NATIONAL INSURANCE CO. LTD. vs Ravi Traders

NATIONAL Insurance Company Limited -petitioner herein, which was the Opposite Party before the District Consumer Disputes Redressal Forum, Balghat (hereinafter referred to as the District Forum'' for short), has filed these Revision Petitions against the Order passed by the Madhya Pradesh State Consumer Disputes Redressal Commission, Madhya Pradesh (hereinafter referred to as the State Commission'' for short).

SHORTLY stated, the facts of the case are: The dispute in the present case arose on account of repudiation of claim of the respondent -insured by the petitioner in respect of the cash amount of Rs. 70,000 which was lost in Bank premises where the money was taken by an employee of the respondent -insured. It appears that the said employee had put the money on the cashier''s counter in the tray but before it could be collected by the cashier, the said employee under a call from some unknown persons, left the counter for a while and, on return, found that the money was missing/stolen. On being informed, petitioner appointed Mr. Radheyshyam Gupta as Surveyor, who, after holding a detailed inquiry, vide his Report dated 16.8.2002, reached at the following conclusion: "Money was said to be put in the room of cashier on its table in Plastic Tray. Hence, at the time of loss, money was neither in the hands of the insured or nor in the hands of its employees. It was also not transit from shop to bank."

BASED on the above Report, the petitioner repudiated the claim of the respondent. Aggrieved against the repudiation of the claim by the petitioner, respondent filed a complaint before the District Forum. District Forum vide its Order dated 26.12.2003, dismissed the complaint holding that as the carrier of the money had reached its destination and put the money in the tray of the cashier, the money was no longer in transit.

AGGRIEVED against the Order passed by the District Forum, the respondent filed an Appeal before the State Commission, which has been dismissed by the impugned Order. The State Commission came to the conclusion that it would be unreasonable to hold that money, when stolen from the cash counter of the Bank, was still "in transit" within the meaning of Clause (a) of Section III of the Policy. It was observed as under: "In the instant case, the object of carrying the money from insured''s place to the said bank was to deposit the same and obviously the purpose of the policy was to indemnify the loss, if any, caused to the insured in respect of the said money during this transaction i.e., taking of the money from his premises and depositing the same with the bank. The process of transition was not over unless the money was actually delivered to the cashier and deposited by the latter in the appellant''s account. It would not be therefore unreasonable to hold that the money when stolen from the cash counter of the bank was still "in transit" within the meaning of Clause (a) of Section III of the policy already extracted hereinabove."

THE petitioner, being aggrieved, has filed the present Revision Petition.

COUNSEL appearing for the petitioner -Insurance Company contends that once money is put on the counter of the cashier in a plastic tray for handing over to the bank, no longer remains money in "transit" as it has already reached its destination. After reaching the Bank premises, the transit came to an end. Counsel for the petitioner contends that Clause (a) of Section III of the Policy speaks of "transit between any two places" and, in the instant, the process of transition was over no sooner the money reached the other place, i.e., the Bank and, in any event, after putting the money in the tray of the Bank for handing over to the cashier of the Bank which is the normal procedure/practice for handing over the money to the Bank for depositing/crediting to the account of the insured. The money stands handed over or entrusted to the Bank for depositing/crediting to the account of the insured. Thus, it cannot be said that the money was still in transit.

AS against this, the Counsel appearing for the respondent contends that the object of carrying the money from the insured''s place to the Bank was to deposit the same and, obviously, till it was not deposited, the money was still in transit and the Insurance Company would be liable to indemnify for the loss suffered by the respondent.

THE word transit'' has to be read in the light of the terms and conditions of the Policy. The claim has to be accepted or repudiated keeping in view the terms and conditions of the Policy and, any interpretation which goes beyond the terms and conditions of the Policy, would be erroneous.

BEFORE proceeding further, reference to Clause (a) of Section III of the Policy may be looked at, which reads as under: "The Company will indemnify the Insured in respect of - (a) loss by accident or misfortune whilst the Insured''s money is in his hands or in the hands of his employees in transit between any two places within a radius of fifteen miles from the Insured premises." (b) xxx xxx xxx xxx (c) xxx xxx xxx xxx"

[Clauses (b) and (c) are not applicable and are, therefore not reproduced]

IT is an admitted position that on 7.5.2002, the employee of the respondent went to the State Bank of India, Balghat Branch, which is within the radius of 15 miles from the insured premises, to deposit the sum of Rs. 70,000 . On reaching the Bank, the employee of the respondent put the money on the cash tray to be given to the cashier. Thus, at this stage, the money was neither in the hands of the insured nor in the hands of the employee of the insured. After keeping the money on the tray, the employee left the counter for some work and when he returned, the money was found missing. From the undisputed facts, as stated above, it is clear that money was put in the room counter of the cashier in plastic tray. Putting the money in the tray of the cashier for handing over to the cashier of the Bank is normal procedure/practice for handing over the money to the Bank for deposit of money. The money stood handed over or was entrusted to the Bank for depositing/crediting to the account of the insured in the Bank and, thus, it cannot be said that the money was in transit as per the Insurance Policy conditions when the loss allegedly occurred.

THE money was in transit only upto the point till it was put in the tray for deposit. When the money was stolen, the money was neither in the hands of the insured nor in the hands of the employee of the insured. Clause (a) of Section III of the Policy provides that the Insurance Company shall indemnify the insured in respect of the loss or incident or misfortune while the money is in the hands of the owner or in the hands of the employee while in transit between the two places within a radius of 15 miles from the insured premises. It would be seen from the facts of the present case that the money was no longer in transit as the employee had reached the destination where the money was to be deposited and had, in fact, put the money in the tray of the cashier for being handed over. After the putting of the money in the tray, the money was no longer in transit. Once the money reached the counter table of the cashier, the transit came to an end. The money was lost because of the negligence of the employee but for that Bank can be held responsible and not the Insurance Company. Unfortunately, the petitioner has not impleaded the Bank as a party respondent on whom the liability, if at all, could be fastened.

FROM the reading of Clause (a) of Section III of the Policy and the facts above, it is clear that the incident of loss of money completely falls outside the scope of the terms and conditions of Section III of the Policy and that the Insurance Company cannot be held liable to pay the claim. In our considered view, the State Commission misinterpreted Clause (a) of Section III of the Insurance Policy.

IN the facts of the case, only one conclusion is possible and, that is, when money reached the counter table of the cashier of the Bank, the transit came to an end and the money stood handed over to the Bank.

FOR the reasons stated above, we accept these Revision Petitions and set aside the Order passed by the State Commission and restore that of the District Forum in dismissing the complaints. No costs. R.P. allowed.