V.K. Jain ORDER
V.K. Jain, J. (Presiding Member)
1. The complainant company obtained a Standard Fire and Special Perils Policy for the period from 3.11.2012 to 2.11.2013 with respect to the building, furniture, and fixtures & fittings, plant and machinery, stock of raw-material, finished goods, stock in progress, etc. to the extent of Rs. 5,90,00,000/-. The case of the complainant is that in an incident of fire which took place in its factory premises, there was major loss of and damage to the building, machinery, stock etc. which had been insured under the aforesaid policy. On intimation being given to the insurer, a surveyor was appointed to assess the loss to the complainant. The surveyor assessed the loss to the complainant at about Rs. 1,41,00,000/-. An amount of Rs. 14001008/- was paid to the complainant, after it had executed the discharge voucher for payment of the said amount. The case of the complainant, as set out in the complaint, is that the surveyor did not correctly assess the loss suffered by it, which in fact was to the extent of Rs. 4,72,00,000/-. This is also the case of the complainant that discharge voucher in favour of the insurer was executed by it under pressure, on account of the financial difficulties which the complainant faced at the time the loss happened. The complainant is, therefore, before this Commission with the following prayers:-
1. A sum of Rs. 2,28,48,180/- being the balance amount of claim for loss of/damage to the insured property as a result of the said fire on 30.11.2012.
2. A sum of Rs. 3,82,000/- towards debris removal expenses incurred and paid by the complainant.
3. Interest @12 % per annum on the said amount of Rs. 23230180/- from 30.11.2012 up to the date of this complaint and thereafter upto the date of realization.
4. A sum of Rs. 500000/- towards harassment caused to the complainant in entering into avoidable correspondence and consequent expenses.
5. The costs of this litigation."
2. The complaint has been resisted by the insurer which has claimed that the surveyor had rightly assessed the loss at Rs. 14191970/- and after some deductions, a sum of Rs. 14001008/- was paid to the complainant on 27.12.2013 and the said payment was duly accepted by the complainant. The payment was actually made to the bank with whom the factory and stock etc. had been hypothecated/mortgaged.
3. It is an admitted position that the complainant had duly executed a discharge voucher in favour of the insurer before the aforesaid amount was paid to it. It is also not in dispute that the amount paid to the complainant was based upon the assessment made by the surveyor. It is alleged in para 23 of the complaint that the complainant having suffered considerable harassment due to delay in consideration of the claim was incurring Rs. 6 lakhs per month as interest besides the loss of business and, therefore, had no option but to accept immediately discharge voucher sent by the OP to receive the amount offered by it. This is also the case of the complainant that the copy of the report of the surveyor had not been made available to it by the time the aforesaid payment was accepted and the said report was obtained under Right to Information Act on 20.3.2014.
4. I expressly asked the learned counsel for the complainant to show to me the letter sent by the insurer to the complainant offering the amount of Rs. 14001008/-. No letter making such an offer has been shown. The learned counsel for the complainant states that in fact the letter was sent by the insurer to the banker on 1.8.2013 and on the banker having informed the complainant, the discharge voucher was executed, in order to obtain the amount being offered by the insurer. Even the letter addressed to the bank has not been produced. Be that as it may, I proceed on the assumption that the insurer offered the amount of Rs. 14001008/- to the banker of the complainant which conveyed the said offer to the complainant on 3.8.2013 as is stated by the learned counsel for the complainant and it was in terms of the said offer that a discharge voucher was executed by the complainant, though the date of the discharge voucher is not known, neither party having filed a copy of the said voucher on record.
5. There is absolutely no evidence of the complainant having written to the insurer, soon after 27.12.2013 when the payment of Rs. 14001008/- was credited in its account, to the insurer alleging therein that the payment was accepted by it on account of financial difficulty and/or any kind of duress. There is no evidence or even allegation of any protest having been lodged by the complainant with the insurer before executing the discharge voucher. The complainant has placed on record a letter dated 19.5.2014 sent by it to the insurer after receipt of the survey report. In the aforesaid letter, the date of receipt of the survey report is stated to be 24.2.2014, as against the receipt date of 20.3.2014 given in para 24 of the complaint. Moreover, the letter does not even indicate that the survey report was obtained under the Right to Information Act. What is material however, is that in the aforesaid letter dated 19.5.2014, written by the complainant more than four and half months after receipt of amount of Rs. 14001008/- from the insurer there is not a whisper of any financial difficulty or any alleged duress on the part of the insurer. There is no allegation in the aforesaid letter that the amount of Rs. 14001008/- was accepted by the complainant in order to avoid recurring payment of interest and/or in order to resume its business operation. The only plea taken in the letter is that the surveyor had arbitrarily reduced the claim amount without any basis. The aforesaid letter belies the case set out in para 23 of the complaint that the amount of Rs. 14001008/- was accepted by the complainant on account of financial difficulties arising from the disruption of its business and in order to avoid recurring liability to pay interest to its banker. Had the complainant accepted the aforesaid payment under any kind of duress or financial pressure, considering the normal course of human conduct, it would certainly have stated so in some communication to the insurer, soon after receipt of the aforesaid amount. However, such an allegation is missing even from the letter sent by the complainant to the insurer more than four and half months after receipt of the aforesaid amount.
6. In these circumstances, I am satisfied that the acceptance of the payment of Rs. 14001008/- by the complainant was a voluntary act without any kind of financial pressure or duress and therefore, having voluntarily accepted the said payment, the complainant is estopped from claiming any further compensation from the OP on account of the loss suffered by it in the instant of fire subject matter of this complaint.
7. The learned counsel for the complainant relies upon the circulars dated 24.9.2015 and 7.6.2016 issued by Insurance Regulatory and Development Authority of India on the issue of execution of discharge vouchers in settlement of claims. The circular dated 24.9.2015 to the extent it is relevant reads as under:-
"The Insurance Companies are using 'discharge voucher' or "settlement intimation voucher" or in some other name, so that the claim is closed and does not remain outstanding in their books. However, of late, the Authority has been receiving complaints from aggrieved policyholders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts.
While the Authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurers shall not use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora.
Accordingly insurers are hereby advised as under:
Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law."
Vide subsequent circular dated 7.6.2016, the matter was reviewed by the Authority in the light of IRDA (protection of policyholders interests) Regulations, 2002 and the provisions of the Indian Contract Act and the following directions were issued:-
"The Authority has reviewed the matter taking in to consideration the provisions of the Contract Act, PPI Regulations and Apex Court Judgments. Taking equal cognisance of the legal rights of the policy holders and insurers, the Authority hereby further directs that-
(i) Wherever there are no disputes by the insured/s or claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued. However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimant/s.
(ii) If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.
(iii) Under no circumstances the Discharge vouchers shall be collected under duress, by coercion, by force or compulsion."
From a combined reading of the two circulars, it appears to me is that the insurance company is justified in asking the insured to issue a discharge voucher which is dated and complete in all respects but if the amount offered by the insurer is not acceptable to the insured, the insured cannot insist upon execution of the discharge voucher before releasing the amount offered by it. In that case, the insurer must release the amount offered by it, irrespective of whether the discharge voucher is executed by the insured or not. What is important is that the discharge voucher cannot be obtained by any kind of pressure or compulsion upon the insured. However, as far as the present case is concerned, there is no evidence of any kind of duress, coercion or compulsion having been applied by the insurer. The complainant accepted the amount offered by the insurer voluntarily as is evident from its subsequent conduct in not lodging any kind of written protest and not claiming that the aforesaid amount had been accepted by it on account of financial circumstances of the complainant company. Moreover as noted earlier, even in the letter sent by the insured to the insurer more than four and a half months after receiving the amount Rs. 14001008/-, there was no whisper of the alleged financial difficulty of the complainant.
8. For the reasons stated hereinabove, I find no merit in the complaint and it is dismissed accordingly without any order as to costs.
© Manupatra Information Solutions Pvt. Ltd.