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Judgment
THIS is an appeal against the judgment and order dated 12.3.1999 passed by City Consumer, Disputes Redressal Forum, Ahmedabad in Complaint No. 517/97. The appellant is the original opposite party while the respondents are the complainants.
THE facts of the case stated in brief are that the complainant had taken insurance policy from the opposite party for a sum of Rs. 25,000/- on 24.7.1978 which was to be matured on 24.7.1993. THE half-yearly premium was Rs. 968/-. As per the table of the policy the complainant had received back Rs. 5,000/- each in 1983 and 1988. It was alleged that LIC did not pay the maturity amount till 23.3.1996 i.e. about 4 years after the date of maturity. This delay is the deficiency in service on the part of opposite party and he. had filed a letter in the support of this allegation at the time of filing the rejoinder. THE amount of Rs. 38,368/- was also disputed and alleged that it was accepted under protest. THE complainant had claimed that if he had received the amount in time, he would have invested it in his business and would have earned profit to the extent of Rs. 1,50,551 /-. In reply, the appellant submitted that the delay in the payment of maturity amount was because of non-payment of last premium by the complainant. The policy lapsed and in fact appellant renewed/revived it as a good gesture and it took longer as the complainant was not co-operating. The appellant also submitted that the complainant had received the amount of Rs. 38,268/- in full and final settlement on 23.3.1996 and has given full and final discharge receipt. The appellant also contended that the letter submitted by the complainant was not related to the policy in hand.
The Forum below taking into consideration the materials placed on record and after hearing both the parties passed the following order : "(1) The complaint is hereby allowed. (2) The opponents jointly and severally are directed to pay to the complainant No. 2, the interest at the rate of 18% per annum from 28.3.1992 on the amount of Rs. 38,268.00 and to pay the sum of Rs. 2,500.00 to the complainant No. 2 as compensation for mental pain and agony, and to pay the sum of Rs. 2,000.00 as cost to the complainant No. 1 and Rs. 2,000.00 as cost to the complainant No. 2. (3) The opponents to comply within one month from the date of receipt of the copy of this order."
The Forum also passed certain remarks in para 5 of the order against the present appellant as follows : "Ordinarily, every policy holder would expect that he would get the maturity amount when the policy matures. The opponent also in their advertisement, made sole promise but it appears that the opponents want business but when the question of payment comes, it is observed that there is always delay when the amount of maturity is claimed and one or another objection is raised by the opponent in order to avoid or delay payment, and if there is mediclaim then the objection like suppression of material fact is raised and payment in the later case is denied under that pretext rightly or wrongly. This type of attitude on the part of the opponents is not appreciated and not proper. The delay of four years may not be much concerned on the part of the opponent or their officers, but, it is very much important for the complainant No. 2 because the complainant No. 2 who has saved the money for all these years is not getting the amount even though the policy has matured, speaks volumes on the part of the opponent and their officers. Not only that but the opponents in their written statement are not ready to admit the delay on their part. On the contrary, the opponents are making allegations upon the complainant No. 2 that the complaint is filed to extract money in an illegal manner."
BEING aggrieved by the order and the remarks, appellant preferred appeal. We have heard the arguments on behalf of both the parties as well as carefully gone through the entire evidence and material documents placed on record including the letter submitted by the complainant with the rejoinder.
EVEN at the outset, we want to point out that there is a gross error on the part of the lower Forum in relying upon the letter submitted by the complainant with the rejoinder. In fact, the letter is not addressed to the complainant and had no relation with this dispute. The lower Forum erred in holding deficiency in service on the part of appellant in respect of the delayed payment of the maturity amount relying upon that letter and also did not consider the non-payment of the premium on the part of the complainant. The Forum has also erred in respect of the date of maturity. The Forum has also erred in holding that the complainant can file this complaint even after accepting the amount in full and final settlement. The complainant before us admits that there was no fraud or force in the settlement and the acceptance was voluntary. Further, it is a settled principle of law that once the claimant received the amount in full and final satisfaction his complaint before Consumer Forum is not maintainable. Reference in this connection has been made to a recent decision of Jammu and Kashmir High Court in the case of New India Assurance Company & Ors. v. Roopawati Bhat & Anr., reported in AIR 2000 J&K 7. Following observations might be reproduced : "5. There are decisions of the National Commission under the Consumer Protection Act of 1986 i.e. .the Central Act wherein a receipt given by the complainant indicating full and final settlement was held to be a valid defence. Thus, in Pooja Industries v. United India Insurance Co. Ltd., II (1994) CPJ 105 (NC), the complainant had executed a formal receipt acknowledging payment of Rs. 7.30 lakhs from the Insurance Company in full and final settlement of the claim. This was held to be good and sufficient for rejecting the claim of the complainant. The plea sought to be taken by the complainant mat receipt was given under coercion was not looked into because there was no evidence on the record in proof of such a claim. In another case again arising before the National Consumer Disputes Redressal Commission, New Delhi, I (1996) CPJ 140 (NC), the situation was similar. The complainant received the amount in full and final settlement. It was observed that in these circumstances, the question of there being any deficiency in service would not arise. As a matter of fact, the general rules applicable to the payment or discharge of other contractual obligations apply to the payment or discharge of insurance policies also. What is applicable is these cases is the principle of subrogation. Subrogation is a normal incident of indemnity insurance, and, where the insurance contract is regarded as one of indemnity, the Company on payment of the loss is subrogated to all of the rights of insured against the person whose fault or negligence caused the loss. This principle applies to the policies taken for burglary and theft. In Volume 46 Corpus Juris Secundum, P. 160, the principle of law has been enunciated as under :
"An insurer paying a loss under a burglary and theft policy is subrogated to the rights of the insured to recover the stolen property or to recover damages from a bailee for negligence in permitting the theft or from a third person whose tortious act occasioned the loss."
(6) Thus a release of all claims by an insured would bar further proceedings. The mere fact that the Insurance Company had made a hard bargain with the insurer in procuring a receipt indicating discharge of liability is in itself not sufficient reason for fastening the liability again on the insurer. The exception to the rule can be : (i) mental incompetence of the insured; (ii) presence of fraud.
(7)Thus, in the absence of plea of fraud, a receipt in full and valid accord and satisfaction prevents further recovery, an accord and satisfaction or release by the insured of all the claims under the policy suported by valuable consideration would bar further recovery. See Corpus Juris Secundum Vol. 46, P. 145.
(8)In this regard, it would be apt to refer to the decision given by the Supreme Court of India in the case report-Director. National Thermal Power Corporation, 1994 Supp. (3) SCC 126. The above case, no doubt, arose under the Arbitration Act of 1940, but the principle indicated therein would apply to the facts of this case also. In the above case, the Construction Company had given a receipt in writing indicating full and final satisfaction and the amount was received unconditionally. What was observed by the Supreme Court at page 129 is reproduced below
: "Admittedly, the full and final satisfaction was acknowledged by a receipt in writing and the amount was received unconditionally. Thus there is accord and satisfaction by final settlement of the claims. The subsequent allegation of coercion is an after-thought and a device to get over the settlement of the dispute, acceptance of the payment and receipt voluntarily given. In Ressel on Arbitration, 19th Exn., P. 396 it is stated that "an accord and satisfaction may be pleaded in an action on award and will constitute a good defence". Accordingly, we hold that the appellant having acknowledged the settlement and also accepted measurements and having received the amount in full and final settlement of the claim, there is accord and satisfaction. There is no existing arbitrable dispute for reference to the arbitration."
The discharge receipt in the present case is unqualified. No fraud or coercion is alleged or shown by the complainant. Hence, the claim of complainant will obviously be not tenable. Apart from the fact that any of the exceptions stated in para 6 of the citation quoted above does not appear in the present case, there is also no pleading with regard to coercion or undue influence appearing in the present case. It is not the case of the complainant that there is mutual mistake of fact in the calculations noted in the discharge receipt. Thus, the above principle would squarely apply to the facts of the present case also.
IN these circumstances, we find that the order and remarks made by the Forum in the judgment would deserve to be set aside and struck off.
IN the result, .following order is passed : ORDER The judgment and the order of the learned City Forum are set aside. The appeal is allowed and the remarks stated above are struck off from the said order. There will be no order to cost, as the complainant No. 1 is a consumer organisation. This appeal is accordingly allowed, with no cost. Appeal allowed.