State Consumer Disputes Redressal Commission
Janaki Forex, (A Division Of Janaki ... vs The Branch Manager, The New India ... on 27 June, 2023
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IN THE CIRCUIT BENCH OF THE TAMILNADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, MADURAI.
PRESENT: THIRU.N. RAJASEKAR, PRESIDING JUDICIAL MEMBER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER
F.A.Nos.50/2017 & 192/2018
(Against the order made in C.C.No.51/2004, dated 10.02.2017 on the file of the District
Commission, Virudhunagar District @ Srivilliputhur.)
TUESDAY, THE 27th DAY OF JUNE 2023.
F.A.No.50/2017
The Branch Manager,
The New India Assurance
Company Limited,
77/78 South Car Street,
Sivakasi. Appellant/Opposite Party
-Vs-
Janaki Forex,
(Janaki Investment Private Limited),
Through its Managing Director,
R.Ayyanadar Karthick,
Registered Office,
Old No.83, New No.417,
Kamarajar Road, Sivakasi. Respondent/Complainant
Counsel for the Appellant/Opposite Party : Mr.K.Chandrasekaran, Advocate.
Counsel for the Respondent/Complainant : Mr.C.Subramani, Advocate.
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F.A.No.192/2018
Janaki Forex,
(Janaki Investment Private Limited),
Through its Managing Director,
R.Ayyanadar Karthick,
Registered Office,
Old No.83, New No.417,
Kamarajar Road, Sivakasi. Appellant/Complainant
-Vs-
The Branch Manager,
The New India Assurance
Company Limited,
77/78 South Car Street,
Sivakasi. Respondent /Opposite Party
Counsel for the Appellant /Complainant : Mr.C.Subramani, Advocate.
Counsel for the Respondent/Opposite Party : Mr.K.Chandrasekaran, Advocate.
These two appeals coming before us for final hearing on 06.03.2023 and on
hearing the arguments of both sides and upon perusing the material records, this
Commission made the following:-
COMMON ORDER
THIRU.S.KARUPPIAH, JUDICIAL MEMBER.
1. Among these two appeals, F.A.No.50/2017 is preferred by the opposite party/insurance company and F.A.No.192/2018 is preferred by the complainant.
2. As the two appeals are arising out of one and the same order of the learned District Commission, Virudhunagar District @ Srivilliputhur made in C.C.No.51/2004, dated 10.02.2017, these two appeals are jointly heard and disposed of by this Common Order.
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3. For brevity and clarity of the Judgement the parties are referred as per their rank in the consumer complaint.
4. The Facts:-
The complainant is doing money changers business at Chennai, Hyderabad, Kanyakumari, Karur and Madural, for which, he had insured his business with the opposite party, covering the period between 29.06.2002 and 28.06.2003, which includes Travellers Cheques also. On 29.07.2002, the Branch Cashier of Chennai by name A.Ganesamurthy, carried American Express Travellers Cheques, to the value of US Dollar 42950 to Anaiyur Village near Sivakasi, to be delivered to G.Nataraj Prabhu of Coronation Security Printers Private Limited which is equivalent to Indian Rs.19,95,027.50. A.Ganesamurthy arrived at Thiruthangal on 30.07.2002 in the early morning, where from, he went to a Cycle Shop, hire a cycle to reach Anaiyur. At that time, he noticed the bag containing US Dollars worth of Indian currency Rs.19,95,027.50 was found missing, for which, Police complaint was given and the police failed to trace out the Travellers Cheques. Based upon the policy, when a claim was made, though the opposite party has sent Surveyors, ultimately on flimsy and unjustifiable grounds, the claim was not honoured, as if, the opposite party violated the terms and conditions of the policy as well as RBI Guidelines, thereby committed negligent act, as well as deficiency in service. Hence, the claim.
5. The opposite party admitting the policy, its coverage, including the period, resisted the claim, inter alia, contending that the RBI had granted license only to do business at Chennai, Madurai, Karur and Hyderabad and therefore, they are not 4 permitted to carry the Travellers Cheques to any other places, which is not covered under the policy, that there is no document indicating the Police compliant was given, that the policy covers the premises or the portion of the premises at the business address, occupied by the insured, not other places, that the complainant had committed gross violation of not only the provision of RBI guidelines, but also violated the provision of FERA and FEMA Act, that on that basis alone, the claim was negatived/repudiated bonafidely, which cannot be termed as negligent act or deficiency in service, thereby praying for the dismissal of the complaint, denying other averments also.
6. Initially, the above complaint was dismissed by the District Commission Srivilliputhur on 31.05.2017 and the appeal has been preferred before the State Commission, Chennai in F.A.No.360/2007 which also confirmed the dismissal by its order dated 28.01.2011. Against which the complainant preferred Revision Petition in 1605/2011 before National Consumer Disputes Redressal Commission. The National Commission by its order dated 05.06.2015 in para 7 remanded the case as follows:-
"For the reasons stated hereinabove, the impugned orders are set aside and the matter is remanded back to the District Commission for giving an opportunity to the petitioner to prove that (1) the travellers cheques in question were encashed within three months of the date on which they were allegedly stolen/lost and (2) the actual change of Indian currency into foreign currency had taken place at one of the offices of the petitioners listed in the licence issued to it by the Reserve Bank of India and the travellers cheques were carried by the representative of the petitioner 5 to Anaiyur near Sivakasi only as a consequence of the money changing transaction which had taken place in the office of the petitioner. The parties are directed to appear before the concerned District Commission on 15.07.2015. The observations made in this order being tentative, made only with a view to decide the revision petition, shall not affect the decision of the District Commission on merits of the complaint".
7. Afterwards, the District Commission again took-up the case on file giving opportunities to both sides to lead oral and documentary evidences. On the side of the complainant PW1 gave additional evidence and examined PW2 to 4. The opposite party submitted only additional proof affidavit. The complainant's side marked Ex.A23 to Ex.A33 as additional documents and no documents marked on the side of opposite party after remand.
8. The District Commission after perusing the additional evidence, finally concluded that there is deficiency in service on the part of the opposite party and directed the opposite party/insurance company to pay Rs.19,95,027.50 with 9% interest from the date of filing the complaint originally ,along with cost of Rs.3000/-.
9. Aggrieved by the above award The complainant preferred the appeal F.A.No.192/2018 on the following. Grounds: That, the District Commission failed to grant 18% interest which is against law. Hence, he requested this Commission to modify the interest from 9% to 18%.
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10. The opposite party preferred the appeal in F.A.No.50/2017 on the following:-
Grounds: That, the order of the District Commission is erroneous in nature. The District Commission wrongly interpreted the remand order of the National Commission. The District Commission wrongly held that Travellers cheques can be taken out from office premises to customer and it is in practice. As per RBI Guidelines money exchange cannot be done outside the registered office of the complainant. Hence, they prayed to allow the appeal and to set aside the District Commission order.
11. We heard both sides and perused their written arguments . As stated earlier, it is the case of the complainant that they are registered money changers, having their office at Chennai, Hyderabad, Kanyakumari, Karur and Madurai for which they insured the business with the opposite party and the period of insurance is from 29.06.2002 and 28.06.2003. On 29.07.2002 the complainant's cashier took away American Express Travellers Cheques value of US Dollars 42950/- to hand over the same from Chennai office to their customer Coronation Security Printers at Sivakasi. While took away the travellers cheques from Thiruthangal bus stand to Coronation Security Printers Office he travelled in a bicycle and on the way he lost the cheques. Immediately a complaint was lodged with the concerned police station. The claim was repudiated by the opposite party/insurance company stating that, the complainant violated RBI guidelines and misrepresented to the RBI about the incident. Further, the opposite party contended that, insurance coverage is given only to money , transmitted between one office of 7 the complainant to another office of the complainant and it did not cover any loss outside the premises which is not in between the offices
12. Now the points for consideration are:
1. Whether the complainant violated any RBI guidelines?
2. Whether the complainant contravened any policy condition or not?
DISCUSSION: Before adverting to the above points we wish to make it very clear that the opposite party vide their repudiation letter which was marked as Ex.A13 nowhere stated that, the above loss of travellers cheques were stage managed or concocted story. The loss in transit was an admitted true fact But, only in the interrogatories submitted by them in question No.25 it has been suggested by the opposite party that it is a woven story, for which the complainant replied that it is a true incident. So, the narration of incident by the complainant was accepted by the reply notice in Ex.13 but the repudiation was made only on "two technical grounds".
(i) Initially the District Commission and the State Commission (Chennai) accepted the contention of the opposite party and passed the Judgement in favour of the opposite party/insurance company.
(ii) Initially it was accepted by both Commissions that as per the policy condition the policy covered only the transit taken in between two registered office of the complainant.8
13. But, the National Consumer Disputes Redressal Commission in para 6 it has clearly held:"As regards the scope of the license issued to the petitioner for undertaking money changing business, the learned counsel submits and in my view rightly so that if the transactions of changing the Indian currency into foreign currency was carried out at one of the offices of the petitioner listed in the license issued by RBI and Travellers cheques are sought to be delivered to the customers only as a consequence of the said transaction carried in the office of the petitioner, there would be no violation of the instructions of the license issued by the RBI".
The learned counsel for the opposite party would argue that the above observations in this order being tentatively made only with a view to decide the revision petition which shall not affect the decision of the District Commission. So, the above finding of the National Commission is only a tentative one.
14. We perused the RBI guidelines in entirety which is marked as Ex.A1 & Ex.B2. The Ex.A1 is the "Money Exchangers Licence" given for Four Places mentioned, at Chennai, Madurai, Karur and Hyderabad. In Ex.A22 and Ex.B2 RBI issues Memorandum of Instructions to Money Changers and other related persons. The above instructions not only for the authorized Money exchange Centres like the complainant, instructions are also meant for the foreigners as well as Indian citizens to transact money exchange. So, it is necessary for us to ascertain whether any of the instructions were violated or disobeyed by the complainant.
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15. In this case by letting additional evidence and marking documents Ex.A26 to Ex.A30 it was proved that travellers cheques were transferred only at Chennai office and the Chennai office alone had requisite travelers cheques, in their stock. But the complainant's customer, Coronation Security Printers applied for money exchange in Ex.A3, & Ex.A4 only to their Madurai office. As the cheques were not sufficient at Madurai,the Chennai office encashed the Indian money to American travellers cheques. So, the transactions of Indian money to Americal Express Travellers Cheques, that is the "exchange" happened or done only at the Madurai and Chennai offices. The exchange was not done outside the premises. After, exchange the travellers cheques was carried out by the official of the complainant company to their customer place. As far as the first transactions of exchange of Indian to Foreign currency it was done only in the licensed office of the complainant . Hence there is no violation in this regard. Moreover, all the money transactions were properly recorded and proved by the complainant's documents.
16. The next contention made by the Learned counsel for the opposite party would be, that the above travellers cheques which is more than 10000 Dollars cannot be transported outside as per guidelines. Since the above guideline was violated they are not liable to pay the insurance claim. But to counter the same, the learned counsel for the complainant submitted that the above condition of not to carry more than 10000 Dollars is only for the touristers and not for the authorized money changers. This argument made us to go through the guidelines,and the relevant one is reproduced hereunder 10 Bringing in and taking out of Foreign Exchange
(i) Foreign exchange in any form can be brought into India freely without limit provided it is declared on the Currency Declaration Form (CDF) on arrival to the Custom Authorities. When foreign exchange brought in the form of currency notes or travellers cheques does not exceed US$ 10000/- or its equivalent and/or the value of foreign currency notes does not exceed US$ 5000/- or its equivalent, declaration thereof on CDF is not insisted upon.
(ii) Taking out foreign exchange in any term other than foreign exchange obtained from an authorized dealer or a money changer is prohibited unless it is covered by a general or special permission of Reserve Bank. Non-residents, however have general permission to take out an amount not exceeding the amount originally brought in by them subject to compliance with the provisions of sub-para (i) above.
17. On seeing the above instructions it clearly revealed that it is not prohibiting money carried out more than 10000 Dollars, provided. It is declared in the currency declaration form thereto, brought into India. So, the amount taken out by one A.Ganeshamurthy employee of the complainant did not come into the above purview. Moreover, in instructions No.3,only taking out foreign exchange in any form given for foreign exchange obtained from authorized dealer or money changers is prohibited. In this case the money exchange was done by the authorized money changers and it was carried out only by the employee of the money changer. So, taking out more than 10000 Dollars is neither in violation of RBI instructions or violation of Ferra. 11
18. The next contention that, the policy did not cover transaction from office to customer is not acceptable to us. The policy simply states under the heading proper risk Money (except wages and salary) in direct transit any two places). The sum insured is Rs.30,00,000/-. Nowhere in the insurance certificate, it is clarified what is. the meaning of two places . Whether it means only the licenced offices of the complainant or outside the offices also. Suppose, if the complainant company sent some bulk amount to deposit in a bank and the above amount was lost due to theft or otherwise, will the insurance company not obliged to compensate ? can they shrunked their responsibility? The answer will be 'no'. Similarly, if the money is taken out from the office and transmitted to their customer which is a valid and legal transmission of the money which already exchanged in the office, this transmission is also covered by the policy conditions. The policy condition when it was general in nature the insurance company cannot escape from it's liability by inserting its own exclusionary clause which were not found in the policy terms. So, by the observations of the Hon'ble National Commission, the District Commission also feels that transmission was after valid and legal exchange of travellers cheques. The transmission of travellers cheques to the customer is a valid transmission and the complainant did not violate the policy condition as the policy condition was very general in term.
19. The next point is that, whether the above lost travellers cheque were encashed within three months from the date of loss. The National Commission also remanded the matter to prove this by giving an opportunity to the complainant. To prove the travellers cheques in question were encashed within three months of the date on which 12 they were allegedly stolen cum lost, this complainant marked Ex.A23 which is dated 13.08.2002 and Ex.A24 which is dated 12.09.2002 . In the documents, the American Express informed the complainant that the cheques were encashed within a month,
20. The learned counsel for the opposite party in their written arguments vehemently contented that Ex.A23 & Ex.A24 are not genuine, and raised a doubt If they are genuine why it were not marked earlier? It is their contention in page No.3 of the written arguments "had it been available and produced with the insurance company, the insurance company on verification would have settled the claim but belatedly after getting direction from the National Commission had marked the same as additional documents which would go to show that the said Ex.A23 & Ex.A24 are concocted and put up one for the purpose of the case" . In this aspect we wish to emphasize one important aspect Which was lost sight all along and even failed to bring it to the notice of the Hon'ble National Commission. The Ex.B9 is the same document marked on the side of the complainant as Ex.A24. This, Ex.A24 dated 12.09.2002 was already handed over to the insurance company. So, as per the submission of the learned Advocate, Now, it is for the insurance company to honour the claim.
21. So, as per the direction of the Hon'ble National Commission, the complainant has clearly proved that his claim is bonafide and there is no violation of RBI instructions or policy conditions. It is one of the argument of the opposite party that, the transaction is commercial one. But we did not accept this argument. Since, the insurance claim is meant only to make the loss good, whether the insured doing any commercial activity. 13 As far as the transactions between insurar and insured, it is not commercial in nature as there is no profit making. The insurance policy is taken only to indemnify the actual loss and there is no commercial are profitable purpose. There are so many Judgement in this regard.
22. So, we sum up the entire discussion as follows. The National Consumer Disputes Redressal Commission in its remand order giving an opportunity to the complainant, ● To prove the money exchange was done only at their registered licenced places and it was proved by additional evidence.
● The allegations that to take out more than 10,000 Dollars is against RBI instructions is also found not correct. Because, the RBI instructions clearly stated that any amount of foreign money can be taken out provided if it is obtained from authorized money changers.
● The encashment of lost travellers cheques also within three months and it is not only proved from Ex.A23 & Ex.A24 but already it was submitted to the insurance company and the insurance company also marked the above letter of American Express as Ex.B9.
● As per the version of written arguments if the above Ex.A24 was submitted earlier, the insurance company would have settled the same. So it is the right time for the insurance company to settle the claim. 14 ● The travellers cheques were lost while taking out from the registered office to a customers' office, and necessary complaint was given before concerned police. The lost was not disputed as stage management one in written version.
● The surveyor's reports were not marked by the opposite party.
23. Though, a suspicion was raised by the insurance company regarding the necessity for the complainant official to visit Thiruthangal, instead of straightaway going to Sivakasi. It was further clarified by the complainant by producing a rough sketch as Ex.A23. From which it is seen that the above Coronation Printer Office is situated in between Sivakasi and Thiruthangal. So, nothing wrong for the complainant's official to travel Thiruthangal from Madras. Moreover, bus ticket was also produced on the side of the complainant to prove this fact. So, in every respect the complainant has proved the claim as a genuine one and the repudiation seems to be invalid. As such the repudiation is a deficiency in service, so they are liable to honour the claim as found by the District Commission.
24. The District Commission awarded only at the rate of 9% and rightly so. We also feel it appropriate that the above interest is in consonant with National Commission and Apex Court Judgements. After all the entire claim is to be paid only by the insurance company and already we decided that it is not a commercial transaction. So, the request of the complainant to enhance the interest from 9% to 18% is not maintainable. Hence, we dismiss the both appeals and we further awarded cost of 15 Rs.5000/- to be paid to the complainant by the opposite party in this appeal (F.A.No.50/2017) and we answered the point accordingly.
25. In the result, F.A.No.50/2017
1. The appeal, filed by the opposite party in F.A.No.50/2017 is dismissed.
2. The order passed by the Learned District Commission, Virudhunagar District @ Srivilliputhur, made in C.C.No.51/2004, dated 10.02.2017 is hereby confirmed.
3. The appellant/opposite party is directed to pay further cost of Rs.5000/- to the respondent/complainant.
In the result, F.A.No.192/2018:-
1. The appeal, filed by the complainant in F.A.No.192/2018, is dismissed.
2. The order passed by the Learned District Commission, Virudhunagar District @ Srivilliputhur, made in C.C.No.51/2004, dated 10.02.2017 is hereby confirmed.
3. There shall be no order cost in this appeal.
Dictated to the Steno-typist transcribed and typed by her corrected and pronounced by us on this the 26th day of June 2023.
Sd/-xxxxxxxxxxx Sd/-xxxxxxxxxxxxxxx
S.KARUPPIAH, N. RAJASEKAR,
JUDICIAL MEMBER. PRESIDING JUDICIAL MEMBER.
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Corrected