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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member
M/s Shiv Udyog and Anr. – Complainants
versus
M/s S.B.I. General
Insurance Co. Ltd. – Opp. Party
Consumer Case No.133 of 2014
Decided on 18.4.2023
Consumer Protection Act, 1986 – S. 21(a)(i) – [Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Repudiation of Claim - discharge voucher signed under coercion and protest - needs to be established - It is evident from the record that there is no dispute with regard to the cause of the fire. The complainant, however, contends that the policy should have been settled within 30 days but was willfully protracted to over 8 months so as to put him under pressure. He has claimed interest @18% for this period also - There is no correspondence with the opposite party on record to suggest that the discharge was not of accord and satisfaction immediately protested thereafter. There is no correspondence to establish that the report of the Surveyor was challenged before agreeing to sign the discharge voucher. Although the IRDA on 17.12.2013 depreciated the practice of “coercive bargaining” by insurance companies – thus, in cases where loss claim settlements are accepted by the insured under protest, there should be evidence to establish that the protest was ‘immediate’ in terms of time the protest is registered in. In the present case, there is no evidence of this. The discharge voucher was signed on 24.12.2013 and thereafter the present complaint has been filed on 02.05.2014 i.e. after 150 days. The averment of signing the discharge voucher under coercion and protest is therefore not substantiated by any action on the part of the complainant – Therefore, the complainant has not been able to establish the reasons for the delay of five months of filing the complaint from the date he signed the discharge voucher. In a case where there is no ‘accord and satisfaction’ and the discharge voucher is signed under coercion, there are a catena of judgments to justify the challenge to such a discharge voucher if the complainant is able to establish that the discharge voucher was protested immediately – Complaint dismissed. [Paras 7 to 14].
Result: Complaint dismissed.
ORDER
This complaint under the Consumer Protection Act, 1986 (in short, the ‘Act’) has been filed seeking the enhancement of an insurance claim filed with the opposite party with compensation alleging deficiency in service. The complainant is a proprietorship firm which had obtained a Standard Fire and Special Peril Insurance Policy (in short, the ‘Policy”) from the opposite party for Rs 3.10 crores for his premises which was completely damaged in a fire due to an electrical short circuit on 13.02.2013.
2. The facts as per the complainant are that he has a grain cleaning and colour sortex unit at C-98, Additional MIDC, Latur since 2012 with imported plant and machinery worth Rs.2.25 crores covered by the Policy dated 23.11.2012. The fire incident on 13.02.2013 destroyed machinery, building and godown though the fire brigade was summoned. An FIR No. 2/2013 was registered with the Police and opposite party informed the same day. Cunningham & Lindsey International Pvt. Ltd. was appointed surveyors on 14.02.2013 and various documents shared with them per correspondence. The complainant filed a claim for Rs 2,86,00,000/-.The imported Sortex machine was inspected by the suppliers, M/s Buhler (India) along with other machines and it was assessed by them that the machines were extensively damaged the repair of which would cost the same as a new machine. On 25.02.2013, one G. Chandrashekhar, an investigation consultant was appointed by the opposite party who sent samples for verification to establish the cause of the fire. An inspection was also undertaken by one Rajesh D. Pandey, Government Contractor on 24.04.2013.
3. The complainant repaired the godown which was the adjoining building but states that the main building was not repairable and could not be done. It is stated that the delay in settlement of the claim resulted in further damage to the machinery due to exposure to the elements. Despite being provided names of 3 consultants by the complainant to assess damage to the steel structure and shed, opposite party appointed another consultant, M/s Delcos Consultants India Pvt. Ltd, Pune. Details were provided by complainant to them also. Despite the fact that it was visually apparent that the steel structure had been destroyed in the fire, the report of M/s Delcos dated 16.10.2013 was that it was intact.
4. The State Bank of India issued a notice under the SARFAESI Act, 2002 to the complainant for settlement of dues which put the complainant under pressure. On 03.12.2013 the claim was settled for Rs.1,12,39,656/- which was consented to by the complainant not voluntarily but under coercion and undue pressure due to the delaying tactics of the opposite party. The discharge voucher was signed and on 28.12.2013 the claim was transferred to the complainant’s account with the State Bank of India.
5. The complainant states that the opposite party committed deficiency in service by not completely indemnifying the complainant to the loss especially when the claim was fully covered under the policy. The total loss was Rs 2,86,00,000/- and the opposite party assessed it as Rs 1,12,39,656/- holding that some parts of the machinery were intact or not severely damaged, whereas they had been reduced to scrap. It is stated that consent had been obtained by undue influence and coercion through pressure by getting notices from the Bank issued, inordinate delay in settling the claim much beyond the stated period of 30 days in the policy. It is contended that the surveyor erred in undervaluing the machinery and structure which had been used only for 7 to 8 months prior to the fire. The remittance of the claim amount to the loan account of the Bank left the complainant with no funds to try and revive the unit. Therefore the complainant is now before us alleging wrongful denial of the balance claim with the following prayer:—
(a) the complaint may kindly be allowed
(b) the opposite party be directed to pay to the complainant a sum of Rs 1,73,60,344/
A claimant must establish evidence of coercion in accepting insurance settlement to prevail in a deficiency of service claim under the Consumer Protection Act.
The insurance company’s coercive practices in settling claims amount to deficiency in service under consumer law.
Amount received under protest - After signing the discharge voucher and accepting the amount in full and final settlement, the Complainant is not permitted to raise the plea that the amount was accep....
(1) Specific Law - It is settled law that the remedy under the Consumer Protection Act is an additional remedy and is not curtailed due to any specific law.(2) Arbitration clause - Arbitration clause....
The court upheld the view that a discharge voucher does not preclude subsequent claims under the Consumer Protection Act if evidence of coercion is absent.
The court established that a consumer can claim under the Consumer Protection Act for insurance disputes, even with commercial intent, emphasizing assessment fairness by the appointed Surveyor.
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