National Consumer Disputes Redressal
M/S. Footwear Center vs New India Assurance Co. Ltd & Anr. on 13 July, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 433 OF 2015 (Against the Order dated 12/01/2015 in Appeal No. 777/2013 of the State Commission Uttar Pradesh) 1. M/S. FOOTWEAR CENTER ...........Petitioner(s) Versus 1. NEW INDIA ASSURANCE CO. LTD & ANR. ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. Ritesh Khare,, Advocate. For the Respondent : Mr. Vishnu Mehra, Advocate.
Dated : 13 Jul 2020 ORDER
JUSTICE V.K.JAIN (ORAL)
The petitioner/complainant obtained a standard fire and special perils insurance policy from Respondent No. 1 United India Assurance Col. Ltd. for a sum assured of Rs. 8 lakhs for the period from 17.12.2007 to 16.12.2008. A fire broke out in the insured premises resulting in loss of stock kept therein.
2. A surveyor was appointed by the insurer who assessed the loss to Rs. 3,20,740/-. The insurer offered an amount of Rs. 2,15,775/- to the complainant which he accepted by way of a consent letter dated 31.08.2008. A copy of which has been filed by the insurer along-with its written version.
3. A cheque of Rs. 2,15,775/- dated 18.12.2008 was accordingly sent to the complainant which was received by the complainant on 26.12.2008. The cheque was got encashed by the complainant. Thereafter the complainant sent a letter dated 26.12.2008 delivered by hand to the insurer on 05.01.2009 alleging therein that the amount of Rs. 2,15,775/- was not acceptable to him and he had retained the cheque under protest. The complainant/petitioner thereafter approached the concerned District Forum by way of a consumer complaint.
4. The complaint was resisted by the insurer which inter alia stated in its reply that the complainant had over-estimated the claim and the payment made to him was fair and reasonable and the same was duly accepted by the complainant.
The banker of the complainant i.e. Punjab National Bank was also impleaded as a party to the consumer complaint. However, the Bank did not contest the consumer complaint.
5. The District Forum allowed the consumer complaint against the insuer by directing it to pay a sum of Rs. 5,32,221/- to the complainang along-with interest @ 7% p.a.
6. Being aggrieved from the order passed by the District Forum, the insurer approached the concerned State Commission by way of an appeal. Vide impugned order dated 12.01.2015 the State Commission allowed the appeal and modified the order of the District Forum by directing the insurer to pay a sum of Rs. 3,20,740/- to the complainant after deducting payment already made to him along-with interest @ 9% w.e.f. 18.12.2008 and Rs. 15,000/- as compensation.
7. Being still aggrieved the complainant is before this Commission. The insurer, however, has not challenged the order passed by the State Commission.
8. From the letter dated 31.08.20098 written by the complainant to the insurer it is evident that the complainant agreed to accept an amount of Rs. 2,15,775/- in complete settlement of his claim. Accordingly, the insurer paid the said amount to him vide cheque dated 18.12.2008 which the complainant had duly encashed. Though, the case of the complainant is that the aforesaid cheque of Rs. 2,15,775/- was accepted by him under protest, in the facts and circumstances of the case as discussed hereinbelow do not support the plea taken by him. Though even as per complainant's own letter the cheque dated 18.12.2008 was received by him on 26.12.2008, the letter which he delivered to the insurer was delivered to the officer of the insurer on 05.01.2009 though the date put on the letter was 26.12.2008. The complainant's office is in Chandausi, which is part of District Moradabad where the letter to the insurer was delivered. Had this letter been actually written on 26.12.2008 it would have been delivered in the office of the insurer latest by 27.12.2008. The fact that the letter was delivered by hand on 05.01.2009 is a clear indicator that the letter had been pre-dated and was sent only after encashing the cheque of Rs. 2,15,775/-, the complainant being apprehensive that the insurer might stop the payment of the cheque if the letter was received by it before the encashment of the cheque.
9. Another important aspect of the matter is that even the letter sent by the complainant to the insurer gives no reason as to why the complainant accepted Rs. 2,15,775/- when the much much higher.
10. In the absence of any reason being given in the above-referred letter dated 26.12.2008 for accepting a much lesser amount, there is no escape from the conclusion that the complainant had voluntarily accepted the amount offered by the insurer and that is why he had executed the consent letter dated 31.08.2008 months before receiving the cheque of Rs. 2,15,775/-.
11. In my opinion, having accepted the cheque of Rs. 2,15,775/- voluntarily and without any protest from the insurer the complainant was estopped from claiming any additional amount from the insurer. The consent letter executed by him on 31.08.2008 constituted a valid and legally binding agreement between the parties, the fixed amount was paid and accepted as a settlement between the parties.
12. The issue involved in this petition came up for consideration of this Commission in RP No. 2771/2017 M/s Pankaj Trading Co. & Ors. Vs. National Insurance Co. Ltd. order dated 19.02.2020 and the following view was taken:-
"8. The issue involved in this case came up for consideration of this Commission recently in CC No.285 of 2013 M/s Elastrex Polymers Pvt. Ld. Vs. M/s New India Assurance Co. Ltd., decided on 16.08.2019 and the following view was taken:
(13) The learned counsel for the complainant refers to the Circulars dated 24.09.2015 and 07.06.2016 issued by IRDA which to the extent they are relevant reads as under :
Circular dated 24.09.2015 "The Insurance Companies are using 'discharge voucher' or "settlement intimation voucher" or in some other name, so that the claim is closed and does not remain outstanding in their books. However, of late, the Authority has been received complaints from aggrieved policyholders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts.
While the Authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurers shall not use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora.
Accordingly insurers are hereby advised as under :
Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law.
All insurers are directed to comply with the above instructions.
Circular dated 07.06.2016 Wherever there are no disputes by the insured/s claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued.However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimant/s.
If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.
Under no circumstances the Discharge vouchers shall be collected under duress, by coercion, by force or compulsion.
Insurers are directed to comply with the above with immediate effect.
(14) It is seen that after issuance of the circular dated 24.09.2015 the insurers represented to IRDA that the said circular was not in the line with the IRDA (protection of policyholders interests) Regulation, 2002 and the provisions of Indian Contract Act. On receipt of representation from the insurers IRDA reviewed the matter in the light of the provisions of Contract Act, P.P.I. Regulation and the judgements of the Hon'ble Supreme Court and issued the directions contained in the Circular dated 07.06.2016.
(15) It would be seen that vide subsequent Circular dated 07.06.2016 IRDA will permitting the continuance of the practice of obtaining discharge voucher it, only instructed the insurers not to obtain such vouchers under duress, by coercion, by force or compulsion. None of these circumstances however have been established in this case. Though IRDA Circular enjoins upon the insurer to pay the amount assessed by it without waiting for the discharge voucher in case the offer made by them is disputed by the insured, in the present there is no evidence of any kind of protest by the insured before sending the discharge voucher to the insurer on the very same day on which it received the same alongwith a forwarding letter. Therefore, it cannot be said that there was a non-compliance of the aforesaid circulars though the contention of the learned counsel is that both the circulars came to be issued by years after the payment was accepted in this case.
(17) The issue involved in this complaint came up for the consideration of the Hon'ble Supreme Court in United India Insurance Vs. Ajmer Singh Cotton & General Mills & Ors. (1999) 6 SCC 400 and the following view was taken :
"4............ 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 misrepresentation 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, undue influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complainant is made would be justified in granting appropriate relief. However (sic so), 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 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."
This issue also came up for consideration of the Hon'ble Supreme Court in New India Assurance Co. Ltd. Vs. Genus Power Infrastructure Ltd. (2015) 2 SCC 424, and the following view was taken:
"7. The question that arises is whether the discharge in the present case upon acceptance of compensation and signing of subrogation letter was not voluntary and whether the claimant was subjected to compulsion or coercion and as such could validly invoke the jurisdiction under Section 11 of the Act. The law on the point is clear form following decisions of this Court. In National Insurance Co. Ltd. V. Boghara Polyfab (P) Ltd. in paras 26 and 51 it was stated as under (SCC pp. 284-85 and 294)
26. when we refer to a discharge of contract by an agreement signed by both the parties or by execution of a full and final discharge voucher / receipt b one of the parties, we refer to an agreement or discharge voucher which is validly and voluntarily executed. If the party which has executed the discharge agreement or discharge voucher, alleges that the execution of such discharge agreement or voucher was on account of fraud / coercion / undue influence practised by the other party and is able to establish the same, then obviously the discharge of the contract by such agreement / voucher is rendered void and cannot be acted upon."
8. ................. A bald plea of fraud, coercion, duress or undue influence is not enough and the party who sets up such a plea must prima facie establish the same by placing material before the Chief Justice / his designate. If the Chief Justice / his designate funds some merit in the allegation of fraud, coercion, duress or undue influence, he may decide the same or leave it to be decided by the Arbitral Tribunal. On the other hand, if such plea is found to be an afterthought, make-believe or lacking in credibility, the matter must be set at the rest then and there."
9. It is therefore, clear that a bald plea of fraud, coercion, duress or undue influence is not enough and the party who sets up a plea, must prima facie establish the same by placing material before the Chief Justice / his designate."
10. In our considered view, the plea raised by the respondent is bereft of any details and particulars, and cannot be anything but a bald assertion. Given the fact that there was no protest or demur raised around the time or soon after the letter of subrogation was signed, that the notice dated 31.3.2011 itself was nearly after three weeks and that the financial condition of the respondent was not so precarious that it was left with no alternative but to accept the terms as suggested, we are of the firm view that the discharge in the present case and signing of letter of subrogation were not because of exercise of any undue influence. Such discharge and signing of letter of subrogation was voluntary and free from any coercion or undue influence."
13. The State Commission has already directed additional payment to the complainant so that the complainant gets the same amount which was assessed by the surveyor. Since the order passed by the State Commission has not been challenged by the insurer, the complainant is entitled to the said amount awarded by the State Commission.
The Revision petition, however, has no merit and the same is accordingly dismissed with no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER