NAFE SINGH BADAL OF DISTRICT JIND vs National Insurance Company Ltd.

WHETHER an insured person can maintain a consumer dispute against his insurer with regard to the quantum of his claim even after having accepted an amount in full and final settlement thereof? This is the threshhold crucial question in this complaint.

THE facts deserve notice with relative brevity in relation to the issue aforesaid alone. Nafe Singh Badal, complainant had set up a sugar-cane crusher for the manufacture of brown sugar (Gur) and had taken out an insurance fire Policy ''C (Annexure C-1), therefore, with the National Insurance Company to the limit of Rs. One lac. On the 21st of April, 1991 a fire allegedly broke out at the said crusher causing damage to the sugar-cane and a nearby hut with regard to which the complainant lodged a First Information Report at 11 A.M on the 22nd of April, 1991 at Police Station, Julana vide Annexure C-2. It is the complainant''s case that he immediately informed his insurance company and on 22nd of April, 1991 a surveyor came to the spot at around 4 P.M and later submitted his report of the damaged caused. Further the complainant''s case is that the actual loss suffered by him was to the tune of 35000 kgs. of processed gur though the First Information Report mentioned only a loss of 400 quintals of sugar-cane which was allegedly due to the fact that the police had obtained his signature on blank paper on the basis of which the said F.I.R. was recorded. Consequently, the complainant assessed his loss at Rs. 1,70,000/- and the grievance is that the National Insurance Company released a sum of Rs. 8,000/- only on the basis of the surveyor''s report. In the present complaint a claim of Rs. 4,75,000/- is'' made out against the Opposite Party. In the reply filed on behalf of the Insurance Company a firm preliminary objection has been taken that the complainant had voluntarily accepted an amount of Rs. 7,900/- in full and final satisfaction of his claim under the policy and the Company'' s cheque No. 398629 dated 27th of July, 1991 had been duly received and encashed by him. Consequently, no cause of action in favour of the complainant now subsists because of the principle of estoppel, waiver and acquiescence. On merits the factum of the taking out of the insurance policy is admitted, but numerous other allegations in the complaint stand denied. It is pointed out that the First Information Report lodged by the complainant himself mentioned only a loss of 400 quintals of sugar-cane and it is further the case that there was neither any loss of 35000 kgs. of processed brown sugar (Gur) nor was the same covered by the terms of the policy. It is the case that the independent surveyor in his report had assessed the loss at Rs. 7,900/- which the company promptly paid to the complainant who received the same in full and final satisfaction thereof.

No replication has been filed on behalf of the complainant nor was the factual stand taken on behalf of the Opposite Party with regard to the full and final satisfaction of the claim seriously controverted. Infact the complainant had himself mentioned that the Insurance Company had only released a sum of Rs. 8,000/- and the authenticity of the receipt/satisfaction voucher for Rs. 7,900/- annexed to the reply was not disputed. In this context the preliminary objection about the very maintainability of the complaint was seriously pressed at the threshhold and detailed arguments of the learned Counsel were heard thereon.

MR. Rao Ranjit, the learned Advocate for the complainant faced with a some what up-hill task had forcefully contended that despite the acceptance of Rs. 7,900/- by the complainant in full and final satisfaction of his claim, he was still not precluded from maintaining the present case. Reliance was placed on Section 3 of the Consumer Protection Act for arguing that the remedies under this statute are in addition to and not in derogation of the provisions of any other law. Counsel submitted that the consumer-insurer being in a some what week bargaining position had to accept whatever was offered by the Company, but this fact should not bar him from agitating his claim for a larger amount thereafter. We regret our inability to accept the stand of the learned Counsel for the complainant. It is true that the remedies under the Act are in addition to and not in derogation of those under the ordinary civil law. Yet a consumer dispute cannot possibly be wholly outside the larger pale of legal jurisprudence. Reference in this context may be made to Section 11 of the Act pertaining to the jurisdiction of the District Forums and in particular to Clause (c) of Sub-section (2) thereof which refers to the cause of action whether arising wholly or in part within the limit of such jurisdiction. It is thus manifest that a consumer can sustain the complaint if a cause of action in his favour either arises or survives. If the very foundation of the cause of action has been taken away by a valid satisfaction thereof then there would remain no adequate legal basis for maintaining a consumer dispute.

ON behalf of the Opposite Party, it has been rightly and forcefully urged that on the larger principles of estoppel, waiver and acquiescence the complaint is now barred. It needs no great erudition to hold that the larger principle of accord and satisfaction would be equally attracted to consumer disputes as it is to the other fields of law. Under the said principle, it is well settled that one of the parties may agree to accept satisfaction for an amount lesser than the claim and also that an agreement to that effect accompanied by the delivery or performance of what is so agreed thereon discharges his right of action. This mode of discharge is called in technical language as accord and satisfaction. Herein that the complainant made the claim for loss by fire to the Insurance Company and later he accepted their assessment in full and final payment of his claim by the receipt/satisfaction voucher voluntarily executed by him. By doing so he clearly discharged his right to sue and any cause of action accruing to him thereunder would no longer survive thereafter. The situation equally attracts the longer equitable principle of estoppel. It is well settled that such estoppel may be by conduct or a receipt in writing or representations made by one of the parties. Consequently, once the complainant by his own conduct accepted the amount offered to him by the Insurance Company and declared that the same was in full and final payment thereof, he would thereafter be estopped from raising any claim contrary thereto. The view we are inclined to take is butteressed by a recent short order of the Delhi State Commission reported in II (1991) CPJ 183 ''Harvinder Kaur v. Oriental Insurance Co. Ltd.!'' In the said case also in somewhat identical circumstances it was held that the complainant after having received an amount in full and final settlement of his claim against the Insurance Company was debarred from filing the complaint before the Commission.

IN the light of the aforesaid discussion, the answer to the question posed at the outset is rendered in the negative and it is held that an insured person cannot maintain a consumer dispute against his insurer with regard to quantum of his claim after having accepted an amount in full and final settlement thereof.

IN view of the aforesaid conclusion the preliminary objection of the Opposite Party has to be up-held. The complaint is, therefore, not maintainable and is hereby dismissed on that ground. However, it is clarified that this would not in any way preclude him from seeking his remedies in civil law (if any) as he may be advised. Appeal dismissed.