State Consumer Disputes Redressal Commission
Standard Capital Markets Ltd vs National Insurance Co. Ltd. on 21 July, 2008
IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b) of the Consumer Protection Act, 1986 ) Date of Decision: 21-07-2008 Complaint No.C-201/2000 M/s Standard Capital Markets Ltd., - Complainant Having its registered office/ Through Head office Mr. R.K. Kohli, At : 8/28 W.E.A. Abdul, Advocate. Aziz Road, Karol Bagh, New Delhi. Versus 1.
Senior Branch Manager, - Opposite party No.1 National Insurance Co. Ltd. Through Branch office at: Mr. Yogesh Malhotra, Narain Complex, Civil Road, Advocate.
Rohtak, Haryana.
2. National Insurance -Opposite Party No.2 Co. Ltd., Regional Office-I, SLO 337-340, Sector-35-B, Chandigarh.
3. National Insurance -Opposite Party No.3 Co. Ltd., Registered & Head Office:
Middlton Street, P.O.B.No.9229, Calcutta-70071.
CORAM:
Mr. Justice J.D.Kapoor President
1.
Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) Complainant Company is engaged in the business of finance and merchant banking etc. and it had taken a Fidelity Guarantee Insurance Policy in respect of its employee Sh. Anil Khanna. Sh. Khanna allegedly committed infidelity to the tune of Rs.20.23 lacs and a claim was lodged with the OP Company, but the same was repudiated. By way of this complaint, the complainant is seeking the payment of Rs.9,96,261/- as approved by the surveyor of the OP company with interest @24% p.a. and Rs. one lac. as compensation for mental agony.
2. Briefly stated, facts of the case are that Sh. Anil Khanna, employee of the complainant company and covered under the policy above mentioned, sold travelers cheques to the tune of Rs.20.23 lacs to two different companies on 12.02.1998 and 13.02.1998. He made these transactions contrary to the instructions for issuance of such travellers cheques, which could be issued only against account payee pay orders/cheques. This was not done by him in order to cheat the complainant company. The fraud came to the knowledge of the complainant only when the two cheques received by Sh. Khanna in lieu of the travellers cheques were dishonoured. After committing this fraud Sh Khanna left for Switzerland without the permission and knowledge of the complainant. After his return and after a domestic enquiry an FIR No.113/98 dated 23.03.1998 under sections 420/467/468/471/120-B IPC was lodged with police station Karol Bagh, New Delhi. A claim was also lodged with the OP- Company (OP-1) for the reimbursement of the loss suffered by the complainant company on account of the infidelity committed by Sh. Anil Khanna. The surveyor appointed by the OP Company recommended the damage upto Rs.10 lacs. However, vide letter dated 05.08.1999, the OP company repudiated the claim on the following grounds:-
i) The claim falls beyond the terms and conditions of the policy, there being no direct pecuniary loss suffered by the complainant due to fraud/dishonesty committed by Sh. Anil Khanna.
ii) Loss was discovered by the complainant on 18.02.1998/ 19.02.1998, but the OP company was informed on 10.03.1998.
iii) Complainant informed the police on 23.03.1998 inspite of policy provision to inform the police immediately.
3. According to the complainant FIR was lodged immediately after ascertaining the facts and the repudiation of claim is unjustified.
4. Defence version is that there was no written procedure not to accept cheques against the sale of foreign currency travellers cheques and rather it was found by the surveyor that in more than 50% cases cheques were received by the complainant for sale of foreign currency travellers cheques and that there was nothing to establish that Sh. Anil Khanna had violated any rule laid down by the complainant in this regard to cheat the complainant or to cause any monetary loss to the complainant. The transaction was purely a commercial transaction. It is further stated by the OP that merely because the cheques received in lieu of the travellers cheques were dishonoured it could not be said that any direct pecuniary loss was suffered by the complainant due to any fraud a dishonesty of the employee. Plea of delay in giving information to the OP and to the police has also been raised by the OP. According to the OP Company, claim of the complainant was beyond the scope of the policy in question and hence the repudiation is justified.
5. Complainant has filed a rejoinder reiterating averments made in the complaint. Parties have filed their evidence by way of affidavits.
6. The learned counsel for the complainant has forcibly contended that in spite of Surveyor having accepted the factum of misappropriation of the travellers cheque by the delinquent employee and recommended damage upto Rs. 10 lacs, the OP-Company did not honour the claim of the complainant-Company against the infidelity insurance policy.
7. Let us accept the version of the complainant or the report of the Surveyor, though he was not entitled to make such report because he was only deputed to assess the loss whereas the subsequently appointed investigator to look into the allegations of infidelity of the employee came to the conclusion that there was no such intention as in 50% of the cases the said employee was used to issue travelers cheques against cheques.
Merely because the cheques were dishonoured the said employee cannot be fastened with any infidelity and the complainant suffered any pecuniary loss unless and until there is a finding by criminal courts as to the offence of misappropriation of the amount of the complainant-Company in connivance with the OP-Company. The very fact that the travelers cheques were obtained by a company and not by an individual and in the past also these companies were being given travelers cheques against cheques which was the established practice and not against demand drafts. The ingredients entitling a commercial organization engaged in the business of giving travelers cheques to other commercial companies and not to individuals are utterly wanting. Both the complainant company and the company who availed the service of travelers cheques to its employees were engaged in commercial activities and travelers cheques for such a heavy amount was obtained by the OP-Company was obtained for commercial purpose for the benefit of their employees or for any other purpose.
8. Criminal prosecution of a person is an independent proceeding whereas insurance claim is an independent contract. Insured has to establish beyond doubt the requirement or ingredients of the contract entitling it to the benefit of the insurance policy.
Had it not been practice of giving travelers cheques to its clients against acceptance of cheques and in view of the report of the investigator of the OP-Company accompanied by the nature of the transaction, nature of consumer being a company and nature of the person for whom the infidelity cover was taken which again is a company for whom service of giving travelers cheque was provided by the complainant company and there being no finding of fact returned by the court where criminal prosecution has been pending to look into the cause of loss to the complainant-Company through its fraudulent act or unfaithfulness or infidelity of its employee in conspiracy with the company to whom the travelers cheques were given against cheque, the complainant is not entitled for insurance claim against the policy.
9. The main ingredient of the policy is the collusion of the employee either with the person to whom the service of the company are being rendered by the employee or the criminal misappropriation of the funds of the company. At this stage claim of the complainant cannot be allowed merely on presumption and conjunctures as to the infidelity of its employee, particularly in collusion with the company in whose favour the travellers cheques were issued.
10. However, complainant shall be entitled to raise this claim again depending upon the outcome of the criminal prosecution which shall be adjudicated by the OP-Company within two months of the intimation about the result of the criminal proceedings and in case the complainant is still aggrieved of the decision of the OP it shall have the liberty to file fresh complaint, limitation of which shall commence from the date of intimation of the result to the OP-Company.
11. Complaint is disposed of in aforesaid terms.
12. A copy of the order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
13. Announced on 21-07-2008.
(Justice J.D. Kapoor) President jj