National Consumer Disputes Redressal
M/S. Vivek Traders vs National Insurance Co. Ltd. & 2 Ors. on 20 December, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 428 OF 2018 (Against the Order dated 30/01/2018 in Complaint No. 41/2017 of the State Commission Rajasthan) 1. M/S. VIVEK TRADERS THROUGH VIVEK KUMAWAT (PROPRIETOR)COLLEGE ROAD, BEAWAR AJMER RAJASTHAN ...........Appellant(s) Versus 1. NATIONAL INSURANCE CO. LTD. & 2 ORS. THROUGH SENIOR BRANCH MANAGER BRANCH OFFICE JHALAWAL SADAN COLLEGE ROAD BEAWAR 2. NATIONAL INSURANCE CO. LTD. THROUGH CHIEF REGIONAL MANAGER REGIONAL OFFICE AMBEDKAR CIRCLE LIC BUILDING JAIPUR RAJASTHAN 3. NATIONAL INSURANCE CO. LTD. HEAD OFFICE 3 MIDDLETON STREET KOLKATA 700 071 WEST BENGAL ...........Respondent(s)
BEFORE: HON'BLE AVM J. RAJENDRA, AVSM VSM (Retd.),PRESIDING MEMBER
FOR THE APPELLANT : FOR THE APPELLANT : MR. AVNISH DAVE, ADVOCATE
MR. SHREYAS BALAJI, ADVOCATE
MR.AADHAR SAHA, ADVOCATE
MS. ANKITA CHAUDHARY, ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENTS : MR. SANJAY RAWAT, ADVOCATE
MR. ASHUTOSH KUMAR JHA, ADVOCATE
MR. DHEERAJ, ADVOCATE
Dated : 20 December 2023 ORDER
1. The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act") against the Order dated 30.01.2018 passed by the State Consumer Disputes Redressal Commission, Rajasthan, Jaipur (hereinafter to be referred as "the State Commission"), in Consumer Complaint No. 41 of 2017, wherein the Complaint filed by the Complainant (Appellant herein) was dismissed.
2. As per report of the Registry, there is a delay of 15 days in filing this Appeal. As per records, the copy of the impugned order dated 30.01.2018 was received by the Appellant/Complainant on 16.02.2018. While the prescribed limitation for filing the Appeal is 30 days, the same would be counted from the date of receipt of the impugned order i.e. 16.02.2018 and this period lapsed on 17.03.2018. As the present Appeal was filed on 16.03.2018, there is no delay.
3. For the sake of Convenience, the parties in the present matter being referred to as mentioned in the Complaint before the State Commission. "M/s Vivek Traders" is identified as the Complainant. "National Insurance Company Ltd." is referred to as the Opposite Parties/Insurer (OPs in short).
4. The Complainant is a proprietorship firm owned by Mr.Vivek Kumawat engaged in the retail/wholesale business of foam, pillow, furniture beds and handloom material, including the building of the shop/showroom and situated at College Road, Beawar.
5. Brief facts of the case, as per the Complainant are that he obtained an Insurance Policy No.370702/48/15/9800000407 for shopkeepers from the Respondent No.1/OP-1 for the period from 25.07.2015 to 24.07.2016 for a sum insured of building Rs.50 Lakh, contents Rs.50 Lakh, burglary and housebreaking Rs.50 Lakh, Money in transit Rs.50,000, money in till/counter Rs.10,000, plate glass Rs.1 Lakh and Neon & Glow Sign Rs.10,000. He paid the premium of Rs.19,317. During the validity of the Insurance Policy, a fire incident occurred on 14.12.2015 at the insured premises. The Complainant promptly informed Fire Station and the Police Station. Against the claim of total loss, the OP appointed Surveyor who determined the loss as Rs.64,28,670. On 07.11.2016, the OP sent a letter dated 07.11.2016 asking for a satisfaction voucher to settle the claim at Rs.64,28,670 for full and final satisfaction and he accepted the same on 14.11.2016. It was alleged that the Satisfaction Voucher accepting Rs.64,28,670 "without prejudice" was sent to the OP. Allegedly, on 24.11.2016, the OP transferred Rs.64,27,062 to the Complainant, after deducting Rs.1608.
6. The Complainant immediately protested the deficient payment of Rs.22,79,000 towards the claim of the building and Rs.5,38,000 towards disallowed the claim against debris removal vide several emails. However, the OPs rejected the same on 17.02.2017. The Respondents/OP failed to promptly settle the claim as per the IRDA Act, allowing the Complainant to continue their business without hindrance. The Complainant filed the Complaint seeking the following: -
That the non-complainant insurance company be ordered to make payment to the complainant of the remaining claim amount deducted from the assessed amount of the building, for Rs.22,79,000/- deducted against building and Rs.5,38,000/- deducted and disallowed against debris removal total Rs.28,17,000/- along with interest @ 18%.
That the non-complainant insurance company be ordered to make payment to the complainant for illegal deduction and delay and partial settlement of claim by 10 months by adopting unfair trade practices and delay and deficiency of service as compensation in this head to the tune of Rs.5,00,000/-.
That the non-complainant insurance company be ordered to make payment to the complainant for Rs.1,00,000/- as compensation in head of mental agony and irreparable loss to the business of the complainant.
That the non-complainant insurance complainant be ordered to make payment to the complainant for Rs.51,000/- & Rs.10,000/- being the counsel fee and cost of litigation (filing of complaint expenses).
That any relief which hon'ble commission may deem fit be also ordered in favour of the complainant.
7. The Respondents/OPs in their reply before the learned State Commission contended that Rs.64,28,670 was received by the Complainant as full and final settlement and thus, the complaint is not maintainable and further in the same building M/s. Vinayak Handloom was also running its business hence 50% deduction of the amount for the assessed loss of building was rightly made and the complaint should be dismissed.
8. The learned State Commission considered the facts and contentions averred and dismissed the Complaint.
9. In his arguments in the present Appeal, the learned Counsel for the Appellant comprehensively reiterated the facts outlined in the original complaint and asserted that the Respondents actions constitute a deficiency in service and an unfair trade practice, as outlined by the IRDA Rules and various Orders of this Commission. The loss suffered by the Complainant falls squarely within the terms and conditions of the Policy. The Surveyor's assessment did not in fact align with the actual loss incurred by the Complainant. The OPs actions led them to go into financial distress, making it difficult to meet their creditor payment deadlines. As a result, the Complainant is entitled to the balance amount of Rs.28,17,000 along with interest and compensation, as requested in the prayer.
10. The learned Counsel for the Appellant has placed on reliance on the following judgments:-
(a) United India Insurance Vs. Ajmer Singh Cotton & General Mills & Ors. and United India Insurance Co. Ltd. Vs. ASA Singh Cotton Factory and Ors., (1999) 6 Supreme Court Cases 400;
(b) Kamalraj Paliwal Versus National Insurance Co. Ltd., RP/1607/2017, decided on 12.10.2022 by the NCDRC;
(c) United India Insurance Co Ltd & Ors Vs. Rayana Paper Board Industries Ltd., 2023 SCC OnLine NCDRC 592.
11. The learned Counsel for the Respondents in his arguments asserted that the full and final payment was issued by the OP to the Complainant on 24.11.2016. Further, it is a well-established principle that a contract is deemed concluded when one party provides full and final payment to the other party, and the receiving party voluntarily and unconditionally issues a discharge voucher or certificate acknowledging the settlement of the claim. After this settlement and issue of discharge voucher or certificate, they cannot subsequently bring forward any new claim or resurrect any settled claims. Moreover, the party cannot seek any legal action concerning the claim that has already been settled in this manner. In addition, the learned Counsel for the Respondent has also placed reliance upon the following judgments:-
(a) M/s. Grasim Industries Ltd. Vs. M/s. Agarwal Steel, 2010 91) SCC 83;
(b) Ankur Surana Vs. United India Insurance, 1(2013) CPJ 440 (NC);
(c) Jiwan Spiner Vs. New India Assurance Co. 1 (2013) CPJ 418 (NC);
(d) Ravidra Spiners Vs. National Insurance Co. Ltd., II (2013) CPJ 539 (NC);
(e) Kanta Mathur Vs. National Insurance Co., 1 (2015) CPJ 151 (NC);
(f) Vinod Bhardwaj Vs. Tata AIG, IV (2017) CPJ 14 (NC);
(g) United India Insurance Co. Ltd. Vs. Antique Art Exports Pvt. Ltd., 2019 (5) SCC 362.
12. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.
13. The fundamental issue for determination is whether the Appellant/Complainant is legally entitled to be paid remaining 50% claim of loss/damage of building of Rs.22,79,000 and Rs.5,38,000 towards claim of debris removal by the Insurer or not.
14. It is undisputed that the Complainant obtained the said Policy on 18.09.2015 from the OPs from 25.09.2015 to 24.09.2016. The total premium was Rs.19,317. The sum assured under the policy was, building Rs.50 Lakhs; contents Rs.50 Lakhs; burglary and housebreaking Rs.50 Lakhs; money in transit Rs.50,000, money in till/counter Rs.10,000 etc. During the validity of the policy, a fire accident occurred on 14.12.2015. After necessary actions, against claim for total loss, the Surveyor determined loss as Rs.64,28,670.
15. After the fire accident on 14.12.2015, there were numerous correspondence between the parties regarding the causes for the incident and claim settlement.
16. On 07.11.2016, the Respondent/Insurance Company sent a letter "WITHOUT PREJUDICE" to the Complainant stating:
"We are pleased to inform you that the Competent Authority have approved you above said claim for Amounting to Rs.64,28,670/- (Sixty four Lakhs twenty eight thousand six hundred seventy only) For full and final settlement".
Now we are enclosing herewith satisfaction voucher consisting of your claim details with a request to kindly fill it in all respect and return the same enabling to make the payment in your favour."
17. The complainant responded to the above letter of OP/ Insurance Company dated 07.11.2016 vide "SATISFACTION VOUCHER" towards the claim dated 14.11.2016 stating:
"Received with thanks from NATIONAL INSURANCE COMPANY LIMITED the sum of Rs.64,28,670/-(In Words RUPEES Sixty Four Lakhs Twenty Eight Thousand Six Hundred Seventy ONLY) against full & final satisfaction and discharge of the Fire Claim No.3707024815980000059 under Shopkeeper Policy No.37070248159800000407 arising out of Fire dtd. 14/12/2015. The Payment may be made in My A/c detailed as under:
Bank A/c No.: 53800200000009 Bank Name : Bank of Baroda Branch Code : UDAIRO IFSC Code : BARBOUDAIRO MICR Code : 305012011".
18. Subsequently, the Insurance Company sent a letter dated 24.11.2016 "WITHOUT PREJUDICE" to the Complainant stating:
"We are pleased to inform you that The Competent Authority have transferred the claim amount for a sum of Rs.6427062/- in your Account No. 53800200000009 at Bank of Baroda Udaipur Road Branch. Please note that a sum of Rs.1608/- deducted by system for reinstatement premium. Hence total claim Amount comes to Rs.6428670/- (Sixty four lacs twenty eight thousand six hundred seventy only).
19. After the receipt of the said amount, the next week vide email dated 01.12.2016, the Complainant alleged that the Satisfaction Voucher dated 14.11.2016 accepting Rs.64,28,670 was clearly 'Without Prejudice'. However, it was not accepted. They had no choice but to sign the same. Thus, they claimed Rs.22,79,000 as balance towards building and Rs.5,38,000 towards debris removal. The OP refuted and asserted absence of any dispute between parties on the quantum and deduction of 50% claim towards building by the surveyor as, in the same insured premises, another firm named "M/s. Vinayak Handloom" was running. It was further alleged that the claim of Rs.5,38,000 for removal of debris is not covered under the Policy. Hence, the Complainant has no right to raise any further claim in the same matter which is already settled.
20. Every case has its own facts and circumstances which need independent consideration and there cannot be a rule of thumb. It was observed by the Hon'ble Supreme Court at Para-18 in UOI & Others Vs. Master Construction Co. 2011(12) SCC 349 that: "18. In our opinion, there is no rule of the absolute kind. In a case where the claimant contends that a discharge voucher or no claim certificate has been obtained by fraud, coercion, duress or undue influence and the other side contests the correctness thereof, the Chief Justice/his designate must look into this aspect to find out at least, prima facie, whether or not the dispute is bona fide and genuine. Where the dispute raised by the claimant with regard to validity of the discharge voucher or no claim certificate or settlement agreement, prima facie, appears to be lacking in credibility, there may not be a necessity to refer the dispute for arbitration at all."
21. The Appellant led no evidence to corroborate that the letter of satisfaction voucher signed was under certain reservation and without prejudice to its legal rights. There is no evidence that the Appellant was placed under any duress or compulsion to sign the said satisfaction voucher. The Appellant was well aware and had specific knowledge of the fact that in the insured building was also running business by M/s. Vinayak Handloom. Therefore, the actions taken were based on compromise consent between the parties. The Respondents/Insurance Company already paid the full and final insurance claim amount of Rs.64,28,670 to the Appellant on 24.11.2016. The Appellant has not in any manner corroborated that the satisfaction voucher was obtained under misrepresentation of facts, fraud, undue influence, coercion, duress or he was left with no choice but to sign the same. It was the Appellant who voluntarily accepted compromise and consented for settlement.
22. In catena of judgments, the Hon'ble Supreme Court crystallized the position that once a final settlement has been reached amicably between the parties, then, it is not open to either of the parties to lay any claim/demand against the other party. In Civil Appeal Nos 2491-2492 of 2021 (Union of India and Ors Vs N Murugesan Etc), Hon'ble Supreme Court citing multiple authorities on the subject, held:
"APPROBATE AND REPROBATE:
26. These phrases are borrowed from the Scott's law. They would only mean that no party can be allowed to accept and reject the same thing, and thus one cannot blow hot and cold. The principle behind the doctrine of election is inbuilt in the concept of approbate and reprobate. Once again, it is a principle of equity coming under the contours of common law. Therefore, he who knows that if he objects to an instrument, he will not get the benefit he wants cannot be allowed to do so while enjoying the fruits. One cannot take advantage of one part while rejecting the rest. A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part. An element of fair play is inbuilt in this principle. It is also a species of estoppel dealing with the conduct of a party. We have already dealt with the provisions of the Contract Act concerning the conduct of a party, and his presumption of knowledge while confirming an offer through his acceptance unconditionally.
27. We would like to quote the following judgments for better appreciation and understanding of the said principle:
Nagubai Ammal v. B. Shama Rao, 1956 SCR 451:
"...XXX...The ground of the decision is that when on the same facts, a person has the right to claim one of two reliefs and with full knowledge he elects to claim one and obtains it, it is not open to him thereafter to go back on his election and claim the alternative relief. The principle was thus stated by Bankes, L.J.:
"Having elected to treat the delivery to him as an authorised delivery they cannot treat the same act as a misdelivery. To do so would be to approbate and reprobate the same act".
The observations of Scrutton, LJ on which the appellants rely are as follows:
"A plaintiff is not permitted to 'approbate and reprobate'. The phrase is apparently borrowed from the Scotch law, where it is used to express the principle embodied in our doctrine of election-namely, that no party can accept and reject the same instrument: Ker v. Wauchope [(1819) 1 Bli 1, 21]: Douglas-Menzies v. Umphelby [(1908) AC 224, 232]. The doctrine of election is not however confined to instruments. A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage. That is to approbate and reprobate the transaction".
It is clear from the above observations that the maxim that a person cannot 'approbate and reprobate' is only one application of the doctrine of election, and that its operation must be confined to reliefs claimed in respect of the same transaction and to the persons who are parties thereto. The law is thus stated in Halsbury's Laws of England, Vol. XIII, p. 464, para 512:
"On the principle that a person may not approbate and reprobate, a species of estoppel has arisen which seems to be intermediate between estoppel by record and estoppel in pais, and may conveniently be referred to here. Thus a party cannot, after taking advantage under an order (e.g. payment of costs), be heard to say that it is invalid and ask to set it aside, or to set up to the prejudice of persons who have relied upon it a case inconsistent with that upon which it was founded; nor will he be allowed to go behind an order made in ignorance of the true facts to the prejudice of third parties who have acted on it".
State of Punjab v. Dhanjit Singh Sandhu, (2014) 15 SCC 144:
"22. The doctrine of "approbate and reprobate" is only a species of estoppel, it implies only to the conduct of parties. As in the case of estoppel it cannot operate against the provisions of a statute. (Vide CIT v. V. MR. P. Firm Muar [CIT v. V. MR. P. Firm Muar, AIR 1965 SC 1216]).
23. It is settled proposition of law that once an order has been passed, it is complied with, accepted by the other party and derived the benefit out of it, he cannot challenge it on any ground. (Vide Maharashtra SRTC v. Balwant Regular Motor Service [Maharashtra SRTC v. Balwant Regular Motor Service, AIR 1969 SC 329] .) In R.N. Gosain v. Yashpal Dhir [R.N. Gosain v. Yashpal Dhir, (1992) 4 SCC 683] this Court has observed as under: (SCC pp. 687-88, para 10) "10. Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that 'a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage'."
25. The Supreme Court in Rajasthan State Industrial Development and Investment Corpn. v. Diamond and Gem Development Corpn. Ltd. [Rajasthan State Industrial Development and Investment Corpn. v. Diamond and Gem Development Corpn. Ltd., (2013) 5 SCC 470:(2013)3SCC(Civ) 153], made an observation that a party cannot be permitted to "blow hot and cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such contract or conveyance or order. This rule is applied to do equity, however, it must not be applied in a manner as to violate the principles of right and good conscience.
26. It is evident that the doctrine of election is based on the rule of estoppel, the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppel in pais (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when he has to speak, from asserting a right which he would have otherwise had."
Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470:
"I. Approbate and reprobate
15. A party cannot be permitted to "blow hot-blow cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself. This rule is applied to ensure equity, however, it must not be applied in such a manner so as to violate the principles of what is right and of good conscience. [Vide Nagubai Ammal v. B. Shama Rao [AIR 1956 SC 593] , CIT v. V. MR. P. Firm Muar [AIR 1965 SC 1216] , Ramesh Chandra Sankla v. Vikram Cement [(2008) 14 SCC 58 : (2009) 1 SCC (L&S) 706 : AIR 2009 SC 713] , Pradeep Oil Corpn. v. MCD [(2011) 5 SCC 270 : (2011) 2 SCC (Civ) 712 : AIR 2011 SC 1869] , Cauvery Coffee Traders v. Hornor Resources (International) Co. Ltd. [(2011) 10 SCC 420 : (2012) 3 SCC (Civ) 685] and V. Chandrasekaran v. Administrative Officer [(2012) 12 SCC 133 : (2013) 2 SCC (Civ) 136 : JT (2012) 9 SC 260] .]
16. Thus, it is evident that the doctrine of election is based on the rule of estoppel--the principle that one cannot approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppel in pais (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when it is his duty to speak, from asserting a right which he would have otherwise had."
(Emphasis supplied)
23. In the present case, the facts are known to both the parties. In addition, the Appellant consented to the Satisfaction Voucher of the claim. The Respondents/Insurance Company paid full and final insurance claim amounting to Rs.64,28,670 to the Appellant on 24.11.2016 and the same was accepted. In view of the above, the matter stood settled. The Appellant cannot raise any dispute with respect to the same claim.
24. In view of the foregoing discussions, I do not find any infirmity and irregularity in the Impugned Order dated 30.01.2018 passed by the learned State Commission. Thus, the First Appeal No. 428 of 2018 is dismissed.
25. All pending Applications, if any, stand disposed of. There shall be no orders as to costs. The statutory amount, if any due, deposited by the Appellant be refunded.
................................................................................... AVM J. RAJENDRA, AVSM VSM (Retd.) PRESIDING MEMBER