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Judgment
THE complainant is breeding horses at his Farm Tohana, Distt. Hissar, Haryana. He had insured his mare ''Private Pleasure'' with the opposite party Insurance Company for a sum of Rs. 2 lacs from 8.7.1988 to 7.7.1989. The mare fell ill and intimation of her illness had been sent to the opposite party on 23.1.1989. The mare was examined by the Vet. Officer of the opposite party on 25.1.1989. According to the post -mortem report, the mare died on 12.2.1989 due to ''Purulent Synovitise''. The complainant lodged the claim for the entire amount of Rs. 2 lacs immediately after the death of the mare. The Insurance Company took 30 months to settle the claim. The amount of Rs. 2 lacs due to the complaint under the Insurance Policy was paid. on 8.8.1991.
THE Complainant has claimed interest for inordinate delay in payment of the insured amount and the expenditure he has incurred in running from pillar to post. Visiting many times Hissar, Chandigarh and Calcutta for getting the claim amount, and punitive damages for harassment and consequent physical and mental strain amounting to Rs. 20 lacs. The reliefs claimed are set out below : (a) Interest for delayed period about 30 months Rs. 1,00,000/ - (b) Travel, Board and Lodging March, 1989 to August, 1991 (For chasing the claim) Rs. 1,00,000/ - (c) Punitive damages Rs. 20,00,000/ - Total Rs. 22,00,000/ - The Opposite Party has resisted the claim on various grounds : (1) That the opposite party respondent has settled the claim of the complainant in full and final satisfaction of all his claims. The complainant has given a discharge as under : Payment through cheque No. 3844793 dated 8.8.1991 as full and final settlement.'' According to the opposite party this was a discharge of all claims of the complainant including interest and punitive damages given voluntarily and willingly. (2) The value of the deceased animal was in dispute. One of the experts Dr. Rathore nominated by the opposite party assessed the value of the animal at Rs. 1,00,000/ - (25%). Again another expert Dr. Kewal and also the surveyors M/s. J.B. Boda Pvt. Ltd. had observed that the animal had foaled on 12.2.1989 and the foal thed on 14.2.1989 as it was too weak. From this observation that the animal ''was too weak'', the opposite party inferred that the date of covering would have been about 10 to 11 months earlier i.e. near about April, 1988 and that this information was not disclosed, nay concealed by the complainant, in the Proposal Form question No. 11 of that form. (3) The opposite party inferred from the postmortem report that the illness of the mare was ''most probably'' because of the pregnancy of the mare which fact had not been disclosed in the questionaire of the Proposal Form. This, according to the opposite party, amounted to non -disclosure of material facts relating to insured animal. The petitioner/complainant made lucid representation of his case at the hearing. He has explained that ''At the time of issue of cheque, the applicant was denied the cheque without giving an undertaking of full and final settlement. The applicant received the cheque as there was no alternative but sign as directed or otherwise wait for due payment indefinitely and suffer further harassment.''
HE further contended that ''Full and final payment in this context pertains to receipt of insured value and not to the prayer of the applicant for interest, travel expenses and punitive damages for harassment, mental and physical strain.''
A number of cases have come to the notice of this Commission where there have been inordinate delays in the finalisation payment of the claims of the insured. We have reason to suspect that the payment of insured amounts, which are not in dispute, are often delayed with a view to coerce the insured into giving a receipt in full and final discharge of the claims of the insured. In fact in the case No. I (1992) CPJ 101 (NC) =F.A. 30 of 1991. Manjulaben v. L.I.C. of India it is in evidence that the insured wid6w was told that until she gave a receipt for the full and final settlement of the Corporation would not be prepared to make exgratia payment We are, therefore, inclined to accept the statement of the petitioner that he did not give the discharge, at the time of receiving of cheque for Rs. 2 lacs, willingly and voluntarily and that he had no choice but to give discharge as desired by the Insurance Company. This is particularly so because there had already been 30 months delay in settling his claim and he had justified apprehension that unless he gave the discharge ''in full and final settlement'', he would have to wait for the insured amount also indefinitely.
IT is, however, necessary to examine the legal scope and significance of such a discharge ''in full and final settlement'' as this question has been croping up repeatedly in the cases before this Commission. ''Full and final settlement'' means termination of liability under a contract and under the contract of insurance policy in this case. In fact, the expression in full and final settlement is equivalent to discharge. Discharge is termination liability under a contract by executing an instrument of receipt for payment. In other words discharge in respect of a policy of insurance would be discharge of the liability under that policy. This would not discharge the insurer from any other liability that he might have incurred outside the terms of the contract of Insurance.
LIABILITY for damages or compensation or loss suffered by a consumer due to the negligence of a vendor, supplier etc. is a liability arising not under the contract of insurance but under the Consumer Protection Act. Again the liability for compensation under Section 14(1)(a) of the Consumer Protection Act is in the nature of a liability in torts and not under a contract The discharge furnished by the complainant is obviously a discharge for the contractual payment under the policy of the insurance and therefore, this discharge does not extinguish his right to claim compensation for any damage, loss or injury suffered by him due to the negligence of the opposite party as provided in Section 14(1)(d) of the Act
AS regards the charge that in the Proposal Form there was non -disclosure of material facts and that the complainant had been guilty of concealment of material facts in his reply to question No. 11 of that form, the complainant explained that question No. 11 of the proposal ''is in respect of unborn foal'' which further requires information regarding the mares previous pregnancies and the date of her last covering. Since the proposal in this case was in respect of mare and not in respect of ''unborn foal'', reply to the question in the Proposal Form was absolutely true, that he was not guilty of non -disclosure of material facts nor of concealment of material facts. The complainant also pointed out that, according to the objections raised by the opposite party, the mare would have been covered 10 to 11 months earlier, that is about April, 1988, whereas the mare was insured in August, 1988. He has further averred that as per the insurers regular procedure, before the acceptance of the insurance cover, ''the mares are inspected by a Veterinary Officer on the panel of Government of India and independently by the Insurance Company Veterinary Officer.'' The implication is obvious. At the time of insurance in August, 1988 it would have been possible for the Insurance Company to know whether the mare was pregnant or not and refuse insurance if it was already pregnant
IT may also be noted that eventually the Insurance Company settled the claim in full and yet found it justified to raise objections regarding the proper value of the deceased mare under the policy of insurance. We do not appreciate this. We are satisfied that there has been inordinate and unjustified delay in the settlement of the claim of the insured, that the opposite party i.e. the Insurance Company sought to resist the claim on one ground or other including making wrong statements that the complainant insured had concealed material facts at the time of submitting proposal for insurance. We also agree that the insured had to run unnecessarily to different places for getting his claims settled expeditiously and consequently he suffered mental and physical harassment
WE , therefore, order as under: - (1) Interest should be paid to the complainant insured at the rate of 18% per annum from 4 weeks after submission of his claim till the 18th August, 1991 when the claim was paid. (2) A sum of Rs. 10,000/ - should be paid to the complainant for his travelling expenses, boarding and lodging as against Rs. 1 lakh claimed by him. (3) No punitive damages are payable under the Consumer Protection Act. However, for the mental strain and harassment we allow Rs. 5,000.00p. Order accordingly. -