New India Assurance Co. Ltd. vs Ajay Kumar

BEING aggrieved by the order of the District Forum, Bathinda dated September 6, 1999, whereby the opposite parties have been directed to pay to the complainant an amount of Rs. 3,60,000/- with interest @ 12% p.a., w.e.f. 1.4.1997 till the date of payment alongwith costs of Rs. 1,000/-, the opposite parties are in appeal before us.

THE main grouse of the opposite parties is that since the complainant has given a consent letter dated 21.7.1997 voluntarily and with his full consent to accept Rs. 3,27,500/- so he is legally estopped to claim in excess. According to the complainant he had purchased one Tata Sumo Registration No. PB-044-3636 for the sum of Rs. 3,54,759/- after obtaining loan from SRF Finance LTD. The complainant took comprehensive insurance policy including theft of the said Tata Sumo for a sum of Rs. 3,60,000/- from opposite party No. 1 vide Cover Note No. 88263 for the period from 19.12.1996 to 18.12.1997. On the intervening night of 31.12.1996 and 1.1.1997 at 9.00 p.m. he parked the vehicle at Hotel Panj Rattan. When he came out of the hotel on 1.1.1997 at 1.30 a.m. he did not find his Tata Sumo, as the same was stolen away. He intimated to the opposite party No. 1 regarding the theft of the vehicle and fulfilled all the formalities. The opposite parties failed to release the payment of the claim. Hence the complaint before the District Forum was filed on 14.1.1998.

The opposite parties contested the complaint and raised the only legal objection raised that since the complainant had given consent letter dated 21.7.1997 voluntarily and with his full consent to accept Rs. 3,27,500/- after taking into consideration the market value of the Tata Sumo.

THE parties led their evidence on affidavits and documents, which resulted in passing the impugned order by the District Forum. We have heard the Counsel for the appellant and gone through the records. The vehicle was insured equivalent to its price including accessories. As per terms and conditions of the policy (Section-I), the depreciation to be charged from the complainant is nil in case there was any loss to the vehicle within the period of six months of its purchase. In the case in hand the Tata Sumo was stolen within 50 days. Thus the opposite parties could not reduce the claim of the complainant by reducing the depreciated value.

ANNEXURE No. 1 is policy, which was issued by the opposite parties, at the time of taking the policy. The sum assured is Rs. 3,66,000/- and the interest covered is described in the policy as under : "Section-I : Loss or Damage : The Company will indemnify the insured against loss of or damage to the motor car and/or its accessories whilst thereon : (a) by fire explosion, self-ignition or lightening; (b) by burglary house-breaking or theft; (c) by riot and strike; (d) by earthquake (fire and shock damage); (e) by flood, typhoon, tempest hurricane, storm inundation, cyclone, hailstorm, frost; (f) by accidental external means; (g) by malicious act; (h) by terrorist activity; (i) whilst in transit by road, rail, inland waterway, lift elevator or air. Subject to a deduction for depreciation at the rates mentioned below in respect of parts replaced : 1. For all rubber, nylon, plastic parts tyres and battery 5 2. For all parts made of glass Nil 3. For all other parts Age of Car % of Depreciation Upto 6 months Nil Between 6 months and 1 year 5% Between 1 year and 2 years 10% Between 2 years and 3 years 15% Between 3 years and 4 years 25% Between 4 years and 5 years 35% Between 5 years and 10 years 40% Over 10 years 50%. As per terms and conditions of the policy referred to above, it was incumbent upon the opposite parties not to charge depreciation from the complainant, as according to Section I - Loss or Damage, upto the age of car upto 6 months percentage of depreciation is nil. So the Insurance Company cannot reduce the claim of the complainant by deducting depreciation. An insurer cannot escape its liability when contract of insurance has been concluded. In this case the contract inter-se the parties stood concluded. With regard to the consent letter dated 21.7.1997, this cannot stand in the way as the finding of the District Forum is that the acceptance of Rs. 3,27,500/- was not given by the complainant voluntarily. Hon''ble National Commission in National Insurance Co. v. New Bharat (sic.) Mills, II (1997) CPJ 77 (NC), reads as under : "We have heard Mr. Kishore Rawat, Advocate for the appellant and Mr. Vijay Kishan, Advocate for the complainant and with their help have gone through the records. There is no merit in the first submission of Mr. Rawat that the State Commission erred in entertaining and allowing the complaint as the claim of the complainant was settled for Rs. 40,56,755/- for which the complainant had executed the discharge voucher in full and final settlement of the claim. The discharge voucher dated 17.3.1994 does state that it was in "full and final settlement" of the claim, but the facts and circumstances noticed by the State Commission clearly establish that the complainant was coerced to agree to sign the voucher. This Commission had occasion to consider various aspects of the service agreed to be performed by the Insurance Company in pursuance of the contract of insurance in the event of the loss of the risk covered. In First Appeal No. 59 of 1994, National Insurance Company Ltd. v. M/s. Lal Chand Jain & Sons, decided on 8.1.1997 it was ruled that in case where the claim has been quantified and offered, the complainant may have been compelled to give a valid discharge voucher to the Insurance Company who may have coerced the complainant into accepting the settlement of the claim unwillingly or involuntarily. The Insurance Company will not disburse the amount unless discharge voucher in full and final settlement without protest is given by the insured. The complainant may have no option but to accept the amount offered due to financial constraints or other compelling reasons. The insured may lodge a protest immediately on receipt or soon thereafter. The conduct of the insured becomes relevant on the facts of each case to find out whether the discharge voucher was given voluntarily in full and final settlement or he was coerced into. In this case the cheque was released on 22.3.1994 and the complaint itself was filed on or about 2.6.1994. The complainant being in an unequal bargaining capacity had to pay the difference of premium demanded as otherwise the Insurance Company had refused to release the payment of compensation. The view taken by the State Commission that the complainant was coerced to deposit a sum of Rs. 3,46,180/- before the settled amount was paid to him, is affirmed and the complainant''s conduct established that he never accepted it voluntarily in full and final settlement."

FOR the reasons recorded above, we do not find any merit in this appeal. Thus we have no hesitation in dismissing the appeal. The appeal is, hereby dismissed with no order as to costs. Order of the District FORum is upheld. Let the order be complied within 30 days from the receipt of its copy. Appeal dismissed.