State Consumer Disputes Redressal Commission
Sri Sarbati Steel Tubes Ltd.,No.163/1, ... vs The Oriental Insurance Co. Ltd., ... on 29 August, 2011
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE : Honble Thiru Justice M.THANIKACHALAM PRESIDENT Thiru J. JAYARAM, M.A.,M.L., (JUDICIAL) MEMBER
Tmt. VASUGI RAMANAN MEMBER II O.P.NO.169/2001 DATED THIS THE 29th DAY OF AUGUST 2011 Sri Sarbati Steel Tubes Ltd., Mr. K. Ramasamy No.163/1, Broadway IInd Floor Counsel for Chennai 600 108 Complainant Vs. The Oriental Insurance Co. Ltd., Divisional Office VI Bali Towers, 4th Floor M/s. Nageswaran & Narichania No.1, Abdul Razack Street Counsels for Saidapet, Chennai- 600 015 Opposite party Petition dt.29.11.2001, was filed, praying for a direction to the opposite party to pay Rs.5,55,317/- with 18% interest p.a., from 29.11.2001, alongwith cost.
This petition coming before us for hearing finally on 17.08.2011. Upon hearing the arguments of the counsels on both sides, perusing the material papers on records, this commission made the following order:
M. THANIKACHALAM J, PRESIDENT
1. This is a petition under Sec.12 r/w 17 A(1) of the Consumer Protection Act, claiming a total sum of Rs.5,55,317/-, with interest thereon from 29.11.2001, on the basis of the following grounds (in brief).
2. The complainant, a manufacturer of steel tubes, had taken a fire insurance policy C No.411600/F/11046/2001, with the opposite party for the building factory, stock etc., for a total sum assured Rs.7,43,00,000/-, by paying premium, covering the period 1.5.2000 to 30.4.2001, and the risk covered includes damage due to cyclone also.
3. On 29.11.00, there was a heavy rainfall, storm cyclone, in which the major portion of the factory was destroyed, which was intimated to the opposite party, who deputed a surveyor. After the surveyor visited the factory, as requested by the surveyor, the complainant submitted a claim for Rs.8,57,572/-
on 3.3.2001, but actually later incurred an expenses of Rs.8,04,258/-. The opposite party offered a sum of Rs.2,73,941/-, for which the complainant was not willing, whereas the opposite party being in a dominant position, harassing the complainant, obtained signature in full and final settlement of claim, which should be construed as coercion and compulsion.
4. The complainant accepted the cheque under protest, thereafter obtained the details of loss, assessment made by the surveyor, and on perusal, it revealed the surveyor has not properly assessed the loss, whereas he has given unnecessary deductions, not only in depreciation, but also in salvage, etc., which should be construed as deficiency in service, since on incorrect ground deductions were made.
The opposite party is liable to indemnify the insured, against the loss actually suffered, and this being the legal position, even as per the terms and conditions of the policy, the non-payment of the claim made by the complainant should be construed as negligence, and default on the part of the opposite party, in the performance of the service undertaken to be rendered, which amounts to deficiency, and in this view, the complainant is entitled to the balance of the amount of Rs.5,30,377/-, which was not paid, even after letter, thereby the complainant is constrained to file this case.
5. The defense as follows:
The claim of the complainant, as reported, was settled as per the terms and conditions of the policy, which was acknowledged by the complainant, without any protest, and therefore, as such the complaint is liable to be dismissed. On the report received from the complainant, regarding the damage, a surveyor was nominated, report obtained, who had assessed the claim at Rs.3,34,371/-, i.e., claim No.66/2001, and for claim No.2/2002, Rs.84,963/-. After deducting depreciation, salvage, etc., as per the terms and conditions of the policy, for both the claim, the net loss was assessed at Rs.2,73,941/-, which amount was paid in full settlement of the claim, and therefore, the contention of the complainant, that still they are entitled to any amount, is unreasonable, against the terms of the policy. As per the terms and conditions alone, deductions were made, not contrary to the terms of the policy, as incorrectly contended in the complaint, and therefore there was no deficiency or negligence, on the part of the opposite party, praying for the dismissal of the complaint.
6. On behalf of the parties, proof affidavits, and documents were filed, which are exhibited as Ex.A1 to A8 and B1 to B13.
7. The surveyor, who conducted the survey has been examined as witness. By going through the pleadings, as well as the documents, the following points are framed for determination.
1. Whether the opposite party has committed any negligence, and deficiency in service, in not settling the claim, as claimed by the insured.
2. Whether the complainant is estopped from claiming the balance of the claim amount, because of the payment made by the opposite party, in full and final settlement of the claim under acknowledgement?
3. Whether the complainant is entitled to the claim, made in the complaint with interest?
8. POINT NO. 1 AND 2The complainant, who is running an industry, manufacturing steel tubes, had taken fire policy C as evidenced by Ex.A1, for the period covering 1.5.00 to 30.4.2001, under which the sum insured was Rs.7,43,00,000/-, and the description of properties are building, machinery, and accessories plant-machinery, as well compound wall, each valued separately, totaling the sum assured as said above, for which premium also paid, not in dispute. In the place, where the factory/plant, situated, there was major cyclone on 29.11.2000, at 2.30 p.m, which had caused damages to the asbestos roofing and supporting structure of the factory and building.
Upon intimation by the complainant, as seen from Ex.A2, the surveyor who has been examined as DW1, conducted preliminary inspection, and probably should have informed the complainant to lodge a claim, based upon the policy. Accordingly, as seen from Ex.A3, the complainant claiming a total sum of Rs.8,57,572/-, lodged a claim, later it appears by spending a sum of Rs.8,04,258/-, as seen from Ex.A4, he repaired the damage caused due to cyclone. The opposite party, nominated the surveyor, who had inspected the cyclone ravaged premises, submitted his report, assessing the net loss, at Rs.2,08,940/-, though net assessment, as per the annexure was Rs.3,84,371/-. In this amount, deducting salvage, depreciation, under insurance policy, the net liability of the insurance company was fixed at Rs.2,08,940/-. Out of this amount, the insurance company deducted some more amount, and came to the conclusion that the complainant is entitled to only a sum of RS.2,02,423/- under claim No6/2001, and under claim No.2/2002 a sum of R.71,518/-, totaling a sum of Rs.2,73,941/-. This amount was paid, which was acknowledged by the opposite party, under the original of Ex.B5 (two receipts), one for Rs.71,58/- and another for Rs.2,02,538/-. In both the receipts, the amount was received by the complainant in full settlement of all claims, upon the said company , referring the policy number also. The complainant, though accepted the payment, in full and final settlement, requested the opposite party to furnish the loss assessment report of surveyor, and accordingly Ex.A6 (B7), statement was furnished to the complainant. After going through the loss assessment report, the complainant felt there were unnecessary deductions, and the surveyor has not properly assessed the damage.
Therefore, the complainant issued notice (Ex.B8) on 16.6.2001, questioning the calculation, claiming only a sum of RS.124480/-, which elicited a reply, justifying the surveyors report, as well as the payment. Thereafter, on the same day, it seems as seen from Ex.A7, which is not explained, the insurance company justified its acts, refused to pay the balance, resulting the consumer complaint, as stated above.
9. The learned counsel for the complainant would contend, that the surveyor has not properly valued the damages, and infact he had unnecessarily deducted amounts, under various headings, that should be construed as deficiency in service, since insurance company accepted to pay the value of the same. It is the further submission of the learned counsel for the complainant, that despite the receipt issued by the complainant, as if amounts were received in full and final settlement, still it is open to them to challenge and claim the amount, and accordingly as per the terms and conditions of the policy, the value as of date of damage was claimed, which the insurance company bound to pay, as per the terms and conditions of the policy also, in addition to other plea, as narrated in the written version.
10. Per contra, it is the submission of the learned counsel for the opposite party, that the complainant, having received the amount in full and final settlement of the claim, the present claim should be negatived, on the basis of estoppel.
It is the further submission of the learned counsel for the opposite party, that the complainant had not only projected inconsistent case under Ex.B8=A7, but also a concocted document, as if amounts were received by them, under protest, which is proved to be false, by the production of the original document, and on this ground also, the complainant is not entitled to claim the balance of the amount. A further submission was made that as per the terms and conditions of the policy, despite the surveyor was cross examined, nothing was brought as against the terms of policy, and in this view, on merit also the complainant is not entitled to any relief.
11. We have gone through the pleadings, affidavits, written arguments, as well as the documents, meticulously, and by going through the same, applying our mind, based upon the submission made both parties, we are of the considered opinion, that the complainant has not come to the commission with clean hands, not entitled to any relief, since he failed to make out any case, regarding negligence, or deficiency, on the other hand the opposite party had made out a case, that they have settled the claim in terms of the policy, which was accepted by the complainant, without any protest.
12. The learned counsel for the complainant drew our attention, in order to overcome the plea of estoppel or the full settlement of the claim, a decision of the Apex Court in United India Insurance Vs. Ajmer Singh Cotton & General Mills Ors. Reported in II (1999) CPJ 10 (SC), wherein the Apex Court has observed, that the insured is not estopped from making further claim, from insurer only on the basis of the execution of discharge voucher provided, the consumer has made out a case of deficiency in service. In the case involved in the above decision, the claimant failed in view of the discharge voucher voluntarily executed by him, which was upset by the National Commission, and upon appeal to the Supreme Court, the order of the State Commission was restored, nullifying the order of the National Commission, wherein the question raised was Whether the insured is estopped from making any further claim from the insurer after accepting the insurance claim amount in full and final settlement of all the claims by executing the discharge voucher willingly and voluntarily without any protest or objections?, for which finding was given, it all depends upon the facts and circumstances of the case, observing 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, which principle we are bound to follow, cannot be disputed.
Therefore if there was a plea of fraud, coercion or compulsion , that the insurance company being in the dominant position, obtained full settlement receipt, then only applying the doctrine of estoppel, will arise, and in this case, we find no such specific plea, regarding fraud coercion, compulsion or something like that, to make the discharge vouchers, as void or unenforceable. In paragraph 5 end of the complaint, we find the following words, The complainant was compelled to sign the loss voucher in full and final settlement of claim at the force of the opposite party which can be termed as coercion and compulsion, this is only in inference of the complainant, and not the actual act said to have been committed by the opposite party. Therefore, the pleading is insufficient.
13. The party having signed the full settlement receipt, may repudiate the same forthwith, which cannot be faulted generally, as rightly held by the National Commission, in Singureddy Ramana Murthy Vs. National Insurance Co. Ltd., and Ors. reported in I (2003) CPJ 37 (NC), where it appears, the party protested soon after signing the full and final settlement, wherein also some kind of dominant position of the insurance company was recorded, which is not the case before us. Therefore, if the execution of the voucher was not proved as if obtained from the complainant, under coercion, or compulsion, to bring it under the meaning of fraudulent or exercise of undue influence, by misrepresentation, it is not possible, to overcome the full settlement, even as observed by the Apex Court, in the above quoted rulings.
14. The learned counsel for the opposite party, invited our attention, on the other hand, in support of his contention of estoppel, to a decision of the Apex Court in M/s. Bhagwati Prasad Pawan Kumar Vs. Union of India, reported in AIR 2006 Supreme Court wherein it had taken extreme view by conduct also, full settlement can be inferred, which principle, we cannot ignore. In the above case, when there was a claim between the Railway and the complainant, the Railway admitting part of claim, enclosed two cheques, informing that the retention of the cheques or encashment of cheque, will automatically amount to full and final settlement of the claim. Claimant therein, having received, encashed the cheque and later on sent protest to railway, and considering this conduct, the Apex Court has ruled by conduct appellant/offeree must be held to have accepted the offer made by railways- claim application liable to be dismissed. This commission also had an occasion to consider this kind of cases in A.P.No.522/2004, as well as in F.A.No.81/2007 dt.2.7.2007 and 27.8.2010 respectively, and accepted the principle of estoppel, when the vouchers were issued as full and final settlement. Therefore, now on the basis of the fact proved, we have to see the claim of the complainant.
15. As pointed out by us supra, in the discharge vouchers, there was no reservation, and the receipts were issued in full and final settlement. Therefore, now on the basis of the fact proved, we have to see the claim of the complainant.
16. In the discharge vouchers, there was no reservation, and the receipts were issued in full and final settlement of the claim, with reference to the fire Policy C, under which claim was made. Though it is said, after obtaining loss assessment statement, the complainant had protested or that he had received the amount under protest, we find no supportive evidence, whereas we find destructive evidence, since the complainant had fabricated the document, on his own. After the settlement, Ex.B6 letter was addressed on 25.5.2001. In this document, the complainant has not claimed, that the receipts were issued under protest, or they have accepted the cheque in the claim, under protest. But in Ex.A5, which is said to be the copy of Ex.B6, very cleverly forgetting the original of Ex.A5, viz. B6 was sent to opposite party, last sentence was added, which reads we have accepted your cheque in the above claim under protest, which does not find place in Ex.B6, and therefore we are constrained to say that the complainant has fabricated the document, to make the full settlement voucher, not enforceable, probably retaining the right to claim the balance, which is not available to the complainant. Even in Ex.A5, or Ex.B6, there is no whisper or murmur, regarding the alleged compulsion or coercion, which does find place at the end of paragraph 5 of the complaint.
Therefore, we are of the considered opinion, that the complainant had accepted the settlement of the opposite party, on his own, without any coercion or compulsion or external force, and that is why, they have signed in full settlement of the claim, not reserving any protest, as seen from the discharge vouchers, as well as seen from Ex.B6, and later on only to lodge a claim, if possible Ex.A5 was concocted, which should be rejected. Therefore, as held in the above decision, when there was no challenge to the discharge voucher, then there is no question of fraud, coercion or compulsion and it should be construed that without committing any negligence or deficiency, the opposite party had settled the claim, which should follow, the complainant is not entitled to claim the alleged balance, as per the original claim, or even as per the surveyor report, though it is faulted, incorrectly and we record our reasons further.
17. Assuming that the complainant is entitled to claim the balance, on the basis of the deficiency, then it is for them to make out a case. The surveyor in his report, has given the details in page 21 of the report, as total assessment in the area vise, and as seen from page 20 of the surveyor report, giving salvage depreciation, under insurance, policy excess, then net amount was assessed to Rs.2,08,940/-. In the complaint, as seen from page 4, deduction under the heading less policy excess, reinstatement premium, not faulted, whereas other deductions are faulted. Under the policy, the company had undertaken to pay the insured, the value of the property, at the time of happenings of its destructions, that means value as on the date of the incident, viz. cyclone. If the building is an old one, to ascertain the value, as on the date of the incident, certainly depreciation has to be calculated, and the salvage has to be deducted, which were done by the surveyor, in our opinion, correctly. If the surveyor had committed any defect, that should have been challenged, when he was cross examined by the complainant.
But, as seen from the cross-examination by the complainant, except a bald suggestion, that the report is contrary to the conditions of the fire insurance policy, no condition was brought to his notice, how he offended the conditions in the policies, and no condition also brought to our notice, how the surveyor had committed error in deducting the amount.
18. The submission of the learned counsel for the complainant, that the insurance company is not entitled to deduct salvage, depreciation, under insurance, is not acceptable to us, since that was not challenged, when the surveyor was in the box.
Thus, viewing the case from this angle also, we find neither the surveyor, nor the opposite party had committed any deficiency, or any mistake in calculating or assessing the damage to building, and the deduction for staff quarters, cannot be taken as deficiency, since that is not covered under the policy, as indicated above. The complainant themselves were not clear, regarding their claim, and that is why, as pointed out supra, in one communication, they have claimed only Rs.1 lakh and odd, and in another communication, they have claimed Rs.5 lakhs, and odd, under the policy. The company has not undertaken to pay the actual expenses, incurred by the insured, due to cyclone, whereas they have undertaken to reimburse the value of the damaged property, on the date of the incident alone, and therefore, even assuming that the complainant had spent more amount, as claimed, the insurance company is not bound to reimburse the same. Thus analyzing the case from all probable angles, and applying the dictum laid down by the Apex Court, which is followed by this commission also, we conclude that the opposite party has not committed any negligence, or deficiency in service, and the complainant who had fabricated the document, or tampered the document, is not entitled to any mercy, in the hands of this commission.
Hence these two points are answered against the complainant.
19. POINT NO.3:
In view of our findings in point No.1 and 2, the complainant is not entitled to any of the claim, and therefore the claim is liable to be dismissed. Having regard to the facts and circumstances of the case, we are not inclined to award cost.
20. In the result, the complaint is dismissed.
Parties are directed to bear their respective costs.
VASUGI RAMANAN J. JAYARAM M.THANIKACHALAM MEMBERII JUDICIALMEMBER PRESIDENT Exhibits of the complainant A1 01.05.2000 Fire Insurance Policy A2 02.12.2000 Intimation of Loss/ damage by cyclone by complainant to OP A3 03.03.2001 Claim form A4 03.04.2001 Amount paid receipt A5 25.05.2001 Letter from complainant to OP A6 31.05.2001 Loss Assessment receipt by complainant from OP A7 16.06.2001 Letter to OP from complainant for balance amount of claim A8 26.06.2001 Letter from OP to complainant Exhibits of the Opposite party:
B1 Terms and conditions of the Fire Policy B2 08.02.2001 Interim Survey report B3 19.04.2001 Survey report B4 24.05.2001 Letter from Surveyor to OP B5 24.05.2001 Disbursement voucher B6 25.05.2001 Letter from complainant to OP B7 31.05.2001 Loss assessment B8 16.06.2001 Letter from complainant to OP B9 22.06.2001 Letter from OP to complainant B10 28.06.2001 -do-
B11 27.09.2001 -do-
B12 19.11.2001 -do-
B13 Claim scrutiny forms WITNESS EXAMINATION Mr. C. Parirajan, Surveyor, was examined as DW1 VASUGI RAMANAN J. JAYARAM M.THANIKACHALAM MEMBERII JUDICIALMEMBER PRESIDENT INDEX : YES / NO Rsh/d/mtj/Bench-1/OP Order