National Consumer Disputes Redressal
Shankar Woolen Pvt. Ltd. vs National Insurance Co. Ltd. on 15 October, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3645 OF 2012 (Against the order dated 27.01.2012 in First Appeal No. 3541 of 2007 of the Haryana State Consumer Disputes Redressal Commission, Panchkula) WITH INTERIM APPLICATION NO. 1 OF 2012 (STAY) Shankar Woolen Pvt. Ltd., Delhi Sanauli By Pass, Sector -25, Panipat, Haryana, Through the Director Shri Ashok Singla Petitioner (s) Versus National Insurance Co. Ltd., Registered Office at SCO No. 337 340, Sector 35B, Chandigarh Respondent (s) BEFORE : HONBLE MR. JUSTICE R.C. JAIN, PRESIDING MEMBER HONBLE MR. S.K. NAIK, MEMBER For the Petitioner (s) Mr. Salil Paul, Advocate DATED: 15th OCTOBER, 2012 ORDER
PER JUSTICE R.C. JAIN, PRESIDING MEMBER Aggrieved by the order dated 27.1.2012 passed by the Haryana State Consumer Disputes Redressal Commission, Panchkula, (for short the State Commission) in First Appeal No. 3541 of 2007, M/s. Shankar Woolen Pvt. Ltd., the original complainant in the complaint before the District Forum has filed the present petition purportedly under Section 21(b) of the Consumer Protection Act, 1986 (for short the Act). The appeal before the State Commission was filed by the National Insurance Co. Ltd. (opposite party in the complaint before the District Forum) against the order dated 26.11.2007 passed by the District Consumer Disputes Redressal Forum, Panipat. By the said order, the said District Forum had allowed the complaint filed by the complainant with a direction to the opposite party-Insurance Company to pay a sum of Rs. 16,47,101/- with interest @ 9% per annum from the date of the earlier payment till realization, besides awarding Rs.3,300/- as litigation cost with the stipulation that the payment shall be made within thirty days from the receipt of the copy of the order. In appeal, the State Commission has set aside the finding and order passed by the District Forum and in turn dismissed the appeal primarily on the ground that the claim of the complainant had already been settled by the insurance company by paying a sum of Rs. 9,51,759/-, which payment was received by the complainant in full and final settlement of his claim.
2. The facts and circumstances, which led to the filing of the complaint are amply noted in the orders of the fora below and need no repetition in detail at our end. The complainant lodged a claim in the sum of Rs. 25,98,860/-
for indemnification of the loss suffered by the complainant as a result of fire, which took place in the insured factory of the complainant. A surveyor appointed by the insurance company, however, assessed the net loss to the tune of Rs. 9,51,759/-, which amount the insurance company paid to the complainant vide a discharge voucher dated 02.8.2007, which was received by the complainant in full and final settlement of its claim relating to the said fire incident. However, after more than a month the complaint was filed claiming the balance amount of Rs. 16,47,101/- on the ground that the amount already received by the complainant was under duress / coercion / undue influence.
3. We have heard Mr. Salil Paul, learned counsel representing the petitioner-complainant and have considered his submissions. He would assail the order passed by the State Commission, primarily on the ground that it is not based on correct and proper appreciation of the facts and circumstances of the case and the evidence and material brought on record and least it being in consonance with the legal position as settled by the Honble Supreme Court and this Commission. In this connection, he placed reliance upon a decision of the Honble Supreme Court in the case of National Insurance Co. Ltd., Versus M/s. Boghara Polyfab Pvt. Ltd. JT 2008 (10) SC 448 and a decision of this Commission in the case of Oriental Insurance Co. Ltd., & Ors. Versus Government Tool Room and Training Centre I (2008) CPJ 267 (NC). Counsel seeks support from the observations made by the Honble Supreme Court in para 25 and 26 of the said decision, which are extracted herein below:
25. In several insurance claim cases arising under Consumer Protection Act, 1986, this Court has held that if a complainant / claimant satisfies the consumer forum that discharge vouchers were obtained by fraud, coercion, undue influence etc., they should be ignored, but if they were found to be voluntary, the claimant will be bound by it resulting in rejection of complaint. In United India Insurance Co. Ltd., V. Ajmer Singh Cotton & General Mills (JT 1999 (6) SC 23), this Court held:
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 with 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 complaint is made would be justified in granting appropriate relief.
In the instant cases the discharge vouchers were admittedly executed voluntarily and the complainants had not alleged their execution under fraud, undue influence, misrepresentation or the like. In the absence of pleadings and evidence the State Commission was justified in dismissing their complaints.
The above principle was followed and reiterated in National Insurance Co. Ltd. V. Nipha Exports (P) Ltd. (JT 2006 (12) SC 369 2006 (8) SCC 156) and National Insurance Co. Ltd. V. Sehtia Shoes (JT 2008 (3) SC 301; 2008 (5) SCC 400). It will also not be out of place to refer to what this Court had said in Central Inland Water Transport Corporation Ltd. V. Brojo Nath Ganguly (1986) (3) SCC 156) in a different context (not intended to apply to commercial transactions):
(This) principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept as set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In todays complex world of giant corporations with their vast infrastructural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances.
26. Obtaining of undated receipts-in-advance in regard to regular/routine payments by Government Departments and corporate sector is an accepted practice which has come to stay due to administrative exigencies and accounting necessities. The reason for insisting upon undated voucher / receipt is that as on the date of execution of such voucher / receipt, payment is not made. The payment is made only on a future date long after obtaining the receipt. If the date of execution of the receipt is mentioned in the receipt and the payment is released long thereafter, the receipt acknowledging the amount as having been received on a much earlier date will be absurd and meaningless.
Therefore, undated receipts are taken so that it can be used in respect of subsequent payments by incorporating the appropriate date. But many a time, matters are dealt with so casually, that the date is not filled even when payment is made. Be that as it may. But what is of some concern is the routine insistence by some government Departments, statutory Corporations and government companies for issue of undated no due certificates or a full and final settlements vouchers acknowledging receipt of a sum which is smaller than the claim in full and final settlement of all claims, as a condition precedent for releasing even the admitted dues. Such a procedure requiring the claimant to issue an undated receipt (acknowledging receipt of a sum smaller than his claim) in full and final settlement, as a condition for releasing an admitted lesser amount, is unfair, irregular and illegal and requires to be deprecated.
4. There cannot be any quarrel with the legal position emanating from the said decision. However, it is to be seen whether the ratio of the said case can be applied to the facts of the present case. Our answer is in the negative because in the case in hand not only the complainant had signed the voucher / receipt acknowledging the payment of Rs. 9,51,759/-
in full and final settlement of the claim, but by a communication dated 02.8.2007, the complainant had given his unequivocal consent to the settlement of the claim in the sum of Rs. 9,51,759/- in the following manner:
SHANKAR WOOLLEN PRIVATE LTD.
MANUFACTURERS OF : HIGH CLASS WOLLEN AND SHODDY YARN Residence: Factory:
Delhi Sanoli Bye-Pass, Delhi Sanoli Bye-Pass, Opp. Sec. 25, Panipat 132 103 Opp. Sec.25, Panipat-132 103 Ref. No. Dated : 02.8.2007 To, The Divisional Manager, National Insurance Co. Ltd., Karol Bagh, New Delhi Dear Sir, In connection with the above consent to your net assessment of Rs. 9,51,759/-
(Rs. Nine lacs fifty one thousand seven hundred fifty nine only) on account of full and final settlement.
Thanking you, Yours faithfully, For & on behalf of Shankar Woolen Pvt. Ltd.
Sd/-
Manager/Director In view of the above consent given by the complainant it cannot be said that he had signed the voucher / receipt pursuant to any coercion or undue influence exercised by the Insurance Company.
6. The State Commission was therefore fully justified in taking the view which it has taken in the matter. It appears to us that the complaint filed by the complainant for the receipt of the balance amount of Rs. 16,47,101/- was an afterthought measure to which he resorted after agreed settlement of his claim.
7. The order passed by the State Commission is therefore fully justified on the facts and circumstances and evidence and material brought on record and does not suffer from any illegality, material irregularity, much less any jurisdictional error, which warrants interference of this Commission.
8. The Revision Petition being devoid of any merit as such is dismissed in limine.
.....
(R. C. JAIN, J.) PRESIDING MEMBER .
(S.K. NAIK) MEMBER SB/2