Sudip Ahluwalia, Member

This Appeal has been filed against the impugned Order dated 04.11.2015 in Consumer Complaint No. 107 of 2011, passed by the State Consumer Disputes Redressal Commission, Delhi, vide which, the Complaint filed by the Respondents was partly allowed with the following directions -'...We, therefore, direct the insurance company (OP) to pay to the complainant as under:-Pay an amount of Rs. 59,84,700/- (64,84,700-5,00,000) alongwith interest @ 6% p.a. from 19.06.2008 till date.

Insurance Company (OP) shall pay the aforesaid amount within a period of ninety days from today failing which the insurance company/OP shall be liable to pay interest @ 12% p.a. on the amount accruing after the expiry of the period of ninety days from today. Complaint is accordingly disposed of.'

2. The factual background, in brief, is that the Complainant No. 1/ Respondent No. 1 is a Private Limited Company engaged in specialized services such as cash sorting, inter/intra-city transportation of cash and valuables, ATM cash replenishment, and bullion vaulting for leading Banks across the country. The Complainant No. 2/ Respondent No. 2, is also a similarly situated Private Limited Company and co-insured under the impugned Policy. The Opposite Party /Appellant/ Insurance Company, engaged in general insurance, issued a Special Contingency Policy No. 221800/46/07/39/00000305 (Cover Note No. 659109) for the period 18.09.2007 to 17.09.2008, initially for Rs. 12.00 crores and later enhanced to Rs. 17.00 crores w.e.f. 01.10.2007. The Policy for which total premium of Rs. 3,13,800/- was paid, covered losses from theft, burglary, dacoity, fraud, employee infidelity, and other perils.

3. On 19.02.2008, the Complainants deployed their custodians- Raj Kumar and Rajesh along with guard- Harish Chand and driver- Sanjeev Kumar to load cash into ATMs. After replenishing Rs. 21.00 lakhs, while visiting Karnataka Bank's ATM on GTK Road, Delhi, it was discovered around 13:45 hours that Rs. 65.00 lakhs was missing from the vehicle. An FIR No. 44 was lodged at P.S. K.W. Camp/ Model Town u/s 379 IPC. However, only Rs. 5.00 lakhs was recovered. Based on the internal assessment, the Complainants suspected all four employees and reported the same to the Police. They also initiated disciplinary action through an internal enquiry, which found two guilty while the other two absconded.

4. Due to client's pressure, Complainants reimbursed Rs. 50.00 lakhs to Axis Bank by cheques dated 20.02.2008, and HDFC Bank deducted Rs. 15.00 lakhs from Complainants' invoices. The matter was also reported in the Media. Subsequently, a final Police report dated 24.07.2010 stated that neither the cash nor the culprits could be traced. The Complainants submitted their Insurance Claim for Rs. 64,84,700/-, and the Surveyor appointed by the Opposite Party confirmed the loss, after which repeated follow-ups were made by the Complainants. Despite confirmation of the loss and submission of requisite documents, the Opposite Party failed to settle the Claim and continued raising irrelevant queries. It is the case of the Complainant that the Claim is admissible both under the infidelity extension, as the employees dishonestly misappropriated the amount, and also under the theft cover as per the FIR. The Complainants contend that the Opposite Party's failure to honour the Claim constitutes a gross deficiency in service under the Consumer Protection Act. Aggrieved with the same, they filed their Complaint before the Ld. State Commission, Delhi.

5. In its reply to the Complaint before the State Commission, the Opposite Party/ Appellant contended that no deficiency of service can be attributed to it, as the Claim for Rs. 65.00 lakhs was thoroughly examined and independently investigated, following which they concluded that the Claim was not payable due to material breaches of Policy terms and suspicious circumstances surrounding the loss. The Policy in question was a tailor-made Special Contingency Policy covering cash in transit and provided fidelity coverage for up to 2,000 employees. The Complainant delayed in intimating the loss and reported the same on 20.02.2008, with the intimation being received only on 22.02.2008. The investigation revealed multiple irregularities, including lack of pre-employment verification of key personnel, unexplained partial recovery of Rs. 5.00 lakhs (not reflected in the FIR), and contradictory statements regarding the time, location, and nature of the incident. The investigator concluded that while a loss of Rs. 64,84,700/- occurred, the circumstances suggest a 'mysterious disappearance' of cash. Since there was no conclusive proof of employee involvement, no Charge-Sheet or Court finding having been issued, the Claim could not be processed under the infidelity Clause. Furthermore, the Complainant committed a fundamental breach by failing to notify the Insurer promptly and by violating Policy safeguards; That the Complainant is engaged in a purely commercial activity and, therefore, does not qualify as a 'Consumer' under the Consumer Protection Act, 1986; That the Complaint involves disputed facts and complex legal issues not amenable to summary adjudication under the consumer jurisdiction.

6. We have heard the Ld. Counsel for the Appellant and Respondents, and perused the material available on record.

7. Ld. Counsel for the Respondents has argued that the present Appeal has been filed by the Insurance Company assailing the well-reasoned Order passed by the State Commission which does not suffer from any infirmity; That the Surveyor's report, though acknowledging a loss of Rs. 64,84,700/-, took a biased view by treating the loss as a case of mysterious disappearance and opining that the infidelity Clause was not applicable due to lack of a Charge Sheet. However, an internal domestic enquiry was conducted, in which the concerned employees were found guilty and efforts were made to secure a Police investigation and judicial direction, but no action followed, and a final untraced Report was issued. In such circumstances, the absence of a Charge Sheet cannot defeat the Claim, especially when the loss was squarely covered under the Policy; That the State Commission rightly held that the Claim was admissible under the infidelity Clause or, in the alternative, under the theft cover. No formal repudiation letter was issued by the Insurer, and the 'No Claim' stance was adopted without due basis. The impugned Order properly relied on the terms of the Policy, including its fidelity guarantee covering 2,000 employees, and rightly rejected the Insurer's technical objections. The State Commission's observations in paragraphs 9 to 12 of the impugned Order expose the untenability of the Insurer's defence; That in similar earlier claims involving comparable circumstances, the Appellant has complied with the Commissions' Orders and paid the awarded amounts. Accordingly, the present Appeal is devoid of merit and is liable to be dismissed.

8. It is an admitted fact that the Respondents/Complainants filed the Complaint in April 2011, i.e., more than 3 years after the incident of loss, during which period the Appellant/Insurance Company failed to arrive at a clear decision on the Claim, despite having received all necessary documentation and having the benefit of a Police investigation. The material placed on record shows that vide letter dated 04.01.2011 (Annexure A-3, Pg. 25 of the Paperbook), the Appellant had raised certain queries, which were duly responded to by the Complainant on 19.01.2011 (Annexure A-4, Pg. 26 of Paperbook). However, no decision was communicated until 13.10.2011, which was only after the filing of the Complaint and just a month prior to filing the Written Statement on 15.11.2011. It is thus evident that the Appellant consciously remained noncommittal for a prolonged period, despite being in possession of adequate facts to process the Claim, and only purported to repudiate the same after being served notice of the Complaint, which speaks about its evasive and deficient conduct.

9. The grounds taken by the Appellant for denial of the Claim are equally unconvincing. The assertion that the loss was a case of 'mysterious disappearance' is directly contradicted by the FIR, which clearly treats the matter as a cognizable offence of theft. The fact that Rs. 5.00 lakhs was recovered, and the remaining Rs. 59,84,700/- could not be traced despite Police investigation, does not alter the character of the incident. Moreover, it is not the Complainant's responsibility to ensure a successful criminal prosecution or to lodge a second FIR merely because the initial informant may have been complicit in the crime. The Complainant had, in fact, moved the Criminal Court seeking further action, but the Hon'ble Court, in its wisdom, held that such matters fell within the domain of the Police, which had already filed an untraced final Report. Hence, adverse inferences cannot be drawn against the Complainant on this issue.

10. Further, the Appellant's reliance on the alleged lack of pre-employment verification of the four accused employees is entirely misplaced. The Complainant had categorically asserted in their Reply that such verification was indeed conducted to the satisfaction of the Management. More importantly, this was never cited as a ground in the final repudiation letter dated 13.10.2011. It is a well-settled principle that the Insurer cannot be permitted to improve upon the grounds of repudiation at a later stage. As such, this argument deserves to be summarily rejected.

11. The fact that the Complainant had, at its own cost, reimbursed Rs. 50.00 lakhs to Axis Bank and suffered deduction of Rs. 15.00 lakhs by HDFC Bank from their Invoices, demonstrates their bona fide and the reality of the loss. That internal disciplinary proceedings were conducted and led to the termination of the involved employees, which further supports the Claim that the loss arose from employee misconduct, thereby attracting the fidelity guarantee Clause under the Special Contingency Policy. The Appellant's insistence on a formal criminal Charge-Sheet as a condition precedent to processing a Claim under the infidelity Clause is wholly unsustainable. Insurance contracts are not to be interpreted with the rigidity of criminal law, a reasonable evidentiary threshold suffices, particularly when the Policy covers dishonesty of employees and a clear internal enquiry has established the same.

12. The Ld. State Commission has rightly appreciated these aspects in its well-reasoned Order. There is no perversity, illegality, or jurisdictional error in the impugned Order warranting appellate interference.

13. Accordingly, this Commission finds no merit in the present Appeal, and the same is dismissed. The impugned Order dated 04.11.2015 passed by the Ld. State Commission, Delhi, is upheld in its entirety. No order as to costs.

14. Pending application(s), if any, also stand disposed off as having been rendered infructuous.