The apex consumer court has ordered Oriental Insurance Company to pay a total of over Rs 24 lakh (Rs 2.4 million) to a policy holder which suffered losses after the shares it held of different companies were allegedly stolen.
"We find Oriental Insurance deficient in rendering service. It is directed to pay to complainant Vikas Holdings Pvt Ltd Rs 18,14,650 against the first claim and Rs 6,08,550 against the second claim as assessed by the surveyors along with interest at 9 per cent per annum from April 1, 1996 till the date of payment," the National Consumer Disputes Redressal Commission said.
The two separate claims emanated from the same policy and relate to similar issues, the Commission Presiding Member Justice K S Gupta, members Rajyalakshmi Rao and B K Taimni noted and asked the insurance company to pay Rs 5,000 as litigation cost.
Vikas Holdings was in the business of sale and purchase of stocks/shares, company scripts and securities. It had obtained a Stock Brokers Indemnity Insurance from Oriental Insurance valid from June 1995 to May 1996 for an indemnity limit of Rs 25 lakh (Rs 2.5 million), cash sub limit of Rs 500,000 and self-insured excess of Rs 25,000.
The complainant alleged that it suffered a loss of 1,01,700 shares worth Rs 27,95,811 when they was stolen by the employees of P K Wadhwa and Co (a share broker firm).
The alleged theft happened on August 12, 1995 when the complainant company's director went to return those shares at the Delhi Stock Exchange as it (the shares of different companies) was found to be 'bad deliveries' by the respective companies.
Though the employees of the share broker firm -- which received the shares from the Director of the complainant company -- assured that they would return soon after getting the receipt from the stock exchange, they disappeared with the shares, the complainant alleged.
On being contacted again, the share broker firm denied having received the scripts, the complainant said, adding that immediately an FIR was lodged regarding the theft.
The matter was also reported to the Delhi Stock Exchange which after inquiry suspended the licence of the share broker firm, the complainant said.
After the insurance company repudiated the claim, the complainant moved the National Consumer Disputes Redressal Commission seeking Rs 34,54,657 for the losses.
"Following our investigation and enquiries and perusal of records of complainant Vikas Holdings Pvt Ltd we were satisfied that a genuine loss had occurred," the National Commission said, adding that it saw 'no merit' in the contention of the insurance company that the claim was imaginary or exorbitant.
Though the insurance company as part of its arguments alleged that the complainant had indulged in fraudulent acts, it (the insurance company) did not produce any evidence to support the charge, the Commission said.