BARODA CENTRAL CO-OP. BANK LTD. vs Branch Manager, New India Assurance Co. Ltd.

THE admitted facts are that the opposite party, New India Assurance Company Limited had undertaken the obligation to indemnify the insured for the loss caused by the reason of dishonest or criminal act of the employee(s) of the insured in respect to the loss of Money and/ or Securities wherever committed and whether committed singly or in connivance with others. During the insurance period the employees of Sardarnagar Branch of the complainant bank Shri M.G. Bhatt and H.C. Mehta, agent and cashier-cum-clerk respectively acted dishonestly and misappropriated huge amount and the suits and criminal complaints etc. were filed against them. Another misappropriation took place at Kawant Branch of the complainant bank and the agent G.C. Sheth misappropriated the amount of Rs. 2,000,000.00 but subsequently Sheth paid the amount of Rs. 1,00,000.00 on 22.3.1987. THE opposite party was informed and the Surveyor was appointed and ultimately the opposite party offered an amount of Rs. 95,351 .00 which according to the complainant is negligent amount. THE complainant therefore claimed Rs. 3,69,681.30 and interest and cost etc.

THE opposite party by the reply objected the claim and stated that the offer for Rs. 95,931.00 was made in good faith but the complainant did not accept it and, therefore, it has lost the significance. THE opposite party appointed Surveyor Shri C.N. Shukla who submitted the survey report on May 27,1987. As the complainant was not agreeable to accept the amount as stated above the complainant filed the complaint on 8/5/1992 claiming the amount of Rs. 8,24,551.00 under various heads including the amount of Rs. 3,69,681.00, loss incurred by above misappropriation and criminal act of the employees. During the proceedings of this complaint the parties negotiated and the Insurance Company agreed to pay Rs. 3,19,682.00. Ms. S.S. Shah, learned Advocate for the opposite party while producing the letter dated September 10,1993 by the opposite party New India Assurance Company Limited submitted that the amount of Rs. 3,19,681.00 is agreeable to the opposite party but that amount includes the cost and interest while Shri B.C. Patel, learned Advocate for the complainant while producing the Resolution by the Administrator of the Baroda Central Co-op. Bank Limited submitted that the said amount is exclusive of the interest and the interest is payable upto the date of settlement. As both the parties were not agreeable about the claim for interest we heard the learned Advocates for the parties on the point of interest and cost.

From the letters and the Resolution produced by the parties it is now an admitted position that the settlement is for Rs. 3,19,681.00 and the opposite party has to pay that amount to the complainant. The complainant had originally claimed the amount of Rs. 3,69,681.30 for the amount misappropriated and for interest and other cost and accordingly claimed the amount of Rs. 8,24,551.00. It is clear that the complainant has now given up the claim for the entire amount and has accepted only Rs. 3,19,681.00. It is clear from the Resolution passed by the Administrator that the said settlement is exclusive of the interest and the claim for interest is to be asserted. It should therefore be held that the settlement for the amount of Rs. 3,19,681 .00 is exclusive of the claim for the interest. The complainant is denied the assured amount for a considerable period - for about a year and 5 months even after the complaint was filed. The complainant bank suffered the loss of interest. Considering the circumstances, we hold that the complainant should be awarded interest at the reasonable rate of 10% p.a. from the date of the complaint i.e. 8/5/1992 till the date of the order i.e. 17/9/1993. The interest @ 10% comes to Rs. 37,009.00. The opposite party should be directed to pay that interest amount and also interest on the principal amount of Rs. 3,19,681.00 from 18.9.93 till the date of realisation.

MR. B.C. Patel, learned Advocate for the complainant asserts for the cost but considering the fact that the parties have now settled the disputes, we do not allow cost to the complainant. Parties should be ordered to bear their own cost of this complaint. We, therefore, pass the following order. ORDER The opposite party, New India Assurance Company Limited shall pay Rs. 3,56,690.00 to the complainant with running interest of 10% on the principal amount of Rs. 3,19,681.00 from 18/9/1993 till the date of realisation. Parties shall bear their own cost of this complaint. Complaint allowed.