UNITED INDIA INSURANCEversusAJMER SINGH COTTON AND GENERAL MILLS AND ORS. ETC.

               UNITED INDIA INSURANCE                                         A
                          v.
 AJMER SINGH COTTON AND GENERAL MILLS AND ORS. ETC.

                           AUGUST 12, 1999

             [S. SAGHIR AHMAD AND R.P. SETHI, JJ.]                            B

      Consumer Protection Act, 1986-Section 14-Deficiency in service-
Claim by the insured-Mere execution of discharge voucher and acceptance
of insurance claim-Tenable only if insured proves that discharge voucher
was obtained by fraud or coercion-Held, insured estopped from making ary      C'
further claim from insurer after accepting full settlement of the claim by
executing the discharge voucher.

      Award of interest-Grant of-Tribunal/Commission can grant
appropriate relief when proved that discharge voucher was obtained by         D
fraud or coercion-Held. delay in settlement of claim under policy cannot be
ground for Commission to grant interest when it is not pleaded at the time
 of acceptance of the insurance amount.

      liability of Insurance Companies-Issuance of discharge voucher by
insured-Forums have powers to fasten liability against insurance company-     E~
But cannot fasten liability against the insurance companies over and above
the liabilities payable under contract of insurance.

      Respondent No. l procured two insurance policies and two insurance
covers to the extent of Rs. 1,00,000 respectively from the appellant and F
insurance cover of Rs. 27 lakhs from respondents Nos. 2 to 4. Subsequently,
respondent No. 1 suffered losses due to fire. On the basis of the report of
the surveyors, he was paid the insurance amount under the policy. The
insurance claim amount was accepted in full and final settlement of all
claims by executing the discharge vouchers willingly and voluntarily.
Thereafter, respondent No. 1 filed a complaint before the State Commission· 0 ·
claiming inter-alia interest at the rate of 18 per cent per annum against the
appellant. The State Commission dismissed the claims. ·The National
Commission accepted the claims of respondent No.I and directed the appellant
to pay interest at the rate of 18 per cent. Hence, these appeals by the
appellant
                                    385
                                                                              H
    386                      SUPREME COURT REPORTS [1999] SUPP. IS.CR.
                                        .
A          Allowing these appeals, this Court                                        ..
          HELD 1.1. The mere execution of the discharge voucher by insured
    in respect of claim raised under insurance policy and acceptance of the
    insurance claim would not estop the insured from making further claim
    from the insurer but only if it is proved that discharge voucher was obtained
B   by fraud or coercion. [388-F]

            1.2. The execution of the discharge voucher would not always deprive
    the consumer fr~m preferring claim with respect to the deficiency in service
    or consequential benefits arising out of the amount paid in default of the
C   service rendered. Despite execution of the discharge voucher, if the consumer
    i,s 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 mis-representation or the like, the authority before whom the
    complaint is made would be justified in granting the appropriate relief.
D                                                                     {388-C-D-E]

          Jivajeerao·Cotton Mills Ltd v. New India Assurance Co. Ltd, (Original
    Petition No. 52of199t decided on November 28, 1991), relied on.

          2. The Consumer Disputes Redressal Forums and Commission
E   constituted under the Act shall have the power to fasten liability against the
    insurance companies notwithstanding the issuance of the discharge vou~her.
    Such a claim cannot be termed to be fastening the liability against the
    insurance companies over and above the liabilities payable under the contract
    of insurance envisaged in the policy of insurance. [388-F-Gl
F         3. The discharge vouchers were admittedly executed voluntarily and
    the complainants had not alleged their execution under fraud, undue influence,
    mis-representation or the like. In the absence of pleadings and evidence the
    State Commission was justified in dismissing their complaints. The National
    Commission granted relief on the ground of delay in the settlement of claim
G   under the policies. Mere delay of a couple of months would not have authorised
    the National Commission to grant relief particuiarly when the insurer had
    not complained of such a delay at the time of acceptance of the insurance
    amount under .the policy. (389-A-BI
                      ,·

           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 535 of 1994
H   Etc.
  UNITED INDIA INSURANCE v. A.S. COT. AND GEN. MILLS [SETHI, J.]           387

     From the Judgment and Order dated 13.4.1993 of the National Consumer          A
Disputes Redressal Commission, New Delhi in F.A. No. 147 of 1992.

      Vishnu Mehra, K.M.K. Nair, Pramod Dayal, S.M. Suri and M. T. George
for the Appellant.

     Yogeshwar Prasad, P.N. Puri, P.K. Bajaj and Ms. Rachna Gupta for the          B
Respondents.

     The Judgment of the Court was delivered by

       SETHI, J. Whether the insured is estopped from making any further
claim from the insurer after accepting the insurance claim amount in full and      C .
final settlement of all the claims by executing the discharge voucher willingiy
and voluntarily without any protest or objections?

      Whether inspite of the acceptance of the claim amount and execution..
of discharge voucher voluntarily, the insured is entitled to the grant of any
interest?
                                                                                   n.
      Whether the Consumer Disputes Redressal Commissions constituted
under the Consumer Protection Act, 1986 are entitled to fasten liability against
the insurance companies over and above the liabilities payable under the
contract of insurance envisaged in the policy of insurance? are the main           ~
questions of law required to be adjudicated in all these appeals.

       In Civil Appeal No. 535 of 1994 the respondent No. l had procured two
policies Nos. 201202-11-43-11-01234-90 from the appellant-insurance company.
Similarly in Civil Appeal No. 723 of 1994 respondent No. l had procured two
insurance covers operative from 20th October, 1989 to 19th June, 1990 to the F           ·
extent of Rs. 1,00,000 and from 3rd April 1990 to 29th June, 1990 to the extent
of Rs. 10,00,000 respectively. Respondent No. I had also procured insurance
cover to the tune of Rs. 27 lakhs from respondents 2 to 4. The respondent
suffered losses on account of fire regarding which the surveyors were
appointed and upon submission of their reports the payments were made G
which were accepted by the insured with declaration of receipt of the "sum ·
in full and final discharge of claims upon them". After the payments were
made, the respondents filed complaint petitions before the State Consumer
Disputes Redressal Commission, Punjab at Chandigarh claiming inter alia
interest at the rate of 18 per cent per annum against the appe!lant. The State
Commission dismissed the claims but the National Consumer Disputes Redressal H
    388                     SUPREME COURT REPORTS [1999] SUPP. l S.C.R.

A Commission accepted the appeal of the respondent No. l and directed the
    appellant to pay the interest at the rate of 18 per cent.

          The facts in Civil Appeal No. 534 of 1994 are almost identical for
    determining the controversy and deciding the question of law noted
    hereinabove.
B
          We have heard learned counsel for the parties and perused the record.
   It is true that the award of interest ·is not specifically authorised under the
   Consumer Protection Act, 1986 (hereinafter called 'the Act') but in view of
   our judgment in Sovintorg (India) Ltd. v. State Bank of India (Civil Appeal
C No. 823 of 1992) decided on I Ith August, 1999, we are of the opinion that
   in appropriate cases the Forum and the Commissions under the Act are
   authorised to grant reasonable interest under the facts and circumstances of
   each case. 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
D. 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 disch!lrge voucher or receipt had been obtained from him under the
   circumstances which can be termed as fraudulent or exercise of undue influence
   or by mis-representation or the like. If in a given case the consumer satisfies
E the authority under the Act that the discharge voucher was obtained by
   fraud, mis-representation, undue influence or the like, coercive bargaining
   compelled by circumstances, the authority before whom the complaint is made
   would be justified in granting appropriate relief. However, 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
F justified in granting the appropriate relief under the circumstances of each
   case. The mere execution of the discharge voucher and acceptance of the
   insurance claim would not estop the insured from making further claim from
   the insurer but only under the circumstances as noticed earlier. The Consumer
   Disputes Redressal Forums and Commissions constituted under the Act shall
G also have the power to fasten liability against the insurance companies
   notwithstanding the issuance of the discharge voucher. Such a claim cannot
   be termed to be fastening the liability against the insurance companies over
   and above the liabilities payable under the contract of insurance envisaged
   in the policy of insurance. The claim preferred regarding the deficiency of
   service shall be deemed to be based upon the insurance policy, being covered
H by the provisions of Section 14 of the Act.
       UNITED INDIA INSURANCE v. A.S. COT. AND GEN. MILLS [SETHI, J.]         389

          In the instant cases the discharge vouchers were admittedly executed        A
    voluntarily and the complainants had not alleged their execution under fraud,
    undue influence, mis-representation or the like. In the absence of pleadings
    and evidence the State Commission was justified in dismissing their complaints.
    The National Commission however granted relief solely on the ground of
    delay in the settlement of claim under the policies. The mere delay of a couple   B
    of months would not have authorised the National Commission to grant relief
    particularly when the insurer had not complained of such a delay at the time
    of acceptance of the insurance amount under the policy. We are not satisfied
    with the reasoning of the National Commission and are of the view that the


'
    State Commission was justified in dismissing the complaints though on different
    reasonings. The observations of the State Commission in Jivajeerao Cotton         C
    Mills Ltd. v. New India Assurance Co. Ltd. (Original Petition No. 52of1991
    decided on November 28, 1991) shall always be construed in the light of our
    findings in this judgment and the mere receipt of the amount without any
    protest would not always debar the claimant from filing the complaint.

          Under the circumstances the appeals are allowed. The orders of the          D
    National Commission are set aside by confirming the orders passed by the
    State Commission. The complaint of the respondents shall stand dismissed
    without any order as to costs.

    NJ.                                                          Appeals allowed.