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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Satyen Vaidya, J.
Himachal Pradesh State Co-operative Bank Limited - Plaintiff
Versus
National Insurance Company Limited & another - Defendants
Civil Suit No.4086 of 2013
Decided On : 11-12-2025
| Table of Content |
|---|
| 1. bips indemnify bank losses from employee dishonesty. (Para 1 , 2 , 3 , 4) |
| 2. fraud discovered; claims submitted post-audit, rejected. (Para 5 , 6 , 7 , 8) |
| 3. defendant alleges breaches: dual control, late notice, audits. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18) |
| 4. evidence proves policies, firs, unsubstantiated audit. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25) |
| 5. policies undisputed; terms authenticity contested. (Para 26 , 27 , 28 , 29 , 30) |
| 6. repudiation cites excess, dual control, retroactive limits. (Para 31 , 32 , 33 , 34) |
| 7. excess clause excludes claims under rs.50,000. (Para 35 , 36 , 37) |
| 8. retroactive cover barred post-expiry undiscovered losses. (Para 38 , 39 , 40 , 41) |
| 9. dual control unproven, inapplicable to fraud; no negligence. (Para 42 , 43 , 44 , 45) |
| 10. special audit contents not legally proved. (Para 46 , 47 , 48) |
| 11. preliminary objections overruled; suit maintainable. (Para 49 , 50 , 51 , 52 , 53) |
| 12. suit dismissed for unproven loss. (Para 54 , 55) |
JUDGMENT :
Satyen Vaidya, J.
The instant suit has been filed for recovery of Rs.2,54,38,311/- with interest pendent lite and future at the rate of 18% per annum. Costs of suit have also been claimed.
2. The plaintiff bank had purchased Bankers Indemnity Policies from the defendant during the years 2003-2004, 2006-2007 & 2007-2008 (for short the, ‘BIPs’). The plaintiff has claimed indemnification of Rs.2,52,494/- against the ‘BIP’ for the year 2003- 2004, Rs.46,28,604/- against the ‘BIP’ for the year 2006-2007 and Rs.1,56,36,000/- against the ‘BIP’ for the year 2007-2008 by alleging that one of its employees, namely, Visheshwar Lal Sanartu, while posted as In-charge of a Branch of plaintiff at village Taklech in District Shimla between 2003 and 2008 had indulged in mass irregularities, misappropriation, embezzlement and falsification of accounts, causing loss of aforesaid claimed amount to the Plaintiff.
3. It is averred that the plaintiff had purchased ‘BIP’ for the year 2002-2003 by paying a premium of Rs.1,98,600/- plus service tax at the rate Rs.9,930/- and had thereby insured a sum of Rs.70,00,000/-. Similar ‘BIPs’ had statedly been purchased by the plaintiff from the defendant for the year 2006-2007 and 2007-2008 by assuring a sum of Rs.1,00,00,000/- each on payment of requisite premium.
4. As per the plaintiff, the ‘BIPs’ purchased by it from the defendant covered the losses suffered by the plaintiff by reason of the dishonest or criminal act of any of its officer, clerk or employee with respect to money and/or securities wherever committed or whether committed directly or indirectly.
5. The plaintiff has alleged that one Visheshwar Lal Sanartu was an office assistant working in plaintiff bank and was posted as In-charge in one of the branches of the plaintiff at village Taklech in District Shimla from 2003 to 2008. The said official allegedly had committed various acts of irregularities, misappropriation, embezzlement and falsification of accounts. As per plaintiff some of the irregularities, misappropriation, embezzlement and falsification of accounts committed by Visheshwar Lal Sanartu had come to the notice of R. B. Rana, Branch Manager and he had reported the matters to the police on the basis of which FIRs Nos.81 and 82 dated 14.06.2008 were registered at Police Station, Rampur under Sections 420, 418, 408, 409, 463, 464 and 378 and 120-B IPC. The FIRs were stated to have been lodged with the allegations that Visheshwar Lal Sanartu had furnished unauthorized bank guarantees on behalf of the plaintiff bank for the benefit of private contractors; had charged less commission on demand issued in the name of plaintiff bank in favour of private contractors; had participated in forgery of documents; had affected illegal and unauthorized transactions/deductions from the accounts of consumers and had illegally routed funds to himself and his partners.
6. It is alleged by the plaintiff that in order to ascertain the actual loss sustained by the pl
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