National Consumer Disputes Redressal
Indian Acrylics Ltd. vs National Insurance Co. Ltd. & Ors. on 25 September, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 428 OF 2002 1. INDIAN ACRYLICS LTD. SCO NO.49-50 ,SECTOR 26 MADHYA MARG CANDIGARH ...........Complainant(s) Versus 1. NATIONAL INSURANCE CO. LTD. & ORS. ITS CHAIR MAN CUM M.D. , 3, MIDILE TON STREET CALCUTTA 700071 2. SENIOR BRANCH MANAGER NATIONAL INSURANCE CO. LTD SCO 4-5 , SECTOR 9 D CHANDIGARH ...........Opp.Party(s)
BEFORE: HON'BLE MRS. JUSTICE DEEPA SHARMA,PRESIDING MEMBER
For the Complainant : Mr. Deepak Dhingra, Advocate For the Opp.Party : Mr. Kishore Rawat, Advocate
Dated : 25 Sep 2019 ORDER
JUSTICE DEEPA SHARMA, PRESIDING MEMBER
1. The brief facts of the case are that complainant took two marine insurance policies from the opposite party for Acrylo Nitrile which is used in the manufacture of the acrylic fibre. These two polices relate to the goods and also for custom duty. The policy for the custom duty was endorsed to the custom authorities Kandla port. Two imported consignments arrived at Kandla on 13.12.2000 and 14.01.2001 and were kept in the storage tank JRE 14 under the supervision of M/s J.B Boda Surveyors Pvt. Ltd. First consignment which arrived on 13.12.2000 was surveyed on 24.12.2000 and second consignment arrived on 14.01.2001 was surveyed by the surveyor on 24.01.2001. A severe earthquake hit the port of Kandla Gujarat on 26.01.2001 and it had caused massive destruction. As a result of the earthquake, there was a leakage in storage tanks, storing materials of the complainant. The complainant informed the opposite party about this leakage on 29.01.2001 and also of the loss caused to it and also filed its claim. The surveyor M/s J B Boda Surveyors Pvt. Ltd. was also informed. The leakage was confirmed on 30.01.2001. On 31.01.2001, a formal claim was lodged with the insurer. Case of the complainant is that it also intimated the opposite party about the requirement of fresh import of the material for running its plant and requested for the release of 75% of the insured amount for such payment and for establishing another Letter of Credit. His contention was that material which was weighing 2064.946 metric tonnes had approximate value of ₹13.63 crores, got destroyed. The preliminary survey report was submitted by deputing surveyor of the opposite party on 05.02.2001. The final survey report was submitted by the surveyor on 26.02.2001 wherein surveyor had assessed the cargo loss of ₹9,88,49,500/- and ₹3,64,36,923/- for custom duty. The claim was approved by the opposite party vide letter dated 21.05.2001 for a sum of ₹9,79,12,152/- for the loss of cargo and intimated the same to the complainant. The complainant, thereafter, signed the discharge voucher in full and final settlement of claim for cargo and money was released to him on 23.05.2001.
2. The complaint was filed by the complainant on the ground that since the claim was settled after a delay of three months, the complainant had to procure 610 MT of Acrylo Nitrile from IPCL ( Indian manufacturer) at a higher price of ₹45 lakhs and contended that it amounted to deficiency in service and claimed a sum of ₹5,38,66,787/- towards interest due to delay and also sought directions to pay sum of ₹3,65,00,000/- directly to the Custom Authorities. On these contentions, the complaint was filed.
3. The claim was contested by the opposite party. It is contended that complaint was not maintainable since complainant had settled its claim full and final with them and, therefore, had no cause of action. He voluntarily signed the discharge voucher. It is also contended that there is no averment in the complaint that said discharge voucher was signed by the complainant under any undue force, coercion or pressure. It is further submitted that claim had been settled speedily and whatever delay had occurred, it occurred due to lack of response on the part of the complainant. It is submitted that claim intimation was received by the opposite party on 29.01.2001 and, thereafter on 30.01.2001, the complainant wrote a letter to M/s J B Boda Surveyors Pvt. Ltd. stating that he was not in a position to reach their Kandla Office and requested them to do the spot survey on its behalf. M/s J B Boda Surveyors, Mumbai on 31.01.2001 had shown their inability to contact their counter part at Kandla and their inability to depute their surveyor from Mumbai at such a short notice. On 31.01.2001, however, the opposite party responded to the complainant and certain documents were also sent by the complainant to them. The opposite party promptly appointed a surveyor on 05.02.2001 who conducted preliminary survey and submitted its report on the same day. The officials of the opposite party also accompanied the team to Kandla. Vide letter dated 12.02.2001, the surveyor requested the complainant to provide certain documents to finalize the survey report, list of which was given in the said letter. Those documents were furnished by the complainant on 15.02.2001. The surveyor submitted its final survey report on 26.02.2001. Vide letter dated 23.03.2001, certain clarifications were sought from the surveyor after perusing survey report and related documents. The surveyor after telephonic discussion with the insurers gave written clarification to the points raised on 26.03.2001. As the matter involved huge amount which was around 13.00 crores, the mater had to go right up to the Head Office at Calcutta, which remained in constant touch and coordinated with the Regional Office as well as other offices, for processing the claim. Certain other documents including copy of the contract with the supplier and mode of payment were needed for perusal before approval of claim and, therefore, a letter dated 09.05.2001 was written to the complainant to provide the same. On 21.05.2001, an approval of ₹9,79,12,152/- was given and the complainant signed the discharge voucher and settled all his claims for loss of cargo fully and finally. On 23.05.2001, the money was released to the complainant. It is contended that opposite party had acted with due diligence and at the earliest approved the claim amount to the satisfaction of the complainant. As regards the payments of the custom duty is concerned, it is contended that so far no custom duty has been paid by the complainant and he should take up the matter with the custom authorities regarding remission of duty as per Section 23 of the Customs Act, 1962.
4. Parties led their evidences. I have heard the arguments and perused the record.
5. The admitted facts are that insurance company settled the claim of the petitioner for the loss of the cargo within less than four months. Formal claim was filed by the complainant on 31.01.2001 and the claim was approved and money was released on 23.05.2001. The present complaint has been filed by the complainant alleging that this delay of about four months in settling his claim amounts to deficiency in service as it had caused huge loss to him since he had to buy goods at a higher price from the market. It is argued that the opposite party has to compensate it for the losses suffered by the complainant on account of delay in settling his claim.
6. The contention of the opposite party is that complainant had settled all his claim on 23.05.2001 and once he had settled his claim fully and finally, the complaint is not maintainable and is liable to be dismissed. It is further the case of the opposite party that in the claim petition, the complainant has not pleaded that he had signed or settled the claim fully and finally under any duress, coercion or force. It is submitted that complaint is liable to be dismissed on this count alone. It is also argued by learned counsel that after the claim was lodged on 31.01.2001, the surveyor was appointed and a preliminary report of the surveyor was submitted on 05.02.2001 and final report was furnished on 26.02.2001 and, thereafter, certain documents and information were sought from the complainant. It is argued that surveyor had submitted his report within 30 days and, thereafter, the claim was settled at the earliest and there is no intentional delay in settling the claim and, therefore, it cannot be said that there is any deficiency in service on the part of the opposite party.
7. Reliance is also placed by the opposite party on the judgments of the Hon'ble Supreme Court of India in United India Insurance Vs. Ajmer Singh Cotton & General Mills II (1999) CPJ 10 (SC), New India Assurance Co. Ltd. Vs. Sri Venkata Padmavathi R & B Rice Mill (2000) 10 SCC 334, National Insurance Company Ltd. Vs. Sehtia Shoes (2008) 5 SCC 400 and also reliance is placed in the matter passed by this Commission in M/s K N Resourses Pvt. Ltd. Vs Divisional Manager/Regional Manager, Oriental Insurance Co. Ltd. in Consumer Case No. 1247 of 2016.
8. I have given my thoughtful consideration to the rival contentions and perused the file and evidences led by the parties by way of affidavits and considered all the documents and case laws relied upon by the parties.
9. Admittedly, the complainant had settled the claim in full and final settlement and signed the voucher to this effect on 21.05.2001. The main contention of the opposite party is that he had voluntarily signed the discharge voucher and, therefore, had voluntarily settled the dispute and, therefore, the complaint is not maintainable. Counsel for the complainant has argued that complaint can still be filed even though there is a voucher of full and final settlement. The issue is whether in the facts and circumstances of this case, can it be said that the voucher was signed on 21.05.2001 by the complainant towards full and final settlement and at his own free will or whether he was forced, coerced or compelled or that some sort of misrepresentation was made to him and undue influence was used against him or that any fraud was played upon him at that time.
10. The expression Free Consent is defined in the Indian Contract Act in Section 14, which reads as under:
"Free consent' defined.--Consent is said to be free when it is not caused by -
(1) coercion, as defined in section 15, or
(2) undue influence, as defined in section 16, or
(3) fraud, as defined in section 17, or
(4) misrepresentation, as defined in section 18, or
(5) mistake, subject to the provisions of sections 20, 21 and 22.
Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake."
Section 15 defines the coercion as under: -
15. 'Coercion' defined.--'Coercion' is the committing, or threatening to commit, any act forbidden by the Indian Penal Code (45 of 1860) or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
Explanation.--It is immaterial whether the Indian Penal Code (45 of 1860) is or is not in force in the place where the coercion is employed.
Section 16 defines undue influence as under: -
[16. 'Undue influence' defined.--
(1) A contract is said to be induced by 'undue influence' where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another--
(a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall be upon the person in a position to dominate the will of the other.
Nothing in the sub-section shall affect the provisions of section 111 of the Indian Evidence Act, 1872 (1 of 1872).
Fraud is defined under Section 17 as under: -
17. 'Fraud' defined.--'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent1, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:--
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
Explanation.--Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence, is, in itself, equivalent to speech.
Similarly, misrepresentation is defined under Section 18 as under: -
18. "Misrepresentation" defined.--"Misrepresentation" means and includes--
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him;
(3) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement."
11. The proposition of law that emerges from the above provision is that consent shall be deemed to be free consent and binding on the parties to the contract unless the person to the contract shows that he had signed it under coercion, undue influence, fraud, misrepresentation, mistake or duress. The burden is upon such person i.e. upon the complainant to prove such facts and lead such evidences to prove those facts which could show that the consent given by him / it while entering into the settlement was not free. This Commission in case of Aaradhna Fabric Pvt. Ltd. vs. United India Insurance Co. Ltd. 2015 SCC online NCDRC 25 has considered this issue at length and after considering the law laid down by the Hon'ble Supreme Court in the case of National Insurance Co. Ltd. vs. Boghara Polyfab Pvt.Ltd (2009) 1 SCC 267 and United India Insurance Co. Ltd. vs. Ajmer Singh Cotton & General Mills (1999) 6 SCC 400 and also New India Assurance Co. Ltd. vs. Genus Power Inf. Ltd AIR SCS (1) 67 has held as under: -
"8. The legal proposition, which emerges from the above referred decisions of the Hon'ble Supreme Court is that though, issue of a discharge voucher accepting a particular amount in full and final settlement of its claim is not conclusive when there are allegations of fraud, undue influence etc., mere bald allegations are not sufficient in this regard and such allegations cannot be accepted by the Court, unless the insured places material before the concerned Court / Forum, which would substantiate the plea of fraud, undue influence etc., taken by him and establish that the discharge voucher executed by him was not voluntary and was in fact a product of exercise of fraud, undue influence, coercion, misrepresentation etc., on the part of the insurer. The onus will be upon the insured to substantiate the plea of fraud, undue influence etc., taken by him. As observed in Boghara Polyfab Pvt. Ltd. (supra) if it is found that there was no fraud, coercion, undue influence, the Court/forum concerned has to accept the voucher as being in discharge of the contract and reject the claim without examining it on merits. If however, it is found that the discharge voucher was obtained by use of fraud, undue influence, coercion etc., it has to be ignored and the claim needs to be examined and decided on merits.
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14. Thus the consent given by a person would be deemed to be free consent and would be binding upon the parties to the contract unless it can be shown that it was obtained by exercise of coercion, undue influence, fraud, misrepresentation and mistake as defined in Section 15, 16, 17 & 18 or by mistake subject to provisions of Section 20 to 22 of the Indian Contract Act.
15. "Coercion" is the committing, or threatening to commit, any act forbidden by the Indian Penal Code (45 of 1860) or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
Explanation: It is immaterial whether the Indian Penal Code (45 of 1860) is or is not in force in the place where the coercion is employed."
12. This Commission has held that there should not only be allegations of force, coercion, undue influence, fraud and misrepresentation but sufficient material should also be placed on record in support of these contentions.
13. Hon'ble Supreme Court in the case of United India Insurance Vs. Ajmer Singh Cotton & General Mills & Ors. (supra) has held that mere execution of the discharge voucher would not always deprive the consumer from filing the claim. The Hon'ble Supreme Court has held as under:
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The 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 a 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 or by mis-representation or the like. If in a given case the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, mis-representation, under influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complaint is made would be justified in granting appropriate relief. However, where such discharge voucher is proved to have been obtained under any of the suspicious circumstances noted hereinabove, the tribunal or the commission would be justified in granting the appropriate relief under the circumstances of each case. The mere execution of the discharge voucher and acceptance of the insurance claim would not estopple the insured from making further claim from the insurer but only under the circumstances as noticed earlier. The Consumer Disputes Redressal Forums and Commissions constituted under the Act shall also have the power to fasten liability against the insurance companies notwithstanding the issuance of the discharge voucher. Such a claim cannot be termed to be fastening the liability against the insurance companies over and above the liabilities payable under the contract of insurance envisaged in the policy of insurance. The claim preferred regarding the deficiency of service shall be deemed to be based upon the insurance policy, being covered by the provisions of Section 14 of the Act.
5. In the instant cases the discharge vouchers were admittedly executed voluntarily and the complainants had not alleged their execution under fraud, undue influence, mis-representation or the like. In the absence of pleadings and evidence the State Commission was justified in dismissing their complaints. The National Commission however granted relief solely on the ground of delay in the settlement of claim under the policies. The mere delay of a couple of months would not have authorised the National Commission to grant relief particularly when the insurer had not complained of such a delay at the time of acceptance of the insurance amount under the policy."
14. The National Commission in the case of M/s K N Resourses Pvt. Ltd. Vs. Divisional Manager / Regional Manager, Oriental Insurance Co. Ltd. (supra) has held that full and final settlement between the parties constitute a binding contract unless it is shown that it was influenced by force, coercion and undue influence. This Commission has held as under:
"10. As held by this Commission in Anshupati Fibres Pvt. Ltd. ( supra) that once the insured accepts a particular amount in full and final settlement of his claim, he is estopped from claiming any further amount from the insurance company, since the settlement constitutes a binding contract between the parties unless it is shown that it was influenced by use of coercion, undue influence, fraud, mistake or misrepresentation. In the present case, no such influencing factor has been established by the complainant."
15. The Hon'ble Supreme Court in the case of New India Assurance Co. Ltd. Vs. Sri Venkata Padmavathi R & B Rice Mill ( supra) has clearly held that unless it is contended and proved that full and final settlement of the claim has been obtained under fraud, coercion or undue influence, such a settlement is binding upon the parties. The Hon'ble Supreme Court has held as under:
"6. There is no dispute between the parties that the respondent had agreed to accept Rs.14.16 lakhs in full and final settlement of their claim. That being so, they are bound by their commitment, particularly, as there is no allegation anywhere before the Commission or before us that the agreement was vitiated by fraud, coercion or undue influence."
16. Again in the case of National Insurance Company Limited Vs. Sehtia Shoes (supra), Hon'ble Supreme Court has reiterated the same principle and held as under:
"Filing of a complaint is, therefore, not barred; but it has to be proved that agreement to accept a particular amount was on account of coercion. In the instant case, this relevant factor has not been considered specifically by the District Forum, State Commission and the National Commission. Though plea of coercion was taken by claimant-respondent, same was refuted by the appellant. There is no dispute that the discharge voucher had been signed by the respondent. There has to be an adjudication as to whether the discharge voucher was signed voluntarily or under coercion."
17. It, therefore, is apparent that when a voucher if signed towards full and final settlement without any protest, shall be deemed to have been signed voluntarily or with free consent unless in a complaint, allegations of fraud, coercion, misrepresentation, undue influence has been made out and evidences has been led to this effect. The bald allegations of force, coercion etc. are not sufficient. The allegations have to be specific which leads to a conclusion that force, coercion etc. has been used against the complainant. A complaint cannot be rejected simply because discharge voucher has been signed by the complainant. In the present case, complainant has not even pleaded that he did not sign the discharge voucher voluntarily or with his own free will. He has not raised any allegations or plea of coercion, undue influence, fraud, misrepresentation against the opposite party. He, therefore, had signed the discharge voucher voluntarily and with free will.
18. Since the discharge voucher has been signed by the complainant voluntarily with his own free consent settling all the disputes including the one raised before this Commission with the opposite party, the complainant is not entitled to any relief.
18. The second policy relates to the payment of custom duty. Admittedly, the custom authorities have not so far raised any demand from the complainant. As and when the demand is raised by the custom authorities, complainant is at liberty to take up the issue before the appropriate Forum.
19. In view of the above discussion, present consumer complaint stands dismissed.
......................J DEEPA SHARMA PRESIDING MEMBER