National Consumer Disputes Redressal
Chandigarh Petro Foam Pvt. Ltd vs United India Insurance Co. Ltd on 14 December, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO.315 of 2007 (From the Order dated 17.04.2007 in Complaint No.16/2003(Pb)/RBT No.9/07 of the State Consumer Disputes Redressal Commission, UT, Chandigarh) Chandigarh Petro Foam Pvt. Ltd. House No. 3225, Sector 21 D, Chandigarh its regd. Office, works at 565, Industrial Area, Phase IX, Mohali (Punjab), Through its Managing Director, Surinder Kumar S/O Shri R.K. Goel ..Appellant Vs. 1. United India Insurance Co. Ltd. SCO No. 123-124, Sector 17, Chandigarh through its Regional Manager 2. The Divisional Manager, United India Insurance Co. Ltd. SCO NO. 183-184, Sector 17, Chandigarh 3. The Manager, United India Insurance Co. Ltd. Branch Office 11, SCO NO. 357-358, Sector 35-B, Chandigarh ..Respondents BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Appellant : Mr. Adarsh Aggarwal, Advocate For the Respondents : Mr. Vineet Malhotra and Mr. R.M. Tatia, Advs. PRONOUNCED ON: 14.12.2012 O R D E R
ASHOK BHAN, J., PRESIDENT Complainant/Appellant has filed this Appeal against the judgment and order dated April 17, 2007 passed by the State Consumer Disputes Redressal Commission, UT Chandigarh (in short, the State Commission) in Complaint No. 16/03(Pb)/RBT No.9/07 whereby the State Commission has dismissed the complaint filed by the complainant.
FACTS:-
Briefly stated the facts of the case are that the complainant/appellant through its Managing Director got its building, machinery, finished goods and raw material insured through different insurance policies from the respondents-insurance company. A fire broke out on Aug.29/30, 2002 in the factory premises resulting in extensive damage. FIR was lodged with the concerned police station and intimation about the incident was also given to the respondents. A claim of Rs.80,00,000/- was lodged by the appellant with the respondents. Respondents appointed M/s. R.K. Singhal & Co. Pvt. Ltd. as surveyor to assess the loss. The surveyor gave a report dated Oct.8, 2002 assessing the total loss to the tune of Rs.57,25,208/-. However, the respondents offered a sum of Rs.54,05,000/- to the appellant disallowing the claim for Rs.25,95,000/-. Rs.54,05,000/- were paid to the appellant in full and final discharge of the claim by the respondents. Thereafter, appellant immediately issued a registered notice dated Jan.29, 2003 to the respondents demanding balance amount of Rs.25,95,000/- but in vain. Alleging that it gave the full and final discharge on payment of Rs.54,05,000/- under duress and compulsion, appellant filed complaint before the State Commission demanding the balance amount of Rs.25,95,000/-.
Respondents, on being served, entered appearance and filed their written statement resisting the complaint mainly on the grounds that the appellant had no locus standi to file the complaint as it had accepted the sum of Rs.54,05,000/- in full and final settlement of the claim without any coercion or pressure; that the claim was settled by taking into consideration the survey report; that there was no law for re-opening the claim once it had been settled strictly in accordance with law.
The State Commission, after scanning the material available on record and going through the evidence led by the parties, came to the conclusion that the report submitted by the Surveyor was correct and since the appellant had given full and final discharge on receipt of Rs.54,05,000/- the complaint filed by it seeking balance amount of Rs.25,95,000/- was not maintainable. Accordingly, State Commission dismissed the complaint observing thus:-
11. Complainant had issued notice through its counsel annexure C-6 dated 29.01.03 to opposite parties asking them to pay Rs.29.95 lacs more as complainant had consented to an amount of Rs.54.05 as compensation under pressure and the same did not bind it. Admittedly, complainant had received Rs.54.05 lacs vide cheque dated 23.12.02, although it was wrongly mentioned in para 18 of the complaint that it received the cheque on 29/30/08/02 i.e. present notice was given after about 37 days i.e. more than one month. It is not the case that immediately after receiving the cheque, complainant had got issued a notice or letter of protest.
The conduct of complainant becomes relevant to find whether discharge voucher was given voluntarily in full and final settlement of the claim or it was coerced into. It is true that sometimes a person may be compelled to give valid discharge voucher accepting the amount in full and final settlement unwillingly or involuntarily because insurance company would not release the amount unless discharge voucher in full and final settlement without protest is given by the insured. In that situation, the insured may have no option but to accept the amount due to financial constraints or other compelled reasons. The insured may lodge protest immediately on receipt of amount or soon thereafter but in the present case complainant took more than one month in lodging a formal protest. It shows that complainant had accepted the amount in full and final settlement of the claim voluntarily but after a lapse of more than 37 days i.e. at a belated stage, it lodged protest in order to get more money which plea of complainant cannot be accepted at this stage.
Prime-facie report of the surveyor is to be taken correct. We have gone through the report of the surveyor annexure R-1 dated 8.10.02. He made detailed survey report and had given reasons for depreciation of the amounts in question. Prime facie it cannot be challenged. It is difficult to believe that nothing remains after the fire. Certainly some material is left as far as machinery and building are concerned. He had deducted some amount as wastage. Certainly mattresses are made by cutting big foam sheets and some material goes waste and cannot be used for making pillows etc. Anyhow we are not going to enter into this controversy because complainant has accepted the amount in full and final settlement of the claim which is valid.
Appellant, being aggrieved, has filed the present First Appeal.
Learned counsel appearing for the appellant contends that the State Commission has erred in holding that the amount of Rs.54,05,000/- was accepted by the appellant in full and final settlement voluntarily or that there was any delay in lodging the protest; that due to fire, appellant had lost everything i.e. machinery, building and raw material and being in dire need of money to restart its business, it accepted the amount of Rs.54,05,000/- and gave the discharge for full and final satisfaction of claim because the respondent had made it a condition precedent to release the amount which amounted to duress and coercion; that immediately after accepting the amount a registered notice was sent to the respondents demanding the balance amount of Rs.29,95,000/-; that the report of the surveyor was never given to the appellant despite the issuance of legal notice dated Jan.25, 2003; that the surveyor assessed the loss to the tune of Rs.57,25,208/- but the respondents paid a sum of Rs.54,05,000/- only without giving any reason; that the surveyor while assessing the net loss under the head plant & machinery, though considered the loss/damage to the 4 items i.e. iron M.S. Tanks, fire extinguishers, welding set and 63 KVA D.G. set with Kirloskar Engine which came to Rs.3,86,580/- as per their market value but did not award the said amount without giving any reason; that stock items amounting to Rs.4,20,600/- had wrongly been disallowed by the surveyor. It was also contended that the surveyor had erred in reducing the amount of compensation to Rs.8,77,074/- while assessing the loss for the building.
As against this, learned counsel for the respondent supports the order passed by the State Commission and contends that since the amount offered by respondents was accepted by the appellant voluntarily without any coercion, the State Commission had rightly dismissed the complaint as not maintainable.
We find substance in the submission made by the learned counsel for the appellant that the sum of Rs.54,05,000/- was accepted by the appellant as full and final settlement under compelling circumstances. Due to fire the entire factory of the appellant including machinery, building, raw material and stocks had been reduced to ashes and the appellant had no other alternative but to accept the amount settled at the earliest as he was under pressure to pay the debts and to establish/restart the business. Respondents vide its letter dated Dec.12, 2012 offered the sum of Rs.54,05,000/- approved by the competent authority subject to the giving of the discharge voucher duly signed by him as well as by the bank on Rs.1/- revenue stamp apart from the other conditions. The amount was to be released only on furnishing the discharge voucher and other conditions mentioned in the letter. Being in dire need of money, appellant gave the discharge for full and final settlement of the claim as the respondents had made it a condition precedent to release the amount which amounted to duress and coercion under the given circumstances. Soon after receiving the amount the appellant sent a registered notice to the respondent demanding the balance amount of Rs.25,95,000/-. Even the surveyors report had not been given to the appellant. The surveyor had assessed the loss at Rs.57,25,208/-. The report of the surveyor was sent to the higher authorities which approved the payment for Rs.54,05,000/- only. No reasons were assigned or given to the appellant for reduction of this amount. We do not agree with the finding recorded by the State Commission that the sum of Rs.54,05,000/- was accepted by the appellant voluntarily or that the protest was lodged by him at a belated stage. Mere execution of discharge voucher would not deprive the consumer for claiming the balance amount. Honble Supreme Court of India, in the similar circumstances in the case of United India Insurance Co. Ltd. Vs. Ajmer Singh Cotton and General Mills and Ors. AIR 1999 SC 3027 has held as under:-
mere execution of the discharge voucher would not always deprive the consumer from preferring claim with respect to the deficiency in service or consequential benefits arising out of the amount paid in default of the service rendered. Despite execution of the discharge voucher, the consumer may be in position to satisfy the Tribunal or the Commission under the Act that such discharge voucher or receipt had been obtained from him under the circumstances which can be termed as fraudulent or exercise of undue influence of by mis-representation of the life.
This Commission in the case of Oriental Insurance Co. Ltd. & Ors. Vs. the Government Tool Room and Training Centre (First Appeal No. 383 of 2005 decided on 17.05.07) has held as under:-
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 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.
In the given circumstances of the case, we are of the view that the appellant accepted the amount under duress as the respondents had offered the amount subject to the furnishing of the discharge voucher towards the full and final settlement. This was a coercive practice. Appellant accepted the amount under compelling circumstances. In view of the law laid down by the Honble Supreme Court and this Commission, we set aside the finding recorded by the State Commission that the sum of Rs.54,05,000/- was accepted by the appellant towards full and final settlement voluntarily or that the protest was lodged at a belated stage.
We also find substance in the contention of the learned counsel for the appellant that no reasons were given by the insurance company to settle the claim at Rs.54,05,000/- though the surveyor in its detailed report has assessed the loss at Rs.57,25,208/-. Since the insurance company did not lead any evidence or give any reasons to settle the claim at the reduced amount, the appellant is held entitled to receive the sum of Rs.57,25,208/- assessed towards the loss by the surveyor. Respondents are held liable to pay the balance amount of Rs.3,20,208/-(Rs.57,25,208/-
- Rs.54,05,000/-) on this count.
A perusal of the surveyors report reveals that the surveyor had assessed the loss for various items under the heading plant & machinery as under:
Sr. No Description Present Cost Purchyr.
[email protected]% Present Market Value (Rs.) Assessment Net after dep.
% Amount(Rs.)
1.
Foaming Machine with Block cutting & complete assessories 2,050,000 1997 33 682,650 1,367,350 2,050,000 1,367,350
2. Circular cutting machine for flexible PU Foam for 8 blocks 1,000,000 1997 33 333,000 667,000 1,000,000 667,000
3. Heavy Duty Vertical Cutting Machine 175,000 1997 33 58,275 116,725 175,000 116,725
4. 3 iron MS Tank 10 X 6 208,000 1997 33 69,264 138,736
5. Ball type Foaming Machine (Repair) 17,000 2000 13 2,264 14,736 8,000 6,934
6. Digi Weighing Machine 32,100 1998 27 8,551 23,549 32,100 23,549
7. Fire Extinguishers 29,021 1997 33 9,664 19,357
-
8. Welding set 11,960 1997 33 3,983 7,977
-
9. 63 KVA DG set with Kirloskar Engine & Alternator 330,600 1997 33 110,090 220,510
-
10. Compressor (Repair) 32,054 1997 33 10,674 21,380 10,000 6,670
11. Total 3,885,735 2,597,320 3,275,100 2,188,228
12. Electrical Panel, switches, cables, etc. @10% (for claim @5%) 388,574 259,732 163,755 109,411
13. Total 4,274,309 2,857,052 3,438,855 2,297,639
14. Packing forwarding, loading, transport, erection, etc.@7% (for claim @5%) 299,202 199,994 171,943 114,882
15. Gross Valuation & Assessment 4,573,510 3,057,045 3,610,798 2,412,521
16. Less: Salvage value @10%
- 241,252 Net Assessment 2,171,269 A perusal of this report shows that though the surveyor had assessed the present market value of the items mentioned against the serial numbers 4, 7, 8 and 9 at Rs.1,38,736/-, Rs.19,357/-, Rs.7,977/- and Rs.2,20,510/- respectively but did not take into consideration the values of these items while assessing the net loss after depreciation. Surveyor had not assigned any reason in its report for disallowing these claims and, thus, the appellant is held entitled to the market value of these items totaling to Rs.3,86,580/-.
We do not find any substance in the submission of the counsel for the appellant that the surveyor had committed any error in under valuing of the stocks or the loss towards building.
For the reasons stated above, this appeal is partly allowed with cost assessed at Rs.10,000/-. Respondents are directed to pay sum of Rs.7,06,788/-(Rs.3,20,208/- + Rs.3,86,580/-) in addition to the sum of Rs.54,05,000/-, already paid along with interest @9% p.a. with effect from the date of filing of complaint till realization within eight weeks of the date of receipt of copy of this order failing which the respondents will be liable to pay interest @12% p.a. to the appellant from the date of filing of the complaint till realization.
.. . . . . .
(ASHOK BHAN J.) PRESIDENT . . . . . . . . . . . . . . . .
(VINEETA RAI) MEMBER Yd/Rb