State Consumer Disputes Redressal Commission
The Manager, Shree Samarth Sahakari ... vs National Insurance Company Ltd. on 20 April, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
BEFORE THE
HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MAHARASHTRA, MUMBAI
First Appeal
No. A/04/2019
(Arisen out
of Order Dated 01/10/2004 in Case No. 80/2002 of District Nashik)
1. The Manager, Shree Samarth Sahakari Bank Ltd.
Naroshankar
Building,
Rajebahadur Compound,
M. G.
Road, Nashik 422 001
Maharashtra
...........Appellant(s)
Versus
1. National Insurance Company Ltd.
Reg. H.O. at 3, Middleton Street, Calcutta 700 071
Through its Branch Office having address as The Branch Manager,
National Insurance Company Ltd., Satpur Branch, Naad Bramha, 7, Mahatma
Nagar, Trimbak Road, Nashik 422 007
Maharashtra
...........Respondent(s)
BEFORE:
Hon'ble Mr. S.R. Khanzode PRESIDING MEMBER
Hon'ble Mr. Narendra Kawde MEMBER PRESENT:
Advocate Mr.Jaliondar V. Tadge ......for the Appellant Advocate Mr.Sanjay Krishnan ......for the Respondent O R D E R Per Shri Narendra Kawde Honble Member:(1)
This appeal takes an exception to an order dated 01.10.2004 in Consumer Complaint No.80/2002 (Manager, Shree Samarth Sahakari Bank Ltd. V/s. National Insurance Company Ltd.) passed by the Consumer Disputes Redressal Forum, District Nashik (the District Forum in short), thereby dismissing the consumer complaint of the present appellant Bank. Aggrieved and dissatisfied with the order of the District Forum the Appellant has preferred the appeal on the ground that exclusion clause of the Bankers Indemnity Policy subscribed by them is mis-interpreted and the Ld.Consumer Forum dismissed the consumer complaint of the Appellant as the Appellants claim was wrongly repudiated by the Opponent National Insurance Co. Ltd. (the opponent insurance company in short).
Further it is stated that the Bankers Indemnity Policy subscribed by the Appellant and issued by the Opponent Insurance Company provided the insurance cover for forgery or alteration while in the transaction of the Banks.(2)
Heard the Ld.Advocates of the parties. Perused the record. There is no dispute regarding the payment against forged documents to one Shri Bharat Ramlal Agrawal, the current account holder of the Appellant Bank who opened the current account bearing no.1295 and proposed by one Shri Satish Mahajan, the account holder of the Appellant Bank. The demand draft bearing no.596968 for `6,79,980/- was allegedly issued by the Bank of Baroda, Chembur Branch, Mumbai.
The Draft was presented to the Appellant Bank by the said Shri Bharat Ramlal Agrawal. Said demand draft was forwarded for realization to the issuing Bank who declared the said demand draft as a forged instrument. In the meantime prior to sending the demand draft for realization said Shri Bharat Ramlal Agrawal presented two cheques, one for `4,50,000/- in favour of himself and other cheque of `2,00,300/- favouring M/s.Agrawal Bros. payable at Surat. The Appellant Bank honoured both the cheques and the amount of `4,50,000/- was realized in favour of the payee Shri Bharat Ramlal Agrawal. However, another cheque of `2,00,300/- issued in favour of Agrawal Bros., payable at Surat, on introducing the original demand draft was forged instrument issued the instructions to stop payment of `2,00,000/- payable at Surat. Said demand draft of `6,79,980/- was routinely accepted and deposited in the current account newly opened by Shri Bharat Ramlal Agrawal and later on sent for clearance in normal course of business.(3)
The Ld.District Forum treating demand draft as negotiable instrument as bill of exchange against the receipt of commission as a trading by the Appellant Bank and dismissed the consumer complaint on this ground. The Bankers indemnity policy provides insurance as per Condition no.C, insurance cover against forgery or alteration with exclusion clause (e) of the policy. We agree with the submission of Ld.Advocate of the Appellant that accepting the demand draft and forwarding for clearance against receipt of commission is routine activity as a Banker and unless and until the Banker is engaged in dealing securities/shares of the client it cannot be termed as a trading activity. The District Forum erroneously held that the Appellant Bank was engaged in trading by clearing demand draft presented by the account holder for deposit. However, on perusal of the record it is evident that prior to clearance of the said demand draft by the Drawee Bank the appellant Bank honoured both the cheques presented by the said account holder on presumption of the said instrument as genuine; which was later on stated to be forged one.
The said account holder withdrew immediately the amount against the said instrument by presenting cheque.(4)
Ld.Forum erroneously observed this transaction as trading by the Bank and dismissed the complaint. What we observe is that, the Appellant Bank nowhere averred as to what precautions were exercised by them especially when the account holder was new and the demand draft presented to them was yet to be cleared and proceeds deposited in the account of the said account holder. The Appellant Bank without waiting for at this stage honoured the total payment of `4,50,000/- plus `2,00,000/- against the self drawn cheque and the cheque favouring Agrawal Bros. respectively. We do not find any statement or averment on perusal of the record that as to what precaution was exercised by the Appellant Bank before making such payment. In the circumstances, such a contingency is not covered under the Bankers Indemnity Policy issued by the Appellant Insurance Company. We hold accordingly and pass the following order:
O R D E R
(i) Appeal stands dismissed.
(ii) In the given circumstances, parties to bear their own costs.
Pronounced on 20th April, 2012.
[Hon'ble Mr. S.R. Khanzode] PRESIDING MEMBER [Hon'ble Mr. Narendra Kawde] MEMBER ep