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2009 SCC OnLine NCDRC 150 : [2009] NCDRC 149

National Consumer Disputes Redressal Commission New Delhi

(BEFORE ASHOK BHAN, PRESIDENT AND B.K. TAIMNI, MEMBER)

Revision Petition No. 2626 of 2005 (From the Order dated 11.08.2005 in Appeal
No. 174 of 2004 of State Consumer Disputes Redressal Commission, Patna, Bihar)
Raghuwans Mani … Petitioner;
Versus
The New India Assurance Company Limited and Another …
Respondents.
Revision Petition No. 2626 of 2005 (From the Order dated 11.08.2005 in Appeal
No. 174 of 2004 of State Consumer Disputes Redressal Commission, Patna, Bihar)
Decided on October 20, 2009
For the Petitioner: Mr. Pranay Ranjan, Advocate.
For the Respondents: Mr. Kanwal Chaudhary, Advocate.
ORDER
ASHOK BHAN, J., PRESIDENT:— Petitioner herein, who was the complainant before
the District Consumer Disputes Redressal Forum, Patna, Bihar (hereinafter referred to
as ‘the District Forum’ for short), has filed the present Revision Petition against Order
dated 11.08.2005 in Appeal No. 174 of 2004 passed by the State Consumer Disputes
Redressal Commission, Patna, Bihar (hereinafter referred to as ‘the State Commission’
for short) whereby the State Commission has set aside the Order passed by the
District Forum. District Forum had directed the respondent-Insurance Company to pay
Rs. 33,000/- with interest @ 10% p.a. for delay in payment.
Briefly stated, the facts of the case are:—
Petitioner is the owner of a Maruti car bearing registration No. BR-1C-0835 of 1991.
The said car was insured with the respondent-Insurance Company for a sum of Rs.
1,60,000/-. Validity period of the Policy was from 26.07.1996 to 25.07.1997. The
vehicle was stolen on 17.12.1996. Petitioner lodged the claim with the Insurance
Company which deputed a Surveyor to assess the loss. Surveyor assessed the loss at
Rs. 1,20,000/-. Insurance Company, after including the costs, etc., paid a sum of Rs.
1,25,000/- as insurance claim to the petitioner. Petitioner accepted the sum of Rs.
1,25,000/- and gave a discharge voucher dated 28.10.1997 and receipt indicating
acceptance of the amount in full satisfaction and discharge of all claims. On the same
day, i.e., on 28.10.1997 itself, petitioner wrote a letter of protest which was duly
served upon and received by the Insurance Company. Petitioner claimed the balance
amount of Rs. 35,000/-. As the Insurance Company did not accede to his request,
petitioner filed a Complaint before the District Forum.
Respondent-Insurance Company, on being served, filed its Written Statement and
took the stand that the claim had been settled to the satisfaction of the petitioner.
Petitioner had accepted the amount of Rs. 1,25,000/- without any protest in full
satisfaction in discharge of all the claims. That the petitioner had given a
disbursement voucher and receipt indicating disbursement of the amount and
discharge of all the claims. That having done so, the petitioner was not justified in re-
agitating the issue. It was prayed that the complaint be dismissed.
District Forum held that the Insurance Company had insured the car of the
complainant on the existing market value on 25.07.1996, by accepting the premium,
on the insured amount of Rs. 1,60,000/-. The car was stolen after 5 months. That the
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Surveyor was not justified in deducting Rs. 35,000/- from the insured value of the car.
It was further held that the petitioner had received the settled insurance amount
under protest expressed on the same date by way of written application which was
duly served upon and received by the Insurance Company. Insurance Company was
directed to pay Rs. 33,000/- with interest @ 10% within 2 months. Rs. 2,000/- were
deducted by way of depreciation.
Aggrieved against the Order passed by the District Forum, respondent-Insurance
Company filed an Appeal before the State Commission. The State Commission, by the
impugned Order, reversed the Order passed by the District Forum holding that the
petitioner, having accepted the sum of Rs. 1,25,000/- without any protest or alleged
coercion or pressure exercised by the Insurance Company, could not wriggle out of its
commitment. That there was no allegation that the petitioner was coerced by the
respondent to accept the amount under duress or that he accepted the amount due to
any financial constraints or compelling reasons. In the absence of any allegation of
coercion, etc., it has to be accepted that the discharge voucher was given voluntarily.
Aggrieved against the Order passed by the State Commission, under these
circumstances, petitioner has preferred this Revision Petition.
The point as to whether the Insurance Company, after having accepting the
premium and insuring the car for a particular value, could, on its own, change that
very figure on one pretext or the other when they are called upon to pay the
compensation, is now settled by Hon'ble the Supreme Court of India in Dharmendra
Goel v. Oriental Insurance Company Limited case reported in (2008) 8 SCC 279, held
as under:—
“We have heard the learned counsels for the parties and have gone through the
record very carefully. The facts as narrated above remain uncontroverted.
Admittedly, the accident had happened on 10th September, 2002 during the validity
of the Insurance Policy taken on 13th February, 2002 insuring the vehicle for Rs.
3,54,000/- on a premium of Rs. 8498/- It is also the admitted position that the
vehicle had been declared to be a total loss by the surveyor appointed by the
company though the value of the vehicle on total loss basis had been assessed at
Rs. 1,80,000/- We are, in the circumstances, of the opinion that as the company
itself had accepted the value of the vehicle at Rs. 3,54,000/- on 13th February,
2002, it could not claim that the value of the vehicle on total loss basis on 10th
September, 2002 i.e., on the date of the accident was only Rs. 1,80,000/-. It bears
reiteration that the cost of the new vehicle was Rs. 4,30,000/- and it was insured in
that amount on 19th January, 2000 and on the expiry of this policy on 18th January,
2001, was again renewed on 19th January, 2001 on a value of Rs. 3,59,000/- and on
the further renewal of the policy on 13th February, 2002 the value was reduced by
only Rs. 5,000/- to Rs. 3,54,000/-. We are, therefore, unable to accept the
company's contention that within a span of seven months from 13th February 2002
to the date of the accident, the value of the vehicle had depreciated from Rs.
3,54,000/- to Rs. 1,80,000/-. It must be borne in mind that Section 146 of the
Motors Vehicles Act, 1988 casts an obligation on the owner of a vehicle to take out
an insurance policy as provided under Chapter 11 of the Act and any vehicle driven
without taking such a policy invites a punishment under Section 196 thereof. It is
therefore, obvious that in the light of this stringent provision and being in a
dominant position the insurance companies often act in an unreasonable manner
and after having accepted the value of a particular insured good disown that very
figure on one pretext or the other when they are called upon to pay compensation.
This ‘take it or leave it’ attitude is clearly unwarranted not only as being bad in law
but ethically indefensible. We are also unable to accept the submission that it was
for the appellant to produce evidence to prove that the surveyor's report was on the
lower side in the light of the fact that a price had already been put on the vehicle by
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the company itself at the time of renewal of the policy. We accordingly hold that in
these circumstances, the company was bound by the value put on the vehicle while
renewing the policy on 13th February, 2002.”
(Emphasis Supplied)
In above referred case, taking the similar stand, the Insurance Company had
repudiated the claim. It was held that the Insurance Company was bound to pay the
value put on the vehicle while renewing the Policy.
The next question which falls for consideration is as to whether the respondent had
accepted the settled amount of Rs. 1,25,000/- under protest or voluntarily? On the
basis of the report submitted by its Surveyor, the Insurance Company had agreed to
pay a sum of Rs. 1,25,000/- in full satisfaction of the claim of the petitioner. Petitioner
accepted the said amount and gave the discharge voucher and receipt acknowledging
receipt of Rs. 1,25,000/-. Admittedly, in the discharge voucher, it is not mentioned
that the petitioner had accepted the amount under protest but on the same day, i.e.,
28.10.1997, he wrote a letter to the Insurance Company stating that he had accepted
the amount under protest and claimed the balance amount of Rs. 35,000/-.
Counsel appearing for the respondent strenuously contended that after having
accepted the amount voluntarily and without any protest, the petitioner was not
justified in claiming the balance amount. That the petitioner is debarred from doing
so. Petitioner had accepted the amount because as per practice, the amount could not
have been paid to the petitioner unless he had signed the discharge voucher. On the
same day, petitioner lodged the protest, which clearly shows that he had accepted the
amount under protest. Insurance Company, being in a dominant position, paid the
amount giving the discharge voucher. But that does not mean that the discharge
voucher was given voluntarily. Mere execution of discharge voucher and acceptance of
the insurance claim would not estop the insured from making further claim.
This Commission in Oriental Insurance Company Limited v. The Government Tool
Room and Training Centre reported in I (2008) CPJ 287 (NC), held as under:—
“4. In the present case, it is to be stated that such contention is raised despite the
law being settled. As early as in 1986 the Apex Court discussed the concept of
coercive bargaining in Central Water Transport Corporation Ltd. v. Tarun Kanti
Sengupta, (1986) 3 SCC 156, and held that where a man has no choice, or rather
no meaningful choice, but to give his consent to a contract or to sign on the dotted
line in a prescribed or other form or to accept a set of rules as part of contract,
however unfair, unreasonable and unconscionable a clause in that contract may be
the courts will enforce and will, when called upon to do so, strike down as unfair
and unreasonable contract or an unfair or unreasonable clause in a contract entered
into between the parties who are not equal in bargaining power. In arriving at the
aforesaid conclusion the Court referred to Chitti on Contracts (25th Edn. Vol. 1, pr.
4) wherein it has also been observed that the Courts have developed a number of
devices for refusing to implement exemption clauses imposed by the economically
stronger party on the weaker. Thereafter, in the United India Insurance Co. Ltd. v.
Ajmer Singh Cotton & General Mills, II (1999) 6 SCC CPJ 10(SC) : VI (1999) SLT
590 : (1999) 6 SCC 400, wherein the Court observed that mere execution of
discharge voucher and acceptance of insurance claim would not estop insured from
making further claim from the insurer under the circumstances which can be
termed as exercise of undue influence or coercion or the like.
5. Before the State Commission, it was vehemently contended by the Insurance
Company that the complaint was not maintainable for recovering the remaining
amount because the Vice Chairman of the Government Tool Room and Training
Centre has signed the voucher given by the Insurance Company as full and final
settlement and, therefore, complaint under the Consumer Protection Act is not
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maintainable.
6. It is to be stated that if the Government department is required to accept the
amount for one or other reason and sign the document as full and final settlement,
think of the fate of a consumer whose entire factory is gutted by fire; when the
banks are insisting for repayment of the loan amount and the creditors are
harassing the owner of the factory by various means. In that set of circumstances,
if a person requires the money and signs the voucher as receipt of full and final of
claim, it amounts coercive practice by the Insurance Company. Various such
illustrations can be given but this is only to highlight that wrong practice followed
by the Insurance Companies in not paying the single pie without having a discharge
voucher stating that the amount is received by the claimant as full and final
settlement of his claim. In our view, it is a coercive practice. And, it is suggested
that the Insurance Companies may abandon this practice and do not try to snatch
away the right of the insured to approach the legal forum for getting just and
reasonable reimbursement.
(1) In support of its claim the Managing Director of the Government Tool Room
and Training Centre, Bangalore, has filed an affidavit to the effect that
Insurance Company informed that it was a standard format prescribed by
them and unless and until voucher was signed, they would not release the
fund. They also informed that it would be always open for the complainant to
agitate the matter if they were not satisfied with the amount but so far as
Insurance Company is concerned unless the voucher was signed the issue of
release of funds could not be made.
It appears that this wrong practice is required to be given up by the Insurance
Company or in any set of circumstances we would suggest to IRDA to keep
control upon such unfair trade practice.
(2) It has been furt 9+ her stated that the Legal Department of the complainant,
i.e., Govt. Tool Room and Training Centre advised the complainant that this
acceptance of the money by signing the voucher would not prejudice the claim
of the complainant. We have to state that such advice is an erroneous one.
But wrong and erroneous advice by a counsel would be a sufficient ground for
finding out the truth.
(3) Even the government department states on affidavit that the department
was in dire/urgent need of funds to pay backlog salaries of their employees.
This would be sufficient for holding that the voucher was not signed
voluntarily but was signed under compulsion.
(4) Further, it is to be stated that after receipt of the amount on 7.7.2000, on
31.7.2000 complainant wrote letter to the Insurance Company that deduction
of Rs. 10,32,500/- was unjustified. Not only that but even the receipt was a
pre-paid stamped receipt for an amount of Rs. 16,37,000/- and is taken prior
to payment.”
Respectfully following the aforesaid view, we hold that the petitioner had accepted
the settled amount under the Insurance Policy under protest.
Both the parties admit that the petitioner had taken the Insurance Policy for Rs.
1,60,000/- and the premium paid was upon the same insured value.
Its value was fixed on the date of insurance, i.e., 26.07.1996. In view of the
Judgment of Hon'ble the Supreme Court of India in Dharmendra Goel's case (supra),
the respondent is bound to pay the insured sum minus the depreciation for 2 months.
The District Forum, keeping in view the facts and circumstances of the case, has given
the depreciation, which is quite adequate.
For the reasons stated above, this Revision Petition is accepted and the Order
passed by the State Commission is set aside and that of the District Forum is restored.
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Parties shall bear their own costs.

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