State Consumer Disputes Redressal Commission
New India Assurance Company Limited vs The Patiala Central Co-Operative Bank on 3 April, 2017
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.739 of 2016
Date of Institution: 27.09.2016
Order reserved on:28.03.2017
Date of Decision : 03.04.2017
The New India Assurance Co. Ltd., Opposite Income Tax Officer
Leela Bhawan, Patiala now filed through SCO No.36-37, Sector
17-A, Chandigarh through its duly authorized officer.
.....Appellant/Complainant
Versus
The Patiala Central Cooperative Bank Ltd., Patiala through its
District Manager.
.....Respondents/Opposite Parties
Appeal against order dated
11.08.2016 passed by the District
Consumer Disputes Redressal
Forum, Patiala.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Smt. Surinder Pal Kaur, Member Present:-
For the appellant : Sh. Vinod Gupta, Advocate
For respondent : Sh. N.S. Vashist, Advocate
............................................ F.A. No. 739 of 2016 2 SURINDER PAL KAUR, MEMBER :-
The appellant (OP No.1 in the complaint before District Forum) has filed this appeal against order dated 11.08.2016 of District Consumer Disputes Redressal Forum Patiala (in short the 'District Forum'), vide which, the complaint filed by the respondent of this appeal (the complainant in the complaint) U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") was allowed and OPs therein were directed to pay a sum of Rs.7 lac to the complainant along with interest @ 8% per annum from the date of repudiation till realization of the amount along with Rs.5000/- as litigation expenses within 30 days from the receipt of copy of the order. OP No.2 in the complaint has not been impleaded as a party in this appeal by the appellant.
2. Complainant The Patiala Central Cooperative Bank Ltd., Patiala through its District Manager filed the complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that it had obtained a policy namely "Bankers Indemnity Insurance Policy" from OPs for a period from 01.05.2013 to 30.04.2014 for sum assured of Rs.30 lac for covering the risk of transit, forgery and alteration in respect of cheques, drafts etc. It received a draft bearing No.838141 dated 24.10.2013 for sum of Rs.7 lac in favour of Ravi, issued by Punjab State Cooperative Bank, SCO 175-187 Sector 34A, Chandigarh. The complainant-bank was collecting bank for its payment. Draft was sent by State Bank of India Branch, Patiala F.A. No. 739 of 2016 3 for clearing. Complainant-bank cleared the draft for its payment on 29.10.2013. After 29.10.2013, complainant sent the claim for the payment of Rs.7 lac from Punjab State Cooperative Bank Ltd., Chandigarh. On 15.11.2013, employee of complainant bank namely Sh. Gurnam Singh visited the office of Punjab State Cooperative Bank Ltd., Chandigarh for reconciliation of the amount, which was cleared by complainant bank for its payment. It came to the notice that draft No.838141 of Rs. 7 lac was not drawn/issued by Punjab State Cooperative Bank Ltd., Chandigarh. On 16.11.2013, Punjab State Cooperative Bank Ltd., Chandigarh telephonically informed that the above-said draft was fictitious and the number of the same did not tally. Complainant-Bank made a contact with the State Bank of India, The Mall Branch, Patiala and it came to its notice that this draft was credited/deposited in the State Bank of India, Branch Ferozabad (UP) in account No.33318924305, which was in the name of Ravi R/o 24/3 Sohag Nagar, Ferozabad and the above account was opened on 08.10.2013. On 18.11.2013, official of the complainant-Bank was called by Managing Director of Punjab State Cooperative Bank Ltd., Chandigarh along with record and it was discovered that there was material alteration in the draft far committing the fraud of Rs.7 lac, which could not be detected with naked eyes. Sh. Rajesh Singla, Inquiry Officer submitted the enquiry report that originally draft was of Rs.1000/- on 24.07.2013 and material alteration was made therein very carefully in a F.A. No. 739 of 2016 4 sophisticated manner and fraud was played with the bank. Complainant-Bank made a complaint to SSP, Patiala dated 19.11.2013 for initiating criminal action for this fraud and thereafter, FIR No.120 dated 31.05.2014 was registered at Police Station, Kotwali, Patiala under Section 420, 467, 468 and 471 IPC against Ravi s/o Teza R/o House No.24/3, Sohag Nagar, Ferozabad (UP). Complainant-Bank also got the report of handwriting expert regarding the tampered draft. Dr. Inderjit Singh, Handwriting Expert gave a report dated 10.04.2014 with the observation that the amount in digit was written as Rs.1000/- and subsequently was changed to 7.0 lacs and the word 7 lac had been written by erasing the letter "0" of one and the word "Thousand" with the use of chemical eraser and adding "Se" and the original digit in the date in the month portion had been cut from its top portion and its lower semi-curve was carefully joined and the word Raju had been first written in the first line of the draft was changed by Ravi by adding a stroke from the middle of the staff of letter "j". The left leg of "u". Complainant-Bank submitted the claim to the OPs on 13.01.2014 claiming the amount of Rs.7 lac. OPs appointed its Chartered Accountant and Loss Assessor Sh. Rajiv Goyal to assess the loss. Complainant-bank submitted all the information to surveyor, which was required for settling the claim. However, vide letter dated 16.03.2015, the claim was rejected by OPs stating "No claim" and closed the case on baseless grounds. There was no negligence on the part of the F.A. No. 739 of 2016 5 employee of complainant bank, as alleged in the letter dated 16.03.2015 and rejection of the claim of the complainant bank amounted to deficiency in service on the part of OPs. Complainant-bank also sent a registered legal notice dated 15.05.2015 to OPs and requesting to pay Rs.7 lac along with interest at the rate of 18% P.A. from the date of submitting the claim and further Rs.2 lac as compensation for harassment, within 15 days from the receipt of the copy of the notice, but notice was not replied by the OPs. Hence, it filed the complaint in the District Forum seeking following directions against the OPs:-
i) to pay Rs.7 lac along with interest @ 18% P.A. from the date of loss;
ii) to pay Rs.2 lac as compensation for harassment;
iii) to pay Rs.50,000/- as litigation cost.
3. Upon notice, complaint was contested by OP No.1 and 2 by filing joint written reply by taking the preliminary objections that the complaint is not maintainable, as the claim was repudiated on 16.03.2015 on the ground that loss was caused due to negligence and omission of the employee of the Insured Bank, which amounted to violation of the terms and conditions of the policy. Complainant-Bank did not fall under the definition of consumer. Moreover, complicated questions of law and facts are involved in the complaint, which required voluminous evidence for its adjudication, which is not feasible in summary procedure by the Consumer Forum and as such the complaint be relegated to F.A. No. 739 of 2016 6 competent Civil Court for decision. On merits, the OPs pleaded that they have issued bankers indemnity insurance policy in favour of complainant bank for a period from 01.05.2013 to 30.04.2014 for sum assured of Rs.30 lac, as basic premium and additional cover was also issued for money in premises to the tune of Rs.27 lac and Rs.30 lac for money in transit. On receipt of information of alleged loss, the OPs immediately deputed Sh. Rajiv Goyel, Chartered Accountant, Surveyor and Loss Assessor, Patiala to survey and investigate the loss, who submitted his report dated 10.03.2015 with the observation that OP-company was not liable to pay the claim to complainant-bank under exclusion clause (b) of the policy, as loss was caused due to negligent act and omission of the insured's employee. It was further submitted in his report that there were number of deficiencies in the system, which had not been followed regularly. The alleged draft was altogether altered i.e. date alteration, punching, amount changed in words and figures, draft number and new draft number pasted on the same. Claim was repudiated keeping in view the terms and conditions of the policy. Rest of the averments made in the complainant were denied by OP. It was pleaded by OPs that there was no deficiency in service on their part and they prayed for dismissal of complaint with cost.
4. The complainant tendered in evidence his affidavit Ex.C-A, affidavit of Dr. Inderjit Singh, Handwriting and Fingerprint Expert Ex. C-B, Affidavit of Gurnam Singh, Assistant Manager, F.A. No. 739 of 2016 7 The Patiala Central Cooperative Bank Ltd., Ex. C-C, affidavit of Sh. Rajesh Singla, the then Sr. Manager, the Patiala Central Cooperative Bank Ltd. Ex. CD, along with documents Ex.C-1 to C-37 and closed the evidence. As against it, OPs tendered in evidence affidavit of Sh. S. Sidhu, Sr. Divisional Manager, New India Assurance Co., as Ex.OP-A, affidavit of Sh. Rajiv Goyel, Surveyor and Loss Assessor as Ex.OP-B along with documents Ex.OP-1 to OP-13 and closed the evidence.
5. On conclusion of evidence and arguments, the District Forum, Patiala, accepted the complaint of the complainant-bank by virtue of order under challenge in this appeal. Dissatisfied with the order of the District Forum, Patiala, under challenge in this appeal, the OPs now appellants directed this appeal against the same.
6. We have heard the learned counsel for the parties and have also examined the record of the case. It was argued by the counsel for appellant that District Forum failed to consider the entire evidence on the record and wrongly held that complainant suffered the loss to the tune of Rs.7 lac, whereas, the loss was caused due to the negligence of employee of insured bank, as the draft in question was ex-facie fake one. It was not having the bank code and was also not punched, but the dealing officer of complainant-bank omitted to examine the alleged draft properly, as per the rules and regulations of the bank, therefore, the claim F.A. No. 739 of 2016 8 of the complainant-bank was not covered under the insurance policy. Moreover, surveyor and loss assessor appointed by the OPs, vide his report dated 10.03.2015 records the observation that the alleged draft was altered by tampering i.e. altered date, punching amount changed in words and figures and new draft number was pasted on the same. It was further submitted before us that the appeal needs to be accepted for setting aside the order of District Forum in this case.
7. On the other hand, counsel for the respondent in the appeal submitted that District Forum after appreciating the entire evidence, gave the correct finding that the OPs are liable to indemnify the loss of Rs.7 lac under the insurance policy.
8. No doubt, both the parties have led their evidence. A specific plea has been taken by OPs in their written reply that the policy did not cover forgery, alteration in respect of cheques drafts and dishonesty of other types. On the receipt of intimation of loss by the insurer, Sh. Rajeev Goyal, Chartered Accountant, Surveyor and Loss Assessor was appointed to investigate the loss, who submitted his report dated 10.03.2015 to the effect, the alleged draft was altered in respect of date, punching amount being changed in words and figures and new draft number was also pasted on the same. Report of Handwriting Expert was also obtained by complainant, showing that the alteration was made in the draft in dispute. Complainant-bank also lodged the complaint F.A. No. 739 of 2016 9 with SSP Patiala, and FIR No.120 dated 31.05.2014 was registered under Section 420, 460, 467 and 468 IPC against one person Ravi, in whose account the amount in dispute was credited. The specific plea of the complainant is that alteration was made in the alleged draft very carefully and in a sophisticated manner, whereas, OPs alleged that loss was caused due to the negligence of employee of insured bank, as the draft in question was fake one on the face of it, as it was not having the bank code and was not punched by the dealing officer of the bank as well. The instant case requires voluminous evidence for its adjudication. Handwriting expert witness has been examined by one side and in rebuttal another handwriting witness would also be required for decision of the case. The Consumer Forum is invested with summary power to reside the case. Keeping in view the complexity of the res involved in the case, we find that Consumer Forum cannot decide the question in dispute in this case, when forgery and fraud are involved in this case. Reliance on law laid down in B.V. Nagaraju Vs. M/s Oriental Insurance Col Ltd.., Hassan reported in 1996(2) CPJ 28 is misplaced in this case on account of different factual matrix of this case. Moreover, complainant bank itself pleaded that the case was registered under Section 420, 467, 468 and 471 IPC and these Sections relates to cheating and forgery. A reference can be made to the judgment IV (2014) CPJ 38 (NC) "Oriental Bank of Commerce Vs. Shankar Chawal Udyog & another" wherein it F.A. No. 739 of 2016 10 was held, there were allegations of forgery in the cancellation of endorsement and accordingly, the complaint was dismissed with a liberty to complainant to approach Civil Court for Redressal of his grievance.
9. In view of our above discussion above, we are of the opinion that District Forum passed the order erroneously in this case. Therefore, appeal of the appellant is allowed by setting aside the order of District Forum below, by dismissing the complaint of the complainant, by giving the liberty to complainant to approach the competent Civil Court for adjudication of the matter in dispute. The complainant is at liberty to invoke the provision of Section 14 of Limitation Act, 1963 in this regard.
10. The Appellants/OPs had deposited an amount of Rs.25,000/- with this Commission at the time of filing this appeal. After compliance of the order dated 17.01.2017, OPs also deposited Rs.5,75,000/- on 08.02.2017 in this Commission. Both these amounts with interest, which accrued thereupon, if any, be remitted by the registry to appellant/OP No.1 by way of a crossed cheque/demand draft after the expiry of 45 days from the date of receipt of copy of the order.
11. Arguments in this appeal were heard on 28.03.2017 and the order was reserved. Certified copies of the order be communicated to the parties as per rules.
F.A. No. 739 of 2016 11
12. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (Surinder Pal Kaur) MEMBER April 03, 2017 DB