The main legal point established in the judgment is the interpretation of the Banker's Indemnity Policy and its exclusion clause, and the assessment of liability based on the policy terms and conditions.

ORDER

Mrs. Caroline Collasso, Member - This is a complaint filed by Bicholim Urban Co-Op. Bank Ltd. through its Managing Director against the opposite party National Insurance Co. Ltd., for negligence/deficiency rendered by it in its ordinary course of business.

2. It is the case of the Complainant that they entered into a contract with the opposite party by subscribing to its Banker's Indemnity Policy, bearing No. 270906/99/ 7700001 for a period commencing from 1.4.1999 to 31.3.2000 for a sum of Rs. 75,00,000. In terms of the said policy, the Complainant was insured by the Opposite Party against the loss of money/security suffered by it, on account of fraud, forgery, alteration, dishonesty of its employees. The Complainant after subscribing to the said policy, complied with all the terms and conditions and paid the regular premiums.

3. One Shri Sureshchandra R. Kapdi, the complainant's employee played a fraud on the complainant's bank. However, the Opposite Party refused to indemnify the Complainant and rejected their claim without assigning any reasons. The Complainant states that due to the fraud played, the Complainant Bank suffered a loss of Rs. 50,52,614.50 which included further interest from 1.10.1999. The said fraud was noticed on 25.3.1999 during the subsistence of the policy.

4. The Complainant has elaborated the fraud pertaining to various accounts under different heads:

(a) Overdraft Account No. 18 of M/s. Gurudrupa Polymers:

The Complainant states that Shri S.R. Kapdi who was working as a Branch Manager of the Complainant branch at Bicholim, opened an overdraft A/c No. 18 fictitiously for an overdraft facility of Rs. 25 lakh based on non-existing Fixed Deposit Receipts. This account was opened in the name of M/s. Gurukrupa Polymers. Upon opening, an amount of Rs. 13,62,056 was debited from the said account and credits from the same were passed in overdraft account No. 10 of M/s. Camat and Co. to the tune of Rs. 4,35,415 and to the overdraft account No. 11 of M/s. S.S. Multiplast to the tune of Rs. 9,26,641. After transferring the said amounts in these two above account Nos. 10 and 11, they were closed. It was noted that while the debit vouchers were signed by Shri S.R. Kapdi and credit vouchers initialled by him, no documents were available in the Complainant/branch records.

The overdraft account No. 18 was fictitiously created initially to close the overdraft account of M/s. Camat and Co. and M/s. S.S. Multiplast. The documents pertaining to these accounts, including ledger folio were not available, being intentionally removed by Sri. Kapdi. Debit balance noticed at the relevant time on account No. 18 was Rs. 18,42,278.50 with interest thereon from 1.7.1999.

(b) Loan FDR 12/76 L.F.9/120 and SB A/c No. 12089 of Shri Suryakant S. Tople.

On 10.6.1998, a loan was disbursed in the name of Shri S.S. Tople for Rs. 6.35 lakh against 13 FDRs on face value of Rs. 7,32,229 which were recovered from the drawer of Shri S.R. Kapdi. Documents in respect of this loan were not available in the file of the Complainant Bank. However, there was an unsigned noting on the ledger folio that the documents are with Branch Manager, S. Kapdi 8.2.1997 and none of the Fixed Deposit receipts were discharged by the depositors. The debit vouchers for Rs. 6.35 lakh were signed on the reverse by Shri S.S. Tople and the proceeds of the loan were credited to Saving Bank A/c No. 12089 of Shri S.S. Tople.

The Complainant, however, stated that the aforesaid transaction cannot be said to be fraudulent at the necessary Fixed Deposits Receipts were kept as security.

On 15.7.1998, a further sum of Rs. 2.15 lakh was disbursed from the same loan account, vide debit voucher prepared and signed by Shri S.R. Kapdi. However, the signature of the borrower on the reverse side was not taken. The said amount was also credited to the Saving Bank account No. 12089 of Shri S.S. Tople and vouchers of this transaction were prepared and initialled by Shri Kapdi.

On 12.8.1998, an am