National Consumer Disputes Redressal
Raghuwans Mani vs The New India Assurance Company on 20 October, 2009
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2626 OF 2005 (From the Order dated 11.08.2005 in Appeal No. 174 of 2004 of State Consumer Disputes Redressal Commission, Patna, Bihar) RAGHUWANS MANI PETITIONER VERSUS THE NEW INDIA ASSURANCE COMPANY LIMITED AND ANOTHER RESPONDENTS BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MR. B.K. TAIMNI, MEMBER FOR THE PETITIONER : MR. PRANAY RANJAN, ADVOCATE. FOR THE RESPON DENTS: MR. KANWAL CHAUDHARY, ADVOCATE. PRONOUNCED ON : 20.10.2009 O R D E R
ASHOK BHAN J., PRESIDENT Petitioner herein, who was the complainant before the District Consumer Disputes Redressal Forum, Patna, Bihar (hereinafter referred to as the District Forum for short), has filed the present Revision Petition against Order dated 11.08.2005 in Appeal No. 174 of 2004 passed by the State Consumer Disputes Redressal Commission, Patna, Bihar (hereinafter referred to as the State Commission for short) whereby the State Commission has set aside the Order passed by the District Forum. District Forum had directed the respondent-Insurance Company to pay Rs.33,000/- with interest @ 10% p.a. for delay in payment.
Briefly stated, the facts of the case are:-
Petitioner is the owner of a Maruti car bearing registration No. BR-1C-0835 of 1991. The said car was insured with the respondent-Insurance Company for a sum of Rs.1,60,000/-. Validity period of the Policy was from 26.07.1996 to 25.07.1997. The vehicle was stolen on 17.12.1996. Petitioner lodged the claim with the Insurance Company which deputed a Surveyor to assess the loss. Surveyor assessed the loss at Rs.1,20,000/-. Insurance Company, after including the costs, etc., paid a sum of Rs.1,25,000/- as insurance claim to the petitioner. Petitioner accepted the sum of Rs.1,25,000/- and gave a discharge voucher dated 28.10.1997 and receipt indicating acceptance of the amount in full satisfaction and discharge of all claims. On the same day, i.e., on 28.10.1997 itself, petitioner wrote a letter of protest which was duly served upon and received by the Insurance Company. Petitioner claimed the balance amount of Rs.35,000/-. As the Insurance Company did not accede to his request, petitioner filed a Complaint before the District Forum.
Respondent-Insurance Company, on being served, filed its Written Statement and took the stand that the claim had been settled to the satisfaction of the petitioner. Petitioner had accepted the amount of Rs.1,25,000/- without any protest in full satisfaction in discharge of all the claims. That the petitioner had given a disbursement voucher and receipt indicating disbursement of the amount and discharge of all the claims. That having done so, the petitioner was not justified in re-agitating the issue. It was prayed that the complaint be dismissed.
District Forum held that the Insurance Company had insured the car of the complainant on the existing market value on 25.07.1996, by accepting the premium, on the insured amount of Rs.1,60,000/-. The car was stolen after 5 months. That the Surveyor was not justified in deducting Rs.35,000/- from the insured value of the car. It was further held that the petitioner had received the settled insurance amount under protest expressed on the same date by way of written application which was duly served upon and received by the Insurance Company. Insurance Company was directed to pay Rs.33,000/- with interest @ 10% within 2 months. Rs.2,000/- were deducted by way of depreciation.
Aggrieved against the Order passed by the District Forum, respondent-Insurance Company filed an Appeal before the State Commission. The State Commission, by the impugned Order, reversed the Order passed by the District Forum holding that the petitioner, having accepted the sum of Rs.1,25,000/- without any protest or alleged coercion or pressure exercised by the Insurance Company, could not wriggle out of its commitment. That there was no allegation that the petitioner was coerced by the respondent to accept the amount under duress or that he accepted the amount due to any financial constraints or compelling reasons. In the absence of any allegation of coercion, etc., it has to be accepted that the discharge voucher was given voluntarily.
Aggrieved against the Order passed by the State Commission, under these circumstances, petitioner has preferred this Revision Petition.
The point as to whether the Insurance Company, after having accepting the premium and insuring the car for a particular value, could, on its own, change that very figure on one pretext or the other when they are called upon to pay the compensation, is now settled by Honble the Supreme Court of India in Dharmendra Goel v. Oriental Insurance Company Limited case reported in (2008) 8 SCC 279, held as under:
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We have heard the learned counsels for the parties and have gone through the record very carefully. The facts as narrated above remain uncontroverted. Admittedly, the accident had happened on 10th September, 2002 during the validity of the Insurance Policy taken on 13th February, 2002 insuring the vehicle for Rs. 3,54,000/- on a premium of Rs. 8498/- It is also the admitted position that the vehicle had been declared to be a total loss by the surveyor appointed by the company though the value of the vehicle on total loss basis had been assessed at Rs. 1,80,000/- We are, in the circumstances, of the opinion that as the company itself had accepted the value of the vehicle at Rs. 3,54,000/- on 13th February, 2002, it could not claim that the value of the vehicle on total loss basis on 10th September, 2002 i.e., on the date of the accident was only Rs. 1,80,000/-. It bears reiteration that the cost of the new vehicle was Rs. 4,30,000/- and it was insured in that amount on 19th January, 2000 and on the expiry of this policy on 18th January, 2001, was again renewed on 19th January, 2001 on a value of Rs. 3,59,000/- and on the further renewal of the policy on 13th February, 2002 the value was reduced by only Rs. 5,000/- to Rs. 3,54,000/-. We are, therefore, unable to accept the company's contention that within a span of seven months from 13th February 2002 to the date of the accident, the value of the vehicle had depreciated from Rs. 3,54,000/- to Rs. 1,80,000/-. It must be borne in mind that Section 146 of the Motors Vehicles Act, 1988 casts an obligation on the owner of a vehicle to take out an insurance policy as provided under Chapter 11 of the Act and any vehicle driven without taking such a policy invites a punishment under Section 196 thereof. It is therefore, obvious that in the light of this stringent provision and being in a dominant position the insurance companies often act in an unreasonable manner and after having accepted the value of a particular insured good disown that very figure on one pretext or the other when they are called upon to pay compensation. This `take it or leave it' attitude is clearly unwarranted not only as being bad in law but ethically indefensible. We are also unable to accept the submission that it was for the appellant to produce evidence to prove that the surveyor's report was on the lower side in the light of the fact that a price had already been put on the vehicle by the company itself at the time of renewal of the policy. We accordingly hold that in these circumstances, the company was bound by the value put on the vehicle while renewing the policy on 13th February, 2002 .
(Emphasis Supplied) In above referred case, taking the similar stand, the Insurance Company had repudiated the claim. It was held that the Insurance Company was bound to pay the value put on the vehicle while renewing the Policy.
The next question which falls for consideration is as to whether the respondent had accepted the settled amount of Rs.1,25,000/- under protest or voluntarily? On the basis of the report submitted by its Surveyor, the Insurance Company had agreed to pay a sum of Rs.1,25,000/- in full satisfaction of the claim of the petitioner. Petitioner accepted the said amount and gave the discharge voucher and receipt acknowledging receipt of Rs.1,25,000/-. Admittedly, in the discharge voucher, it is not mentioned that the petitioner had accepted the amount under protest but on the same day, i.e., 28.10.1997, he wrote a letter to the Insurance Company stating that he had accepted the amount under protest and claimed the balance amount of Rs.35,000/-.
Counsel appearing for the respondent strenuously contended that after having accepted the amount voluntarily and without any protest, the petitioner was not justified in claiming the balance amount. That the petitioner is debarred from doing so. Petitioner had accepted the amount because as per practice, the amount could not have been paid to the petitioner unless he had signed the discharge voucher. On the same day, petitioner lodged the protest, which clearly shows that he had accepted the amount under protest. Insurance Company, being in a dominant position, paid the amount giving the discharge voucher. But that does not mean that the discharge voucher was given voluntarily. Mere execution of discharge voucher and acceptance of the insurance claim would not estop the insured from making further claim.
This Commission in Oriental Insurance Company Limited and Others v. The Government Tool Room and Training Centre reported in I (2008) CPJ 287 (NC), held as under: -
4. In the present case, it is to be stated that such contention is raised despite the law being settled. As early as in 1986 the Apex Court discussed the concept of coercive bargaining in Central Water Transport Corporation Ltd. and Anr. v. Tarun Kanti Sengupta and Anr., (1986) 3 SCC 156, and held that where a man has no choice, or rather no meaningful choice, but to give his consent to a contract or to sign on the dotted line in a prescribed or other form or to accept a set of rules as part of contract, however unfair, unreasonable and unconscionable a clause in that contract may be the courts will enforce and will, when called upon to do so, strike down as unfair and unreasonable contract or an unfair or unreasonable clause in a contract entered into between the parties who are not equal in bargaining power. In arriving at the aforesaid conclusion the Court referred to Chitti on Contracts (25th Edn. Vol. 1, pr. 4) wherein it has also been observed that the Courts have developed a number of devices for refusing to implement exemption clauses imposed by the economically stronger party on the weaker. Thereafter, in the United India Insurance Co. Ltd. v. Ajmer Singh Cotton & General Mills and Ors., II (1999) 6 SCC CPJ 10(SC)= VI(1999) SLT 590=(1999) 6 SCC 400, wherein the Court observed that mere execution of discharge voucher and acceptance of insurance claim would not estop insured from making further claim from the insurer under the circumstances which can be termed as exercise of undue influence or coercion or the like.
5. Before the State Commission, it was vehemently contended by the Insurance Company that the complaint was not maintainable for recovering the remaining amount because the Vice Chairman of the Government Tool Room and Training Centre has signed the voucher given by the Insurance Company as full and final settlement and, therefore, complaint under the Consumer Protection Act is not maintainable.
6. It is to be stated that if the Government department is required to accept the amount for one or other reason and sign the document as full and final settlement, think of the fate of a consumer whose entire factory is gutted by fire; when the banks are insisting for repayment of the loan amount and the creditors are harassing the owner of the factory by various means. In that set of circumstances, if a person requires the money and signs the voucher as receipt of full and final of claim, it amounts coercive practice by the Insurance Company. Various such illustrations can be given but this is only to highlight that wrong practice followed by the Insurance Companies in not paying the single pie without having a discharge voucher stating that the amount is received by the claimant as full and final settlement of his claim. In our view, it is a coercive practice. And, it is suggested that the Insurance Companies may abandon this practice and do not try to snatch away the right of the insured to approach the legal forum for getting just and reasonable reimbursement.
(1) In support of its claim the Managing Director of the Government Tool Room and Training Centre, Bangalore, has filed an affidavit to the effect that Insurance Company informed that it was a standard format prescribed by them and unless and until voucher was signed, they would not release the fund. They also informed that it would be always open for the complainant to agitate the matter if they were not satisfied with the amount but so far as Insurance Company is concerned unless the voucher was signed the issue of release of funds could not be made.
It appears that this wrong practice is required to be given up by the Insurance Company or in any set of circumstances we would suggest to IRDA to keep control upon such unfair trade practice.
(2) It has been furt9+her stated that the Legal Department of the complainant, i.e., Govt. Tool Room and Training Centre advised the complainant that this acceptance of the money by signing the voucher would not prejudice the claim of the complainant. We have to state that such advice is an erroneous one. But wrong and erroneous advice by a counsel would be a sufficient ground for finding out the truth.
(3) Even the government department states on affidavit that the department was in dire/urgent need of funds to pay backlog salaries of their employees. This would be sufficient for holding that the voucher was not signed voluntarily but was signed under compulsion.
(4) Further, it is to be stated that after receipt of the amount on 7.7.2000, on 31.7.2000 complainant wrote letter to the Insurance Company that deduction of Rs. 10,32,500/- was unjustified. Not only that but even the receipt was a pre-paid stamped receipt for an amount of Rs. 16,37,000/- and is taken prior to payment.
Respectfully following the aforesaid view, we hold that the petitioner had accepted the settled amount under the Insurance Policy under protest.
Both the parties admit that the petitioner had taken the Insurance Policy for Rs.1,60,000/- and the premium paid was upon the same insured value. Its value was fixed on the date of insurance, i.e., 26.07.1996.
In view of the Judgment of Honble the Supreme Court of India in Dharmendra Goels case (supra), the respondent is bound to pay the insured sum minus the depreciation for 2 months. The District Forum, keeping in view the facts and circumstances of the case, has given the depreciation, which is quite adequate.
For the reasons stated above, this Revision Petition is accepted and the Order passed by the State Commission is set aside and that of the District Forum is restored. Parties shall bear their own costs.
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(ASHOK BHAN J.) PRESIDENT .
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(B.K. TAIMNI) MEMBER