JUDGMENT
Doabia, J.
1. The complainant having received the amount after arriving at a settlement and after giving a receipt indicating full and final satisfaction, filed a complaint before the State Commission. It was contended that as there was delay in the matter of settling the claim, therefore there was deficiency of service. In these circumstances. Interest was claimed for the period the matter remained pending with the Insurance Company.
2. A claim was registered. This was resisted on the ground that the complainant having given a receipt for full and final settlement, therefore, the complainant was not entitled to claim the interest.
3. The State Commission came to the conclusion that the receipt given by the complainant was only regarding the quantum of compensation. If there was any deficiency, then that would not be covered under the receipt of satisfaction given by the complainant. As there was delay in the matter of payment of compensation the Commission came to the conclusion that there was deficiency of service. It, therefore, allowed 18% interest. A sum of Rs. 50,000/- was also allowed as compensation. It is this aspect of the matter which is the subject matter of challenge in this appeal.
4. The learned counsel appearing for the appellant submits that the question of dispute being settled would arise only when there is a subsisting dispute or difference between the parties. It is submitted that once there is a settlement of claims, then the question of a dispute being pending which requires adjudication before the authorities constituted under the Jammu and Kashmir State Consumer Protection Act of 1987, would not arise. What is sought to be contended is that an accord and satisfaction can be pleaded as a defence in these proceedings and this if proved, would be enough to reject the claim of the complainant.
5. There are decisions of the National Commission under the Consumer Protection Act of 1986 i.e. the Central Act wherein a receipt given by the complainant indicating full and final settlement was held to be a valid defence. Thus, in Pooja Industries v. United India Insurance Co. Ltd., (1994) 2 CPJ 105 (NC), the complainant had executed a formal receipt acknowledging payment of Rs. 7.30 lakhs from the Insurance Company in full and final settlement of the claim, This was held to be good and sufficient for rejecting the claim of the complainant. The plea sought to be taken by the complainant that receipt was given under coercion was not looked into because there was no evidence on the record in proof of such a claim. In another case again arising before the National Consumer Dispute Redressal Commission, New Delhi, (1996) 1 CPJ 140 (NC), the situation was similar. The complainant received the amount in full and final settlement. It was observed
that in these circumstances, the question of there being any deficiency in service would not arise. As a matter of fact, the general rules applicable to the payment or discharge of other contractual obligations apply to the payment or discharge of insurance policies also. What is applicable in these cases is the principle of subrogation. Subrogation is a normal incident of indemnity insurance, and, where the insurance contract is regarded as one of indemnity, the company on payment of the loss is subrogated to all of the rights of insured against the person whose fault or negligence caused the loss. This principle applies to the policies taken for burglary and theft. In Volume 46 Corpus Juris Secundum, p. 160, the principle of law has been enunciated as under :
“An insurer paying a loss under a burglary and theft policy is subrogated to the rights of the insured to recover the stolen property or to recover damages from a bailee for negligence in permitting the theft or from a third person whose tortious act occasioned the loss.”
6. Thus a release of all claims by an insured would bar further proceedings. The mere fact that the Insurance Company had made a hard bargain with the insurer in procuring a receipt indicating discharge of liability is in itself not sufficient reason for fastening the liability again on the insurer. The exception to the rule can be :
i). mental incompetence of the insured;
ii). presence of fraud;
7. Thus, in the absence of plea of fraud, a receipt in full and valid accord and satisfaction prevents further recovery, an accord and satisfaction or release by the insured of all the claims under the policy supported by valuable consideration would bar further recovery. See Corpus Juris Secundum Vol. 46, p. 145.
8. In this regard, it would be apt to refer to the decision given by the Supreme Court of India in the case reported as P. K. Ramaiah and Company v. Chairman and Managing Director, National Thermal Power Corporation, 1994 Supp (3) SCC 126. The above case, no doubt, arose under the Arbitration Act of 1940, but the principle indicated therein would apply to the facts of this case also. In the above case, the Construction Company had given a receipt in writing indicating full and final satisfaction and the amount was received unconditionally. What
was observed by the Supreme Court at page 129 is reproduced below :
“Admittedly the full and final satisfaction was acknowledged by a receipt in writing and the amount was received unconditionally. Thus there is accord and satisfaction by final settlement of the claims. The subsequent allegation of coercion is an afterthought and a devise to get over the settlement of the dispute, acceptance of the payment and receipt voluntarily given. In Ressel on Arbitration, 19th Edn., p. 396 it is stated that “an accord and satisfaction may be pleaded in an action on award and will constitute a good defence”. Accordingly, we hold that the appellant having acknowledged the settlement and also accepted measurements and having received the amount in full and final settlement of the claim, there is accord and satisfaction. There is no existing arbitrable dispute for reference to the arbitration.”
9. The above principle would apply to the acts of this case also. The complainant having received the amount in full and final satisfaction under the contract of insurance, cannot raised a further demand and initiate proceeding by filing a complaint under the Consumer Protection Act.
10. Some other contentions have also been raised by the Insurance Company. These are to the effect that the proceedings were not conducted in accordance with the law. This aspect of the matter was considered in detail in CIMA 61/95, titled Oriental Insurance Company Ltd. v. Sh. Pyare Lal Koul”, decided by this Court on 13-11 -98. The conclusions which have been arrived at are as under :
i) that the rate of interest should be 12%.
ii) that this should be payable two months after the Surveyor has submitted its report;
iii) that if the Divisional Forum or the State Commission comes to a conclusion that there is inordinate delay caused by the Insurance Company and the proceedings have lingered-on on account of dilatory tactics adopted by the Insurance Company, then it can award even higher rate of interest, but in doing so, reasons would have to be mentioned;
iv) that so far as the proceedings are concerned, these can be conducted by two members. The presence of President is not necessary;
v) that the lacuna in the matter of the
order having been not signed by all the members, stood validated by the validation Act. Section 16-A which was brought on the statute Book validates the proceedings which were not in confirmity with the Act as it originally existed;
vi) that the order signed by two members is to be taken as a valid order ;
vii) that the argument that the President heard the argument and the other members signed the order later on cannot be looked into in this appeal.
11. In view of what has been stated above vis-a-vis complainant having been received compensation, in full and final settlement then the question of further compensating him/her by way of giving further amount of compensation would not arise afresh. The claimant would not be entitled to additional amount of Rs. 50,000/- as assessed by the State Commission. As the complainant has received the amount in full and final settlement, the further contentions noticed above would not affect the merits of the controversy. This appeal is accordingly allowed. The order passed by the State Commission is set aside.