UNITED INDIA INSURANCE CO. LTD. DIVISIONAL OFFICE, TIMBER HOUSE,CART ROAD, SHIMLA H.P Vs. HIMACHAL PRADESH STATE CO

JUDGEMENT

(1.) The respondent/complainant which is a Cooperative bank purchased a Bankers Indemnity policy from the petitioner company for the period from 01.4.2004 to 31.3.2005 and got the said policy renewed for the period from 01.4.2005 to 27.3.2006. The aforesaid policy inter-alia covered the risk of loss to the respondent bank caused by fraud, embezzlement etc. on the part of its employees. During audit for the period from 01.4.2004 to 31.3.2005, it was detected that the Manager of Moorang Branch of the respondent bank had committed several acts of fraud and embezzlement, resulting in a loss of Rs.3,10,521.00 to the respondent bank. The respondent bank submitted a claim to the insurer, for reimbursement of the loss sustained by it. The claim however, was repudiated on the ground that the policy had not been renewed beyond March, 2006, when the bank purchased a new policy from another insurance company. Being aggrieved, the respondent bank approached the concerned District Forum by way of a consumer complaint. The complaint was resisted by the insurer, primarily on the ground on which the claim had been repudiated.

(2.) The District Forum, vide its order dated 28.8.2010 dismissed the complaint. Being aggrieved the complainant approached the concerned State Commission by way of an appeal. Vide impugned order dated 07.3.2012, the State Commission allowed the appeal and consequently directed the insurer to pay a sum of Rs.3,10,521.00 along with interest @ 9% per annum from the date of the complaint and cost of litigation quantified at Rs.10,000.00. Being aggrieved from the aforesaid order, insurer is before this Commission by way of this revision petition.

(3.) A perusal of the FIR lodged against the bank officer who allegedly embezzled the money would show that the said embezzlement comprised (i) the fake loss against PLI amounting to Rs.48,832.00, (ii) fake loan against BOD amounting to Rs.1,11,689.00 and (iii) a fake draft of Rs.1,50,000.00, aggregating to Rs.3,10,521.00.