State Consumer Disputes Redressal Commission
The Oriental Insurance Company Limited vs The Sangrur Central Cooperative Bank ... on 26 March, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR-37A, CHANDIGARH
FIRST APPEAL NO. 973 OF 2008
Date of Institution: 05.09.2008
Date of Decision: 26.03.2013
The Oriental Insurance Company Limited, Branch Office Shree Ram
Building, New Court Road, Mansa, through its authorized signatory,
Chief Regional Manager, Oriental Insurance Company Limited,
Regional Office, SCO No. 109 to 111, Sector 17-D, Chandigarh.
.....Appellant/Opposite Party
VERSUS
The Sangrur Central Cooperative Bank Limited, Branch Patiala Gate,
Sangrur through its District Manager.
.....Respondent/Complainant
First Appeal against the order
dated 30.7.2008 passed by the
District Consumer Disputes
Redressal Forum, Sangrur.
Quorum:
Hon'ble Mr. Justice Gurdev Singh, President
Sh. Baldev Singh Sekhon, Member
Present:
For the appellant : Sh. Rahul Sharma, Advocate for Ms. V.A. Talwar, Advocate For respondent : Sh. Baljinder Singh, Advocate BALDEV SINGH SEKHON, MEMBER This appeal has been filed by the appellant/opposite party against the order dated 30.7.2008, passed by the District Consumer Disputes Redressal Forum, Sangrur (in short "District Forum") vide which the complaint of the respondent/complainant was allowed.
2. Briefly stated, the facts of the case are that the respondent/complainant bank obtained the services of the opposite party and got its 68+3 branches insured for the period 1.7.2006 to 30.6.2007 by paying a premium of Rs. 1,49,934/-. Under this policy, First Appeal No. 973 of 2008 Page 2 of 8 the opposite party insured the cash in premises to the extent of Rs. 10,00,00,000/- and cash in transit to the tune of Rs. 5,00,00,000/- after examining the details of the cash of all branches. Cash in the Kalajhar Branch of complainant bank on the date of issuing the cover note was Rs. 8,68,337/-. On 5.11.2006, a theft took place in the said branch regarding which the intimation was given by the District Manager of the complainant to the opposite party on 6.11.2006. FIR No. 152 was also lodged under Section 457/380 IPC read with Section 120-B IPC with the Police Station Bhawanigarh. The complainant bank filed the insurance claim and submitted all the relevant documents to the opposite party for settling the same as per policy but the opposite party repudiated the claim on 30.3.2007 on the ground that the management of the complainant bank was found negligent because two persons were not provided to handle the cash of the Kalajhar Branch. The grouse of the complainant is that the opposite party only supplied the cover note and terms and conditions of the said policy were never supplied by it nor it mentioned in the cover note that the Kalajhar Branch could handle cash only upto Rs. 3,00,000/-. The alleged circular mentioned in repudiation letter dated 30.3.2007 bearing instructions for restricting the cash to be handled by different branches of the complainant bank, was not a part of the agreement with the opposite party. Thus, the repudiation was wrong and illegal.
3. Alleging deficiency in service on the part of the opposite party, the complainant filed the complaint before the District Forum seeking directions to the opposite party to First Appeal No. 973 of 2008 Page 3 of 8
(a) pay to the complainant a sum of Rs. 14,73,937/- with interest @ 18% per annum.
(b) pay to the complainant a sum of Rs. 11,000/- as litigation expenses and
(c) pay Rs. 10,000/- as compensation for mental agony and harassment.
4. Upon notice, the opposite party filed written reply taking legal objections about the jurisdiction and maintainability. It was not denied that Indemnity Policy was issued in favour of the complainant bank, however, it was subject to terms and conditions. It was pleaded that the terms and conditions were immediately sent to the insured. The retention limit of Kalajhar Branch was fixed as Rs. 3,00,000/- which includes balance of Rs. 1,00,000/- with other banks. It was pleaded that after receiving intimation regarding theft, the opposite party immediately appointed M/s. Mittal Surveyors Pvt. Ltd. for assessing the loss, who submitted its report dated 11.11.2006 to the opposite party and submitted its final report on 30.3.2007 to the appellant company. As per this report, the loss was declared not payable under the terms and conditions of the policy as there was gross negligence on the part of the complainant bank. The repudiation was justified specially in view of the exclusion clause (b) of the policy.
5. Both the parties led their evidence by way of affidavits and documents.
6. The learned District Forum, after going through the pleadings of the parties and evidence on record, allowed the complaint and directed the opposite party to pay to the complainant a sum of Rs. 14,73,937/- First Appeal No. 973 of 2008 Page 4 of 8 alongwith interest @ 9% per annum from the date of repudiation i.e. 30.3.2007 till realization and a sum of Rs. 3,000/- as litigation expenses were also allowed.
7. Aggrieved by this order, the opposite party has come up in this appeal on the ground that the complainant is estopped by his own act and conduct to file the complaint as it failed to adhere to the terms and conditions of the insurance policy. The claim was repudiated by the opposite party on the following grounds:
a) No separate cashier was deputed by the bank and its Manager was handling the cash in the Kalajhar Branch.
b) The bank was exceeding its cash retention limit of Rs.
3,00,000/-.
c) Sh. Bharpur Singh, the main accused for the burglary, was working as Branch Manger-cum-Cashier.
d) No forcible entry by the thieve was found in the premises of bank as the act of theft was attributed to direct negligence of the employees of the bank.
The opposite party had no option but to close the claim of the complainant as "no claim". A surveyor was deputed to ascertain the veracity of the loss and the said surveyor duly returned findings that the terms and conditions of the insurance policy were being violated by the bank. The bank was being run single handedly by one man i.e. Manager, Sh. Bharpur Singh and there was no separate cashier. The learned District Forum has failed to appreciate that the insurance policy covered the cases of theft that would mean forcible entry to the premises. However, in the present case, even after the theft the original First Appeal No. 973 of 2008 Page 5 of 8 keys of the locks were duly working and there was no sign of forcible entry into the bank premises. The specific case of the opposite party was that the terms and conditions alongwith policy schedule were duly supplied to the main branch of the bank and further plea is that during the entire investigation, the plea of terms and conditions having not been available, was never taken by the complainant bank.
8. We have thoroughly gone through the submissions of learned counsel for the parties and carefully perused the evidence on record.
9. The contention of the complainant that the terms and conditions of the policy were never supplied alongwith cover note or the policy schedule is not tenable. The complainant has itself placed on record the copy of the cover note as Ex. C-2, perusal of which reveals that the following note has been specifically given in the cover note:-
"The insured named above having this day proposed to effect the above insurance and having paid/made a deposit/furnished a bank guarantee for the premium stated above the risk is hereby insured subject to the usual terms and conditions of the Company's Standard policy."
10. The risk was not covered on the basis of the cover note dated 29.6.2006 but on the company's standard policy namely Bankers Blanket/Indemnity Policy reference to which is made in the cover note iteself. This policy has been proved by the opposite party as Ex. R-1, which contains all the terms and conditions including the exclusion clauses. The exclusion clause (b) of the policy document provides as under:-
"EXCEPTIONS The company shall not be liable in respect of:- First Appeal No. 973 of 2008 Page 6 of 8
(a) ..............................................................
(b) losses resulting wholly or partially from any negligent act or omission of the Insured employee.
(c) losses resulting wholly or partially from the wrongful act of any Directors or Partners of the Insured other than salaried."
11. Even the FIR for the theft was lodged by one Sh. Gurmit Singh and not by the bank employees themselves. After lodging of the FIR all the three employees of the Kalajhar Branch namely Bharpur Singh, Cashier-cum-Manager, Surjit Singh, Peon and Ravinder Kumar, Peon, were detained and even the challan was presented against these employees of the complainant bank in the court. The opposite party deputed M/s. Mittal Surveyors Pvt. Ltd. as surveyor and loss assessor for conducting a detailed enquiry into the theft and in its final report dated 30.3.2007 (Ex. R-10), the investigator concluded as under:-
"Under the policy terms and conditions, loss due to negligence on the part of bank is excluded. As discussed above, the management i.e. Directors and higher officials were negligent in deputing one man at the branch and allowed him to handle the cash single handedly which resulted in the loss."
12. As per the circular of the bank (Ex. R-3), the cash retention limit of the Kalajhar Branch was Rs. 3,00,000/- which included balance of Rs. 1,00,000/- with other bank. As against this retention limit, the said branch used to get heavy cash balances in routine which was found to be Rs. 15,64,725/- at the time of theft. Nobody at the head office bothered to check this practice which grossly violated the rules and regulations of the bank. It was, in fact, negligent act on the part of the insured and its employees.
First Appeal No. 973 of 2008 Page 7 of 8
13. It was observed that all the three locks of the shutter/grill gate were found working with original keys. Similarly both the locks of the safe, in which the cash was kept, were also working with original keys. Thus, there was no forcible entry into the bank premises. As per the Exclusion Clause, losses resulting wholly or partially from the wrongful act or default of any Director or any partner of the insured under than salaried were excluded. This investigation report is supported by the affidavit of Sh. Parmal Kumar Mittal, Director of Mittal Surveyors Pvt. Ltd., Bathinda (Ex. R-12). Even though the circular regarding the fixing of the cash retention limit was not a part of the agreement between the complainant and the opposite party but non- adherence to these specific instructions, circulated by the management, tantamounts to negligence on the part of the employees of the complainant bank and, therefore, as per Exclusion Clause, such loss was not covered. Thus, the opposite party has rightly repudiated the claim of the complainant bank vide Ex. R-11.
14. In view of the above discussion and findings, the appeal of the appellant/opposite party is accepted and the impugned order of the learned District Forum is set aside. Consequently, the complaint of the respondent/complainant is dismissed. No order as to costs.
15. The appellant/opposite party deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal and Rs. 2,75,000/- as per the order of this Commission. This amount alongwith interest which has accrued thereon, if any, be remitted by the registry for payment to the appellant/opposite party by way of a crossed cheque/demand draft, under intimation to the learned District Forum. First Appeal No. 973 of 2008 Page 8 of 8
16. The arguments were heard on 19.3.2013 and the order was reserved. Now, the order be communicated to the parties.
17. The appeal could not be decided within statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (BALDEV SINGH SEKHON) MEMBER March 26, 2013 VINAY