Date: 25-02-2015
Sri Debasis Bhattacharya
Case of the Complainant, in a short compass, is that it took some insurance policies from the OP No. 2 through the OP No. 4 bearing nos. (1) OG-12-2401-0411-00000001 for an insured sum of Rs. 1,70,00,000/-, (2) OG-12-2401-0420-00000004 for an insured sum of Rs. 2,05,07,749/-, and (3) OG-11-2401-4001-00002842 for an insured sum of Rs. 46,15,000/- which was subsequently replaced by policy nos.(i) OG-11-2401-4001-00003911 for an insured sum of Rs. 7,50,00,000/- and (ii) OG-11-2401-00002111 for an insured sum of Rs. OG-11-2401-00002111 for an insured sum of Rs. 46,15,000/-. During the subsistence of the policies, all on a sudden on 18-09-2011, an aggravated form of earthquake surfaced in and around Dakshin Dinajpur, which caused grave damage to the cold storage plant of the Complainant. Accordingly, due intimation was communicated to different authorities concerned, including the OP insurer. On being informed about the incident, the OP No. 2 deputed the OP No. 3 to assess the loss, who visited the plant on 23-09-2011 and 24-09-2011. The degree of detailed damages caused to the civil construction of the cold storage have been recorded by the OP No. 3, the Surveyor of the OP No. 1 and Registered Valuer, Govt. of India, after causing an inspection of the civil construction of the cold storage building and surroundings and inspection proceeding was duly recorded in the minutes drawn up by the OP No. 3. Thereafter, the Complainant engaged an independent Surveyor and Registered Valuer, Govt. of India for assessment of the detailed damages caused by the earthquake to the Complainant’s cold storage. Accordingly, the said Surveyor visited the plant on 25-09-2011 to cause inspection and assess the detail damages surfaced at the Complainant’s cold storage plant. Thereafter, by a letter dated 17-10-2011, the OP No. 3 asked the Complainant to submit the required documents and in compliance of the said letter of the OP No. 3, the Complainant, by a letter dated 19-10-2011, furnished all the required documents as asked for, including some other relevant documents for early release of the claim amount. Subsequently, the Complainant submitted the Fire Claim Form dated 19-10-2011 with the OP No. 1 demanding a sum of Rs. 39,92,573/- for the civil damages caused to the cold storage plant because of the earthquake. After a lot of persuasion, the OP No. 1 vide its letter dated 30-12-2012 asked the Complainant to return the Discharge Voucher for a sum of Rs. 8,00,720/- in advance confirming acceptance of the awarded amount. Because of severe financial crisis, the Complainant was compelled to comply with the said directive. The acceptance of the reduced claim by the Complainant was under protest and not at all voluntary. Thereafter, the Complainant though made several correspondences requesting the OP insurer to release rest of the claim amount, the latter did not pay any heed to such requests. In such circumstances, finding no other alternative, the Complainant filed the instant case praying for a direction upon the OP insurer to release the balance claim amount of Rs. 31,91,853/- and other relief(s) as per prayer of the petition of complaint.
The OP Insurer, i.e., Bajaj Allianz General Insurance Co. Ltd. contested the case by filing a written version. In it, the OP insurer denied all the material allegations of the Complainant and stated that they, in accordance with law, appointed one independent IRDA licensed Surveyor. The said Surveyor, in his earnest effort to unearth the truth inter alia took the opinion of the Department of Construction Engineering, Jadavpur University, Salt Lake and Civil and Structural Engineers Consultancy, M/s Con-Quest Consultant and only thereafter, quantified the loss at Rs. 8,00,979/-. After considering the terms and conditions of the policy in question, they quantified the loss at Rs. 8,00,720/- and the same has been accepted by the Complainant by duly executing a Discharge Certificate to this effect. With the signing of the discharge voucher recording full and final settlement after accepting a sum of Rs. 8,00,720/-, the contractual liability under the contract of insurance stands fully discharged and no further claim is maintainable and/or the instant complaint is not maintainable.
The OP No. 3, i.e., the Surveyor contested the case by filing a written version, whereby he inter alia denied all the material allegations of the Complainant and stated that he conducted an extensive survey with the knowledge and consent of the insured Complainant. He, in order to unearth the truth, took the opinion of the Department of Construction Engineering, Jadavpur University, Salt Lake and Civil and Structural Engineers Consultancy, M/s Con-Quest Consultant and only thereafter quantified the loss at Rs. 8,00,979/- and submitted report to the OP Nos. 1&2 within due time. His report is quite exhaustive and backed by technical report of a well reputed university. It cannot be said that the same is cryptic and/or lack in quality. On the basis of his assessment, the OP insurer quantified the loss at Rs. 8,00,720/-, which was accepted by the Complainant by signing a discharge voucher accepting such amount in full and final settlement of the claim in the matter. His action does not smack of mala fide and/or there is no deficiency in service on his part.
The OP No. 4, i.e., the UBI also contested the case by filing a written version, by which, it has been contented that, 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 Insurance 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 on behalf of the borrower and/or the Complainant.
Point for consideration
In view of the rival positions of the parties concerned in respect of the instant insurance claim made by the Complainant, the following points are framed to arrive at a just decision.
1. Is the case maintainable under the Consumer Protection Act?
2. Whether the Discharge Voucher was given voluntarily or under duress or coercion/undue influence?
3. Whether execution of discharge voucher ceases the right of a claimant to seek further compensation?
4. Is there any deficiency in service on the part of the OP insurer?
5. Whether the Complainant is entitled to the relief(s) sought for in the facts and circumstances of the case?
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.
In this regard, we refer to a decision of the Hon’ble National Commission 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 5:
All the above points are taken up collectively for convenience of discussion.
Ld. Advocate for the Complainant has submitted that during the subsistence of the policy, all on a sudden, on 18-09-2011, an aggravated form of earthquake surfaced in and around Dakshin Dinajpur and as a result, the entire cold storage sustained severe civil damage. They reported the matter to the Balurghat P.S. on 20-09-2011 and also informed the OP No. 2 on the very same day. Subsequently, a Surveyor deputed by the Insurance Company inspected the site and assessed the nature of detail damages suffered by the Complainant due to the earthquake. The degree of detail damages caused to the civil construction of the cold storage have been recorded by the OP No. 3 and registered Valuer, Govt. of India and post inspection, a minute was drawn up by the Surveyor. The Complainant also engaged an independent Surveyor and registered valuer, who after inspecting the damaged site, prepared a report thereof. The Gram Pradhan of Amritakhanda Gram Panchayat, Balurghat Block, at the request of the Complainant, visited the cold storage site and issued a certificate on 13-10-2011. The Complainant submitted a Fire Claim Form to the OP No. 1 at its Kolkata Office on 19-10-2011 demanding a sum of Rs. 39,92,573/- and also provided requisite documents to the Insurance Company as and when demanded. However, by a letter dated 30-12-2012, the OP No. 1 sent a Discharge Voucher for a sum of Rs. 8,00,720/-. As the business of cold storage virtually became static and/or stopped for paucity of fund, finding no other alternative and choice in the circumstances, the Complainant through its representative acknowledged the said Claim 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. Therefore, they served a notice dated 14-12-2012 upon the OPs asking them to release the balance amount, but to no avail. Hence, the case was filed to get the residual amount of claim from the Insurance Company together with some other relief(s) as per prayer of the complaint.
Ld. Advocate for the OP Nos. 1&2 has submitted that on receipt of intimation from the Complainant about the damage to Complainant’s Cold Storage, they deputed independent Surveyor to assess the loss, who, after thorough survey quantified the loss at Rs. 8,00,979/-. After proper scrutiny of documents, including the report of the Surveyor, they quantified the loss at Rs. 8,00,720/- and sent a discharge voucher of said amount. After accepting such amount and encashing the cheque, the Complainant on 14-12-2012, illegally issued a legal notice through its Advocate demanding a further sum of Rs. 31,91,853/-. With the signing of the discharge voucher recording full and final settlement after accepting a sum of Rs. 8,00,720/-, the contractual liability under the contract of insurance stood fully discharged and no further claim is maintainable. Therefore, the instant case be dismissed with costs. In support of his contention, Ld. Advocate for the OP Nos. 1&2 has submitted a copy of order of the Hon’ble State Commission, Haryana reported in 1993 (1) CPR 86.
Ld. Advocate for the OP No. 3 has submitted that he conducted an extensive survey with the knowledge and consent of the Complainant. In his earnest effort to unearth the truth, he took the opinion of the Department of Construction Engineering, Jadavpur University, Salt Lake and Civil and Structural Engineers Consultancy firm, M/s Con-Quest Consult and only thereafter, quantified the loss at Rs. 8,00,979/- and submitted his report to the OP Nos. 1&2 within due time. His survey report is quite extensive and backed by technical report of a well reputed university. It cannot be said that the report is cryptic and/or lack in quality. If the Complainant was not satisfied with such quantification, then they ought to have proceeded before the appropriate Court of Law and/or invoke the arbitration clause. As because the Complainant has accepted the amount by discharging a clear and unequivocal voucher to that effect, the plea of the Complainant is not sustainable in any manner whatsoever.
Ld. Advocate for the OP No. 4 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 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. It is clearly mentioned in the insurance policy under agreed bank clause that upon any monies becoming payable under this policy the same shall be paid by the Insurance 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 on behalf of the borrower and/or Complainant. Therefore, the Insurance Company be directed to pay the compensation amount to the OP Bank on behalf of the Complainant.
Complainant moved a Miscellaneous Application being no. 353/2013, 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. 39,92,573/-, the OP Insurer settled it for Rs. 8,00,720/-. It is contended by the Complainant that it signed the discharge voucher under compulsion, due to paucity of fund to up-lift their frustrated business which suffered a serious blow by the damage caused by the severe earthquake.
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. 8,00,720/-, 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. 800720/- 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 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 30-01-2012. 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 the lapse of considerable time, which does raise eyebrows. Although it is claimed by the Complainant that it’s 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 intrigue 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 the Complainant 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 being 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 or just after encashment. 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.
