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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member, Dr. B.C. Gupta, Member
Lala Urban Co.Op Bank Ltd. —Complainant
versus
United India Insurance Co. Ltd. & Anr. —Opp.Parties
Consumer Case No. 214 of 2006
Decided on 7.5.2015
For the Complainant:Mr. Shantwanu Singh, Mr. Ashok Kumar Singh, Advocates
For the Opp.Parties:Mr. Pradeep Gaur, Mr. Amit Gaur, Advocates
IMPORTANT POINT
Insurance company was required to pay to complainant bank only as per value of jewellery recorded in register of bank at the time jewellery was pledged.
Headnote:Consumer Protection Act, 1986—Section 12—Insurance—Theft of jewellery from premises of Bank—Irrespective of value of jewellery at the time of loss to bank, insurance company was required to reimburse bank to the extent of value as recorded in register of bank at the time of pledging of jewellery or ornaments—Value of jewellery may go up or may go down after it has been pledged with bank but liability of bank would not vary with valuation in value of jewellery after it is pledged with bank—Insurance company was required to pay to complainant bank only as per value of jewellery recorded in register of bank at the time jewellery was pledged—Complainant bank has already paid as per value recorded in its registers at the time jewellery was pledged—If bank has paid higher amount to depositors, it will have to bear difference between amount it received from insurance company and amount which it paid to depositors since policy taken by bank was not a reinstatement policy—Complaint dismissed. (Paras 4 to 6)
The complainant before us is an Urban Cooperative bank which had taken an insurance policy from the opposite party United India Insurance Co. Ltd., to the extent of Rs. 3.81 Crores. The insurance policy inter alia covered the jewellery pledged with the complainant bank. In a theft which took place in the premises of the plaintiff bank on 28.12.2003, gold jewellery weighing 48,684 gms was stolen. The case of the complainant bank is that since the gold rate at the time of the loss taken place was Rs. 6,200/- per gram, it had to reimburse the depositors of the gold at the aforesaid rate thereby incurring loss to the extent of Rs. 3,01,84,080/-. The insurance company however paid only a sum of Rs. 1,32,97,390/- to the complainant which comprised the value of the jewellery calculated @ Rs. 3500/- per 10 gms which was the gold rate at the time the said jewellery was pledged with the bank. Being aggrieved from the decision of the insurance company to pay only a part of the claim lodged by the complainant bank, the said bank is before us by way of this complaint seeking payment of balance amount of Rs. 2,03,51,319/- alongwith interest @ 18% per annum and compensation amounting to Rs. 20 lacs.
2. The complaint has been resisted by the insurance company primarily on the ground that the complainant bank has been paid in terms of the valuation clause contained in the insurance policy and therefore, there was any deficiency in rendering services to the complainant. It is also stated in the reply that in violation of the guidelines issued by Reserve Bank of India, the complainant bank had advanced loan against pledge of jewellery to money lenders.
3. The valuation clause contained in the insurance policy issued to the complainant bank reads as under:
(d) Valuation Clause : Value for the purpose, settlement of any claim in respect of jewellery/ornaments under this policy shall be as per the 100% value as recorded in the register of the Bank at the time of pledging jewellery or ornaments.
4. It would thus be seen irrespective of the value of the jewellery at the time of loss to the bank, the insurance company was required to reimburse the said bank to the extent of the value as recorded in the register of the bank at the time of pledging of jewellery or ornaments. The value of the jewellery may go up or may go down after it has been pledged with the bank, but liability of the bank would not vary with the valuation in the value of the jewellery after it is pledged with the bank. The same gets crystalized on the basis of the valuation recorded in the register of the bank at the time the jewellery was pledged. Therefore, it can hardly be disputed that the insurance company was required to pay to the complainant bank only as per the value of the jewellery recorded in the register of the bank, at the time the said jewellery was pledged. Admittedly, the complainant bank has already paid as per the value recorded in its registers at the time the jewellery was pledged. Therefore, if the bank has paid a higher amount to the depositors, it will have to bear the difference between the amount it received from the insurance company and the amount which it paid to the depositors, since the policy taken by the bank was not a reinstatement policy.
5. Another reason why the complainant bank cannot succeed is that admittedly vide letter dated 09.08.2005 received by the bank on 10.08.2005, it was informed by the insurance company that the competent authority had approved the claim to the extent of Rs. 1,32,97,390/- and requested the bank to discharge the enclosed voucher and submit subrogation letter on stamp paper. In terms of the aforesaid offer made by the insurance company, the complainant bank duly executed the letter of subrogation dated 09.08.2005 which is available on page no. 29-30 of our paperbook and it also discharge settlement voucher which is available on page no. 31 of our paperbook. Vide the aforesaid settlement voucer, the complainant bank ag
