State Consumer Disputes Redressal Commission
M/S Lkp Merchant Financing Ltd. vs The New India Assurance Co. Ltd. on 12 December, 2008
IN THE STATE COMMISSION: DELHI IN THE STATE COMMISSION: DELHI (Constituted under section 9 clause (b) of the Consumer Protection Act, 1986) Date of Decision: 12-12-2008 Complaint Case No.C-188/2001 M/s LKP Merchant Financing Ltd. -Complainant 203-A, Embassy Centre, Nariman Point, Mumbai 400021 Regional Office, M-138 Connaught Circus, New Delhi - 110001 Acting through: Shri Rajeev Jain, Senior Manager (Legal, Personnel & Administration-North & East Region) Versus The New India Assurance Co. Ltd. -Opposite Party 87, Mahatma Gandhi Road, Through Fort, Mumbai 400001. Ms. Pankaj Bala Verma, Advocate. Divisional Office, Bombay Life Building, N-34 Connaught Circus, New Delhi-110001. CORAM: Mr. Justice J.D. Kapoor President Ms. Rumnita Mittal Member
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) The complainant is an authorized foreign exchange dealer, duly licensed by the Reserve Bank of India to purchase foreign currency notes/coins and travellers cheques and to sell foreign currency notes/coins and also to stock or sell foreign currency travellers cheques issued by overseas organizations at its office premises at M-56, Connaught Circus, New Delhi. The complainant is engaged in the money changing business since the year 1992.
2. For purposes of indemnifying the complainant against loss of travellers cheques, foreign currency and Indian currency while they are in transit, the complainant took Cash in Transit Policy of Insurance bearing No.4831030109570 from the OP for the period from 03.04.1997 to 02.04.1998 for a sum of Rs.20,00,00,000.00(Rupees twenty crores only) with the highest amount in transit at a time being Rs.50,00,000.00 from the office of the complainant at M-56, Connaught Place, New Delhi to all Banks, Money Exchanges, Hotels and other pick-up points within a radius of 40 kms.
The insurance policy covered travellers cheques, foreign currency and Indian currency in the custody of the complainants officers, executives and authorized persons whilst in transit by car, scooter and road. The complainant was covered under the Cash in Transit Insurance with the OP from the year 1994 onwards.
3. On 30.03.1998 at 11.10 a.m. Shri Gopal Sharma, the Regional Manager of the complainant along with Shri Vineet Batta, Executive, Foreign Exchange (Operations) and Shri Suresh Kumar Messenger/Driver left their office at M-56 Connaught Place, New Delhi on routine official work. Shri Gopal Sharma was dropped near Bank of Baroda Building at Parliament Street and Shri Vineet Batta went to Allahabad Bank where he met Shri Shiv Kumar, a Bank official. Thereafter Shri Vineet Batta along with Shri Suresh Kumar proceeded in the car to ANZ Grindlays Bank at Parliament Street where Shri Batta collected currency worth Rs.88,000.00 from Shri Mehra, the cashier of the Bank. Shri Vineet Batta thereafter met Smt. Kapoor at Bank of Tokyo and Shri Rangarajan at Indian Overseas Bank, Parliament Street. Shri Vineet Batta and Shri Suresh Kumar proceeded to Hotel Le Meridien at 8 Windsor Place, New Delhi where Shri Vineet Batta collected foreign currency worth Rs.7,51,000.00 from Shri Mohinder of C.J. International Hotels Limited. The two employees then proceeded to Punjab National Bank, Kanishka Hotel, New Delhi where Shri Vineet Batta collected foreign currency worth Rs.13,080.00 from Shri Chawla, Official of the Bank. They thereafter proceeded to Standard Chartered Bank. Shri Vineet Batta was carrying black coloured Odyssey make bag with him having number lock and he took the same to various banks and hotel in his hand, while Shri Suresh Kumar who was driving the car, waited in the vehicle. However, when he went to Standard Chartered Bank, he had left the bag containing foreign exchange and travelers cheques worth Rs.8,48,452.00 and other documents, cheque books etc. in the back seat of the car and requested Shri Suresh Kumar to take care of the same. While Shri Vineet Batta was away to Standard Chartered Bank, a stranger approached Shri Suresh Kumar who was sitting in the drivers seat and told him that the front tyre of his car was punctured. Shri Suresh Kumar therefore went to enquire but found the tyre in proper condition.
Therefore, he came back and sat in the drivers seat, by which time the stranger had disappeared. Shri Suresh Kumar however did not realize that the stranger had played a trick on him by diverting his attention from the bag lying in the back seat and that while he went to check the tyre, the stranger by himself or with the assistance of accomplices carried away the bag containing the cheque books, documents, foreign exchange and travelers cheques worth Rs.8,48,452.00. Shri Vineet Batta on returning from Standard Chartered Bank found that the bag had disappeared and therefore the two employees made frantic efforts to locate the same. Since they could not find the bag, and no beat constable was also around, they got nervous and returned to the office of the complainant at M-56, Connaught Place, New Delhi to report the matter to their superior officers.
On receiving the information, Shri Gopal Sharma, Regional Manager-North of the complainant, immediately lodged FIR No.264 of 1998 at P.S. Connaught Place at 3.30 p.m. the same day.
4. The complainant on 30.03.1998 itself dispatched letters to the issuers of travelers cheques namely Thomas Cook (I) Ltd., Barclays Bank and American Express Bank, informing them about the incident and requested them to stop payment on the stolen travelers cheques. The complainant further sent letters dated 30.03.1998 to Bank of Baroda and Bank of Punjab, requesting them to stop payment of stolen cheques. The complainant also inserted advertisements in Nav Bharat Times and Times of India regarding the loss of Bulk purchase of Bodreaux travelers cheques bearing their distinctive numbers and the loss of cheque books of Bank of Punjab and Bank of Baroda, which were published in their New Delhi editions dated 01.04.1998. The complainant on 31.03.1998 informed the branch office of the OP at N-37, Bombay Life Building, Connaught Circus, New Delhi.
5. The OP appointed Shri R.G. Verma, Chartered Accountant, 101 Swastik Bhawan, Ranjit Nagar Commercial Complex, New Delhi as Surveyor/investigator in the claim. Shri R.G. Verma met Shri Sunil Chadha, the Area Manager of the complainant on 01.04.1998 and requested him to submit various documents and records in support of the claim. These were submitted by the complainant vide their letter dated 11.04.1998 addressed to the investigator. Another meeting was held by the complainant with the surveyor on 13.04.1998 when additional documents and information were sought and these were supplied by the complainant. The complainant submitted a formal claim in the format of the OP to the surveyor dated 16.04.1998 and fully cooperated with the surveyor appointed by the OP. The complainant in reply to various communications received letter dated 05.11.1998 from the Divisional Office of the OP, rejecting the claim stating that the complainant had committed serious lapses tantamounting to breach of the terms and conditions of the policy on the part of the complainant. It was alleged therein that the employee of the complainant had not taken reasonable care for the safety of the bag which was allegedly left negligently and carelessly in the car. It was further alleged that Shri Vineet Batta the carrier of the money was required to keep the same in his personal custody which he failed to do and that the briefcase was left in the rear seat of the car without notifying to the driver to take special care of it as it contained valuable documents and money. The complainant sent letter dated 11.11.1998 to the Chairman of the OP Insurance Company, reminder dated 23.11.1998 to the Senior Divisional Manager and a representation dated 24.06.1999 to the Assistant General Manager at the Regional Office, New Delhi. However in spite of repeated requests reminders, personal meetings as also telephone calls, the OP Insurance Company failed and neglected to heed to the request of the complainant to reconsider their claim.
6. Complainant in the circumstances got issued a legal notice dated 19.07.1999 pointing out that they had taken inordinately long period of time to process the claim, that the survey report dated 28.04.1998 which was allegedly the basis of rejection of the claim was not supplied to the complainant and that the alleged lack of reasonable care on the part of Shri Vineet Batta, employee of the complainant was incorrect and baseless. The OP did not send any reply to the legal notice much less refuting the stand taken by the complainant therein. Shri R.G. Verma, Surveyor in the letter dated 14.11.1999 put forward new grounds for rejecting the claim afresh, namely (1) the loss had occurred allegedly during return journey to the office which according to him was not covered under the policy (2) the foreign currency was allegedly not in the personal custody of Shri Vineet Batta and Shri Suresh Kumar Kaushik was allegedly not an authorised person and (3) Shri Suresh Kumar Kaushik had allegedly not taken reasonable care so as to protect the foreign exchange since he allegedly left the car unattended. These new grounds suggested that the OP and/or its surveyor after recalling the earlier rejection of the claim, were conducting a rowing and fishing expedition to hunt for new grounds to reject the claim, and to build a more sound defence, since they were presumably aware that the grounds for rejection of claim in their earlier repudiation letter dated 05.11.1998 would not stand the test of judicial scrutiny. The complainant on 14.11.1999 itself sent a suitable reply to Shri R.G. Verma, Surveyor. Shri R.G. Verma, Surveyor thereafter sent another letter dated 16.01.2000 raising various queries regarding Shri Suresh Kumar Kaushik, his antecedents etc. which were duly replied to by the complainant the same day vide reply dated 16.01.2000. Shri R.G. Verma, surveyor sent another letter dated 04.04.2000 to the complainant, now demanding that copy of the proposal form of the concerned policy and copies of policies of earlier years of cash in transit be supplied to him, to which a reply dated 04.04.2000 was given to him the same day, enclosing therewith copies of the concerned policies, but stating that the proposal form was not available with the complainant, as the same ought to have been with the OP Insurance Company only. Shri R.G. Verma, surveyor thereafter requested the complainant for a latest untraced report from the Police and therefore the complainant obtained untrace report dated 05.04.2000. Shri R.G. Verma, surveyor thereafter raised further queries to which the complainant sent reply dated 17.04.2000. The OP appointed another surveyor namely M/s Ramchandran Radhakrishnan & Associates to survey the loss, who sent letter dated 15.05.2000 seeking additional information regarding the status of claims with issuers of travelers cheques, particulars of travelers cheques for which identity of issuers was not known etc. The second surveyor appointed by the OP was informed that the information sought had already been supplied to the first surveyor, and in any case, copies of these were submitted by the complainant to the second surveyor once again.
7. Shri R.G. Verma as well as Shri P.R. Radhakrishnan the two surveyors thereafter kept silent for several months, after which a letter dated 05.09.2000 was received from M/s Ramchandran Radhakrishnan & Associates. The complainant informed the Divisional Office of the OP company that the loss had taken place approximately 3 years back and that at that belated stage it was not possible to retrieve the records which were retained centrally at the office of the complainant at Pune. After a long silence, the complainant received a letter dated 30.03.2001 stating therein that they had requested the head office of the OP for reopening the said claim in view of the complainants representation and that since the Head Office had not acceded to their request, the file could not be reopened.
8. The rejection of the claim vide repudiation letter dated 05.11.1998 on flimsy, baseless, incorrect and arbitrary grounds, is not sustainable in law, for the grounds already urged in the legal notice dated 19.07.1999 issued by the complainant. The OP Insurance Company is guilty of deficiency of service and negligence in wrongfully rejecting the claim of the complainant. The OP is therefore liable to pay a sum of Rs.8,48,452.00 being the value of foreign currency and travelers cheques lost on account of perils insured against. The complainant is availing credit facilities from Bank at exorbitant rate of interest.
Therefore the complainant is entitled to interest @24% per annum from the date of the loss i.e. 30.03.1998, besides damages to the extent of Rs.2,00,000.00 and also Rs.50,000.00 as cost of the proceedings.
9. Complainant has prayed that order may be passed directing the OP to pay a sum of Rs.8,48,452.00 being the loss suffered by the complainant and to pay interest on the aforesaid amount @ 24% per annum w.e.f 30.03.1998 i.e. the date of the loss till realization of the amount with damages to the extent of Rs.2,00,000.00 and Rs.50,000.00 as cost of the present proceedings.
10. While justifying the rejection of the claim, the OP came up with the following pleas:-
(i) That the alleged theft of the briefcase containing Money i.e. cash in transit and documents had taken place entirely due to the carelessness of the authorized person of the complainant as the same were not in the custody of the authorized person which tantamounts to serious breach of the terms and conditions of the policy.
(ii) That as per the terms and conditions of the Policy the carrier of the bag, namely Shri Vineet Batta was required to keep the same in his personal custody which he failed to do so and caused loss due to his own negligence.
(iii) That the claim was repudiated on 5.11.98 after due application of mind to the facts and circumstances and terms of the policy as such there is no deficiency on the part of the OP Co.
(iv) That the complaint is highly time barred as the same has been filed on 27th June 2001 much beyond the Limitation period.
(v) That the complainant had taken, for the first time money in transit policy in 1994 and the same was being renewed every year.
The policy bearing No.310300/48/09570 for the period 3.04.97 to 02.04.98 was a renewal of the previous years policy with a per carrying limit of Rs.50 lacs and a total limit of Rs.20 crores during the year for money transaction within the radius of 40 kms. from the complainant office M-56 Connaught Place, New Delhi.
(vi) That the complainant was covered under the cash in Transit Insurance with the OP from 1994 onwards.
(vii) That the Insurance Policy is a complete document with the schedule and its terms and conditions and the same are always supplied to the insured at the time of issuance of initial policy. On subsequent renewal only the renewed policy and schedule thereto is supplied. Complainants were provided with the terms and condition of the Policy in 1994 when they purchased the policy for the first time. The policy schedule gives the number of previous policy, sum insured, premium charged and details of the insurance coverage. The events leading to the theft of the bag in question are denied being wrong.
(viii) That there are certain variations in the details as given by the investigator and the complainant. There is a contradiction in the statements made by the complainant and their representatives. The Investigator concluded vide his Surveyor cum Investigation report that Mr. Vineet Batta and Mr. Suresh Kumar did not take reasonable care to protect the property insured, so the claim may be rejected.
(ix) That the complainant has not informed the OP whether the missing traveler cheques have not been actually misutilized and in this circumstances the complainant cannot get credit for the amount of the said missing cheques.
(x) That the Investigator was deputed by the Regional Office. The entire claim file was forwarded to the Regional office vide their letter dated 13.5.98 along with their recommendations to repudiate the claim.
Later on the file was referred to the Head Quarters by the R.O. The Head Quarters after examining the claim file conveyed their decision, to repudiate the claim vide letter dated 7.10.98 after consultation with the local legal retainer. On 5.11.98 the Divisional office issued the letter rejecting the claim.
(xi) That as an after thought the complainant came up with the plea that the driver who was sitting in the car was an employee of the insured and therefore even if the bag was left in the car by Mr. Vineet Batta, it was in the custody of another employee namely Mr. Suresh Kaushik the driver, therefore, the ground of rejection of the claim does not hold good.
(xii) That the contention of the insured in the legal notice that the driver was also competent to carry the money is an afterthought. Even the fact about the driver being aware of the money being carried is disputable as per the statement given by the driver and Mr. Vineet Batta.
(xiii) That in view of the legal notice, the matter was again referred to D.R.O.I. The D.R.O.I. after considering the entire case papers declined the liability. Since the insured was persisting for reconsideration of claim, the D.O. has also tried to find out any possibilities of reconsidering the matter, the opinion of another surveyor was also sought.
Thereafter the claim was again referred to the regional office who in turn referred the matter to the Head Office.
Finally the request was again declined by the H.O. for reconsideration. The Divisional office at no stage had withdrawn the letter of repudiation as is being claimed by the insured.
(xiv) That the entire post repudiation exercise was being done to help the insured considering the long standing relations with them. The file was filed as NO CLAIM after sending the repudiation letter on 5.11.98 and it was never reopened, as no new fact was brought to the notice of the OP in the light of which the repudiation could be revoked.
11. We have accorded careful consideration to the rival claims and contentions of the parties. Admittedly the policy was for covering the risk and loss of cash in transit.
The OP has heavily relied upon the Schedule of the policy to justify rejection of the claim of the complainant.
The Insurance cover in the policy was as under:-
Cash in transit Insurance Sum insured Rs. 20,00,00,000/- (Twenty crores only) from above place to all Banks/Money Exchangers/Hotel/ clients pick-up points within the radius of 40 kms by car/scooter/road by Companys officers/Executives. Foreign currency notes/travelers cheques , Indian Curency in the personal custody of the insureds authorized person while in transit.
Warranted that claim in respect of Foreign Currency will be paid in Indian Currency.
12. Most significant covenant of this cover relied upon by the OP is that the risk was covered only if there was a loss of currency in the personal custody of the insured authorized person while in transit.
In the instant case one Shri Vineet Batta, Executive Officer of the complainant Company was in the car being driven by the Driver of the complainant Suresh Kumar. The OP has not disputed the factum of Vineet Batta being the Executive Officer of the complainant and therefore was the person authorized to carry the cash.
13. The main contention of OP is that Mr. Vineet Batta did not carry the brief case containing the cash when he went to the Standard Chartered Bank for his personal work and therefore the Driver of the vehicle was not the authorized person to carry the cash and was not in the custody as the brief case was left on the back seat of the car and a stranger approached the Driver Suresh Kumar who was sitting in the driver seat and told him that the front tyre of the car was punctured and he just got down to see as to what had happened and during this period the stranger or the miscreant disappeared with the bag and thereafter he realize that the stranger played a trick on him by diverting his attention. Further it was averred by the OP that the Driver did not know whether the bag was lying on the back seat and was containing cash or not.
14. Now the question arises whether the cash was in transit and was in the custody of the authorized person of the complainant or not. Admittedly Vineet Batta was the authorized person who was carrying the cash. Merely because he went to Standard Chartered Bank does not mean that the cash was not in his custody nor did he cease to be the authorized person. Such a hair splitting interpretation of the term of contract is not permissible in the contract of beneficial nature. If there are two views possible, the view which protects the interest of the consumer and serve the purpose and always should be accepted.
15. The loss in the car was loss during transit.
The money lying in the car was money in transit. Merely because the car stopped for two minutes or five minutes does not mean that the cash ceased to be in transit. Cash in a car is cash in hand. Even if Mr. Bhatia had left the brief in the Car it continued to be in his custody and even in the temporary custody of the driver who was also employee of the complainant.
Even if the person takes the cash in the car he may visit 10 different places on the way. By doing so he does not lose the custody of the cash inside the car as any person who is not authorized to take away cash and if the cash is lost while in car, it entitles the insured to reap the benefit of the the policy covering risk of cash in transit.
16. In the given facts and circumstances of the case we do not find ourselves in agreement with the counsel for the OP. We have taken a view that wherever a criminal offence takes place and report is lodged with the police, the police is the only statutory authority to investigate into the offence and not any other authority. However, even if an investigator is appointed he has to act like a prudent man and not to dissect the matter in such a manner to find out one or other flimsy reasons as to how the rightful claim can be frustrated and defeated and this is what has been done by the Investigator of OP.
17. Again the contention of the counsel for the OP that the circumstance when Vineet Batta went two places carrying the bag with him and the last place of Standard Chartered Bank he did not carry the bag does not cut ice as it is suggestive that Vineet Batta was in connivance with the stranger who had taken away the cash from inside the car.
18. Further the objection of the counsel that the complaint was filed beyond the prescribed period of two years is also without any substance as the first representation letter is dated 5th November 1998 and it was only after receipt of legal notice set by the complainant the OP reopened the claim and carried out additional survey through two different surveyors namely R.G. Verma and P.R. Radhakrishnan and therefore OP itself has written a letter dated 30th March 2000 informing the complainant that the file had been given to the surveyors for their reconsideration and that as soon as the report was received, it would revert to the complainant.
This circumstance itself is sufficient to bring the complaint within the prescribed period.
19. Word compensation has been provided a wide connotation by the Supreme Court in Ghaziabad Development Authority Vs Balbir Singh-(2004) 5 Supreme court Cases 65 by including in its fold each and every element of sufferings like expected loss, actual loss, mental agony, harassment, emotional suffering, humiliation and all other sufferings suffered by the consumer at the hands of the service providers, traders etc.
20. So far as the actual loss is concerned the insured is entitled for reasonable interest besides the compensation for mental agony, harassment and all other sufferings referred above as the interest does not take care of mental agony or harassment for making the consumer run from pillar to post and to suffer losses in getting his rightful claim. This is over and above the actual loss.
21. This concept of compensation can be further extended.
If the service provider or trader forces a consumer to approach the legal forum or court and does not redress on its own in the first instance this itself is a cause for further mental agony and harassment as now a days legal remedies are becoming costlier and time consuming and even the orders of the consumer courts take decade to attain finality. We have also taken a view that any Insurance Company who takes more than a year in deciding the claim of the insured one way or the other it has to further compensate for deficiency in service because no service provider can be given indefinite period to settle claim of the consumer.
22. Foregoing reasons persuade us to allow the complaint in the following terms:-
(i) OP shall pay Rs. 8,48,452/- towards loss of cash in transit with interest @ 9% from the date of filing of the complaint till the date of this order.
(ii) OP shall pay Rs. 1 lac as compensation for mental agony, harassment, emotional sufferings, physical discomfort and other sufferings suffering by the complainant.
(iii) OP shall pay Rs. 10,000/- as cost of litigation.
23. Aforesaid payment shall be made within one month from the date of receipt of this order.
24. Complaint is disposed off in aforesaid terms.
25. A copy of the order as per statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
26. Announced on 12-12-2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj