Delhi District Court
Supreme Securities Limited vs National Insurance Company Ltd on 27 January, 2010
IN THE COURT OF SHRI HARISH DUDANI,
ADDITIONAL DISTRICT JUDGE-15 (CENTRAL) : DELHI
Suit No.263/09/07
Supreme Securities Limited, Registered
Office, 3rd Floor, RD Chamber, 16/11 Arya
Samaj Road, Karol Bagh, New Delhi 110005
Through:
Shri Sushil Singla, Director ............Plaintiff
Versus
1. National Insurance Company Ltd.,
having its registered office at 3,
Middleton Street, Kolkata 700071 and
Divisional Office No.3 at Jeevan Vikas
(2nd Floor), 30-31A, Asaf Ali Road,
New Delhi 110002
2. ING Vysya Bank Ltd., RD Chambers,
16/11 Arya Samaj Road, Karol Bagh,
New Delhi 110005 ..........Defendants
Date of Institution : 03/04/2007
Date of Decision : 27/01/2010
JUDGEMENT
1. This is a suit for recovery of Rs.9,26,678.00 (Rupees Nine Lacs Twenty Six Thousand Six Hundred and Seventy Eight Only) alongwith interest and cost filed by the plaintiff.
2. The plaintiff has filed above noted suit stating therein that the plaintiff is a money changer licensed by Reserve Bank of India to purchase foreign currency notes/coins and travellers cheques and also to stock or sell foreign currency travellers cheques issued by overseas organizations. The plaintiff for 1 the purpose of its business engages services of officers, executives and other employees and the staff is selected by plaintiff after careful scrutiny of their ability, competence, past experience, honesty and integrity as the nature of duties performed by them involves handling and holding in trust of large sums of money, foreign currency, travellers cheques, etc. The defendant No.1 is a public sector insurance company, engaged in the business of general insurance.
3. It is stated in the plaint that for the purpose of indemnifying the plaintiff against loss of travellers cheques, foreign currency and Indian currency while they are in transit, as also to cover the fidelity of employees of the plaintiff who are engaged in money changing transactions on behalf of the plaintiff, the plaintiff took Money Insurance Policy bearing No.350300/48/04/7600284 from Defendant NO.1, for a sum of Rs.40,00,00,000.00 (Rupees Forty Crores only), inter alia, in respect of fidelity of its employees who engaged themselves in sale and purchase of foreign exchange. The plaintiff has obtained a money insurance policy from the defendant no.1 with hypothecation clause in favour of defendant No.2 Bank. The defendant No.2 Bank is a proforma party from whom no relief is claimed by the plaintiff.
4. It is stated in the plaint that vide appointment letter dated 28/11/2003 plaintiff engaged one Shri Sunil Kumar Arora as Business Development Manager after holding a proper 2 interview and checking his qualifications, experience, antecedents and credentials. After assessing the performance of Shri Sunil Kumar Arora, the plaintiff delegated to him the authority and responsibility of signing the documents in regard to sale and purchase of foreign currency and travellers cheques on behalf of the company and the same was also intimated to the Reserve Bank of India. At that time the plaintiff had no reason to doubt the honesty and integrity of Shri Sunil Kumar Arora. On 11/08/2004 Shri Sunil Kumar Arora asked for travellers cheques for USD 10,500.00 for sale to clients known to him and Shri Sushil Singla, Director of the plaintiff issued him travellers cheques for USD 10,500.00 and the same was entered into relevant register. Shri Sunil Kumar Arora effected the purported sale and brought a cheque bearing No.475325 dated 11/08/2004 drawn in ING Vysya Bank Limited alongwith concerned documents to the plaintiff and filed the same in office. The details of the aforesaid sales are as under:-
Cash Name of Person Passport Amount Amount Memo No. USD Rs. No.
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3751 Dulari Devi Goel A7330461 3000 141000
3752 Bhura Mal Aggarwal E6895662 3000 141000
3753 Bimla Devi Aggarwal E6895663 4500 211500
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10500 493500
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The aforesaid cheque was presented for payment but was returned unpaid due to insufficiency of funds vide memo 3 dated 17/08/2004. Immediately thereafter the plaintiff sought clarifications from Shri Sunil Kumar Arora who stated that cheque would be cleared after three days and in the meantime the plaintiff checked the documents furnished by Shri Sunil Kumar Arora and it was noticed that signatures of the person to whom the purported sale was made did not match with the signatures of those persons on their passport copies. Scrutiny of the documents further showed that sale was made by Shri Sunil Kumar Arora to three different persons but their signatures appeared to be in one hand and one single cheque was issued for the aforesaid three sale transactions and the cheque was issued by M/s. Soleeda Exports which apparently had no relation with the persons to whom foreign exchange was issued. Thereafter the plaintiff approached Smt. Dulari Devi Goel one of the buyers of USD travelers cheque who denied transactions and also her signatures therein. Thereafter, Shri Sunil Kumar Arora informed the plaintiff that transaction was effected through one Shri Surya Kant Dash working as a Manager in Shrey Forex Ltd with whom he had worked previously and the cheque in question was also issued by Shri S. Mahanti on behalf of M/s Soleeda Exports who was also chairman of M/s Shrey Forex Ltd. In order to avoid the loss, or at least to minimise the loss, the plaintiff tried to find out whereabouts of Sh. Surya Kant Dash and Sh. S. Mahanti. The enquiry made by the plaintiff revealed a conspiracy and sinister motive of Shri Sunil Kumar Arora and the persons who had conspired with him to play a fraud on the plaintiff and the plaintiff reported the matter to Economic Offences Wing, 4 Crime Branch of Delhi Police vide complaint dated 24.08.2004 and the said complaint was transferred to DCP (Central) vide diary No.2926/27 dated 27/09/2004. Thereafter, the plaintiff made one more complaint dated 25/10/2004 to the Economic Offences Wing of Delhi Police and on 26/10/2004 the plaintiff gave intimation of the loss to defendant No.2 and also to defendant No.1 insurance company. After constant follow up with the Police, the Police finally registered FIR No.565/05 dated 01/12/2005 at Police Station Karol Bagh, New Delhi under Sections 420/406/120B IPC.
5. It is stated in the plaint that the plaintiff sent requests and reminders dated 17/01/2005, 15/03/2005, 06/05/2005, 16/06/2005, 03/08/2005, 21/12/2005 & 27/03/2006 to defendant No.1 to process the claim but there was no response. Thereafter, Shri Sushil Singla, Director of the plaintiff personally visited the office of defendant No.1 on 21/06/2006 and gave another reminder and for the first time the official of defendant no.1 handed over claim form to the plaintiff. Thereafter, vide letter dated 23/06/2006, the plaintiff delivered the claim form alongwith all supporting documents to the defendant no.1. But no action was taken. Thereafter, plaintiff sent letters and reminders dated 05/07/2006, 12/07/2006 & 14/07/2006 to defendant No.1 and vide reply dated 21/07/2006 the plaintiff was informed by defendant no.1 that they have appointed M/s Garg & Jain Insurance Consultants Pvt. Ltd as investigator with regard to the claim on 20/07/2006. Vide letter dated 01/08/2006 the 5 investigator sought some information and documents from the plaintiff which were duly complied with by the plaintiff by detailed reply dated 11/08/2006. Thereafter, on getting no response from the investigator and defendant no.1, the plaintiff sent letters and reminders to defendant no.1 for early settlement and payment of claim and and defendant No.1 sent letter dated 14/11/2006 to the plaintiff seeking various information and clarifications from the plaintiff which was duly replied. Thereafter, the plaintiff sent further letters and reminders dated 24/01/2007, 29/01/2007 and 01/02/2007 to defendant No.1 calling upon them to settle and pay the claim of the plaintiff immediately. However, defendant no.1 issued a letter of repudiation dated 01/02/2007 rejecting their claim on false, baseless, arbitrary, irrational and filmsy grounds. It is stated that defendant No.1 is liable to pay a sum of Rs.4,93,500.00 (Rupees Four Lacs Ninety Three Thousand Five Hundred only) being the value of the travellers cheques lost on account of the infidelity of employee insured against under the policy, a sum of Rs.2,33,178.00 (Rupees two lacs thirty three thousand one hundred seventy eight only) on account of interest @ 18% per annum on the sum of Rs.4,93,500.00 from 11/08/2004 to 26/03/2007 and a sum of Rs.2,00,000.00 (Rupees Two Lacs only) towards damages for loss to business of plaintiff on account of non settlement of claim by defendant no.1 i.e. in total the defendant no.1 is liable to pay a sum of Rs.9,26,678.00/- (Rupees Nine Lacs Twenty Six Thousand Six Hundred Seventy Eight Only) to the plaintiff alongwith interest pendentelite and future on the 6 decreetal amount @ 18% per annum along with cost of the suit.
6. Summons of the suit were issued to both the defendants who filed their respective Written Statements and contested the suit. In its Written Statement the defendant No.1 has taken objection that the suit is bad for non-joinder of necessary parties as M/s. Soleeda Exports and its director Shri S. Mohanti and Shri Surya Kant Dash and Shrey Forex Ltd. who are also necessary parties have not been implemented in the present suit. It is admitted that plaintiff had obtained Money Insurance Policy from the defendant No.1 with hypothecation clause in favour of defendant No.2. It is admitted that for the purpose of indemnifying the plaintiff against the loss of travellers cheques, foreign currency and Indian currency while they were in transit, as also to cover the fidelity of employee of the plaintiff who are engaged in money changing transactions on behalf of the plaintiff, the plaintiff took Money Insurance Policy bearing No.350300/48/04/7600284 from the defendant no.1 for a sum of Rs.40,00,00,000.00 (Rupees forty crores only). It is denied that Shri Sunil Kumar Arora was appointed by the plaintiff after holding a proper interview and checking his qualifications, antecedents, etc. It is also denied that after assessing his performance the plaintiff delegated Shri S.K. Arora the authority and responsibility of signing the documents in regard to sale and purchase of foreign currency and travelers cheques on behalf of company and 7 the same was also intimated to the Reserve Bank of India. It is stated that Shri S.K. Arora was appointed vide appointment letter dated 28/11/2003 and as per document filed by the plaintiff the authority had been given by the plaintiff to Shri S.K. Arora only after passage of one month's time of his appointment and that the plaintiff was not vigilant while giving authority to its employee and while receiving cheque from M/s. Soleeda Exports in lieu of transactions held with three persons. It is stated that Shri S.K. Arora sold travelers cheque to three different persons and obtained a single cheque from fourth person, who did not have any concern with the transaction and it was a case of negligence on the part of the employee of plaintiff as well as plaintiff itself. It is also stated that had the plaintiff been vigilant at the time of receiving of the cheques, the loss could had been averted, therefore, the defendant No.1 was not liable to pay any sum towards loss suffered by the plaintiff due to negligence of its employee. It is denied that Shri S.K. Arora informed the plaintiff that transaction was effected through Shri Surya Kant Dash, working as Manager in Shrey Forex Ltd. and cheque in question was stated by him to have been issued by Shri S. Mohanti on behalf of M/s. Soleeda Exports who was also the Chairman of M/s. Shrey Forex Ltd. It is stated that police has already conducted preliminary investigation and Shri Surya Kant Dash has been charged for offences u/s406/120B IPC and the police has not included section 408 IPC which specifically deals with the criminal breach of trust by clerk or servant. Neither the plaintiff has lodged any complaint against his employee to 8 the police nor police during their investigation have come to the conclusion that there has been any fraud played by the employee against the employer/plaintiff. It is also stated that it is established that there has been no fraudulent action or activities by the employee and hence, the Insurance Company under the Money Insurance Policy is not at all liable for the loss. It is also stated that as per terms and conditions of the policy, the plaintiff was liable to intimate the defendant within a period of 24 hours of the offence which was not done by the plaintiff. It is further stated that the defendant No.1 has rightly repudiated the claim of the plaintiff as the plaintiff itself was not vigilant and has not also taken due care at the time of the transaction as specifically mentioned in the Insurance Policy. It is stated that plaintiff has not made Shri S.K. Arora as party to the suit who was responsible for the loss due to his negligence. The plaintiff had lodged complaint against Shri S.K. Dash only which itself clarifies that Shri S.K. Arora has not committed any fraud against the plaintiff. It is also stated that the act to the employee of the plaintiff as per plaintiff itself does not fall under the criminal breach of trust by the employee. It is denied that repudiation of the claim of the plaintiff vide letter dated 01/02/2007 is on false, flimsy, baseless, incorrect and arbitrary grounds. It is also denied that the defendant No.1 is liable to pay a sum of Rs.4,93,500.00 (Rupees four lacs ninety three thousand and five hundred only) being the value of travelers cheques lost on account of peril of infidelity of employee insured under the policy as alleged. It is also denied that the defendant No.1 is liable to pay a sum 9 of Rs.2,33,178.00 (Rupees two lacs thirty three thousand one hundred seventy eight only) as interest @ 18% per annum from the date of loss or that damages to the extent of Rs.2,00,000/- (Rupees two lacs only) as claimed. It is denied that defendant No.1 is liable to pay a sum of Rs.9,26,678/- (Rupees nine lacs twenty six thousand six hundred seventy eight only) alongwith interest and cost as claimed.
7. Defendant No.2 has also filed written statement to the plaint of the plaintiff and has contested the same. In written statement the defendant No.2 has taken objection that no cause of action ever arose against it and the suit is liable to be dismissed and in the plaint the plaintiff has implemented the defendant No.2 as proforma party and nothing has been claimed against the defendant No.2, hence, the suit is liable to be dismissed. It is stated that the plaintiff is availing credit limit of Rs.50 lacs from the defendant No.2. It further is stated the suit of the plaintiff is liable to be dismissed as no relief has been claimed against the defendant no.2 who has been implemented as proforma party.
8. From the pleadings of the parties, the following issues were framed by my learned Predecessor on 01/10/2007:-
1. Whether the plaintiff is entitled to recover a sum of Rs.9,26,678/- or any other amount from the defendant No.1?OPP
2. If issue No.1 is decided in favour of plaintiff, whether the plaintiff is entitled to any interest on the said amount, if so, at what rate and for what period? OPP 10
3. Whether the suit is bad for non joinder of necessary parties?OPD
4. Whether the plaintiff is not competent and authorised to file and institute the suit?OPD
5. Whether there was any infidelity on the part of Shri S.K. Arora, employee of plaintiff/OPD
6. Whether the plaintiff or its authorised employee was negligent in accepting one cheque from Solida Exports in respect of three cheques, if so its effect? OPD
7. Whether the plaintiff acted in contravention to the terms and conditions of the policy? If so its effect?OPD.
8. Relief.
9. In order to prove its case the plaintiff has examined PW1 Shri Sushil Singhal, Director of plaintiff and PW2 HC Jai Prakash, P.S. Karol Bagh, New Delhi who proved FIR No.565 /05, u/s420/406/210B IPC registered on 01/12/2005 as Ex.PW2/A and thereafter the P.E. was closed on 29/02/2008.
10. In order to prove its defence the defendant No.2 examined DW1 Shri Sanjay Arneja, Assistant Manager of divisional office of defendant no.1 and DW2 Shri Mukesh Kumar Garg, Director of Garg & Jain Insurance Consultants (P) Ltd., Surveyors, Loss Assessors and Investigators.
11. As per order dated 08/10/2008, the defendant No.2 did not prefer to examine any witness and DE was closed.11
12. I have heard learned counsels for the parties and carefully perused the record and my findings on the specific issues are as under:-13. Issue No. 3
In the WS, the defendant no. 1 has taken the objection that the suit is bad for non-joinder of necessary parties as M/s Soleeda Exports and its director Shri S. Mohanti who had issued cheque in question has not been impleaded as a party and, moreover, Shri Surya Kant Dash and M/s Shrey Forex Ltd. are also the necessary parties. It is to be noted that the case of the plaintiff is that Shri S. K. Arora who was employee of the plaintiff had taken travellers cheques worth USD 10,500.00 for sale to clients known to him and after the sale, Shri S.K. Arora gave one cheque in respect of aforesaid USD 10,500.00 and the said cheques was issued by Shri S. Mohanti on behalf of M/s Soleeda Exports who was also the Chairman of M/s Shrey Forex Ltd. and Shri S. K. Arora informed the plaintiff that the transaction was effected through one Shri Surya Kant Dash working as Manager in Shrey Forex Ltd. It is to be noted that this is not a case for recovery of the amount of the cheque which was issued by M/s Soleeda Exports in favour of the plaintiff. Rather, the plaintiff has filed the present suit alleging that his employee Shri S. K. Arora has acted with infidelity and on that account the plaintiff is entitled to be compensated by defendant no. 1 in view of the insurance policy which the plaintiff has taken from defendant no.1. In the present suit in order to succeed the plaintiff is required to prove that his 12 employee Shri S. K. Arora has acted unfaithfully to the interest of the plaintiff and on that account, in view of insurance policy, the plaintiff is entitled to be compensated by defendant no.1. In the circumstances, the presence of M/s Soleeda Exports or its director Shri S. Mohanti or Shri Surya Kant Dash and M/s Shrey Forex Ltd. is not necessary for adjudicating the real controversy between the parties. This issue accordingly stands decided in favour of the plaintiff and against the defendant.14. Issue No. 4
The present suit has been filed by the plaintiff on the ground that the plaintiff has taken insurance policy from the defendant no.1 to cover acts of infidelity of his employees and that Shri Sunil Kumar Arora, Business Development Manager of the plaintiff committed act of infidelity and on that account the plaintiff is entitled to be compensated by the defendant no.1 for the loss which has occasioned on account of act of infidelity of Shri Sunil Kumar Arora. In the written statement, the defendant no.1 has not denied that the plaintiff has taken the money insurance policy from the defendant no.1, as alleged by the plaintiff. The money insurance policy which was taken by the plaintiff from the defendant no. 1 is Ex.PW1/2 and it provides fidelity guarantee of cash carrying messangers/employees. Hence, on account of the policy Ex.PW1/2 issued by the defendant no. 1 in favour of the plaintiff, plaintiff is entitled to institute the present suit against the defendants. This issue stands answered accordingly.13 15. Issue Nos. 5 , 6 & 7
Since all these issues involve common discussion of facts and law and for the sake of brevity all these issues are being taken up together. The case of the plaintiff is that the plaintiff is full fledged money changer duly licensed by the Reserve Bank of India and for the purposes of indemnifying the plaintiff against loss of travellers cheques, foreign currency and Indian currency while they are in transit, as also to cover the fidelity of employees of the plaintiff, the plaintiff took money insurance policy from defendant no.1 and on 11.08.2004 Shri Sunil Kumar Arora, Business Development Manager of the plaintiff asked for travellers cheques for USD 10,500.00 for sale to clients known to him and Shri Sushil Singla, Director of the plaintiff issued travellers cheques and after effecting the purported sale, Shri S.K. Arora brought a cheque dated 11.08.2004 drawn on ING Vysya Bank Ltd for a sum of Rs.4,93,500/- (Rupees four lacs ninety three thousand five hundred only) but on presentation the said cheque was returned back unpaid due to insufficient funds vide memo dated 17.08.2004. After the plaintiff came to know about dishonour of the cheque, they immediately sought clarification from Shri S. K. Arora and the plaintiff also checked the documents furnished by Shri S. K. Arora and it was found that the signatures of the persons to whom the purported sale was made did not match with the signatures of those persons on copies of their passports. Thereafter, the plaintiff was informed by 14 Shri S. K. Arora that the transaction was effected through Shri Surya Kant Dash working as Manager in Shrey Forex Ltd. with whom Shri S. K. Arora had worked earlier and the cheque in question was issued by Shri S. Mahanti on behalf of M/s Soleeda Exports who was also the Chairman of Shrey Forex Ltd. Thereafter, the plaintiff made complaint to the Economic Offence Wing of Delhi Police vide complaint dated 24.08.2004. The contention of the plaintiff is that the loss to the plaintiff had taken place on account of infidelity of its employee, namely, Shri S. K. Arora and in terms of the policy which the plaintiff had taken from the defendant no. 1, the defendant no. 1 was liable to make the payment of loss suffered by the plaintiff due to infidelity of its employee.
16. The contention of the defendant no. 1 is that the alleged loss to the plaintiff took place on account of the negligent conduct of the plaintiff and its employees and not on account of infidelity of Shri S. K. Arora, as alleged and as per terms of the policy, the plaintiff was to take all reasonable steps to safeguard the property insured against accident, loss or damage.
17. The insurance policy issued by defendant no. 1 in favour of the plaintiff is Ex.PW1/2. In Ex.PW1/2, the description of money to be insured is mentioned as :
"CASH DESCRIBED IN THE POLICY SHALL INCLUDE BOTH INDIAN AND FOREIGN CURRENCY NOTES/COINS, FRESH AND ENCASHED TRAVELLERS CHEQUES, 15 FRESH T.C.S HELD IN TRUST FROM AMERICAN EXPRESS TRAVEL, RELATED SERVICES ARE ALSO COVERED."
Ex.PW1/2 also provides fidelity guarantee of cash carrying messangers/employees. Ex.PW1/2 also mentions definition of money as:
"Money shall mean and include Cash, Bank Drafts, Currency Notes, Treasury Notes, Cheques, Postal Orders, and Current Postage Stamps".
General condition no. 3 of Ex.PW1/2 provides :
"REASONABLE CARE : The insured shall take all reasonable steps to safeguard the property insured against accident, loss or damage."
18. Ld. counsel for plaintiff has also relied on Jitendra Kumar vs. Oriental Insurance Co. Ltd. and Anr. (2003) 6 SCC 420, United India Insurance Co. Ltd. vs. Great Eastern Shipping Co. Ltd., AIR 2007 SC 2556, Satyanarayan Jiwanram vs. National Insurance Co. Ltd. and Ors. II (2006) CPJ58 (NC) and National Insurance Co. Ltd. vs. National Co-operative Consumer Federation of India Ltd. MANU/DE/0572/2009 and has contended that in case of ambiguity or doubt, contract is to be construed against the insurance company.
1619. Ld. counsel for defendant has relied on decision in Vikram Greentech (I) Ltd. & Anr.vs.New India Assurance Co. Ltd. 2009 (5) SCALE 183 and United India Insurance Co. Ltd.v s. M/s Harchand Rai Chandan Lal JT 2004 (8) SC 8 and has contended that terms of insurance policy are to be construed strictly to determine extent of liability of the insurance.
20. In B.V.Nagaraju vs. Oriental Insurance Company Limited, Divisional Office Hasan,1996 ACJ 1178 wherein it was held that :
".....When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinnaire approach, the very same conclusion would emerge in obeisance to the doctrine of 'reading down' the exclusion clause in the light of the 'main purpose of the provision so that the 'exclusion clause' highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the 17 main purpose."
21. The contention of the plaintiff is that the loss to the plaintiff had taken place on account of infidelity of its employee Shri S. K. Arora, Business Development Manager. However, the defendant no. 1 has pleaded that alleged loss to the plaintiff had taken place on account of negligence of the plaintiff and its employees because the plaintiff failed to take the reasonable care and the defendant no. 1 was well within its right to disallow the claim of the plaintiff.
22. Infidelity constitutes an act of being unfaithful. For bringing an act within the ambit of infidelity, the plaintiff is required to prove that its employee Shri S. K. Arora acted unfaithfully to the interest of the plaintiff and the plaintiff is also required to prove that Shri S. K. Arora had acted with culpable intent and it was not merely an act of negligence on the part of Shri S. K. Arora. While the necessary attribute of the negligence is lack of proper care and attention. In order to prove its case, the plaintiff examined Shri Sushil Singla, Director as PW-1 who adduced evidence by way of affidavit Ex.PW1/A. In para 8, 9 & 10 of affidavit Ex.PW1/A, it is mentioned that on 11.08.2004 Shri S. K. Arora asked for travellers cheques for USD 10,500.00 for sale to clients known to him on which travellers cheques for USD 10,500.00 were handed over to him and after effecting the said sale, Shri S. K. Arora brought a cheque dated 11.08.2004 drawn on ING Vysya Bank Ltd. alongwith concerned documents and filed the same himself in the 18 office but the said cheque was returned unpaid due to insufficient funds vide memo dated 17.08.2004 Ex.PW1/7. PW-1 admitted in the cross-examination that the said travellers cheques were issued by Shri S. K. Arora to Dulari Devi Goel, Bhura Mal Aggarwal and Bimla Devi Aggarwal and as per the Reserve Bank of India guidelines, at the time of issuance of travellers cheques, photocopy of the passport of the customer is retained. PW-1 further stated in the cross-examination that at the time of issuance of the travellers cheques besides retaining a copy of passport, a letter of request is also given by the customer. Thereafter, PW-1 stated in the cross-examination that in the present case later on it was found that the letter of requests so given in case of aforesaid three persons appeared to be in one and the same handwriting. PW-1 further stated in the cross- examination that it is correct that original passport has to be checked at the time of issuance of travellers cheques. In the cross-examination of PW-1 suggestion was given to the effect that it will mean that at the time of issuance of travellers cheque Shri S. K. Arora had not properly verified or checked the original passports to which PW-1 replied that he cannot say so. PW-1 has not categorically denied the suggestion in the cross-examination that Shri S. K. Arora had not properly verified or checked the original passports at the time of issuance of the travellers cheques which proves that Shri S. K. Arora has not acted with due diligence while entering into the transaction relating to the aforesaid travellers cheques. It is also to be noted that the travellers cheques were issued by the plaintiff on 11.08.2004 and Shri 19 S. K. Arora gave cheque for the sale price of the same on 11.08.2004 and the same were returned dishonoured on 17.08.2004. However, during the said period the plaintiff has not exercised due care by examining documents which were brought by Shri S. K. Arora after the issuance of the aforesaid travellers cheques. If the plaintiff had scrutinized the documents on the day when they were brought by Shri S. K. Arora, then the plaintiff would have itself noted that the signatures of three persons to whom the travellers cheques were issued on the documents appeared to be in one hand. The plaintiff has also not proved as to why immediately on receipt of one cheque for all the three sales, the plaintiff did not question Shri S. K. Arora regarding there being only one cheque for three sales and, moreover, the said cheque was also not issued by the persons to whom travellers cheques were sold but the said cheque was issued by M/s Soleeda Exports. If the plaintiff was vigilant and had immediately checked the documents and had noted that the cheque was not issued by the persons to whom travellers cheques were sold, the plaintiff could have mitigated the loss.
23. The plaintiff is alleging that Shri S. K. Arora had acted with ulterior motive and thereby committed infidelity but in the cross-examination of DW-1 conducted on 12.09.2008, suggestions have been given by the plaintiff to the effect that it is correct that employee of the plaintiff did not act prudently while accepting cheque from unconnected third party. By giving this suggestion to DW-1 in the cross- examination, the plaintiff has admitted that Shri S.K.Arora 20 had not exercised due care and attention while accepting cheque from unconnected third party and he thereby acted negligently. In the cross-examination of DW-1 conducted on 23.09.2008 again the plaintiff gave suggestion to the effect that it is correct that Shri S. K. Arora was not vigilant while dealing with the transaction, he being the employee of the plaintiff. By giving this suggestion also to DW-1 in the cross-examination, the plaintiff has admitted that by not being vigilant while entering into the transaction, Shri S. K. Arora acted negligently. In the cross-examination conducted on 08.10.2008, DW-1 stated that to his knowledge, Shri S. K. Arora did not cheat or deceive the plaintiff. In the cross-examination of DW-1, no suggestion was given to the effect that Shri S. K. Arora was unfaithful to the plaintiff company and in order to cause wrongful gain to himself and wrongful loss to the plaintiff, he committed act of infidelity. Again in the cross-examination of DW-1 conducted on 08.10.2008, a suggestion was given by the plaintiff to DW-1 to the effect that it is correct that Shri S. K. Arora did not comply with all the guidelines issued by the Reserve Bank of India during the transaction in question. By giving this suggestion also, the plaintiff has admitted that Shri S. K. Arora has not exercised due care which was expected of him i.e. following Reserve Bank of India guidelines during the transaction in question.
24. It is also to be noted that it is not a case wherein employee of the plaintiff had acted in a manner thereby causing loss to the plaintiff in monetary terms by act of infidelity so that the 21 said amount could not have been recovered by the plaintiff. As per the case of the plaintiff, employee of the plaintiff i.e. Shri Sunil Kumar Arora after execution of the transaction had brought one cheque bearing no. 475325 dated 11.08.2004 drawn on ING Vysya Bank Ltd. and the said cheque was issued by M/s Soleeda Exports and the plaintiff knowing fully well that the said cheque has been issued by the Soleeda Exports presented the said cheque for encashment but the same was received back dishonoured with the remarks "insufficient funds". PW-1 Shri Sushil Singla stated in cross-examination that action u/s 138 N.I.Act has already been initiated with regard to dishonour of the cheque. The plaintiff has already taken recourse to mitigate the loss which was caused to the plaintiff on account of dishonour of the cheque.
25. In order to prove its defence, the defendant no. 1 has relied on the Survey and Loss Assessment Report of Loss under Money Policy which is Ex.DW2/1. In his report Ex.DW2/1, the surveyor has drawn the conclusion that based on the complaint lodged by the insured to the police and action taken by the police it seems that the act of fraud has been done by Shri Surya Kant Dash of M/s Shrey Forex Ltd. and as per FIR, Surya Kant Dash is the only accused and name of Shri Sunil Kumar Arora is not appearing in the list of accused. Ld. counsel for defendant no. 1 has relied upon a decision in Sikka Papers Limited vs. National Insurance Company Ltd. & Ors. JT 2009 (7) SC 465 wherein it was held that surveyor report is not the last word but there must 22 be legitimate reasons for rejecting it. In his report Ex.DW2/1 the surveyor has referred to the circumstances of the transactions relating to sale of travellers cheques worth USD 10,500.00 by Shri Sunil Kumar Arora, issuance of cheque no. 475325dated11.08.2004 drawn on ING Vysya Bank Ltd. in favour of the plaintiff in lieu of the payment of said travellers cheques and subsequent dishonour of the cheque, report made by the plaintiff to the police and the memorandum of instructions to authorized money changers as issued by Reserve Bank of India and thereafter the surveyor arrived at the conclusion that no act of infidelity has been made out against Shri Sunil Kumar Arora and accordingly the plaintiff is not entitled to the claim. Even the case of the plaintiff that Shri Sunil Kumar Arora had taken travellers cheques for being sold to Smt. Dulari Devi Goel, Shri Bhura Mal Aggarwal and Smt. Bimla Devi Aggarwal but it was found by the plaintiff that the same have not been sold to the said persons and Shri Sunil Kumar Arora sold the same to M/s Soleeda Exports and, was therefore, unfaithful to the plaintiff is also of no help to the plaintiff as in para 8 of the affidavit Ex.PW1/A, plaintiff himself has mentioned that Shri Sunil Kumar Arora asked PW-1 for travellers cheques for USD 10,500.00 for sale to clients known to him and, therefore, PW-1 issued the same to Shri Sunil Kumar Arora. This part of contents of para 8 of affidavit Ex.PW1/A shows that while issuing the travellers cheques to Shri S. K. Arora, the plaintiff was well aware that the same have been taken by Shri S. K. Arora for selling the same to the clients already known to him and that is the reason, the plaintiff accepted 23 single cheque drawn by M/s Soleeda Exports in lieu of the amount of the travellers cheques from Shri S. K. Arora. Acceptance of single cheque against 3 transactions that too drawn at M/s Soleeda Exports does not prove that Shri S.K. Arora had acted unfaithfully to the plaintiff. The plaintiff has not adduced any evidence to the effect that Shri S. K. Arora had acted with ulterior motive by causing wrongful gain to himself and wrongful loss to the plaintiff and was thereby unfaithful to the plaintiff and he committed act of infidelity.
26. In view of aforesaid discussions, the plaintiff has failed to prove that there was infidelity on the part of Shri S. K. Arora, employee of the plaintiff and the plaintiff acted in negligent manner in accepting the cheque from Soleeda Export in respect of three travellers cheques in question, the effect of which is that the plaintiff is not entitled to claim any amount from defendant no. 1 in respect of the insurance policy as issued by defendant no. 1. Plaintiff has also failed to prove that the plaintiff exercised reasonable care in terms of the conditions of insurance policy Ex.PW1/2. All these issues stand answered accordingly.
27. Issue Nos. 1 & 2In findings on Issue Nos. 5, 6 & 7 above, it has been held that plaintiff has failed to prove that there was infidelity on the part of Shri S.K. Arora, employee of the plaintiff and the plaintiff has failed to exercise reasonable care in terms of condition of the insurance policy Ex.PW1/2. Accordingly, the plaintiff is not entitled to recover the amount of 24 Rs.9,26,678/- (Rupees nine lacs twenty six thousand six hundred seventy eight only) or any other amount from the defendant. Consequently, the plaintiff is also not entitled to any interest on the said amount. Both these issues stand answered accordingly.
28. Issue No. 8In view of findings on Issue Nos. 1 & 2 above, the plaintiff is not entitled to the amount as claimed. The suit of the plaintiff is dismissed. Parties are left to bear their own costs. Decree sheet be prepared accordingly. File be consigned to Record Room.
(Announced in the open Court
on 27th January, 2010) (HARISH DUDANI)
ADDL. DISTRICT JUDGE-15
(CENTRAL) : DELHI
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