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M/s. Dangi Financial & Management Consultancy Pvt. Ltd. v/s The Oriental Insurance Co. Ltd, Thro The Regaional Manager


Company & Directors' Information:- G M MANAGEMENT CONSULTANCY P LTD [Strike Off] CIN = U74140MH1994PTC076181

Company & Directors' Information:- H S CONSULTANCY PVT LTD [Active] CIN = U74140WB1988PTC044368

Company & Directors' Information:- S M CONSULTANCY PVT LTD [Active] CIN = U74140WB1992PTC057293

Company & Directors' Information:- A. K. MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U80300MH1999PTC120053

Company & Directors' Information:- E TO E CONSULTANCY PRIVATE LIMITED [Active] CIN = U63030KA2008PTC048557

Company & Directors' Information:- N M FINANCIAL & CONSULTANCY PVT LTD. [Active] CIN = U74140WB1988PTC045715

Company & Directors' Information:- R. A. CONSULTANCY PVT. LTD. [Under Process of Striking Off] CIN = U67120WB1994PTC066521

Company & Directors' Information:- A 2 Z MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140OR2008PTC010442

Company & Directors' Information:- V G CONSULTANCY PRIVATE LIMITED [Active] CIN = U74899DL1993PTC054746

Company & Directors' Information:- K .P. A. CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140WB2010PTC142889

Company & Directors' Information:- T K M CONSULTANCY INDIA PRIVATE LIMITED [Strike Off] CIN = U74140KL1998PTC012694

Company & Directors' Information:- A & A CONSULTANCY PVT. LTD. [Active] CIN = U74140WB1986PTC040777

Company & Directors' Information:- Y K CONSULTANCY (INDIA) PRIVATE LIMITED [Active] CIN = U74140DL2003PTC121113

Company & Directors' Information:- L M J CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140DL2010PTC208950

Company & Directors' Information:- M U S INDIA CONSULTANCY LIMITED [Strike Off] CIN = U74900WB2013PLC191253

Company & Directors' Information:- K. N. FINANCIAL CONSULTANCY COMPANY PRIVATE LIMITED [Strike Off] CIN = U74999WB2011PTC170775

Company & Directors' Information:- R A D CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140DL2011PTC224038

Company & Directors' Information:- Y. K. M. CONSULTANCY PRIVATE LIMITED [Active] CIN = U74900DL2013PTC254940

Company & Directors' Information:- J. P. CONSULTANCY PRIVATE LIMITED [Active] CIN = U51909GJ2002PTC040433

Company & Directors' Information:- P C CONSULTANCY PVT LTD [Active] CIN = U74210WB1991PTC053835

Company & Directors' Information:- J A CONSULTANCY PRIVATE LIMITED [Under Process of Striking Off] CIN = U93090MH2008PTC188284

Company & Directors' Information:- S K A CONSULTANCY PRIVATE LIMITED [Active] CIN = U74999UP2020PTC136502

Company & Directors' Information:- D M M CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140WB2010PTC151887

Company & Directors' Information:- C I S (INDIA) CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74120BR2013PTC021019

Company & Directors' Information:- G. B. FINANCIAL CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140WB2011PTC162172

Company & Directors' Information:- A V N FINANCIAL MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U74120CT2009PTC021164

Company & Directors' Information:- P S P CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74900DL2011PTC222022

Company & Directors' Information:- N. K. CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140HR2006PTC036471

Company & Directors' Information:- M E CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140KL2012PTC031172

Company & Directors' Information:- V F C CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140RJ2015PTC048025

Company & Directors' Information:- R T M FINANCIAL CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U65999MH2008PTC185911

Company & Directors' Information:- E & C CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140TN2007PTC062260

Company & Directors' Information:- M S K FINANCIAL MANAGEMENT CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140TN2007PTC065459

Company & Directors' Information:- R V FINANCIAL MANAGEMENT CONSULTANCY PRIVATE LIMITED. [Active] CIN = U74140TN2008PTC066153

Company & Directors' Information:- L & R CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140TN2009PTC072839

Company & Directors' Information:- S K FINANCIAL CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140MH2003PTC139093

Company & Directors' Information:- M F S CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140MH2008PTC177948

Company & Directors' Information:- M Y FINANCIAL MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140PN2011PTC139310

Company & Directors' Information:- A TO Z FINANCIAL CONSULTANCY PRIVATE LIMITED [Active] CIN = U74900PN2010PTC135332

Company & Directors' Information:- H H S CONSULTANCY PRIVATE LIMITED [Active] CIN = U74120MH2013PTC250345

Company & Directors' Information:- M & W CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74910TN2004PTC053384

Company & Directors' Information:- G & R MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U74120UP2013PTC055438

Company & Directors' Information:- U R MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U65900TN2011PTC081602

Company & Directors' Information:- R K D S FINANCIAL CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74900UP2010PTC039365

Company & Directors' Information:- C. D. MANAGEMENT CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74900WB2012PTC189226

Company & Directors' Information:- M P CONSULTANCY PVT LTD [Strike Off] CIN = U74120WB1996PTC081085

Company & Directors' Information:- J. L. CONSULTANCY PVT LTD [Active] CIN = U74140WB1985PTC039818

Company & Directors' Information:- S E S CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74999WB2011PTC170939

Company & Directors' Information:- M J M CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140DL2005PTC133200

Company & Directors' Information:- A C G CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140DL2005PTC140720

Company & Directors' Information:- H M S CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140DL2010PTC201488

Company & Directors' Information:- INDIA FINANCIAL CONSULTANCY CORPORATION PRIVATE LIMITED [Active] CIN = U74999DL2013PTC249422

Company & Directors' Information:- D & G CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U65990DL2011PTC214142

Company & Directors' Information:- M Q FINANCIAL MANAGEMENT CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140BR2007PTC013159

Company & Directors' Information:- R H H H CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74900AP2014PTC095348

Company & Directors' Information:- A S D S FINANCIAL CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140HR2011PTC041915

Company & Directors' Information:- E S D MANAGEMENT AND CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140KA2005PTC037926

Company & Directors' Information:- A & C CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140KA2008PTC046754

Company & Directors' Information:- A P R CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U93000KA2014PTC073639

Company & Directors' Information:- K S D FINANCIAL CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140GJ2010PTC060229

Company & Directors' Information:- R K G J FINANCIAL CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140GJ2012PTC069847

Company & Directors' Information:- D C D CONSULTANCY PRIVATE LIMITED [Active] CIN = U74999RJ2020PTC071399

Company & Directors' Information:- M S MANAGEMENT CONSULTANCY PRIVATE LIMITED [Active] CIN = U74140GJ2021PTC122546

Company & Directors' Information:- M R MANAGEMENT & CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140WB1997PTC084833

Company & Directors' Information:- B C FINANCIAL CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U67120PB1996PTC017570

Company & Directors' Information:- V Z CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140MH2007PTC170875

Company & Directors' Information:- F T CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74900CH2007PTC030854

Company & Directors' Information:- A S A FINANCIAL CONSULTANCY PRIVATE LIMITED [Strike Off] CIN = U74140MP2008PTC020267

Company & Directors' Information:- M AND M CONSULTANCY PVT LTD [Strike Off] CIN = U74140PB1985PTC006557

    Complaint Case No. CC/213 of 2001

    Decided On, 13 June 2014

    At, Maharashtra State Consumer Disputes Redressal Commission Mumbai

    By, THE HONOURABLE MR. P.B. JOSHI
    By, PRESIDING MEMBER & THE HONOURABLE MR. NARENDRA KAWDE MEMBER

    For the Complainant: A.V. Patwardhan, Advocate. For the Opponent: None.



Judgment Text

P.B. Joshi, Presiding Judicial Member:

(1) Complainant is a Private Limited Company registered under the provisions of the Companies Act, 1956 engaged in the business of share broking and trading in securities and are registered as main brokers with the National Stock Exchange of India and under the SEBI Act. Opponent is a subsidiary of the General Insurance Corporation of India, engaged in the business of covering various types of risks involved in the day-to-day business transactions for a premium charged in consideration of the risk cover. As directed by the National Stock Exchange of India in the larger interest of the investing public, the Complainant subscribed the comprehensive insurance policy of the Opponent and as per the premium calculated and demanded by the Opponent Complainant had paid up the premium so charged. The risk is covered for the period 01.06.1998 to 31.05.1999. The said risk cover had been accepted and granted by the Opponent vide their certificate no.99/478, issued under the Stockbrokers Indemnity Insurance Policy No.120000/48/99/001. The policy covered the risk upto Rs.25,00,000/- for 'Any one Event and Unlimited in the Aggregate'. The policy clearly states that 'Infidelity of Employees' affordable to the Assured under this Section for the loss resulting solely and directly from dishonest or fraudulent acts by Employees of the Assured wherever committed and whether committed alone or in collusion with others, including loss of Securities and/or Cash through any such acts by Employees.'

(2) One Mr.Jay Kumar Sethia was Branch Manager of the Complainant at Surat Branch Office. Said Jay Kumar Sethia was solely responsible for overall functioning of the Surat Branch of the Complainant and was authorized to issue cheques to creditors and receive money from debtors for and on behalf of the Complainant. Being responsible person, he was also authorized to enroll new clients upon ascertaining to his satisfaction their credit worthiness. The Complainant Company’s attention of a likely misappropriate of funds was drawn during their routine internal audit while scrutinizing the cheque books of Tamilnadu Mercantile Bank, it was observed that during the period 23.04.1998 to 20.07.1998 number of cheques were issued by Surat Branch Manager in the name of one Mr.Vimalbhai amounting to Rs.14,70,000/-. Complainant Company to ascertain the misappropriation wrote letter dated 05.12.1998 to their Bankers - Tamilnadu Mercantile Bank asking details about the cheques issued by their Surat Branch Manager Mr.Jay Kumar Sethia. The Complainant Company also asked their Bankers to inform details of the encashment of the cheques. Complainant Company did not get satisfactory reply regarding the cheques from their Manager since he was evading contact. The Complainant immediately issued public notice through the local newspaper dated 08.12.1998 terminating his services. This was necessary so as to restrain him from tampering with the evidence and of course to prevent further loss. The Complainant Company upon ascertaining the loss due to misappropriation approached the Surat Police Station to lodge the criminal complaint against Mr.Jay Kumar Sethia but the said Officer refused to register even F.I.R. on the pretext that the Complainant Company discovered the loss in Mumbai. The Complainant Company in order to save time had therefore along with its sister company Libord Securities Ltd., filed criminal complaint u/sec 156(3) on 11.03.1999 in the Court of the Addl.Chief Metropolitan Magistrate, 33rd Court, Ballard Estate at Mumbai for charges u/sec 406, 409 and 420 of the I.P.C. Said Additional Chief Metropolitan Court had directed inquiry u/sec 156(3) and had subsequently issued process against said Mr.Jay Kumar Sethia. Complainant Company lodged its claim under the section 'Infedility of Employee' for Rs.15,72,887.15 vide its letter dated 23.04.1999 with the Opponent. Then the Opponent appointed Surveyor who from time to time collected details from the Complainant. The Opponent had even after more than two years neither cleared the claim amount nor rejected the same. Hence, complaint is filed by the Complainant with the prayer that the Opponent be declared as guilty of deficiency in service and Opponent may be directed to pay an amount of Rs.15,72,887.15 with interest @18% per annum for the said period till actual payment. The Complainant claimed an amount of Rs.20,000/- towards costs and expenses from the Opponent towards the costs and expenses of the complaint.

(3) The Opponent resisted the claim by filing written version. The Opponent has not disputed about the Insurance Policy about the appointment of surveyor. However, the Opponent contended that the Complainant had not cooperated with the Opponent and the Surveyor submitted his report dated 17.06.2002. It was contended that the Complainant is not entitled for the relief claimed as there is delay in filing the claim. Reasonable care was not taken by the Complainant to avoid the loss. F.I.R. was not alleged by the Complainant. The Opponent has prayed for dismissal of the complaint.

(4) Considering the rival contentions of the parties and considering the record and submissions made before us, following points arise for our determination and their findings are as under:

Points

Findings

(i) Whether there is anything on record to show that the Complainant is not entitled for the claim asked for?

No.

(ii) Whether the Complainant is entitled for the amount claimed?

Yes.

(iii) What order

As per final order below.

REASONS:

Point No.(i):

a) As mentioned above there is no dispute that policy was taken by the Complainant from the Opponent, nature of the policy and payment of premium made is not dispute. Period of policy is also not disputed. The main contention of the Opponent is that Complainant has not filed F.I.R. against the concerned employee. It is the contention of the Complainant that Complainant approached the police station at Surat. However, the said police station had not accepted the complaint on the pretext that the loss was detected by the Complainant at Mumbai. It is the contention of the Complainant that then to avoid further delay the Complainant had filed the complaint in the Additional Chief Metropolitan Magistrate’s Court, Mumbai against the said employee and process was issued under section 406, 409 and 420 of I.P.C. against the said employee Mr.Jay Kumar Sethia and that is the sufficient compliance of the condition. We find that filing of the said complaint can be said as sufficient compliance and hence, we accept the contention of the Complainant.

b) It was contended by the Opponent that there is delay in filing the claim. The Complainant has contended that after ascertaining the loss the complaint was filed against the said employee and then the claim was lodged and hence, there is no delay in lodging the complaint. It was contended by the Complainant that during routine internal audit it was suspected that there is misappropriation of fund by the said employee as number of cheques issued by the said employee in the name of one Mr.Vimalbhai. Then the Complainant wrote letter to Bankers - Tamilnadu Mercantile Bank, asking the details about the cheques issued by their Surat Branch Manager - Mr.Jay Kumar Sethia. The Complainant also asked for the details of the encashment of the said cheques. The Ld.Advocate for the Complainant submitted that by taking those steps and after ascertaining the loss the complaint was lodged and then claim was made and thus, there is no delay and we find much substance in the said arguments.

c) It was contended by the Opponent that Complainant has not taken a sufficient care for avoiding the loss as required by the Appellant. Thus, the contention of the Complainant that there was sufficient machinery to check the activities of the Branch and in those activities by way of routine internal audit the fraud was suspected. It was contended that nothing is pointed out by the Opponent as what was not done by the Complainant as precautionary measures. Only contention that Complainant has not taken proper precautions is not helpful to the Opponent and we find much substance in the said arguments. The Advocate for the Complainant has submitted that the said employee was terminated from service after noticing that he committed fraud and thus, the Complainant has taken appropriate action against the employee.

d) That the Advocate for the Complainant has submitted that the Opponent has not decided the claim of the Complainant till filing of the complaint. One letter was sent by the Opponent on 22.08.2002 informing the rejection of the claim submitting that the complaint was filed in the year 2001 and the said letter was sent by the Opponent on 22.08.2002. Thus, it is clear that till filing of the complaint there was no repudiation of the claim. It is mentioned in the said letter by the Opponent that the movement of fund was outside the Complainant’s business network. The payments made by Shri Sethia were not to those who owed Complainant’s Company any money. This is one of the grounds for rejection of the claim. The Ld.Advocate for the Complainant has submitted that said employee Shri Sethia has issued cheques to person who was not entitled any money from the Complainant and by issuing those cheques the said employee committed fraud and misappropriated the said amount of the business of the Complainant and thus, covered under the policy. We find much substance in the arguments and hence, said ground for rejection of the claim is not sustainable.

e) It is mentioned in the said letter that the copies of the honoured cheques through which the payments were made did not represent Complainant’s Company’s dues or payment to clients as a result of NSE transactions. The Ld.Advocate for the Complainant submitted that those cheques were issued to the persons who were not clients of the Complainant or who were not entitled for any amount and that is why this misappropriation and mischief committed by the employee and hence, said ground of rejection of the claim cannot be accepted. We find much substance in this argument.

f) It was mentioned in the repudiation letter that Complainant has not initiated and followed up for recovery of dues from the concerned parties by civil action. Complainant has submitted that Complainant was not knowing the details of the persons from whose names cheques were issued. Details were called and action was taken against the said employee by terminating him and by filing the complaint against him.

g) It is mentioned in the repudiation letter that vigorous follow up to apprehend and charge sheet the culprits were not undertaken by the Complainant and no F.I.R. was registered as yet against the employee. The Ld.Advocate for the Complainant has submitted that the Complainant had approached at Surat Police Station for lodging the complaint, however, said police station had not accepted the complaint on the pretext that the loss was detected in Mumbai and hence, the Complainant to avoid further delay filed complaint in Additional Chief Metropolitan Magistrate’s Cour

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t at Mumbai against the said employee and process was issued against this employee. h) We find that there is no substance in those grounds and cannot be accepted and claim cannot be rejected on those grounds. i) In view of the discussion, we find that the Complainant has taken appropriate steps after fraud was suspected in internal audit and nothing is brought on record by the Opponent to show that the Complainant is not entitled for the amount claimed. Hence, we answer point no.(i) in the negative. Point No.(ii): In view of the answer of Point No.(i) in the negative, the Complainant is entitled for the amount claimed. Hence, we answer point no.(ii) in the affirmative. Point No.(iii): In view of the answer of point nos.(i) and (ii) the complaint is required to be partly allowed. Hence, the following order: ORDER (i) Complaint is partly allowed. (ii) The Opponent is directed to pay to the Complainant a sum of Rs.15,72,887.15 along with interest @6% per annum from the date of filing of this complaint i.e. from 28/05/2001. (iii) The Opponent is directed to bear its own costs and pay Rs.20,000/- as costs of this complaint to the Complainant.
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