State Consumer Disputes Redressal Commission
M/S. Hili Multipurpose Cold Storage ... vs Bajaj Allianz General Insurance Co. ... on 25 February, 2015
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 Complaint Case No. CC/195/2012 1. M/s. Hili Multipurpose Cold Storage Pvt. Ltd. Vill. Malancha, P.O. Amritakhanda, Balurghat, Dakshin Dinajpur & Office at Arun Das Lane, College Para, M.R. No.10, Ward No.17, Balurghat, Dakshin Dinajpur. ...........Complainant(s) Versus 1. Bajaj Allianz General Insurance Co. Ltd. G.E. Plaza, Airport Road, Yerawada, Pune-411006 also at 57, Chowringhee Road, 2nd Floor, Horizon Building-A, Kolkata - 700 071. 2. The Manager, Bajaj Allianz General Insurance Co. Ltd. 57, Chowringhee Road, 2nd Floor, Horizon Building-A, Kolkata - 700 071. 3. Reviere Survey and Services Pvt. Ltd. 102F, Block 'F', New Alipore, Kolkata - 700 073. 4. Deepak Chowdhury, Bajaj Allianz General Insurance Co. Ltd. 57, Chowringhee Road, 2nd Floor, Horizon Building-A, Kolkata - 700 071. 5. United Bank of India Mayukh Bhavan Branch, Salt Lake City, Kolkata - 700 091. 6. The Deputy General Manager, United Bank of India Kolkata, North Region, E.C. Market, Salt Lake City, Kolkata - 700 091. 7. The Assistant General Manager, United Bank of India Mayukh Bhavan Branch, Salt Lake City, Kolkata - 700 091. ............Opp.Party(s) BEFORE: HON'BLE MR. DEBASIS BHATTACHARYA PRESIDING MEMBER HON'BLE MR. JAGANNATH BAG MEMBER For the Complainant: Mr. Prasanta Banerjee Mr. S. Ghoshal, Advocate For the Opp. Party: Mr. Sourya Mukherjee, Advocate Mr. Sourya Mukherjee, Advocate Mr. Abu Sayem., Advocate Mr. Debasish Bhandari, Advocate ORDER Date: 25-02-2015 Sri Debasis Bhattacharya The instant case revolves over non-settlement of insurance claim of the Complainant as per its demand. Case of the Complainant, in a nutshell, is that its stock items, plant & machinery etc. were under the coverage of four insurance polices, issued by the OP insurer, viz., (i) OG-12-2401-0411-00000001 for an insured sum of Rs. 1,70,00,000/- for the period from 03-04-2011 to 02-04-2012, (ii) OG-12-2401-0420-00000004 for an insured sum of Rs. 2,05,07,749/- for the period from 03-04-2011 to 02-04-2012, (iii) OG-11-24014001-00002842 for an insured sum of Rs. 4,61,50,000/- for the period from 21-08-2010 to 20-08-2011 and (iv) OG-11-2401-00002111 for an insured sum of Rs. 46,15,000/- for the period from 21-08-2010 to 20-08-2011. On 04-05-2011, at about 2 a.m., a violent storm unexpectedly hit the area where the cold storage of the Complainant is situated followed by torrential rainfall which caused severe damage to several portions of the cold storage building, including the shed of the office room, machine room, labour room, drying shed, godown and well built pillars of the two main gates thereof were completely broken. Two number of glow sign boards were thrown at a considerable distance and thereby damaging those completely. The heavy rain continued for two days. Such heavy rain made the engine and the motor of the refrigeration unit totally inactive for two days. Pursuant to the request and to the knowledge of the OP Nos. 1 to 3, the Surveyor (OP No. 3) visited the site on 08-05-2011 and duly surveyed for the whole day and took snap shots of the damaged goods and inspected the other damages in the cold storage caused by the heavy storm and rainfall and the same was minuted by the Surveyor. The Complainant, by its letter dated 24-05-2011 demanded a sum of Rs. 50,82,357/- as insurance benefit comprising of Rs. 14,37,340/- on account of erratic functioning of engine and motors and Rs. 36,45,117/- on account of damage caused to the cold storage and building, shed, office, etc. On 30-05-2011, the OP No. 3 caused another inspection at the Complainant's cold storage and estimated the civil damage suffered by the Complainant due to heavy storm and rainfall and the inspection report was recorded in minutes and the same was acknowledged by the M.D. of the Complainant. Thereafter, the Complainant, as required, duly submitted a Fire Claim Form dated 06-07-2011 with the OP No. 1, demanding the total insurance claim of Rs. 50,37,240/- for the damages, both civil construction and carrots which were rotten and spoiled on the basis of the estimation of actual loss due to damage made by both the Surveyors for the Insurance Company as well as the contractor, Sarkar Construction. However, after lot of persuasion, the OP No. 1 vide its letter dated 31-01-2012 asked the Complainant to execute a clean/unconditional discharge voucher for a sum of Rs. 2,72,660/- to enable the OP Nos. 1 to 3 to process the payment. As the Complainant was passing through unbearable financial hardship, the Complainant, having no other alternative, put its signature on the said voucher 'without prejudice' to their rights and contentions, due to acute shortage and paucity of fund to uplift their frustrated business which by the passage of time had suffered a serious blow due to said incident. The acceptance of the reduced claim by the Complainant was under protest and not at all a voluntary act of the Complainant. Though under compulsion, the M.D. put his signature on the discharge voucher, but for recovery of their entire claim amount, he visited the office of the OP No. 1, but till date no fruits have come out therefrom. Hence, the instant case. The OP insurer contested the case by filing written version, whereby they denied all the material allegations of the Complainant and stated, inter alia, that they received an insurance claim for a sum of Rs. 50,37,240/- from the Complainant on 06-07-2011 and accordingly appointed one independent Surveyor to assess the alleged loss, who conducted an extensive survey with the knowledge and consent of the Complainant and thereafter, quantified the loss at Rs. 2,72,983/- and the Complainant has received Rs. 2,72,660/- by signing a discharge certificate acknowledging the same as full and final settlement of its claim. With the acceptance of said assessed amount of the OP Insurer, the liability of the latter under the contract of insurance stands fully discharged and no further claim is maintainable and/or the instant complaint is not maintainable. The Complainant has merely made out an enhanced claim without making out a case of deficiency in service and therefore, the same should be dismissed. The OP No. 3 also contested the case by filing written version. The OP Insurance Company, on receipt of the insurance claim from the Complainant, appointed him as Surveyor to assess the loss sustained by the Complainant. Accordingly, he conducted an extensive survey with the knowledge and consent of the Complainant and quantified the loss at Rs. 2,72,983/-. The action of the OP No. 3 and the Insurance Company, in the facts and circumstances of the case, do not smack of mala fide and/or there is no deficiency in service on the part of the Insurance Company. On the contrary, the amount so offered by the Insurance Company, had been accepted by the Claimant, who have thereafter signed a discharge voucher by virtue of which, the liability of the Insurance Company under the specific contract of insurance stands fully discharged and no further action can be brought against the Insurance Company in the self same matter. The complaint is essentially frivolous and the same is liable to be dismissed with exemplary cost. The OP Nos. 5,6 and 7, i.e., the UBI, also contested the case by filing written version whereby it is stated that the Complainant is the borrower of the OP Bank and for developing and running its business the Complainant took loan from the OP Bank with hypothecation of its assets and mortgage of property and to secure the loan against any risk, it is compulsory to insure the hypothecated assets and mortgage property. Therefore, the OP Bank, to secure the hypothecated assets and mortgaged property, took different insurance policies on behalf of the Complainant from the OP No. 1. According to the terms and conditions of the insurance policies under Agreed Bank Clause, it is clearly mentioned that upon any monies becoming payable under this policy, the same shall be paid by the Company to the bank and such part of any monies so paid as may relate to the interest of other parties insured shall be received by the bank on behalf of the borrower and/or the Complainant. Point for consideration The following points are framed to come to a just decision about the claim and counter-claim thereof by the parties concerned. 1.
Whether the instant case is maintainable under the Consumer Protection Act, 1986?
2. Whether the Complainant is justified seeking balance amount of insurance claim post signing of the discharge certificate?
3. Whether there is any deficiency in service on the part of the OPs?
4. Whether the Complainant is entitled to the relief as sought for?
Decision with reasons Point No. 1:
It is contended by the Ld. Advocate for the Complainant that there is no dispute as to the fact that it is holding valid insurance policies under the OPs. Therefore, it is a bona fide consumer under the OP insurer and accordingly, the instant case is very much maintainable under the Consumer Protection Act, 1986.
Ld. Advocate for the OP insurer, however, has raised strong objection as to the status of the Complainant as a 'Consumer' under the Consumer Protection Act, 1986 on the ground that admittedly, the Complainant is a private limited company and is running its business for commercial purpose. It is clear, therefore, that the Complainant is not running its cold storage plant by means of self employment which is a critical component to qualify as a 'Consumer' under the Act. Therefore, the instant case is not maintainable in its present form and prayer. In support of his contention, the Ld. Advocate has referred to a decision of the Hon'ble State Commission, Haryana:Chandigarh.
In this regard, we refer to a decision of the Hon'ble National Commission in F.A. No. 159/2004, in the matter of M/s. Harsolia Motors vs. M/s. National Insurance Co. Ltd., where the Hon'ble Apex Commission has delved deep into the issue. The relevant portion of the observation of the Hon'ble Commission is appended below, which is self-explanatory.
'......At the outset, it is to be stated that an insured who takes the insurance policy cannot trade or carry on any commercial activity with regard to the insurance policy taken by him. Under Sec.3 of the Insurance Act, 1938, no person is permitted to carry on business of insurance unless he obtains a certificate of registration from the Insurance Recovery and Development Authority.
Further, hiring of services of the Insurance Company by taking insurance policy by Complainants who are carrying on commercial activities cannot be held to be a commercial purpose. The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured.
In Halabury's Laws of England, vol. 25, 4th Edition, the origin and common principles of insurance is discussed and in paragraph 3 it has been mentioned that it is based on principle of indemnity. Thereafter, relevant discussion is to the effect that most of contract of insurance belong to general category of contracts of indemnity. In the sense that insurers' liability is limited to the actual loss which is, in fact, proved. The contract is one of indemnity and, therefore, insured can recover the actual amount of loss and no more.
In this view of the matter, taking of the insurance policy is for protection of the interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose.......' In the light of above observation of the Hon'ble National Commission, we are of the view that the Complainant is a bona fide consumer under the Consumer Protection Act, 1986 and therefore, there is no irregularity in filing the instant case.
This point, thus, answers in favour of the Complainant.
Point Nos. 2 to 4:
All these points are taken up collectively for the sake of brevity of discussion.
It is contended by the Ld. Advocate for the Complainant that as against their claim for a sum of Rs. 50,82,357/-, the Insurance Company most arbitrarily and illegally offered a meagre sum of Rs. 2,72,660/-. First, the OP insurer took inordinate time to process its claim. Secondly, since the natural calamity played havoc with the Complainant, the Cold storage virtually became static and/or stopped for paucity of fund and finding no other alternative and choice in the circumstances, the Complainant issued the said Discharge Voucher without prejudice to its rights. The acceptance of the reduced claim by the Complainant was under protest and not at all voluntary act of the Complainant. Although the Complainant sent a Lawyer's notice asking for release of the balance claimed amount, the Insurance Company stood to its ground. Finding no other alternative, the Complainant filed the instant case to get back the balance amount of their insurance claim and some other relief(s) as stated in the petition of complaint.
On the other hand, Ld. Advocate for the OP insurer has submitted that undisputedly, the insured has issued the discharge voucher accepting the amount offered by the OP insurer in full and final settlement and discharge of all claims and demands that have been made in relation to the instant loss and subsequently encashed the cheque, so, there was discharge of contract by accord and satisfaction. As a result, neither the contract nor any claim survived. The said voucher should be accepted on its face value as a discharge of contract in full and final settlement. It was also contended that having received the payment under the said discharge voucher, the Complainant cannot, while retaining and enjoying the benefit of the full and final payment, challenge the validity or correctness of the discharge voucher. Consequently, it should entail ipso jure, rejection in limine of any subsequent claim. In support of his contention, the Ld. Advocate has referred to a decision of the Hon'ble National Commission in Revision Petition No. 3689/2009 [Equivalent Citation: 2(2012) CPJ 684 (NC)].
Ld. Advocate for the OP Nos. 5 to 7, i.e., the UBI has submitted that the Complainant is the borrower of the OP Bank and for developing and running its business the Complainant took loan from the OP bank with hypothecation of its assets and to secure the loan it is compulsory to insure the mortgage property. Therefore, the OP Bank, to secure the hypothecated property, took different insurance policies as an agent at the OP Nos. 1&2. It is further argued by the Ld. Advocate that as per the terms and conditions of the insurance polices under agreed Bank Clause, it is clearly mentioned that 'upon any monies becoming payable under this policy, the same shall be paid by the Company to the bank and such part of any monies so paid as may relate to the interests of other parties insured shall be received by the bank as agents for such other parties'. The Complainant has as such not made any allegation against the OP bank. So, the instant case be dismissed against the OP banker.
Complainant moved a Miscellaneous Application being no. 354/2013, u/s 340 Cr.P.C. seeking action against the Insurance Company stating that they had given a conditional discharge while signing the discharge voucher, but the discharge voucher which was relied upon by the Insurance Company was not genuine as the same did not show conditional discharge. Pursuant to such a grave allegation levelled by the Complainant against the Insurance Company, the matter was referred to a handwriting expert, who on proper scrutiny of the same opined that the discharge voucher relied upon by the Insurance Company was not a fake one. There being no substance in the instant application moved by the Complainant, the same stands dismissed. However, we cannot gloss over the fact that resorting to such mala fide tactics, is an affront to the administration of justice, which is highly condemnable. It only manifests the fact that the Complainant has not come before us with clean hands.
The bone of contention of the instant case is non-settlement of Complainant's claim as per its demand. While the Complainant staked a claim of Rs. 50,37,240/-, the OP Insurer settled it for Rs. 2,72,660/-. It is contended by the Complainant that it signed the discharge voucher under compulsion, due to paucity of fund to uplift their frustrated business which suffered a serious blow by the damage caused by the devastating storm and torrential rainfall.
The settled position of law in this regard is crystal clear, i.e., 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 by 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 practiced 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.
In the instant case, the Insurance Company sent a Claim Discharge Voucher whereby they offered a sum of Rs. 2,72,660/-, based on the value assessed by the Surveyor, towards full and final settlement of Complainant's claim. The discharge voucher clearly stipulates that, 'I/We shall accept the amount of Rs. 2,72,660/- receivable from Bajaj Allianz General Insurance Co. in full and final settlement and discharge of all claims and demands that have been made in relation to the said loss.' Such a discharge voucher can at best be treated as an offer from the Insurance Company towards the Insured. Accepting such an offer or rejecting it was the sole discretion of the Complainant. The implication of acceptance of such an offer was, therefore, fully known to the Complainant beforehand. Despite this, if they discharge such a voucher, for whatever reason, they cannot cry foul over it. They cannot accuse the Insurance Company of offering a pittance against their claim as per its whims and fancies. There was a basis behind offering such an amount; it was almost in line with the value assessed by an independent Surveyor. It is altogether a different matter whether or not they had any reservation about the quantum of amount offered by the Insurance Company. Against this backdrop, it cannot be said that the Insurance Company got the Claim Discharge Voucher discharged through the Complainant by practicing any fraud or through coercion or exerting any undue influence upon the latter. The Complainant cannot claim that they had no idea about the implication of such Discharge Voucher.
Now coming to the issue of poor financial condition of the company, as asserted by the Complainant to justify discharge of said voucher, most surprisingly, the Complainant has not placed on record the audited balance sheet of the company of the relevant period to show that it was indeed in financial disarray.
On going through the documents on record, it is observed that the Discharge Voucher was sent by the Insurance Company under cover of its letter dated 31-01-2012. However, most surprisingly, none of the parties has come clean as to the date when the settlement cheque was encashed by the Complainant. The photocopy of discharge voucher placed on record by the OP Nos. 1&2, does not bear any date. It appears, a Lawyer's notice was issued by the Complainant upon the OP Insurance Company on 14-12-2012. However, taking into consideration the long gap of 10½ months between the date of issue of discharge voucher by the OP Insurance Company and the date of Lawyer's notice issued by the Complainant, it can reasonably be presumed that further claim was staked by the Complainant after lapse of considerable time, which does raise eyebrows. Although it is claimed by the Complainant that its Managing Director visited the office of the Insurer several times to pursue the matter, in absence of any tangible evidence, mere claim is not suffice. We find it quite intriguing as to why he fought shy of writing a letter to the Insurance Company before or soon after encashment of the cheque. That being the position, it would not be proper/prudent for us to hold that it had not accepted the offer by conduct, because at the time when it sent the cheque for encashment, it had not conveyed its protest to the offerer. In the absence of any evidence to establish that the encashment of the cheque was subsequent to the protest letter by the Complainant, it is not possible to hold that by encashing the cheque, the Complainant had not adopted the mode of acceptance prescribed in the Claim Discharge Voucher, issued by the OP Insurance Company.
That being the position, we are inclined to hold that by encashing the cheque received from the Insurance Company, the Complainant accepted the offer by adopting the mode of acceptance prescribed in the Claim Discharge Voucher of the Insurance Company and as such, it is our considered opinion that the Complainant has ceased its right to stake further claim by not lodging due protest in writing before encashment of the Cheque. If the Complainant had any reservation/dissatisfaction over the amount offered by the Insurance Company, it was fully at liberty to approach a competent Court of Law, but accepting insurance benefit on one hand without lodging any formal protest and staking further claim on the other cannot go side by side. In this regard, the observation of the Hon'ble Supreme Court of India in Civil Appeal No. 10784 of 2014 @ Special Leave Petition (Civil) No. .24652 of 2013 bears mentioning:
'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 31.03.2011 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. In the circumstances, we hold that upon execution of the letter of subrogation, there was full and final settlement of the claim. Since our answer to the question, whether there was really accord and satisfaction, is in the affirmative, in our view no arbitrable dispute existed so as to exercise power under section 11 of the Act. The High Court was not therefore justified in exercising power under Section 11 of the Act'.
On an overall conspectus of the facts and circumstances in the present case, we do not find any deficiency in service on the part of the Insurance Company over its reluctance to fork out any additional insurance benefit to the Complainant.
All these points are, thus, decided against the Complainant.
Hence, ORDERED that the complaint case be and the same is dismissed on contest against the OPs, but without any order as to costs. Consequently, the M.A. No. 354/2013 is also rejected. [HON'BLE MR. DEBASIS BHATTACHARYA] PRESIDING MEMBER [HON'BLE MR. JAGANNATH BAG] MEMBER