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Judgment
This appeal under section 19 of The Consumer Protection Act, 1986 is in challenge to the Order dated 10.05.2019 of the State Commission in complaint no. 461 of 2012.
We have heard the learned counsel for the appellant (the ‘complainant’) and for the respondents (the ‘insurance co.’). We have also perused the record including inter alia the State Commission’s impugned Order dated 10.05.2019 and the memorandum of appeal.
The matter relates to an insurance claim. The insurance, by way of two policies, was for total amount of Rs. 40 lakh. The claim(s) in question were made for the said amount, asserting that the actual loss incurred was higher. The insurance co. settled at total Rs. 8,36,897/-, after the complainant had executed discharge voucher(s) which was a condition precedent to payment.
The State Commission has dismissed the complaint. The gist of the State Commission’s examination, which caused it to dismiss the complaint, as contained in paras no.14 and no. 15 of its impugned Order dated 10.05.2019, is being reproduced below for reference:
In the present case complainant has not approached this Commission with clean hands. Complainant has not even disclosed about execution of discharge vouchers in the complaint or in the evidence filed by way of affidavit. The payment of Rs. 8,36,897/- by OP to complainant is admitted. There are no allegations that the OP had pressurized complainant or exercised undue influence of acceptance of aforesaid amount. There is no evidence of protest having been raised by complainant at any point of time prior to filing present complaint. The acceptance is voluntary. Once the insured has accepted the amount in full and final settlement of all his claims, he is estopped from raising any further claim and settlement constitutes a binding contract between the parties unless it is shown that the same was influenced by use of coercion, fraud, undue influence etc. Complainant has not alleged any kind of such allegations against the OP in complaint / evidence by way of affidavit. In rejoinder complainant has alleged about his own compelling circumstance. Even the same are not stated in complaint case or evidence by way of affidavit. The allegations in this regard are also afterthought. In any event, it is not his stand that respondent / OP was not ready to pay him without signing the discharge vouchers. Further, it may be mentioned that complainant had received the aforesaid amount on different dates i./e. 05.03.2011 and 25.11.2011 respectively and the complaint is filed on 22.12.2012 i.e. after a gap of substantial period. The complainant has also concealed material facts from this commission also about having settled the claim and received the payment in full and final settlement. The complainant has not approached this Commission with clean hands and withheld important information which goes to the root of the matter. In Amar Singh v. Union of India (UOI) & Ors. (2011) 7 SCC 69, it has been held as under:
“53. Courts have, over the centuries, frowned upon litigants who, with intent to deceive and mislead the courts, initiated proceedings without full disclosure of facts. Courts held that such litigants have come with “unclean hands” and are not entitled to be heard on the merits of their case.”
In view of above discussion, we find that insurance claim has been finally settled by OP by paying a sum of Rs.8,36,897/- by way of two cheques as stated above. Complainant has already accepted the same in full and final settlement by executing discharge vouchers voluntarily. The complainant is not entitled of any relief. Accordingly, the complaint stands dismissed.
The State Commission has dismissed the complaint essentially on two grounds, one, that the amount settled by the insurance co. was accepted voluntarily by the complainant and it has not been shown by the complainant that there was any coercion, fraud or undue duress, etc. in executing the discharge voucher(s), and, two, the complainant did not disclose about executing the discharge voucher(s) in the complaint or in its evidence and therefore did not approach the Commission with clean hands and withheld important information which goes to the root of the matter.
In so far as executing the discharge voucher(s) is concerned, it needs no espousing that the discharge voucher has its own significance and implications but in case if the same has been executed under duress or under coercion or by fraud or in a situation in which the complainant had to necessarily sign the voucher without which it could not have got even the lesser amount being settled by the insurance co. or if the voucher was signed in good faith by treating it as a routine formality without being told or realising its significance and implications, etc., depending upon the facts and circumstances it cannot be held to be a kind of estoppel prejudicially detrimental to the complainant.
Be that as it may, we have strong reservations about the State Commission’s proposition that the complainant was dutybound to mention in its complaint or in its evidence that it had executed the discharge voucher(s). Getting discharge voucher executed is a normal practice adopted by insurance companies in the routine course of their functioning. We fail to understand how such routine thing can be perceived as a mandatory part of a complaint or that omission in mentioning it in the complaint can attract adverse inference. The complainant has not denied receiving the sum of Rs.8,36,897/- from the insurance co. On the contrary it has stated it upfront in its complaint. The case made out in its complaint was that the insurance co. had not settled the insured amount of Rs. 40 lakh in full as the actual loss incurred was higher. The insurance co. based its defence on inter alia the fact that discharge voucher(s) had been executed by the complainant. It was within its rights to do so. On such argument being made by the insurance co. the State Commission was required to form a view on the significance and implications of the discharge voucher(s) in the facts and circumstances of the case. But universalising or generalising the whole issue in the manner that the complainant itself was mandatorily required to mention the discharge voucher(s) in its complaint is totally unwarranted and in no manner can it be said that such an omission is tantamount to approaching the Commission with unclean hands or to wilfully withholding important information. Discloser of having executed the discharge voucher(s) cannot be construed to be a sine qua non to file a complaint or to make it maintainable. After the insurance co. took the defence relating to discharge voucher(s) in its written version the complainant did not dispute the fact in its rejoinder. On the contrary the complainant admitted to it. We therefore fail to understand as to why and in which manner the complainant was thereafter dutybound to mention the discharge voucher(s) in its evidence. Whatever evidence had to be provided apropos the discharge voucher(s) had to be adduced by the insurance co. which was banking its defence on it. The complainant on its part had admitted to the discharge voucher(s) in its rejoinder and was under no obligation to give any evidence in this regard if it did not want to. Hon’ble Supreme Court’s judgment relating to “unclean hands” quoted by the State Commission in para 14 of its Order is scarcely applicable in the present case since the complainant in actual fact did not come before the Commission with any unclean hands.
We are afraid and find it hard to estimate to what extent this misperception of the State Commission regarding non-disclosure of having executed discharge voucher(s) has prejudicially influenced its mind while dealing with the limited significance and related implications of discharge voucher(s).
In fact it is not difficult to see that this perception or finding arrived at against the complainant has gone to a great extent to prejudice the mind of the State Commission and the forum below has allowed itself to be misdirected to reach at wrong conclusions because of it.
As recorded in para 12 of its Order the complainant had stated in its rejoinder that due to fire incident he was under heavy debt and the bankers were pressing for recovery of loan as such he was having no option but to accept the cheques. The State Commission has taken the view that as no such plea was stated in the complaint, rather in the complaint, complainant has concealed the material fact of execution of discharge vouchers in full and final settlement, therefore the plea raised in the rejoinder is an afterthought. In para 14 the State Commission has observed that in rejoinder complainant has alleged about his own compelling circumstances. Even the same are not stated in complaint case or evidence by way of affidavit. The allegations in this regard are also afterthought. However, when this defence itself was taken in its written version by the insurance co., it was but natural for the complainant to give his side in its rejoinder. This was a normal process and can in no manner be construed to be an afterthought to be read detrimentally against the complainant.
Pertinently there is nothing on record to show that the complainant’s categorical contention that its bankers were pressing for recovery of loan and as such he had no other alternative but to execute the discharge voucher(s) in order to atleast obtain the lesser payment being offered is in any way false or erroneous. Also this contention has not been rebutted by the insurance co. To us this appears to be a valid and good enough reason for discounting the discharge voucher(s) since they most obviously appear to have been executed in a situation in which the complainant had to necessarily sign the voucher(s) without which it could not have got even the lesser amount being settled by the insurance co. much moreso when it had to urgently meet its liability with its banker.
Too obviously the fact also remains that the complainant has brought its case before the State Commission when ordinarily there would have been no need for the complainant to do so if it had voluntarily accepted the lesser amount settled by the insurance co. without reservation and was not dissatisfied with it. The impelling circumstances which subdued it to sign the vouchers have already been explained by the complainant which is part of record.
We also do not fail to notice that the essence of the complainant’s case is that it has assailed the surveyor’s report and challenged the payment of a lesser amount against its higher claim. This essence has not even been touched by the State Commission.
Sequel to the above, we find reason to hold in the facts and circumstances of the present case that:
(i) No adverse inference can be drawn against the complaint for not mentioning about the discharge voucher(s) in its complaint or in its evidence; and
(ii) Having regard to its unrebutted contention that it accepted the payment since it had to meet its liability with its banker, the execution of the discharge voucher(s) cannot be held against the complainant.
With the above observations the impugned Order dated 10.05.2019 of the State Commission is set aside and the matter is remanded back to the State Commission for decision on merit on the essence of the complaint.
The parties are directed to appear before the State Commission on 10.05.2023.
The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel immediately. It is also requested to send a copy of this Order to the State Commission by the fastest mode available. The stenographer is requested to upload this Order on the website of this Commission immediately.