UNITED INDIA INSURANCE versus AJMER SINGH COTTON AND GENERAL MILLS AND ORS. ETC.

Citation: [1999] SUPP. 1 S.C.R. 385 · Decided: 12-08-1999 · Supreme Court of India · Bench: S. SAGHIR AHMAD · Disposal: Appeal(s) allowed

Judgment (excerpt)

UNITED INDIA INSURANCE 
v. 
AJMER SINGH COTTON AND GENERAL MILLS AND ORS. ETC. 
AUGUST 12, 1999 
[S. SAGHIR AHMAD AND R.P. SETHI, JJ.] 
Consumer Protection Act, 1986-Section 14-Deficiency in service-
Claim by the insured-Mere execution of discharge voucher and acceptance 
of insurance claim-Tenable only if insured proves that discharge voucher 
was obtained by fraud or coercion-Held, insured estopped from making ary 
further claim from insurer after accepting full settlement of the claim by 
executing the discharge voucher. 
A 
B 
C' 
Award of interest-Grant of-Tribunal/Commission can grant 
appropriate relief when proved that discharge voucher was obtained by D 
fraud or coercion-Held. delay in settlement of claim under policy cannot be 
ground for Commission to grant interest when it is not pleaded at the time 
of acceptance of the insurance amount. 
liability of Insurance Companies-Issuance of discharge voucher by 
insured-Forums have powers to fasten liability against insurance company- E ~ 
But cannot fasten liability against the insurance companies over and above 
the liabilities payable under contract of insurance. 
Respondent No. l procured two insurance policies and two insurance 
covers to the extent of Rs. 1,00,000 respectively from the appellant and F 
insurance cover of Rs. 27 lakhs from respondents Nos. 2 to 4. Subsequently, 
respondent No. 1 suffered losses due to fire. On the basis of the report of 
the surveyors, he was paid the insurance amount under the policy. The 
insurance claim amount was accepted in full and final settlement of all 
claims by executing the discharge vouchers willingly and voluntarily. 
Thereafter, respondent No. 1 filed a complaint before the State Commission· 0 · 
claiming inter-alia interest at the rate of 18 per cent per annum against the 
appellant. The State Commission dismissed the claims. ·The National 
Commission accepted the claims of respondent No.I and directed the appellant 
to pay interest at the rate of 18 per cent. Hence, these appeals by the 
appellant 
385 
H 
386 
SUPREME COURT REPORTS [1999] SUPP. IS.CR. 
. 
A 
Allowing these appeals, this Court 
HELD 1.1. The mere execution of the discharge voucher by insured 
in respect of claim raised under insurance policy and acceptance of the 
insurance claim would not estop the insured from making further claim 
from the insurer but only if it is proved that discharge voucher was obtained 
B by fraud or coercion. [388-F] 
1.2. The execution of the discharge voucher would not always deprive 
the consumer fr~m preferring claim with respect to the deficiency in service 
or consequential benefits arising out of the amount paid in default of the 
C service rendered. Despite execution of the discharge voucher, if the consumer 
i,s 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 the 
circumstances which can be termed as fraudulent or exercise of undue 
influence or by mis-representation or the like, the authority before whom the 
complaint is made would be justified in granting the appropriate relief. 
D 
{388-C-D-E] 
Jivajeerao·Cotton Mills Ltd v. New India Assurance Co. Ltd, (Original 
Petition No. 52of199t decided on November 28, 1991), relied on. 
2. The Consumer Disputes Redressal Forums and Commission 
E constituted under the Act shall have the power to fasten liability against the 
insurance companies notwithstanding the issuance of the discharge vou~her. 
Such a claim cannot be termed to be fastening the liability against the 
insurance companies over and above the liabilities payable under the contract 
of insurance envisaged in the policy of insurance. [388-F-Gl 
F 
3. The discharge vouchers were admittedly executed voluntarily and 
the complainants had not alleged their execution under fraud, undue influence, 
mis-representation or the like. In the absence of pleadings and evidence the 
State Commission was justified in dismissing their complaints. The National 
Commission granted relief on the ground of delay in the settlement of claim 
G under the policies. Mere delay of a couple of months would not have authorised 
the National Commission to grant relief particuiarly when the insurer had 
not complained of such a delay at the time of acceptance of the insurance 
amount under .the policy. (389-A-BI 
,· 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 535 of 1994 
H Etc. 
.. 
UNITED INDIA INSURANCE v. A.S. COT. AND GEN.

Excerpt shown. Read the full judgment & AI analysis in Lexace.