JILA SAHAKARI KENDRIYA BANK MARYADIT AND ANOTHER Vs. BRANCH MANAGER, IFFCO TOKIO GENERAL INSURANCE CO. LTD. AND 2 OTHERS

JUDGEMENT

(1.) The complainant No.1/appellant No. 1 is a cooperative bank, being run by complainant No.2/appellant No. 2 society. The appellants/complainants had obtained an insurance policy from the respondent which inter-alia insured them against misappropriation of funds by their employees. The case of the complainants/appellants is that a fraud in the bank was committed in the years 2003-04 to 2006-07 which came to their knowledge on 08.5.2007. On receipt of the letter disclosing the fraud, they directed the concerned Branch Manager to investigate the matter. He submitted a report which reached the bank on 09.7.2007. He was asked to reinvestigate the matter to identify the guilty officials. Consequently, the Branch Manager submitted an investigation report, which was received by appellants/complainants on 17.8.2007. However, intimation of the loss was not given to the insurer nor was the matter reported to the police for years together. The case of the appellants/complainants is that they were awaiting the special audit report before reporting the matter to the police and that the special audit was completed only on 20.7.2010. The loss was reported to the insurer on 12.3.2010.

(2.) Vide letter dated 24.6.2011, the insurer drew the attention of the appellants/complainants to the Condition No. 1 of the policy which required them to give notice in writing to the insurer immediately upon the occurrence of any loss/damage and noted that the loss had been reported after a gap of three years which amounted to breach of expressed policy condition, making the claim voidable. The appellants/complainants however, were asked to give reasons which prevented timely intimation of the claim to the insurer. The aforesaid letter was replied by the appellants vide letter dated 19.7.2011.

(3.) Since the claim was not paid, the complainants/appellants approached the concerned State commission by way of a consumer complaint.