The National Consumer Disputes Redressal Commission (NCDRC) ordered an insurance company to pay a scheduled bank its insurance claim that had been filed nearly 14 years ago following a burglary. The company has a three month deadline to pay the bank Rs16 lakh as determined by a surveyor in 1994.
The bank had claimed insurance amounting to Rs 22 lakh from the National Insurance Company (NIC) following burglary in 1994.
The robbery occurred between August 2 and August 3, 1994 in the Bandra branch of the Sindhudurg District and Co-operative Bank. Gold ornaments pledged by customers worth approximately Rs23 lakh were stolen.
The bank used its own resources to pay back almost Rs22 lakh to customers. Two months later, it filed an insurance claims for the total loss. The commission ordered the NIC to pay simple interest of 6%, starting from the date when the consumer complaint was filed, adding that the NIC would be liable to pay 9% interest on the period of delay if the claim was not paid within three months.
Police later arrested four bank officials including the branch manager, a branch sub-accountant and the gold valuer, on charges of misappropriation and forgery, though they were acquitted due to lack of evidence.
The NIC delayed payment calling it a case of misappropriation by the bank. "Under the policy, losses caused by dishonest/criminal acts of the employees, is insured for a sum of Rs3 lakh," argued NIC.
The commission dismissed this as all employees were acquitted. It observed that the NIC had agreed to the claim's legitimacy, as they initially agreed to pay the bank the insurance claim.
The NIC also contended the complaint was invalid as the consumer complaint was filed in 2000, which exceeds legal limitations. However, the commission observed: "The complainants filed the claim under the policy as early as October 7, 1994 which remained undecided till the filing of the consumer complaint. Therefore, it is a clear case where the cause of action continues. The question of limitation does not arise."