Oriental Insurance Company vs Sodager Show Room

Bashir A. Kirmani, J.—On his claim before 2nd respondent, the first respondent was awarded interest of 9% p.a, on allegedly a settled

Insurance amount of Rs. 171041/- which he disputed as not being finally settled, as claimed by the insurance company. Both, he, and the company

filed cross appeals against the award before respondent No. 3 first respondent on the ground that his signature on discharge voucher reflecting his

admission regarding settlement of his insurance claim at Rs. 171041/- was obtained and got signed by him under duress; and the petitioner

company on the ground that principal amount having been accepted by first respondent in final settlement, he was not entitled to interest, allowed

thereupon. The 3rd respondent rejected both the Appeals and maintained the award.

Aggrieved thereby, petitioner-company impugns the same through this petition on the ground, that in view of law declared by Apex court, the

first respondent could not lay any further claim after having signed the discharge voucher for the amount allowed by the company on his Insurance

claim in total satisfaction thereof, and that both the Fora below failed to appreciate that position of law even after noticing the judgments and

acknowledging that discharge voucher was so signed by first respondents. During course of submissions petitioners counsel has reiterated the

aforesaid grounds with reference to certain precedents, while respondent is not present to be heard.

The writ petition stands admitted vide order dt. 25.08.2004, whereafter notices were served through registered post to respondents, but on

25.4.05 this Court while observing that respondents 2 and 3 need not be served directed service upon first respondent through process serving

agency of the Pr. District Court, in response whereto, he appeared before the Registrar Judicial on 8.7.2005, but thereafter absented and did not

appear on the subsequent date of hearing i.e. 5.8.05, 20.10.05 and 19.11.05 while matter was listed before the bench. Accordingly, in view of his

total default, the first respondent is proceeded against in ex-parte, and the matter taken up for final disposal.

I have heard learned Counsel and considered the matter. From cumulative reading of the memo of petition, and orders passed by Divisional and

State Consumers Forum, it appears that first respondent who was holding an Insurance policy regarding stocks of his show room at Anantnag

raised a claim thereunder, on the ground that insured stocks suffered total damages due to floods in the month of June, 1996, while Insurance

cover was subsisting. After registering the claim Petitioner Company had the loss assessed at Rs. 2,20,65.00/- and after deducting 15% there from

in lieu of non maintenance of accounts by the policy holder processed the claim for Rs. 1,71,041.00/- and informed the first respondent, about

settlement of the claim at said amount who executed a discharge voucher in their favour in the month of July accepting the amount in full and final

settlement of his Insurance claim as aforesaid. After receiving and en-cashing the cheque as such, the first respondent instituted a claim before the

second respondent, who after noticing the factual aspect of the matter as aforesaid allowed the same along with 9% interest p.a for the period from

8/96 to 11/99 which was upheld by respondent No. 3 on appeal. Thus, the salient features of the controversy can be summed thus, first, that

respondent No. 1 admittedly executed the discharge voucher in favour of petitioner Insurance company accepting Rs. 1,71,041.00/- in full and

final settlement of his claim on the Insurance policy covering stocks of his Show Room as aforesaid; secondly, that the petitioner Insurance

company sent him the cheque for said amount of Rs. 171041/- which was duly received by the first respondent; and thirdly, that only after

receiving the cheque as aforesaid, he preferred the claim before respondent No. 2 as above.

Now in so far as legal aspect is concerned, the settled position is that after accepting a particular amount in full and final settlement of Insurance

claim and execution of discharge voucher witnessing the same, the insured cannot be permitted to re-agitate the claim whether by way of

enhancement or interest payable there upon. That clinches the matter in so far as question of petitioners claim of enhancement in amount of

Insurance is concerned. In that view of the matter, the enhancement claimed by him before two Fora below has rightly been rejected.

In so far as the question of interest payable on the agreed account is concerned, I feel that even though, the Fora below have allowed the same

for a particular period, yet the matter stands on a slightly different footing. In view of the legal position as aforesaid the first respondent certainly

stands disabled from claiming interest upon the amount accepted by him. in full and final settlement but only for the period preceding the date of his

acceptance of the same. Reason being that the moment he signed the discharge voucher he waived off whatever claim he could otherwise lay in so

far as interest payable on the settled amount was concerned. But that waiver would perhaps not cover the period after his signing the discharge

voucher, till receipt of cheque by him; for the obvious reason that during this period the amount payable to him under the cheque was admittedly

lying in the account of petitioner-company and earning interest for them, to which he would be entitled, because the money was payable to him not

on the date of the receipt of the cheque but on the date he signed the discharge voucher, on which date .he was entitled to receive the amount.

Accordingly, while he was not entitled to claim any interest on the amount accepted by him in full and final settlement of his claim, till the date of

signing the acceptance letter, he would certainly be entitled to interest for the period from acceptance of the settlement to the actual receipt of the

cheque, which would even extend to actual encashment thereof in case any delay in en-cashing the cheque, would be attributable to the petitioner

company.

In that view of the matter, therefore, I feel that both the Fora below have acted in excess of jurisdiction lawfully vested in them by allowing

interest for the period from 8/96 to 11/99, as done under impugned orders, which are accordingly, modified to the extent, that first respondent

shall be entitled to interest upon the agreed amount of Rs. 1,71,041.00/- only from date of his signing the discharge voucher to the date of receipt

of the cheque by him, at the rate at which the same has been credited to the relevant account of petitioner company on the said amount.

Petition stands accordingly disposed of along with all connected CMP(s).