1999 JTR(SC) 853
1999 AIR(SC) 3027 ; 1999 AIR(SCW) 2956 ; 2000 1 ALD(SC) 11 ; 1999 37 AllLR 121 ; 1999 4 AllMR(SC) 291 ; 1999 4 AWC 3311 ; 2000 1 BomCR(SC) 44 ; 2000 100 CompCas 741 ; 1999 2 CPJ(SC) 10 ; 1999 3 CTC 278 ; 1999 6 JT 23 ; 1999 3 PLR(SC) 499 ; 1999 3 RCR(Civ) 634 ; 1999 4 Scale 656 ; 1999 6 SCC 400 ; 1999 SCR 385 ; 2000 WBLR 37 ; 1999 KHC 1292 ; 1999 7 Supreme 171
1999(7) Supreme 171
Supreme Court of India
(From National Consumer Disputes Redressal Commission, New Delhi)
S. Saghir Ahmad & R.P. Sethi, JJ.
United India Insurance -Appellant
versus
Ajmer Singh Cotton & General Mills & Ors. etc. -Respondents
Civil Appeal No. 535 of 1994
With
Civil Appeal No. 534 of 1994
And
Civil Appeal No. 723 of 1994
Decided on 12-8-1999
Counsel for the Parties :
For the Appellant : Vishnu Mehra, K.M.K. Nair, Pramod Dayal, S.M. Suri, M.T. George, Advocates.
For the Respondents : Yogeshwar Prasad, Sr. Advocate, P.N. Puri, P.K. Bajaj, Ms. Rachna Gupta, Advocates.
Important points
1. 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; if in a given case the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, mis-representation, under influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complaint is made would be justified in granting appropriate relief.
2. Though award of interest is not specifically authorised under Consumer Protection Act, in appropriate cases the forum and commission are authorised to grant reasonable interest under the facts and circumstance of each case.
Act Referred :CONSUMER PROTECTION ACT : S.2(g), S.17, S.14
(A) The Consumer Protection Act, 1986, sections referenced in this judgment govern the adjudication of disputes involving deficiency in service and consequential claims, specifically Section 2(g) defining consumer and service, Section 14 empowering the forums to grant appropriate relief for deficiency in service, and Section 17 read with Section 14 allowing the forums to pass orders for compensation including in cases involving fraudulent execution of discharge vouchers. These provisions apply where insured parties execute discharge vouchers voluntarily and seek subsequent relief for alleged deficiencies or delays in claim settlement by insurance companies, enabling the commissions to examine the circumstances under which such vouchers were obtained and to grant relief where coercion, misrepresentation, or undue influence is established.
(B) Key legal principles include that execution of a discharge voucher does not automatically estop the insured from approaching the Consumer Disputes Redressal Commissions for deficiency in service under the Act; the commissions have the authority to grant reasonable interest and to fasten liability against insurance companies beyond the contractually payable amounts where the circumstances so warrant; and relief may be granted if the discharge voucher was obtained fraudulently, under undue influence, by misrepresentation, or through coercive bargaining, but mere voluntary acceptance of the claim amount without protest does not bar further claims in the absence of such misconduct.
Facts of the case:
The respondent had procured multiple insurance policies from the appellant insurance company and suffered losses due to fire; surveyors were appointed and payments were made, with the respondent executing discharge vouchers declaring receipt of the sum in full and final discharge of claims. Subsequently, the respondent filed complaints with the State Consumer Disputes Redressal Commission alleging deficiency in service and claiming interest, which were dismissed by the State Commission but allowed by the National Commission on the ground of delay in settlement.
Findings of Court:
The court held that the mere execution of discharge vouchers would not always estop the insured from making further claims; the commissions under the Act are authorized to grant reasonable interest in appropriate cases and to fasten liability against insurance companies beyond the contractually payable sums where justified by the facts and circumstances; and the State Commission was justified in dismissing the complaints where the vouchers were executed voluntarily without allegations of fraud or coercion, while the National Commissions grant of relief solely on the ground of delay was not sustainable.
Issues:
Whether an insured is estopped from making further claims after voluntarily accepting the insurance claim amount and executing a discharge voucher; whether interest can be granted despite the absence of specific authorization under the Consumer Protection Act; and whether the Consumer Disputes Redressal Commissions can fasten liability against insurance companies over and above the contractual liabilities under the policy.
Ratio Decidendi:
The court determined that voluntary execution of a discharge voucher does not operate as an estoppel preventing the insured from approaching the commissions for deficiency in service under the Act; the commissions have the power to award reasonable interest and to impose liability beyond the contractual insurance payouts where the circumstances so require, but where the voucher is obtained without fraud, misrepresentation, or coercion, the commissions may dismiss the complaint, and the mere delay in settlement does not automatically justify relief.
Result:
The appeals are allowed, the orders of the National Commission are set aside, and the complaints are dismissed without any order as to costs.
(A) The Consumer Protection Act, 1986, sections referenced in this judgment govern the adjudication of disputes involving deficiency in service and consequential claims, specifically Section 2(g) defining consumer and service, Section 14 empowering the forums to grant appropriate relief for deficiency in service, and Section 17 read with Section 14 allowing the forums to pass orders for compensation including in cases involving fraudulent execution of discharge vouchers. These provisions apply where insured parties execute discharge vouchers voluntarily and seek subsequent relief for alleged deficiencies or delays in claim settlement by insurance companies, enabling the commissions to examine the circumstances under which such vouchers were obtained and to grant relief where coercion, misrepresentation, or undue influence is established.
(B) Key legal principles include that execution of a discharge voucher does not automatically estop the insured from approaching the Consumer Disputes Redressal Commissions for deficiency in service under the Act; the commissions have the authority to grant reasonable interest and to fasten liability against insurance companies beyond the contractually payable amounts where the circumstances so warrant; and relief may be granted if the discharge voucher was obtained fraudulently, under undue influence, by misrepresentation, or through coercive bargaining, but mere voluntary acceptance of the claim amount without protest does not bar further claims in the absence of such misconduct.
Facts of the case:
The respondent had procured multiple insurance policies from the appellant insurance company and suffered losses due to fire; surveyors were appointed and payments were made, with the respondent executing discharge vouchers declaring receipt of the sum in full and final discharge of claims. Subsequently, the respondent filed complaints with the State Consumer Disputes Redressal Commission alleging deficiency in service and claiming interest, which were dismissed by the State Commission but allowed by the National Commission on the ground of delay in settlement.
Findings of Court:
The court held that the mere execution of discharge vouchers would not always estop the insured from making further claims; the commissions under the Act are authorized to grant reasonable interest in appropriate cases and to fasten liability against insurance companies beyond the contractually payable sums where justified by the facts and circumstances; and the State Commission was justified in dismissing the complaints where the vouchers were executed voluntarily without allegations of fraud or coercion, while the National Commissions grant of relief solely on the ground of delay was not sustainable.
Issues:
Whether an insured is estopped from making further claims after voluntarily accepting the insurance claim amount and executing a discharge voucher; whether interest can be granted despite the absence of specific authorization under the Consumer Protection Act; and whether the Consumer Disputes Redressal Commissions can fasten liability against insurance companies over and above the contractual liabilities under the policy.
Ratio Decidendi:
The court determined that voluntary execution of a discharge voucher does not operate as an estoppel preventing the insured from approaching the commissions for deficiency in service under the Act; the commissions have the power to award reasonable interest and to impose liability beyond the contractual insurance payouts where the circumstances so require, but where the voucher is obtained without fraud, misrepresentation, or coercion, the commissions may dismiss the complaint, and the mere delay in settlement does not automatically justify relief.
Result:
The appeals are allowed, the orders of the National Commission are set aside, and the complaints are dismissed without any order as to costs.
Judgment
Sethi, J.-Whether the insured is estopped from making any further claim from the insurer after accepting the insurance claim amount in full and final settlement of all the claims by executing the discharge voucher willingly and voluntarily without any protest or objections?
Whether inspite of the acceptance of the claim amount and execution of discharge voucher voluntarily, the insured is entitled to the grant of any interest?
Whether the Consumer Disputes Redressal Commissions constituted under the Consumer Protection Act, 1986 are entitled to fasten liability against the insurance companies over and above the liabilities payable under the contract of insurance envisaged in the policy of insurance? are the main questions of law required to be adjudicated in all these appeals.
2. In Civil Appeal No. 535 of 1994 the respondent No. 1 had procured two policies Nos. 201202-11-43-11-01234-90 from the appellant-insurance company. Similarly in Civil Appeal No. 723 of 1994 respondent No. 1 had procured two insurance covers operative from 20th October, 1989 to 19th June, 1990 to the extent of Rs. 1,00,000/- and from 3rd April 1990 to 29th June, 1990 to the extent of Rs. 10,00,000/- respectively. Respondent No. 1 had also procured insurance cover to the tune of Rs. 27 lakhs from respondents 2 to 4. The respondent suffered losses on account of fire regarding which the surveyors are appointed and upon submission of their reports the payments were made which were accepted by the insured with declaration of receipt of the “sum in full and final discharge of claims upon them”. After the payments were made, the respondents filed complaint petitions before the State Consumer Disputes Redressal Commission. Punjab at Chandigarh claiming inter alia interest at the rate of 18 per cent per annum against the appellant. The State Commission dismissed the claims but the National Consumer Disputes Redressal Commission accepted the appeal of the respondent No. 1 and directed the appellant to pay the interest at the rate of 18 per cent.
3. The facts in Civil Appeal No. 534 of 1994 are almost identical for determining the controversy and deciding the question of law noted hereinabove.
4. We have heard learned counsel for the parties and perused the record. It is true that the award of interest is not specifically authorised under the Consumer Protection Act, 1996 (hereinafter called ‘the Act’) but in view of our judgment in Sovintorg (India) Ltd. v. State Bank of India1, we are of the opinion that in appropriate cases the forum and the commissions under the Act are authorised to grant reasonable interest under the facts and circumstances of each case. 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 which can be termed as fraudulent or exercise of undue influence or by mis-representation or the like. If in a given case the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, mis-representation, under influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complaint is made would be justified in granting appropriate relief. However, where such discharge voucher is proved to have been obtained under any of the suspicious circumstances noted hereinabove, the tribunal or the commission would be justified in granting the appropriate relied under the circumstances of each case. The mere execution of the discharge voucher and acceptance of the insurance claim would not estopp the insured from making further claim from the insurer but only under the circumstances as noticed earlier. The Consumer Disputes Redressal Forums and Commissions constituted under the Act shall also have the power to fasten liability against the insurance companies notwithstanding the issuance of the discharge voucher. Such a claim cannot be termed to be fastening the liability against the insurance companies over and above the liabilities payable under the contract of insurance envisaged in the policy of insurance. The claim preferred regarding the deficiency of service shall be deemed to be based upon the insurance policy, being covered by the provisions of Section 14 of the Act.
5. In the instant cases the discharge vouchers were admittedly executed voluntarily and the complainants had not alleged their execution under fraud, undue influence, mis-representation or the like. In the absence of pleadings and evidence the State Commission was justified in dismissing their complaints. The National Commission however granted relief solely on the ground of delay in the settlement of claim under the policies. The mere delay of a couple of months would not have authorised the National Commission to grant relief particularly when the insurer had not complained of such a delay at the time of acceptance of the insurance amount under the policy. We are not satisfied with the reasoning of the National Commission and are of the view that the State Commission was justified in dismissing the complaints though on different reasonings. The observations of the State Commission in Jivajeerao Cotton Mills Ltd. v. New India Assurance Co. Ltd.2 shall always be construed in the light of our findings in this judgment and the mere receipt of the amount without any protest would not always debar the claimant from filing the complaint.
6. Under the circumstances the appeals are allowed. The orders of the National Commission are set aside by confirming the orders passed by the State Commission. The complaint of the respondents shall stand dismissed without any order as to costs.
(C.R.) Appeals allowed.
*************