NATIONAL INSURANCE COMPANY LTD. versus NIPHA EXPORTS PVT. LTD.

Citation: [2006] SUPP. 6 S.C.R. 719 · Decided: 29-09-2006 · Supreme Court of India · Bench: H.K. SEMA

Judgment (excerpt)

NATIONAL INSURANCE COMPANY LTD. 
A 
v. 
NIPHA EXPORTS PVT. LTD. 
SEPTEMBER 29, 2006 
[H.K. SEMA AND P.K. BALASUBRAMANYAN, JJ.] 
B 
Insurance-Insurance of consignment-Damages-Claim for 
compensation-Dispute between consignor and consignee regarding 
payment-Further dispute regarding quantum of compl:!nsation-Final C 
settlement of claim after resolution of both the disputes-Payment of 
compensation after two months of final settlement of claim-Accepted by 
claimant as full and final settlement-Thereafter raising complaint as to 
delayed payment-National Commission of Consumer Disputes Redressal 
directed payment of interest as damages by reason of delay in payment from 
the date the correspondence for claim started between the parties till the D 
date of payment-On appeal, held: There was no delay in making payment, 
as the same was made within two months of final settlement-In such cases 
important date is the date of final settlement after resolution of all. the 
disputes and not the date on which the correspondence ensued. 
Insurance was obtained in 1990 by respondent-company covering their E 
consignment sent to a Sudanese Company. Some damage occurred to the 
consignment and insurance was claimed. Dispute arose between consignor 
and consignee as to who was entitled to receive the claim. After a letter dated 
17.3.1991 from Sudanese Company giving no objection to settle the claim in 
favour of the respondent-company, legalized documents of the consignments F 
were given to the Insurance Company. Again the matter was withheld at the 
instance of the respondent due to dispute regarding quantum of compensation. 
Therefore, the matter was referred to investigation regarding the dispute. 
After investigation claim was finally settled on 8.4.1994 and the same was 
accepted by the respondent on 8.6.1994 without any qualiftcations. Respondent-
com pany approached National Consumer Disputes Redressal Commission,- G 
The Commission by its order directed the insurance company to pay interest 
on the insurance amount from 10.12.1990 tiU 8.6.1994. 
In appeal to this Court respondent contended that there was no 
719 
H 
720 
SUPREME COURT REPORTS (2006] SUPP. 6 S.C.R. 
A explanation by the insurance company to withhold the payment from 17.3.1991 
to 8.4.1994 and hence insurance company was liable to pay interest as damages 
by reason of delay in payment. 
Allowing the appeal, the Court 
B 
HELD: I. 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 
C the correspondences ensued between the parties. 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.1724-C-EI 
D 
2. 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 advice that all future correspondence 
be addressed to them directly. Therefore, it cannot be said that the final 
settlement was arrived at by the a'roresaid letter. (722-G-H) 
E 
3. After giving a clean dist:harge certificate by accepting the amount 
signing thevoucher, the complainant-respondent cannot raise the complaint. 
The payment was made to the respondent on 8.6.1994 and the respondent gave 
a clean discharge to the appella'!t 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 
F appellant. There is no complaint in the letter 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 bargaining. (723-A, B, E( 
G 
United India Insurance v. Ajmer Singh Cotton and General Mills, [ 1999) 
6 SCC 400 and Polymat India P.ltd. v. National Insurance Co. ltd, (2004) 
10 Scale 99, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6

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