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Judgment
V.K. Jain, J
(1) The complainant company obtained two insurance policies from the opposite party one being a Fire Floater Declaration Policy, covering 111 locations, for a sum assured of Rs.70 crores and the other being the Standard Fire and Special Perils Policy covering only one location. The insurance policies covered the building, plant and machinery, furniture, fittings & fixtures etc.
(2) A fire broke down at 397/398, 11th Cross, 3rd Main Road, 4th Phase, Peenya Industrial Area, Bangalore, Karnataka, Pin - 560 058 which was the subject matter of both the policies. A claim for an amount of Rs.23,55,13,287.17 was submitted by the complainant to the insurer.
It is alleged in para 8 of the complaint that after 14 months the insurer, vide letter dated 21.11.2012, intimated the complainant that the claim had been approved for Rs.17,65,26,037/- . The complainant claims to have received that letter on 23.11.2012. This is also the case of the complainant that it immediately protested against the reduction in the claim, but the insurer refused to make payment. Since there was mounting liability on account of interest and the complainant which was incurring a loss of Rs.85000/- per day on account of loss of interest, it accepted the amount offered by the insurer through under protest.
(3) Thereafter vide its letter dated 3.12.2012, the complainant intimated the insurer that the discharge voucher had been executed because the insurer would not pay any amount against the fire claim without its execution. The complainant thereafter approached this Commission seeking the balance amount of Rs.6,88,19,297/- along with cost of litigation.
(4) The complaint has been resisted by the insurer which has taken a preliminary objection that having executed the discharge voucher voluntary in full and final settlement of its claim, the complainant is estopped from filing the additional compensation. It is also stated in the written version that the complainant never disputed the assessment made and the recommendation made by the surveyor.
(5) The letter dated 21.11.2012 (wrongly typed as 21.1.2012) sent by the insurer to the complainant company to the extent it is relevant reads as under:
"We are pleased to inform you that the above claim is approved for Rs.17,65,26,037/- as full and final settlement of the claim.
Kindly also provide us a copy of a cancelled cheque to enable us to make RTGS payment accordingly."
(6) Vide letter dated 23.11.2012, delivered to the insurer on the same day the complainant sent the settlement intimation voucher duly signed by it cancelled cheque of its bank account and NOC from its banker South Indian Bank Limited and requested the insurer to transfer amount of its bank.
(7) The settlement intimation voucher to the extent it is relevant reads as under:
SETTLEMENT INTIMATION VOUCHER
CLAIM NO. : 672300/4/4/01/90000003 Date of Loss : 30.09.20
672300/11/11/04/90000001
Received from THE NEW INDIA ASSURANCE COMPANY LIMITED the sum of Rs.17,65,26,037/- (Rupees Seventeen crore Sixty five lakh twenty six & thirty seven ONLY) Which I/We agree to accept in full satisfaction and discharge of my/our claim upon the Company Under Policy No.672300/11/11/01/00000057 & 672300/11/11/04/00000002 in respect of Rs.17,65,26,037/-
Signature of Insured with seal
Name
Date 23 Nov. 2012
Place Bangalore - 58
BANK NAME - THE SOUTH INDIAN BANK LIMITED,
ACCOUNT NO. - CC A/c No.0127083000001213
IFSC - CIBL0000127
(8) It would thus be seen that the complainant immediately on receipt of the letter dated 21.11.2012 which it claims to have received on 23.11.2012 not only executed the discharge voucher but also obtained the NOC from its bank, annexed the said NOC to the forwarding letter dated 23.11.2012 and delivered the said letter in the office of the insurer on the same day. The aforesaid chain of events become important in view of the claim of the complainant that it had protested against the offer made by the insurer. There is no documentary proof of any protest having been made to the insurer before 03.12.2012. That apart, there was hardly any scope for making any kind of protest considering that the complainant completed the entire process on the very same day on which it had received the letter dated 21.11.2012, offering a sum of Rs.17,65,26,037/-.
(9) Though in its letter dated 03.12.2012 the complainant had alleged that on receipt of the letter on 23.11.2012 they had immediately intimated their protest, this was refuted by the insurer by way of a response dated 12.12.2012 to the aforesaid letter dated 03.12.2012. It was emphasised in the response of the insurer that the discharge voucher was made by the complainant without any protest and expression of dissatisfaction as to the quantum of settlement.
(10) Besides refuting the allegation of protest the insurer also stated in its letter dated 12.12.2012 that the difference in the amount claimed and the amount settled had emanated due to deduction on account of depreciation, salvage and restatement of premium, as per the policy terms and conditions and the recommendation of the surveyor. Admittedly, the complainant did not send any rejoinder to the letter of the insurer dated 12.12.2012.
(11) It would thus be seen that not only the insurer refuted the allegation of protest it also sought to justify the difference between the amount claimed and the amount offered by them to the complainant.
(12) The next question which arises for consideration is as to whether the discharge voucher was executed by the complainant under any duress, compulsion, Coercion etc. No particulars of any coercion, duress or compulsion except the loss of interest were given in the letter dated 03.12.2012 nor the same have been pleaded in the consumer complaint. Thus the case of the complainant in nutshell is that since they were losing interest everyday on account of the delay in settlement of the claim, they accepted the payment offer by the insurer. This is not the case of the complainant that it was in some kind of financial distress which compelled it to accept the offer made by the insurer. Neither such a distress has been pleaded nor has it been proved by the complainant. The complainant appears to be a fairly large company, it having taken one insurance cover for Rs.70 crores and the other insurance cover for about Rs.15 crores. The aforesaid circumstance coupled with the other facts and circumstance, discussed here in above lead to an irresistible conclusion that the payment offered by the insurer was accepted by the complainant voluntarily and without any kind of force, compulsion, duress etc. In my opinion mere loss of interest does not constitute duress and the financial circumstances of the insured were not such that it could have waited to approach a Court/Tribunal for the redressal of its grievance and therefore had no option but to accept the offer made by the insurer on request of the letter dated 21.11.2012, the complainant could have approached a Court/Tribunal and sought an interim order for payment of the offered amount.
(13) The learned counsel for the complainant refers to the Circulars dated 24.09.2015 and 07.06.2016 issued by IRDA which to the extent they are relevant reads as under :
Circular dated 24.09.2015
"The Insurance Companies are using 'discharge voucher' or "settlement intimation voucher" or in some other name, so that the claim is closed and does not remain outstanding in their books. However, of late, the Authority has been received complaints from aggrieved policyholders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts.
While the Authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurers shall not use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora.
Accordingly insurers are hereby advised as under :
Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law.
All insurers are directed to comply with the above instructions.
Circular dated 07.06.2016
Wherever there are no disputes by the insured/s claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued.However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimant/s.
If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.
Under no circumstances the Discharge vouchers shall be collected under duress, by coercion, by force or compulsion.
Insurers are directed to comply with the above with immediate effect.
(14) It is seen that after issuance of the circular dated 24.09.2015 the insurers represented to IRDA that the said circular was not in the line with the IRDA (protection of policyholders interests) Regulation, 2002 and the provisions of Indian Contract Act. On receipt of representation from the insurers IRDA reviewed the matter in the light of the provisions of Contract Act, P.P.I. Regulation and the judgements of the Hon'ble Supreme Court and issued the directions contained in the Circular dated 07.06.2016.
(15) It would be seen that vide subsequent Circular dated 07.06.2016 IRDA will permitting the continuance of the practice of obtaining discharge voucher it, only instructed the insurers not to obtain such vouchers under duress, by coercion, by force or compulsion. None of these circumstances however have been established in this case. Though IRDA Circular enjoins upon the insurer to pay the amount assessed by it without waiting for the discharge voucher in case the offer made by them is disputed by the insured, in the present there is no evidence of any kind of protest by the insured before sending the discharge voucher to the insurer on the very same day on which it received the same alongwith a forwarding letter. Therefore, it cannot be said that there was a non-compliance of the aforesaid circulars though the contention of the learned counsel is that both the circulars came to be issued by years after the payment was accepted in this case.
(16) The learned counsel for the complainant has drawn my attention to the decision of this Commission in Ramdas Sales Corporation -vs- New India Assurance Company Ltd. decided on 10.02.2016. A perusal of the aforesaid decision would show that in the said case the complainant was in great financial stress and under pressure to pay to its creditors but the insurance company refused to release the amount offered to it, without a final discharge. However in the present case no such financial stress or pressure on the complainant company has even been pleaded. Had the complainant protested on receipt of the letter of the insurer dated 21.11.2012 and thereafter accepted the payment, it could possibly be said that the offer had not been voluntarily accepted. But, in the present case there was no protest of any kind and the payment offered by the insurer was based upon the assessment made by the surveyor and according to the insurer, the same was computed after making deductions for depreciation under insurance etc. as per the terms of the policy.
(17) The issue involved in this complaint came up for the consideration of the Hon'ble Supreme Court in United India Insurance Vs. Ajmer Singh Cotton & General Mills & Ors. (1999) 6 SCC 400 and the following view was taken :
"4............ 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 misrepresentation or the like. If in a given case the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, misrepresentation, undue influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complainant is made would be justified in granting appropriate relief. However (sic so), 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 relief 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."
This issue also came up for consideration of the Hon'ble Supreme Court in New India Assurance Co. Ltd. Vs. Genus Power Infrastructure Ltd. (2015) 2 SCC 424, and the following view was taken:
"7. The question that arises is whether the discharge in the present case upon acceptance of compensation and signing of subrogation letter was not voluntary and whether the claimant was subjected to compulsion or coercion and as such could validly invoke the jurisdiction under Section 11 of the Act. The law on the point is clear form following decisions of this Court. In National Insurance Co. Ltd. V. Boghara Polyfab (P) Ltd. in paras 26 and 51 it was stated as under (SCC pp. 284-85 and 294)
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 b 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 practised 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."
................. A bald plea of fraud, coercion, duress or undue influence is not enough and the party who sets up such a plea must prima facie establish the same by placing material before the Chief Justice / his designate. If the Chief Justice / his designate funds some merit in the allegation of fraud, coercion, duress or undue influence, he may decide the same or leave it to be decided by the Arbitral Tribunal. On the other hand, if such plea is found to be an afterthought, make-believe or lacking in credibility, the matter must be set at the rest then and there."
It is therefore, clear that a bald plea of fraud, coercion, duress or undue influence is not enough and the party who sets up a plea, must prima facie establish the same by placing material before the Chief Justice / his designate."
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 31.3.2011 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."
(18) For the reasons stated here in above, I hold that having accepted the payment of Rs.17,65,26,037/- in full and final settlement of its claim, the complainant is estopped from claiming any additional amount. The Complaint is therefore dismissed, with no order as to cost.