National
Insurance Company Ltd. Vs. Nipha Exports Pvt. Ltd [2006] Insc 627 (29 September 2006)
H.K.
Sema & P.K.Balasubramanyan
(with
I.A. No. 2) H.K.SEMA,J.
The
challenge in this appeal is to the order dated 8th September, 2004 passed by the National Consumer Disputes Redressal
Commission (hereinafter the Commission) in Original Petition No. 42 of 1996. By
the aforesaid order, the Commission directed the appellant, National Insurance
Company Ltd., to pay interest @ 6% on Rs.70,38,038/- from 10th December 1990 till 8th June, 1994 within a period of eight weeks by way of damages.
A
limited notice was issued by this Court on 13.01.2005 on payment of interest @
6% as damages by reason of delay in payment.
The
sole question to be determined in this appeal is, as to whether there was any
delay in making the payment of Rs.70,38,038/- and if so, the insurance company,
the appellant is liable to pay interest @ 6% for delay in payment as ordered by
the Commission.
Few
background facts may be noted:
In
1990, five transit insurance were obtained by the respondent herein for
covering their consignment to Sudan for
their principals i.e. M/s Sudan Gezire Rehabilitation Project, Khartoum, Sudan. The policies were issued subject to the terms and
conditions. It was discovered that on arrival of the consignment there was some
damage on account of rust. The investigations were carried out in respect of
the transit of the consignment at the destination port to find out as to at
which stage the damage to the consignment could have had occurred. A dispute
was also raised between the parties as to who would be entitled to receive the
claim amount as the shipment was on C.I.F. basis. Ultimately, the matter was
resolved and the legalized documents of consignments were furnished to the
appellant on 21.5.1993. Thereafter, various correspondences between the parties
to accept the offer of the claim amount as offered by M/s American President
Lines. It is alleged that till the letter dated 25.6.1993 written by the
appellant there was no acceptance of the offer by the complainant-respondent
herein and the matter was withheld at the instance of the complainant. There
was also a dispute between the parties because in the policy, the machinery
items were subject to institute replacement clause, which provided for the
indemnity to be made only when the loss or damage suffered by the goods to the
extent of actual cost of repairs, replacement and conditions effected and
incurred. The complainant was also claiming that they had incurred out of pocket
expenses and, therefore, the appellant was asking them to provide and furnish
the necessary bills in support of total expenses incurred by them, which they
failed to do and therefore, the matter was again referred to M/s Webster &
Co. for making the investigation into the possible cost involved from M/s Nipha
and their local suppliers, respondent herein.
Ultimately,
M/s Webster by its letter dated 8.4.1994 settled the claim on the basis of
consignment as done by the Surveyors.
In the
facts and circumstances, as recited above, it cannot be said that prior to the
letter dated 8.4.1994 the claim had been finally settled and the payment was
withheld by the appellant. After the settlement of the amount US $279158.40
equivalent to Rs.70,38,038/- was paid to the respondent on 8.6.1994. The
respondent received the aforesaid amount and gave a clean discharge to the
appellant without any qualification, signifying receipt of the amount in full
and final settlement of the claim.
Mr.Mahendra
Anand, learned senior counsel, appearing on behalf of the respondent, referred
to a letter dated 17.3.1991 and submitted that by the aforesaid letter right,
title and interest was vested with M/s Nipha Exports Private Ltd. by Sudan Gezire
Rehabilitation Project. In the letter aforesaid, it is stated that they have no
objection to settle the claim in favour of M/s Nipha Exports Private Ltd., and
advised to address the correspondence direct to them in future. It is his
contention that there is no explanation whatsoever by the appellant for
withholding the payment from 17.3.1991 to 8.4.1994, the date on which the
matter was settled. In view of the circumstances, as recited above, we are
unable to accept this contention. From the letter dated 17.3.1991, it is clear
that it was not the settlement of the claim but it was a no objection
certificate that the claim may be settled in favour of the respondent and
advise that all future correspondence be addressed to them directly.
Therefore,
it cannot be said that the final settlement was arrived at by the aforesaid
letter.
The
next question to be considered is as to whether after giving a clean discharge
certificate by accepting the amount signing the voucher, the
complainant-respondent can raise the complaint? As already noticed, the payment
was made to the respondent on 8.6.1994 and the respondent gave a clean
discharge to the appellant without any qualification, signifying receipt of the
amount in full and final settlement of the claim.
Thereafter,
after a lapse of two months the respondent addressed a letter dated 6.8.1994 to
the appellant which is extracted:
"Re:Marine
Loss NO.101500/43/90-91/86-90 Ex.M.V. Eagle Nov/Fresia.
Dear
Sir, Thank you for your letter dated the 9th June, 1994 enclosing a Cheque for Rs.70,38,038/-
in discharge of your liability under the policies, which, however, did not
include interest." In the letter, thus read there is no complaint that the
discharge voucher or receipt had been obtained from the complainant respondent
herein fraudulently or by exercise of undue influence or by misrepresentation
or the like or coercive Ajmer Singh Cotton & General Mills, (1999) 6 SCC
400, it was pointed out by this Court that mere execution of discharge voucher
would not always deprive the consumer from preferring claim with respect to the
deficiency in service or consequential benefits arising out of the amount paid
in default of the service rendered. It was further pointed out that despite
execution of the discharge voucher, the consumer may be in a position to
satisfy the Tribunal or the Commission under the Act that such discharge
voucher or receipt had been obtained from him under circumstances which can be
termed as fraudulent or exercise of undue influence or by misrepresentation or
the like, and if such a case is proved, the authority before whom the complaint
is made would be justified in granting appropriate relief.
This
Court in Polymat India P.Ltd. vs. National Insurance Co.Ltd., 2004(10) Scale 99
also considered the facts of a similar case as in the case in hand. In that
case the reason for delay had been explained. The fire took place on 13th January, 1993 in which the insured goods were
reportedly gutted by fire. The insurance company appointed the Surveyor and
Surveyor sent his report dated 5th November, 1993 which was received by the appellant on 9th November, 1993. As there were some discrepancies in the survey
report, the insurance company vides letter dated 14th December, 1993 sought for clarification from the Surveyor, which
was replied to on 22.4.1994 by the Surveyor. The insurance company after that
took the decision and informed the claimant by a letter dated 1.7.1994 for
approval of the claim under both the policies. It is, in these circumstances,
this Court held that there was no delay in payment and the levy of interest @
18% by the Commission was set aside by this Court.
In the
present case, the claim of the complainant was finally settled by a letter
dated 8.4.1994 and the payment was made on 8.6.1994, which was accepted by the
respondent without any qualifications. It cannot, therefore, be said that the
payment was made belatedly. The important date to be decided in such
circumstances is the date on which the quantum of compensation and to whom it
should be paid is finally decided and not from the dates on which the
correspondences ensued between the parties.
In the
facts and circumstances, aforestated, we are of the view, that the claim was
finally settled by a letter dated 8.4.1994 and the payment was made on
8.6.1994, and therefore, there was no delay in making the payment which would
warrant the award of interest on delayed payment. The view taken by the
Commission was, therefore, erroneous. The Order dated 8th September, 2004 of the Commission is set aside. The appeal is
allowed. No costs.
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