Case Study - 8

Money of complainant stolen by miscreants from possession of complainant’s employee insurance company liable

Ajay Kumar Sehgal Vs Branch Manager, UNITED INDIA INSURANCE CO. LTD. & ORS.

The insured/complainant and his brothers used to carry on the business under various firms under the same roof but under separate managements. One of the employees of the insured/complainant was carrying cash and some cheques to be deposited in bank which were snatched away by unknown miscreants. Out of this total money the complainant’s share was Rs. 20,000/- and rest belonged to his other brothers. The matter was reported to the police and claim filed with the insurer which was repudiated on the ground that there was a violation of the policy terms and conditions as the person who carrying the cash etc. was not the person authorized to carry the cash and not an employee of the complainant.

The insured approached district Forum which did not decide upon the merits of the case but decided the claim was time barred as the claim was repudiated in 1995 and complaint was filed in 1998. The learned state commission in appeal by the complainant observed that the complaint was not time barred as there had been exchange of correspondences regularly from both the sides of both the parties. This clearly showed that the matter had not come to an end hence not time barred.

The court referred to an early decisions on this point clearly held that : “even if the person in question was carrying the money for the complainant it would be unreasonable for the insurer company to repudiate the claim on the ground that the person carrying was not the person authorised to carry the same." In this case the person carrying the money was an employee of the complainant and was carrying the money. The loss of the money from his custody is not disputed and therefore the insurer was liable to pay the sum of Rs. 20,000/- along with interest @12% p.a. from the date of repudiation till payment.

Held: Rs. 20,000/- along with interest @12% p.a.