National Consumer Disputes Redressal
Amirali A. Mukadam vs United India Insurance Co. Ltd. on 6 September, 2007
Equivalent citations: IV(2007)CPJ234(NC)
ORDER
B.K. Taimni, Member
1. These two appeals arise from a common order passed by the State Commission wherein Mr. Amirali A. Mukadam (appellant in FA No. 11 / 2006) was the complainant and United India Insurance Co. Ltd. (appellant in FA No. 95 / 2006) was the opposite party.
2. Briefly stated the facts leading to filing the complaint were that the complainant owned a vessel, namely, 'M.S.V. Safina Al-Amir', which was insured with the United India Insurance Co. Ltd. for a sum of Rs. 30 lakh for the period froml6.12.1993 to 15.12.1994. The vesselstarted its journey from Dubai to Mumbai on 5.7.1994. After two days in the sea due to bad weather, it took shelter at Khor gram Port and upon noticing improvement in the weather condition, the vessel re-started sailing, but again due to bad weather the engine of the vessel stopped working. At this stage the strong currents and the wind swept the vessel away on account of which it got stranded in sand soil in broken and damaged condition on 16.7.1994 with great difficulty and with the help of other fishing boats, the crew members could save their lives but could not save the vessel. The incident was reported to the Insurer, who appointed the Surveyor who submitted report on 11.4.1995 and after a delay of over 1 1/2 year and the Insurer paid an amount of Rs. 28,99,357on 8.11.1996 in full and final settlement. The complainant was not satisfied with this but had to accept this amount on account of his business suffering loss due to non-availability of the claimed amount, and immediately on the next working day a further claim was lodged with the Insurance Company but when this was repudiated, a complaint was filed before the State Commission, who after hearing both the parties and perusal of material on record passed the following order:
1. Opposite party/Insurance Company is directed to pay interest @12% p.a. on the sum of Rs. 28,99,357 from 16.10.1994 till 8.11.1996.
2. O.P./Insurance Company is further directed to pay Rs. 3,000 by way of cost of the proceedings to the complainant.
3. O.P./Insurance Company is directed to comply the order herein within 30 days from the receipt of the order.
4. Copies of the order herein to be furnished to the parties.
3. Aggrieved/not satisfied with the relief given, both the parties filed two separate appeals before us.
First Appeal No. 11/20064. The appellant was the complainant before the State Commission and his main ground is that the deduction of additional premium amount from the claimed / disbursed amount is not in order, as also the Surveyor fees amounting to Rs. 39,590 are not payable by him as also that Rs. 28,930 deducted by the Insurers towards average adjuster clause is also not maintainable.
5. As far as the question of deduction of 'premium amount' is concerned, without going into the merits of this case, one way or the other, we only wish to state that there is no such prayer in the complaint filed by the complainant before the State Commission. In para 5 of the complaint, which runs into 6 pages, as also summary of the claim, there is not even a remote reference claiming the additional amount of premium deducted by the Insurers. Para 5 gives a narration in respect of each claim which, in summary form, reads as follows:
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Rs. 30,00,000 being the amount of sum insured with the Insurance
Company, the value of the vessel.
Rs. 50,000 for harassment and mental Torture.
Rs. 10,000 for cost
Rs. 9,90,000 interest on 30,00,000 from 1.1.1995 to 30.10.1998, i.e.,
date prior to payment of claim --8.11.1996.
Rs. 1,01,000 expenses incurred for searching salvage.
Rs. 28,930 Fee paid to Average Adjuster.
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Rs. 41,89,930
Rs. 29,09,357 paid by the Insurance Co.
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Rs. 12,80,537
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6. As will be evident that the claim for which complaint was filed before the State Commission, was relatable to interest, harassment and mental torture, expenses incurred for searching salvage as also the fee paid to Average Adjuster. There is no mention whatsoever about the complaint being filed in respect of additional premium charged by the Insurers. Since there is no pleading to this effect we refrain from touching on this issue.
7. Even on merits, as rightly held by the State Commission, in this regard, the complainant initially asked some sort of explanation from the Insurance Company and by subsequent letters allowed the Insurance Company to deduct the amount of changed and unpaid premium from the claim amount, payable to the complainant. Letter dated 15.4.1996 sent by the complainant to the Insurance Company is a death blow to the case made out by the complainant with regard to unilateral change in 'premium'. By this letter, complainant authorised the Insurance Company to deduct the amount of changed premium from this claim. Under the circumstances, the grievance raised by the complainant in the complaint in this behalf fails on this ground alone.
8. As already mentioned there is no pleading to this effect. The State Commission has already dealt with this issue in above terms. We reproduce the letter given by the complainant on 15.4.1996 to deduct the premium amount:
Dear Sir, Re: Vessel Safina Alami Claim No. 120100/96/7/01/94 With reference to your demand made by you for Rs. 1,11,258 from me regarding excess premium. I hereby request you my claim is liable to pay under the law, I will agree to authorise you to deduct the said amount from the claim amount payable by you.
I hope you will accept my request and oblige.
Thanking you.
9. Much was made by the learned Counsel for the appellant/complainant that the insurers were competent to deduct the amount but only as per law. This letter does not in any way state the above. What in fact the complainant is asking is to settle the claim under the law and goes on to authorise them to deduct the said amount from the claimed amount payable by them. Be that as it may. Tariff Advisory Committee vide its letter dated 20.11.1995 has affirmed the deduction of premium at the rate of 9.964% which is precisely what has been done hence it cannot be said that the deduction of premium at 9.964% is not as per law, especially when in the policy itself, premium has been shown to be 'Provisional'. In the aforementioned circumstances, we find it does not fall in the mouth of the complainant to raise this objection at this stage.
10. As per the complaint, summary of which has been reproduced earlier, there is no claim towards 'Surveyor fee' charged by the Insurers, hence we do not go into this question. As far as the charges for 'average adjuster' is concerned, this is found as per law under the average clause relating to shipping /shipment matters. In the aforementioned circumstances, we find no merit in this appeal, hence dismissed.
First Appeal No. 95/2006This appeal has been filed by the Insurance Company aggrieved by the interest @12% p.a. awarded on the amount already paid to the complainant from 16.10.1994 till 8.11.1996. Learned Counsel for the appellant-Insurance Company wishes to rely upon the judgment of the Hon'ble Supreme Court in the case of Ajmer Singh Cotton & General Mills and Ors. Etc. II (1999) CPJ10 (SC) with United India Insurance Co. Ltd. v. Mis. Asa Singh Cotton Factory and Ors. 1986-99 Consumer 5077 (NS). It is the case of the Insurance Company that the amount of Rs. 28,99,357 were paid in full and final settlement and since no coercive fraud or exercise of undue influence or mis-representation has been alleged in the complaint as per law laid down by the Hon'ble Supreme Court in the judgment (supra), the interest could not have been granted by the State Commission as they were not guilty of any delay in settlement of the claim. We have gone through this judgment very carefully, operative part of which reads as under:
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 under 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, misrepresentation, 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 estop 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.
11. The important word is "or the like". In this case admittedly, the mishap had occurred on 16.7.1994. The report of the Surveyor had been received on 11.4.1995 yet the payment of Rs. 28,99,357 was made only on 8.11.1996, it was Friday and admitted position is that protest was made in the form of asking for enhanced amount by the complainant to the Insurance Company on the next working day, i.e., Monday, i.e., 11.11.1996. It is necessary to appreciate that in what circumstances, the complainant accepted the awarded amount. Para 5(iii) of the complaint reads as under:
(iii) The complainant also suffered heavy business loss due to non-availability of the aforesaid claim amount. However, the complainant does not wish to claim the same in the present complaint as per advice received that such amount is not payable under the provision of the C.P. Act. However, complainant is advised that he is entitled to claim compensation for mental torture and harassment, the details given herein above which cannot be explained in words.
12. "The complainant also suffered heavy business loss due to non-availability of the claimed amount...." If in these circumstances the appellant accepted whatever was being given, and registered the protest within a reasonable time of two to three days, then it cannot be said that the amount was accepted without protest. Section 15 of the Indian Contract Act, 1872 defines 'coercion', reads 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.
13. It is not the case of the Insurance Company that real threat of non-payment of the admitted amount, did not exist, if the insured had not signed on the dotted line. Section 16 defines undue influence' reads 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.
14. A plain reading of these two sections leave us in no doubt that the Insurers were in a position, where they could dictate terms, and, had the complainant not accepted the amount, it would have been to their detriment for the simple reason that the Insurance Company would not have paid the amount thus affecting the whole business of the complainant. In the given circumstances, it cannot be said that the Insurers did not have a 'real and apparent authority' over the complainant to exert undue influence over the insured.
15. In the aforementioned circumstances, the interest granted by the State Commission to the complainant shall be held to be as per law.
However, we find that as per settled proposition by this Commission, the complainant would be entitled to interest not counting the date from the date of incident but as per consistent view of this Commission, the insured shall be entitled to interest from two months after the receipt of the report of the Surveyor, which in this case was received by the appellant-Insurance Company on 11.4.1995, hence the complainant shall be entitled to interest from 12.6.1995 to8.11.1996. Only to this extent this appeal is allowed and the order passed by the State Commission stands modified.
16. Both these appeals stand disposed of in above terms.