Jain & Anr. (supra). However, the facts involved in the present case are distinct from the facts in General Assurance Society Ltd. vs. Chandumull Jain & Anr. (supra). In that case, the Society had not issued the policies, by the time the river got flooded and there was damage to the houses. In the present case, the Insurance Company claims to have issued and sent the policy to the insured alongwith the terms and conditions, but the same has been denied by the Bank. In the light of these facts, the view taken by the Hon'ble Apex Court in Modern Insulators Ltd. vs. Oriental Insurance Co. Ltd. (supra) is applicable to the facts of the present case.
10. Based on the discussion above, this revision petition succeeds; the order passed by the State Commission is, therefore, set aside and the order passed by the District Forum is sustained, being passed on a correct appreciation of the facts and circumstances on record. The Insurance Company is directed to remit the amount ordered by the District Forum to the complainants within a period of four weeks from the issue of this order.
11. Before parting with this Revision Petition, we deem it necessary to forward a copy of this order to the Insurance Regulator i.e. the Insurance Regulatory & Development Authority (IRDA) with a request to look into the issue of sending the insurance policies alongwith the terms and conditions thereof, to the insured. In a large number of cases filed for adjudication before this Commission, the issues are raised, as to whether the insurance policy in question alongwith the terms and conditions thereof, was sent by the Insurance Company and whether the said documents were received by the insured. Invariably, in such cases, the Insurance Company is asked to submit proof after examining their own office record, whether such policies had been actually sent by them to the insured and to indicate the dispatch number, the mode of sending the same to the insured etc. The Insurance Companies are found wanting in almost all matters to provide evidence, as to whether the insurance policy alongwith the terms and conditions was provided to the insured and the mode thereof. The IRDA may consider the desirability of issuing suitable guidelines in this regard to the Insurance Companies with the objective of ensuring that proper evidence is available in their office, from where it could be deciphered that such policies/terms and conditions etc. were physically sent by them and duly received by the insured. It is felt that a lot of litigation can be avoided if clear-cut guidelines are issued regarding the mode of sending the policies and the communication of the terms and conditions to the insured.
...................... DR. B.C. GUPTA PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER