M/S. Shree Balaji Woolen Mills vs ORIENTAL INSURANCE CO. LTD

BY this order, we propose to decide the above noted two revision petitions involving similar question of law and fact.

BRIEFLY stated facts relevant for the disposal of these revision petitions are that the petitioner (complainant) is engaged in manufacture of shody yarn, carpet yarn and woollen yarn and he took two insurance policies from the respondent - company bearing no. 250845 and 250846 having insurance cover of Rs. 65 lakhs and Rs. 60 lakhs respectively in respect of factory premises, machinery and stock etc. on the terms and conditions detailed in the respective policies. Unfortunately on 28.04.2009, a fire took place in the premises of the petitioner (complainant) resulting in loss and damage to the factory premises, machinery and stock etc. The complainant intimated the respondent - insurance company and the respondent got the actual loss suffered by the petitioner through a competent surveyor who vide his report dated 27.08.2009 assessed the loss suffered by the petitioner in respect of both the policies to the tune of Rs.32, 01,729.25/.

IT is undisputed that the respondent - insurance company settled the claims of the petitioner / complainant by giving a cheque of Rs.31,12,992/- in full and final settlement of the claims of the petitioner under above noted insurance policy. At the time of delivery of the cheque, the petitioner through its partner, signed a discharge receipt in full and final settlement of his claims. 5. Case of the petitioner is that he received a cheque of Rs.31,12,992/- under protest and he was compelled to sign the discharge receipt in full and final settlement of his claims because of coercion and pressure tactics adopted by the respondent / company. This according to the complainant amounts to unfair trade practice as also deficiency in service. Accordingly, he filed two separate complainants in respect of his respective claims under the above said insurance policies.

THE claim petitions were contested by the respondent on the plea that the petitioner having accepted the cheque of Rs.31,12,992/- in full and final settlement of both his claims cannot be allowed to reagitate the same issue by filing the complaints.

THE District Forum Panipat on appreciation of facts and submissions made by the rival parties, allowed both the complaints being complaint nos. 233 and 234 of 2010. In complaint no. 233 of 2010, respondent was directed to pay to the complainant a sum of Rs.2,48,185 with interest @ 8% p.a. w.e.f. 23.11.2009 besides litigation cost of Rs.2200/-. In complaint No. 234 of 2010, the District Forum directed the respondent to pay to the petitioner / complainant a sum of Rs.7,59,906/- with 8% interest p.a. w.e.f. 23.11.2009 besides litigation cost of Rs.2200/-.

RESPONDENT / insurance company being aggrieved by the above referred orders of the District Forum preferred two separate appeals before the State Commission Haryana. The State Commission taking note of the fact that the petitioner / complainant on 23.09.2009 has settled the matter with the respondent and received cheque of Rs.31,12,992/- in full and final settlement of both his claims and relying upon the judgment of the National Commission in the matter of Raj Kumar Vs. United India Insurance Co. Ltd. III (2011) CPJ 354 (NC), allowed the revision petition and dismissed the complaint on the premise that having accepted the cheque in full and final settlement of his claim, the petitioner could not have reagitated the matter. Being aggrieved by the aforesaid orders of the State Commission in appeal, the petitioner has preferred the above referred revision petitions.

LEARNED Shri Manish Aggarwal, Advocate for the petitioner has contended that the order of the State Commission in the respective appeals is not sustainable for the reason that the State Commission has overlooked the facts which tend to show that the petitioner because of the tactics adopted by the respondent / company was compelled to sign the discharge voucher as the complainant was in dire need of finance to revive his factory and run business. LEARNED counsel for the petitioner has taken us through the correspondence between the parties as also the correspondence with the surveyor appointed by the respondent / company. Expanding on the argument, learned counsel for the petitioner submitted that the State Commission has failed to appreciate that initially the petitioner had submitted the claim estimate for Rs.55 lakhs but later on after carefully examining the records etc., the petitioner revised its estimate to Rs. 75 lakhs and thereafter to Rs.87.29 lakhs. It is contended that the petitioner accepted the cheque of Rs.31,12,992/- almost 2 ï¿ 1/2 years after the fire incident against his claim of Rs.87.29 lakh which itself is an indication that the respondent - company by not settling the claim for such a long time had pressurised the petitioner to accept the full and final settlement for a much lesser amount than the actual loss suffered by him. Thus it is argued that impugned orders of the State Commission dismissing the complaints filed by the petitioner suffers from illegality and as such are not sustainable.

IN support of his contention, learned counsel for the petitioner has referred to the judgment of the Supreme Court in the matter of National INsurance Co. Ltd. Vs. M/s Boghara Polyfab Pvt. Ltd. AIR 2009 Supreme Court 170 and the judgment of this Commission in the matter of National INsurance Company Limited Vs. Vasavi Traders I (2008) CPJ 487 (NC).

WE have considered the submissions made on behalf of the petitioner and perused the record. Admittedly in the instant case, the petitioner did receive a cheque of Rs.31,12,992/- from the insurance company against the final settlement of his claims under the above noted two insurance policies. It is well settled that once had insured had received the amount in full and final settlement of his insurance claim and signed the discharge voucher, the insured claimant cannot be permitted to reagitate his claim unless the claimant is able to establish that discharge voucher in question was obtained by undue influence, fraud, misrepresentation or coercion etc.

IN the matter of National INsurance Co. Ltd. Vs. M/s Boghara Polyfab Pvt. Ltd. while dealing with the question whether the discharge voucher signed by the complainant would debar the claimant from agitating the issue, the Hon ''ble Supreme Court observed thus: "We may next examine some related and incidental issues. Firstly, we may refer to the consequences of discharge of a contract. When a contract has been fully performed, there is a discharge of the contract by performance, and the contract comes to an end. IN regard to such a discharged contract, nothing remains - neither any right to seek performance nor any obligation to perform. IN short, there cannot be any dispute. Consequently, there cannot obviously be reference to arbitration of any dispute arising from a discharged contract. Whether the contract has been discharged by performance or not is a mixed question of fact and law, and if there is a dispute in regard to that question, that is arbitrable. But there is an exception. Where both parties to a contract confirm in writing that the contract has been fully and finally discharged by performance of all obligations and there are no outstanding claims or disputes, courts will not refer any subsequent claim or dispute to arbitration. Similarly, where one of the parties to the contract issues a full and final discharge voucher (or no due certificate as the case may be) confirming that he has received the payment in full and final satisfaction of all claims, and he has no outstanding claim, that amounts to discharge of the contract by acceptance of performance and the party issuing the discharge voucher/certificate cannot thereafter make any fresh claim or revive any settled claim. Nor can he seek reference to arbitration in respect of any claim. When we refer to a discharge of contract by an agreement signed by both parties or by execution of a full and final discharge voucher/receipt by one of the parties, we refer to an agreement or discharge voucher which is validly and voluntarily executed. If the party who has executed the discharge agreement or discharge voucher, alleges that the execution of such discharge agreement or voucher was on account of fraud/coercion/undue influence practiced by the other party and is able to establish the same, then obviously the discharge of the contract by such agreement/voucher is rendered void and cannot be acted upon. Consequently, any dispute raised by such party would be arbitrable. Obtaining of undated receipts-in-advance in regard to regular/routine payments by government departments and corporate sector is an accepted practice which has come to stay due to administrative exigencies and accounting necessities. The reason for insisting upon undated voucher/receipt is that as on the date of execution of such voucher/receipt, payment is not made. The payment is made only on a future date long after obtaining the receipt. If the date of execution of the receipt is mentioned in the receipt and the payment is released long thereafter, the receipt acknowledging the amount as having been received on a much earlier date will be absurd and meaningless. Therefore, undated receipts are taken so that it can be used in respect of subsequent payments by incorporating the appropriate date. But many a time, matters are dealt with so casually, that the date is not filled even when payment is made. Be that as it may. But what is of some concern is the routine insistence by some government Departments, statutory Corporations and government Companies for issue of undated ''no due certificates'' or a ''full and final settlements vouchers'' acknowledging receipt of a sum which is smaller than the claim in full and final settlement of all claims, as a condition precedent for releasing even the admitted dues. Such a procedure requiring the claimant to issue an undated receipt (acknowledging receipt of a sum smaller than his claim) in full and final settlement, as a condition for releasing an admitted lesser amount, is unfair, irregular and illegal and requires to be deprecated ". National Commission while dealing with similar issue in the matter of National INsurance Co. Ltd. Vs. Vasavi Traders (supra) observed thus: "The complainant has submitted in his complaint that after 7 days of receipt of Rs.3,45,968/-, the complainant had approached the INsurance Company (O.P.1) and demanded the balance amount which was declined and he was asked to approach O.P.2. He further submitted that since the entire stock was burnt and the business had come to a stand still and because of financial crisis and heavy loss of interest the complainant was constrained to sign on the discharge voucher, which was in a printed format. Therefore, he had no option but to file a complaint for the balance amount. This we feel is an act of coercive bargaining indulged in by the insurance company. A distressed insured person who has lost all means of earning his livelihood in a catastrophic fire has no other choice but to accept any amount as an initial payment in the first instance ".

FROM reading of the above judgments, it is clear that whether or not the discharge voucher / receipt signed by the party should amount to valid discharge of the liability of the other party is a question of fact. If the signatory to the discharge voucher / receipt is able to establish that he was compelled to sign the discharge voucher because of the fraud, misrepresentation, pressure tactics or coercion etc. by the opposite party, he would still be entitled to raise the issue in judicial forum dehors having sign the discharge voucher. Now the question arises whether the petitioner has been able to establish that he was compelled to sign the discharge voucher because of delay and pressure tactics adopted by the respondent - insurance company. In this regard, it would be relevant to note that Discharge Voucher was signed by the petitioner on 23.11.2009. The petitioner has placed on record a letter dated 06.10.2009 addressed by him to the Senior Branch Manager of the insurance company which reads thus: "Date 06.10.2009 The Sr. Branch Manager Oriental Ins. Co. Ltd. G.T.Road, Panipat Sub: Fire loss on dt. 28.04.2009 Dear Sir, With reference to the above, we hereby agree to accept claim amount of fire loss of Rs.31,22,661/- in full and final settlement of our claim. An early action in the matter will be highly solicited. Thanking you, Yours faithfully For Shree Balaji Woolen Mills Sd/- Partner "

FROM this document, it is apparent that the petitioner himself has voluntarily initiated the process of settlement of claim and as such it cannot be said that he was coerced or compelled by the insurance company to settle his claims. Further, from the perusal of the copy of the surveyor report placed on record, it is evident that surveyor has quantified the loss suffered by the petitioner in respect of both the claim at Rs.32,,01,729.25P. The amount of the loss quantified by the surveyor is more or less matching with the amount of the cheque given to the petitioner in full and final settlement of his claim against the Discharge Voucher signed by the petitioner on 23.11.2009. Therefore, we are of the view that the State Commission was right in concluding that the petitioner has voluntarily accepted the cheque of Rs.31,12,992/- in full and final settlement of his claims which are subject matter of this revision.

IN view of the discussion above, we do not find any illegality or infirmity in the order of the State Commission dismissing the complaints of the petitioner in view of the settlement arrived at between the parties, which may call for interference by this Commission in exercise of its revisional jurisdiction. Revision petitions are, therefore, dismissed in liminie. No order as to costs.