State Consumer Disputes Redressal Commission
The Memon Co-Operative Bank Ltd. & Anr. vs The New India Assurance Co. Ltd. on 6 May, 2014
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
BEFORE THE HON'BLE STATE CONSUMER DISPUTES
REDRESSAL
COMMISSION, MAHARASHTRA,
MUMBAI
Complaint Case No. CC/02/83
1. The Memon
Co-operative Bank Ltd.
Regd. Office &
Central Administrative office
at Patel & Soni
Arcade, 1st floor, 234,
Belasis Road, Nagpada Junction,
Mumbai - 400 008.
2. Shri Sidhhartha
Bhattacharya
Liquidator
The Memon
Co-operative Bank Ltd.
73, Rajat Apartment,
Mount Pleasant Road, Mumbai - 400 006.
...........Complainant(s)
Versus
1. The New India Assurance
Co. Ltd.
87, M.G. Road,
Mumbai - 400 001.
............Opponent(s)
BEFORE:
HON'ABLE MR. P. B.
Joshi PRESIDING MEMBER
HON'ABLE MR. Narendra Kawde MEMBER PRESENT:
Mr.H.H. Trivedi, Advocate for the complainants.
Mr.S.R. Singh, Advocate for the opponent.
-: ORDER :-
Per Mr.P.B. Joshi, Honble Presiding Judicial Member Complainant is a scheduled Bank carrying on business of banking as per statute. Complainant obtained as statutorily required being bank, an insurance policy from the opponent covering various risks in banking business. One Mr.Abdul Lalif opened an account with meager amount of `1100/- with the complainant under the recommendation and introduction from Mr.Ghaswalla Anjum Mohammad Husain on 02/06/2000. Said Mr.Abdul Latif deposited in his account a demand draft of `9,50,000/- dated 15/05/2000 drawn on State Bank of Hyderabad. In order to avoid the role played by two Managers of the complainant-Bank, namely, Mr.Mohamad Iqbal Ali Mohamad and Mrs.Zeenat Jummo Batelywalla, obtained a forged payment confirmation containing forged signatures of then director (now Chairman) Mr.Imran Ashraf Furniturewalla and Mr.P.S. Telang (General Manager) of the complainant-Bank. As per complainant, those two Managers knew the signatures of Mr.Imran and Mr.Telang and also knew that Mr.Ghaswalla is a defaulter of the Bank and not paid huge amount of the Bank.
2. On 03/06/2000 said Mr.Abdul Latif came to complainant-Bank with said Mr.Ghaswalla with aid and abatement of said two Managers i.e. Iqbal and Zeenat who were in hand and glove with these two persons allowed withdrawal of the amount of `9,50,000/- even though effect of the said draft had not been cleared at that time. On the same day i.e. 03/06/2000 fabricated letter which is deliberately dated 04/06/2000 purposely being a purported confirmation from C.A.O. that the said Ghaswalla was allowed to collect `9,50,000/- from said Abdul Latif and in lieu thereof he was depositing a cheque No.748101 dated 03/06/2000 drawn on Jan Kalyan Sahakari Bank Ltd., D.N. Road, Fort, Mumbai-400 001 in favour of the Bank.
At about 1.30 p.m. on 03/06/2000 State Bank of Hyderabad informed those two Managers that the said draft deposited by said Abdul Latif was reported lost from the said Bank and was not issued for consideration. Said Bank further informed to those Managers that therefore payment of the said draft would not be made to the complainant-Bank. These two Managers kept all these information and details under suppression from the Bank Management on that day. It was contended by the complainant that all these persons in criminal conspiracy with each other in fraudulent manner made wrongful gains, submitted forged, false and fabricated documents and thereby committed acts of cheating and forgery. Complainant lodged complaint of the said incident in the Pydhonie Police Station and to the Joint Commissioner of Police, Crime Branch and also to the Senior Inspector of Police, Nagpada Police Station on 07/06/2000. It was contended that loss suffered by the complainant is covered under the said insurance policy under the provision dishonesty. The complainant had immediately informed the opponent and lodged the claim of `9,50,000/-. By letter dated 23/04/2001, opponent informed the complainant that loss is caused as per report of said Investigator due to system failure.
Opponent by their letter dated 12/10/2001 repudiated the claim. Hence, complainant filed consumer complaint with prayer to award `9,50,000/-
for the loss caused to the complainant.
Complainant further prayed for interest @ 18% p.a. from 02/08/2000 on the said amount till payment.
Complainant also prayed for `10,000/-
for mental torture and harassment and `10,000/- towards cost of limitation and `15,000/-
as Advocates fees.
3. Opponent resisted the claim by filing written version. Insurance Policy is admitted by the opponent. However, it was contended that loss was because of purported fraud committed by strangers and not by employees. It was contended that Mr.Ghaswalla who alleged to have committed fraud was known to then Chairman Mr.Zakaria Aghadi and even had business dealings with him and was enjoying overdraft facility with the complainant-Bank. Said Mr.Ghaswalla was the introducer for opening of current account of accused-Abdul Latif Ismail and therefore, there was no apparent reason for any officer including accused officers Mr.Mohammed Iqbal Ali Mohammed or Mrs.Zeenat Jumma Batterywala doubting the bonafides of the proposed account holder Mr.Abdul Latif Ismail. Issuing cheque books or doing the other formalities while purchasing the demand draft is normal course of business.
It was contended that there was no reason for these officers even to disbelieve or doubt the notarized letter of confirmation reportedly signed by then Director and now Chairman-Mr.Imran Ashraf Furniturewalla. Opponent has denied that complainant is a consumer within meaning of Consumer Protection Act, 1986.
4. It was contended by opponent that the officers of the Bank did not make attempt to recover the defrauded amount from Mr.Abdul Latif and Mr.Ghaswalla.
Opponent has denied any malice on the part of the accused Managers as alleged or otherwise. It was contended that at the most the said accused Managers could be accused of negligence and/or lack of care which ought to have been taken and nothing more. It was contended that notarized document raised presumption as to genuineness of the signatures and therefore, burden is upon the complainant not only to prove that said signatures of Mr.Imran Furniturewall and Mr.P.S. Telang were forged but also that the signatures on the alleged forged confirmation letters were apparently showed difference that the persons of ordinary prudence would have detected the said fraud on mere perusal of said forged documents. It was contended that accused Managers obtained cheque of `9,50,000/-
from Mr.Ghaswalla along with letter confirming receipt of payment against said demand draft of `9,50,000/-
and that same was deposited for clearing on 05/06/2000 but the same was returned by Jan Kalyan Sahakari Bank Ltd. vide Memo dated 06/06/2000 with the reason payment stopped by the drawer.
It was contended that the accused Managers had not allowed withdrawal against the cheque but same was obtained by said accused managers by way of collateral security from said Mr.Ghaswalla, who had introduced said Mr.Abdul Latif, account holder. Said cheque of `9,50,000/- was obtained in lieu of the returned demand draft in good faith and as collateral security by the accused Managers. The efforts on the part of accused Managers in salvaging the situation is apparent from the fact that they succeeded in obtaining said cheque for `9,50,000/- from said Mr.Ghaswalla in lieu of dishonoured demand draft which prompted said Mr.Ghaswalla to file F.I.R. against them. It was contended that the complainant has failed and neglected to bring on record any material as regards the criminal prosecution of the said fraudsters or the accused Managers as alleged or otherwise. Opponent therefore prayed for dismissal of complaint.
5. Considering the rival contentions of the parties, considering the record, particularly, Insurance Policy, following points arise for our consideration and our findings thereon are noted for the reasons given below :-
(1)Whether claim of the complainant is covered under the Policy?(2)
Whether claim of the complainant is come under exception as given in the policy?(3)
Whether complainant is entitled for amount of `9,50,000/- as claimed and interest thereon and other reliefs?
REASONS Point Nos.1&2
6. To avoid repetition we discuss these two points commonly. From record and from the submissions made before us, it is clear that one Mr.Abdul Latif opened the account in the complainant-Bank with meager amount of `1100/-. Mr.Ghaswalla introduced said Mr.Abdul Latif. Then said Mr.Abdul Latif deposited one demand draft of `9,50,000/-
and obtained said amount. Said demand draft drawn on State Bank of Hyderabad. State Bank of Hyderabad informed the complainant-Bank that said draft deposited by Mr.Abdul Latif was reported lost from the said Bank and was not issued for consideration.
Said Bank further informed to two Managers of the complainant-Bank that payment of the draft could not be made to the complainant. However, by that time, the amount was already paid to said Mr.Abdul Latif.
7. It is the contention of the complainant that it was a conspiracy of Mr.Abdul Latif and Mr.Ghaswalla and two Managers of the complainant-Bank and because of that complainant-Bank suffered loss and hence, that loss is covered by the insurance policy.
8. Learned Advocate for the opponent has submitted that said Mr.Ghaswalla was known to the Chairman of the complainant-Bank. Said Mr.Ghaswalla has also enjoyed overdraft facility.
Said Mr.Ghaswala had introduced Mr.Abdul Latif for opening the account. It was argued that a letter of confirmation was also submitted to the complainant-Bank. It was submitted on behalf of the opponent that there was no reason for the Managers of the complainant-Bank to doubt the notarized letter of confirmation reportedly signed by then Director and now Chairman of the complainant-Bank. It was submitted that there is presumption as to genuineness to notarized document. It was further argued that Managers obtained a cheque of `9,50,000/-
from Mr.Ghaswalla in lieu of returned demand draft of `9,50,000/-. Cheque was obtained as collateral security. It was argued that the efforts on the part of the Managers in obtaining cheque of `9,50,000/- from Mr.Ghaswalla make the position clear that the Managers were not party to the fraud alleged to have been played by Mr.Abdul Latif and Mr.Ghaswalla. We find much substance in the said arguments. The reason is that had the Managers of the complainant-Bank were party to the criminal conspiracy then they would not have obtained a cheque of `9,50,000/- from said Mr.Ghaswalla as collateral security.
9. The complainant is relied on the policy clause Dishonesty which reads as - The Company hereby agrees to indemnify the insured to the extent specified hereinafter..any direct loss of money and/or security sustained by the reason of the dishonest or criminal act of the employee(s) of the insured in respect to the loss of Money and/or Securities wherever committed and whether committed singly or in connivance with others. It was argued on behalf of the complainant that act of the Managers was dishonest or criminal act resulted into said loss of `9,50,000/-. Learned Advocate for the opponent submitted that there is no material on record to accept the contention of the complainant that officers of the complainant-Bank were dishonest or acted criminally.
10. We have already discussed the above facts and circumstances of the case and concluded that contention of the complainant that officers of the complainant-Bank committed criminal conspiracy with other persons cannot be accepted. It is because of that the complainant is not entitled for any relief under the policy.
11. Opponent has also relied on exception clause which is to the effect that Insurance Company shall not be liable in respect of losses resulting wholly or partially from any negligent act or omission of the insured employee(s).
It was submitted on behalf of the opponent that at the most act of the Managers of complainant-Bank can be said as negligence and cannot be branded as criminal act or dishonest act.
Hence, under the exception clause, complainant is not entitled for any loss as allegedly suffered.
After going through the prayer clause, we find much substance in the arguments of the opponent. Thus, we find that claim of the complainant is not covered under the policy and it is also coming under the exception clauses of the insurance policy. We therefore answer Point Nos.1&2 accordingly.
Point No.3
12. In view of answers of Point Nos.1&2, we answer Point No.3 in negative and hence, complaint filed by the complainant-Bank deserves to be dismissed. Hence, we pass the following order :-
-: ORDER :-
1. Consumer Complaint stands dismissed.
2. Parties to bear their own costs.
3. Copies of the order be furnished to the parties.
Pronounced Dated 6th May 2014.
[HON'ABLE MR. P. B. Joshi] PRESIDING MEMBER [HON'ABLE MR. Narendra Kawde] MEMBER dd.