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Supreme Court of India
United India Insurance vs Ajmer Singh Cotton & General Mills … on 12 August, 1999
Author: Sethi
Bench: R.P.Sethi, S.Saghir Ahmed



DATE OF JUDGMENT:	12/08/1999

R.P.Sethi, S.Saghir Ahmed



Whether the insured is estopped from making any
further claim from the insurer after accepting the insurance
claim amount in full and final settlement of all the claims
by executing the discharge voucher willingly 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? 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.1 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.1 had procured two insurance covers operative
from 20th October, 1989 to 19th June, 1990 to the 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.1
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 are appointed
and upon submission of their reports the payments were made
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 appellant. The State Commission dismissed the claims
but the National Consumer Disputes Redressal Commission
accepted the appeal of the respondent No.1 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. 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. Vs. State Bank of India (Civil Appeal No. 823 of
1992) decided on 11th 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 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 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. If in a given case the
consumer satisfies the authority under the Act that the
discharge voucher was obtained by fraud, mis-representation,
under 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
justified in granting the appropriate relied under the
circumstances of each case. The mere execution of the
discharge voucher and acceptance of the insurance claim
would not estopp 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 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 by the
provisions of Section 14 of the Act. In the instant cases
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 however granted relief solely on the ground of
delay in the settlement of claim under the policies. The
mere delay of a couple 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
Jiyajeerao Cotton Mills Ltd. Vs. New India Assurance Co.
Ltd. (Original Petition No. 52 of 1991 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 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.

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