The principle of estoppel in insurance claim settlement, where the acceptance of a settled amount and sending of a discharge receipt precludes the claimant from subsequently raising a demand for the difference or alleged damages.

Mr. Justice S.A. Shah, President — That the complainant filed a complaint before the District Forum against the appellant Insurance Company claiming Rs. 12,063/- differences of damage suffered to his truck which was insured with the opposite party. There was no dispute that there was an accident and the complainant suffered damages. He claimed Rs. 48,432/- as damages. There was some negotiation between the respondent and appellant and the Insurance Company paid Rs. 36,369/- as full and final settlement of the claim of the respondent-Company. Subsequently the complainant sent the receipt of the said amount under protest. However according to Mr. Mehta the original receipt which has been given by the comlainant and produced before the District Forum was a receipt for full and final settlement without any protest. According to Mr. Mehta subsequent change made by the complainant without the concurrence of the Insurance Company and which was a duplicate receipt has no relevance in the eye of law.

2. After accepting the said amount which was paid by the Company on the basis of full and final settlement, on the ground that amount has been reduced by the Insurance Company without any reason the complainant filed his complaint for recovery of difference of amount Rs. 12,063/-. The District Forum accepted the claim of the complainant and passed an order directing the Insurance Company to pay Rs. 12,063/- the difference with 12% interest and cost.

3. Being aggrieved by this judgment the Insurance Company has filed this Appeal.

4. Mr. R.H. Mehta, the learned Advocate, appearing for the Insurance Company has raised a legal contention that the claim having been settled and the complainant having accepted a substantial amount exceeding Rs. 36,000/- as full and final settlement for his claim is estopped from raising his demand for difference or alleged damages.

5. Mr. Mehta in support of his arguments has quoted the derision of the Hon'ble National Commission in the case of "Kilaru Jogendra Narayan Prasad v. The Divisional Manager, Oriental Life Insurance Co. Ltd. & Anr." reported in 1991 (2) C.P.R. Page 22 wherein the Commission held that when the claimant has agreed to accept after discussion, freely and voluntarily the sum of Rs. 6.50 lakhs. He cannot subsequently raise the contention that amount paid was not full settlement. The National Commission has gone to the extent in observing that even if it is assumed that the complainant was coerced into giving his consent, even then it will not be a case of mere deficiency in service by the Opposite Party, but a case of fraud for which the complainant can seek redress from the appropriate Court.

6. Having considered the facts and circumstances of the case we are of the opinion that the complainant has accepted the settled amount and sent the discharge receipt. It may be, that the complainant might be in dire need of money. It may be possible that he might be forced to accept the money due to his financial condition. The remedy for such a case lies with the Civil Court where the consumer can challenge the receipt having been obtained by force, fraud or misrepresentation. However this cannot amount to deficiency in service.

7. In the aforesaid circumstances, we shall have to allow the appeal on principle since there was no deficiency in service.

8. We pointed out to Mr. Mehta that the Insurance Company was a Corporation and 'State' within the meaning of Article 12 of the Constitution of India. The arguments of the respondent regarding deduction of Rs. 12,063/- from the amount surveyed by their own Surveyor was not justified. We, therefore, suggested that it would be just and fair to pay 50% as ex-gratia payment. The suggestion has been accepted by the Insurance Company through Mr. Mehta and the Company has agreed to pay Rs. 6,000/- to complainant to finally settle the matter but has insisted that the appeal may be allowed so that District Forum's Judgment cannot be cited as precedent. Mr. Mehta ass