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Judgment
A. P. Sahi, President Member
CC/41/2005
This is an Original Petition with regard to an insurance claim made by the Complainant claiming relief for the damage caused to the Jacking Equipment of an Oil Rig installation and another claim in respect of the same incident for the damage caused and covered under the Hull and Machinery Policy. The said claims are in respect of a Deep Sea drilling rig machine deployed by the Complainant for drilling oil at Bombay High under the Supervision of Oil and Natural Gas Corporation.
The undisputed facts are that a combined Hull Policy / Package Policy for an amount of Rs.70,85,00,000/- on a premium of Rs.1,34,86,021/- was taken and the duration of the said Policy was from 23.12.2000 to 22.12.2001.
The Rig was deployed since 10.05.2001. The weather conditions were cyclonic with fierce winds that caused the Rig to slide astern suffering foundation failure. The warranty surveyors M/s Noble Denton and Associates observed the moving away of the Rig on 08.11.2001. The hull of the Rig was lowered on 12.11.2001. About 2000 tonnes of mud were lying on the mat. On 18.11.2001 the port jacking system started leaking. On 19.11.2001 the outboard forward motor jacking was found to be not working. It was sent ashore upon being removed but was found to be beyond repairs. Attempts were made to remove the large mud deposits. On 14.12.2001 the hull was jacked up but with the seizing of the upper pinion motor, the Rig became incapable of being jacked up further. The failure of the hydraulic system of the jacking mechanism was due to the over penetration of the mat into the sea bed and the accumulation of mud and sediments on the mat.
This incident with regard to a mal-functioning of the rig and the equipment was reported on 14.12.2001 and during the operations that ensued the equipment went under some stress due to fault in the Hydraulic System and the jacking operations were immediately stopped on 15.12.2001. The failure of the hydraulic jacking mechanism was on account of a stated abnormal over loading on the legs of the rig that had penetrated into the sea bed causing accumulation of mud and sediments on the mat.
This was recorded in the report dated 10.03.2002 of the warranty surveyor and the report of the Indian Register of shipping. Another report dated 06.06.2002 was submitted by them.
The said incident and the damage caused was reported to the Insurance Company who appointed Surveyors, M/s J. B. Boda as Surveyors and Adjusters to assess the loss. The loss regarding the failure in the Hydraulic jacking mechanism was investigated and assessed and a sum of Rs.88,95,707/- was found to be admissible as per the report of the Surveyor dated 08.08.2002. The Complainant was informed that there was approval for the said amount and consequently, a cheque of Rs.88,95,707/- dated 05.09.2002 was issued to the Claimant.
In respect of the same incident and accident there was a damage caused to the Hull of the Rig equipment with regard to which another survey was conducted by M/s Mathew Daniel International (London) Limited who submitted a Report on 30.07.2003. This Surveyor Report also noted the fact that the vessel had to be taken to Dubai Dry Docks where the repair was carried out. The claim was raised in respect of this incident as well but while finalizing the said claim the payment which had been made earlier in respect of the machinery breakdown (Hydraulic Jacking Mechanism) to the tune of Rs.88,95,707/-, it was observed that the first claim with regard to machinery break down aforesaid was not payable under the exclusion clause of the policy inasmuch as the exclusion clause did not permit any such reimbursement that had been caused in the circumstances in the present case.
The report of M/s Noble Denton & Associates, Dubai Warranty Surveyor, discussed the causes of the failures of the mat supported drilling units. The Insurance Company on the basis of reports collected by it found that the cause for damage to the Jacking mechanism was on account of cyclone and resultant accumulation of silt and not on account of any unexplained of sudden breakdown and hence the loss was not payable as per the exclusionary clause under the machine break down section of the policy.
The matter entered negotiations and the Complainant voluntarily vide letter dated 28.09.2003 after discussions agreed for the deduction of the amount from the second claim. The letter dated 28.09.2003 is extracted here as under:-
“ Sub: Claim on 14.12.2001 Deep sea Matdrill
Dear Sir,
This is further to the discussion we had on the subject of the Hull claim and the M. B. claim paid earlier.
We agree to deduct the amount paid from the present payment you are seeking.”
Thus, this was a voluntary acceptance by the Complainant admitting that the machinery break down claim of Rs.88,95,707/- was not payable. At the very outset the impact of such voluntarily waiver and discharge as well as its legal impact needs to be addressed inasmuch as if the aforesaid fact is established then in that event no relief would be permissible. It is to be noted that this letter dated 28.09.2003 was not mentioned or disclosed in the Complaint.
On this issue, the contention on behalf the Complainant is that the earlier claim which was settled in September, 2002 could not have been re-opened and the deductions made in a subsequent claim settlement, may be arising out of the same incident and policy, that was assessed in October, 2003, could have been made.
On this a Rejoinder has been filed on behalf of the Complainant to the stand taken by the Insurance Company in its counter that such waiver and discharge will preclude the claimant from raising any such demand. In Paragraph No.-2 of the Rejoinder the Complainant has stated that he could have never agreed to forego the settlement that had earlier been concluded by getting the amount deducted in the subsequent claim. It is also alleged that the letter dated 28.09.2003 quoted herein above was written under pressure and coercion and not out of free will and choice of the Complainant. To explain this, it is alleged that the Opposite Party had taken a stand that the amount of Rupees Twenty Five Crores which was to be paid with regard to the second claim would be with-held, and would only to be paid if the Complainant accepted the deduction in respect of the first settlement.
The law on this issue therefore needs to be traversed and for that purpose reference deserves to be made to the judgment of the Apex Court in the case of National Insurance Company Limited versus Boghara Polyfab Private Limited (2009) I SCC 267. The legal position relating to a discharge voucher for understanding a discharge by a party under a contract came to be considered, where it was held that if a Party executing any discharge document or voucher alleges it to be on account of fraud, coercion or undue influence practiced by the other Party, and if it is able to establish the same, then obviously the discharge of the contract would be void.
The Apex Court also ruled that where one of the Parties issues full and final discharge or no due certificate confirming that he has no further claims and is satisfied, the same amounts to discharge of a contract by acceptance of performance. The party issuing the discharge certificate cannot thereafter make any fresh claim or revive any settled claim nor can it seek any reference to arbitration in respect to any such claim.
Thus, in a situation like this, it has to be established by oral or documentary or any other evidence that the discharge voucher or settlement was not voluntary and was obtained by fraud, coercion or manipulation.
In the present case the document quoted herein above leaves no room for doubt that both the claims of Hull and Machinery Breakdown are referred to in the said document and there was an express agreement to deduct the amount already paid from the subsequent claim. The execution of this document is not denied. The allegation is that it was tendered under pressure and coercion and not out of free will. This statement has come in the Rejoinder whereas no mention of the same was made in the entire Claim Petition. If the execution of the document was not disputed, then it was the obligation of the Complainant to have disclosed this document in the Complaint itself and then take a plea about the manner of the execution of the document. This was deliberately with held and it is only after the said document and it’s content was disclosed and taken in defence by the Opposite Party that the Complainant in Rejoinder took up this plea. There is no material whatsoever to accept the bald allegations of coercion and under influence without any proof to substantiate the same. Therefore there is no material to believe the version of the claimant about coercion or undue influence, and the deduction of the amount appears to be with the consent of the Complainant. A denial Affidavit dated 05.12.2014 has been filed as a Reply to the rejoinder of the Complainant by the Insurance company and in Paragraph No.-3 it is categorically denied that the letter dated 28.09.2003 was obtained under pressure and coercion. It is also denied that the story of any adjustment or arm twisting tactics to with-hold Rupees Twenty Five Crores was adopted. Such allegations have been described as an afterthought and were never made in the Original Complaint.
There are certain provisions in law and precedents which need to be deliberated upon for understanding the proposition that can be possibly entertained for either accepting or otherwise the argument on a claim settled by way of a discharge or recording satisfaction and then subsequently resiling back on the same.
The definitions regarding free consent in Section 14, Coercion in Section15, undue influence in Section 16, fraud in Section 17 and misrepresentation in Section 18 of the India Contract Act, 1872 have to be kept in mind. The following decisions have been relied on by the learned Counsel for the Opposite Party to substantiate the submission that once the claim had been settled on a voluntary offer of the Complainant which fact was not disclosed in either of the Complaints, the said voluntary action of the Complainant will amount to a willful discharge uninfluenced by any factor. The decisions are:
ONGC Mangalore Petrochemicals Ltd. versus ANS Constructions Ltd. & Ors. reported in (2018) 3 SCC 373.
Garg Acrylics Ltd. versus United India Insurance Co. Ltd. reported in (2014) SCC Online NCDRC 904.
M/s Kundan Rice Mills Ltd. versus United India Insurance CO. Ltd. reported in (2015) SCC Online NCDRC 3559.
MJRJ Medichem Surgicals versus National Insurance Company Ltd reported in MANU/CF/0066/2015.
KN Resources Private Limited versus Divisional Manager / Regional Manager, Oriental Insurance Company Limited reported in (2019) SCC Online NCDRC 37.
United India Insurance Co. Ltd. versus Roshanlal Oil Mills Ltd. reported in (2000) 10 SCC 19.
On going through the judgments that have been cited and the other judgments referred to therein the sum and substance of the ratio read with above mentioned provisions of the Indian Contract Act, 1872 lead to the conclusion that a discharge voucher or a no due slip or any such expression in writing will have to be accepted as valid unless it is shown that the said discharge / offer was under undue influence or coercion or and was not of free consent or founded out fraud or misrepresentation.
Thus, a claimant pleading undue influence or coercion will have to establish that the discharge was on account of having succumbed to any pressure as against other party who might be in a stronger position or having an upper hand.
The contingencies of financial difficulties for succumbing to such pressure or facing a financial crisis, a cash starved situation or any calamity that might have fallen had been an influencing factor and it is only then, if established through evidence, can such a discharge or final settlement be doubted.
On the other hand if such a withdrawal, or turn around lacking credibility is pleaded only through a bald plea then such an averment would not amount to any compulsion or force and rather would be an afterthought or make believe effort that may be possibly attempted for a bargain. If there is no protest in close proximity to the transaction of discharge which is accepted without reservation and willingly then such a claim of attempting to wriggle out of the settlement would be without merit.
It is in this background that the facts of the present case need to be assessed. The letter dated 28.09.2003 was neither preceded by nor pursued by any such protest that the same had been obtained under undue influence or coercion. There was not even a whisper about any threat or coercion up to the settlement which was made in 2003. It was however when the deduction was made in the subsequent claim that is subject matter in Consumer Complaint No. 55 of 2005 that the Complainant took this plea in the Rejoinder Affidavit. It needs to be reiterated that there is a complete non-disclosure of any such allegations in the Complaint.
Testing the transactions on the above principles, there was no protest either express or implied against the settlement. The genuiness or bonafides of the voluntary execution of the letter dated 28.09.2003 is no longer a puzzle to be resolved. There is no evidence of threat or for that matter of any influencing factor. Consequently, the plea of wrongful deduction under any threat is unacceptable.
Accordingly, there is no reason to accept the aforesaid version of the Complainant. The Claim Petition fails and is accordingly dismissed.