A receipt indicating full and final settlement of an insurance claim bars further proceedings under the Consumer Protection Act, as the principle of accord and satisfaction applies to insurance contracts.

Mr. T.S. Doabia, J.—The house property belonging to the respondent complainant was insured with the appellant Insurance Company. The said house suffered damage on account of fire. This damage was caused on the night intervening 11 /12th December, 1994. A Surveyor was appointed. He assessed the loss at Rs. 5,54,581 /-. On 4th December, 1996, the appellant Company paid a sum of Rs. 5,54,581/-. This was accepted by the complainant. After accepting this amount, the complainant approached the State Commission constituted under the Jammu and Kashmir Consumer Protection Act, 1987. He submitted that the Surveyor's report was not in accordance with the law. In any case, the respondent-complainant submitted that he was entitled to interest on the late payment.

2. The appellant Company took an objection. This objection was to the effect that the complainant had given a receipt which indicates that there was full and final settlement and the liability of the appellant Insurance Company under the contract of insurance stood met.

3. The State Commission was of the view that not withstanding the fact that the complainant had issued a receipt regarding receipt of compensation amount indicating that there was full and final settlement, the complainant was still entitled to the interest on account of delayed payment. The view of the Commission is that so far as the question of interest is concerned that can still be examined. The plea of estoppel if any, would operate only regarding compensation amount and not regarding any other claim. After forming this view, the Commission allowed interest @ 18% from the date of occurrence till the date of payment i.e. 4th December 1996. It is against the above order passed by the Commission, the present appeal has been preferred.

4. The learned Counsel appearing for the appellant submits that the question of dispute being settled would arise only when there is a subsisting dispute or difference between the parties. It is submitted that once there is a settlement of claims, then the question of a dispute being pending which requires adjudication before the authorities constituted under the Jammu and Kashmir State Consumer Protection Act of 1987, would not arise. What is sought to be contended is that an accord and satisfaction can be pleaded as a defence in these proceedings and this, if proved, would be enough to reject the claim of the complainant.

5. There are decisions of the National Commission under the Consumer Protection Act of 1986 i.e. the Central Act wherein a receipt given by the complainant indicating full and final settlement was held to be a valid defence. Thus, in Pooja Industries v. United India Insurance Co. Ltd. & Anr., II (1994) CPJ 105 (NC), the complainant had executed a formal receipt acknowledging payment of Rs. 7.30 lakhs from the Insurance Company in full and final settlement of the claim. This was held to be good and sufficient for rejecting the claim of the complainant. The plea sought to be taken by the complainant that receipt was given under coercion was not looked into because there was no evidence on the record in proof of such a claim. In another case again arising before the National Consumer Disputes Redressal Commission, New Delhi, I (1996) CPJ 140 (NC), the situation was similar. The complainant received the amount in full and final settlement. It was observed that in these circumstances, the question of there being any deficiency in service would not arise. As a matter of fact, the general rules applicable to the payment or discharge of other contractual obligations apply to the payment or discharge of insurance policies also. What is applicable in these cases is the principle of subrogation. Subrogation is a normal incident of indemnity insurance, and, where the insurance contract is regarded as one of indemnity, the Company on payment of the loss is subrogated to all of the rights of insured against the person whose fault or negligence caused the loss. This principle