NEW INDIA ASSURANCE CO LTD Vs. SANGRUR CENTRAL CO-OPERATIVE BANK LTD

JUDGEMENT

(1.) This appeal is by New India Assurance Company challenging order of District Forum, Sangrur of November 19, 1996 directing the appellant- Company to pay a sum of Rs.28,500/- alongwith 12% p. a. interest thereon w. e. f. November 9,1987 till payment and Rs.500/- litigation expenses to the complainant-the Sangrur Central Co-operative Bank Limited, Sangrur.

(2.) The important question involved in this appeal is about interpretation and applicability of a clause in the insurance policy known as Excess Clause.

(3.) The complainant-Bank is a Co-operative Registered Society doing banking business in different villages in the State of Punjab having its head office at Sangrur. The branch offices after doing banking business in the villages used to send the cash to the head office for deposit. The Bank had taken insurance policy commencing from July, 1987 for a year covering risk of theft etc. being Banks' money in the hands of the employees of the Bank and even in transit. In the present case, the employees of the Bank were taking cash amount of a branch of Village Chanawal and going to the head office on November 9,1987. They were travelling in a bus. They were Rajinder Kumar, Senior Clerk and Jasbir Singh, Peon. They had cash of Rs.3,13,000/-. They had covered about a half a kilometer away from bus stand, Chanawal that two un-identified persons/terrorists who were travelling in the same bus threatened them at the gun point to hand over the bag containing cash. Thus, under the threat, the bag containing cash was handed over to them who, at some distance, got down from the bus. The matter was reported to the Police and a sum of Rs.2,75,000/- was recovered. Claim was lodged with the Insurance Company for the remaining amount of Rs.38,000/- which was repudiated by the Insurance Company that the Bank approached the District Forum. The Insurance Company submitted its version alledging that the repudiation was legal on the basis of Excess Clause vide which upto 2% of loss suffered upto Rs.50,000/-, was to be borne by the Bank and not by the Insurance Company. According to them, the total loss being Rs.3,13,000/- and 2% thereof the Bank was to shoulder the responsibility and not the Insurance Company. The District Forum did not accept the stand of the Insurance Company holding that in view of the Excess Clause, 2% of the loss claimed i. e. Rs.38,000/- was only to be borne by the Bank and the remaining amount was payable by the Insurance Company and thus the Impugned Order was passed directing the Insurance Company to pay Rs.28,500/- along with 12% p. a. interest w. e. f. November 9, 1987 till payment with Rs.500/- litigation expenses.