Branch Manager, New India Assurance Co. Ltd. ... Petitioner
Vs
M/s Vimal through its Proprietor, Vikramaditya Pal ... Respondent

BEFORE

Hon'ble Mr. Justice Suhas C.Sen, Dr.(Mrs.) R.Thamarajakshi, Member, 
Mr. S.P.Bagla, Member, Hon'ble Mr. Justice C.L.Chaudhry, Member and Hon'ble Mr. Justice J.K.Mehra, Member

Per SUHAS C SEN. J

M/s Vimal, the Respondent, had taken what is known as shopkeepers insurance policy from the New India Assurance Co. Ltd., the appellant herein. By that policy of insurance, loss and destruction of insured properties, i.e., the cloth for sale in its shop was insured for Rs. 5 lakhs. A fire broke out in the insured premises between 29/30 September, 1992 as a result of which the insured goods were destroyed. M/s Vimal intimated the loss to the Insurance Company on 30th September, 1992. On 1st October, 1992 it filed an FIR. The entire quantity of the insured goods had been hypothecated with the State Bank of India, Puri by an earlier transaction.

The Surveyor appointed by the Insurance Company investigated the claim of loss of the goods and estimated the loss to be Rs. 1,62,295/-. Vimal's estimate was Rs. 4,50,000/-.

On the basis of the deed of hypothecation the Insurance Company paid Rs. 1,62,295/- to the State Bank of India, Badasankha Branch, Puri which granted a receipt for the same "in full and final satisfaction" of its claim. Vimal lodged a protest and requested for the payment of the full amount of the claim. The Insurance Company, however, did not accede to that request The respondent filed a complaint before the District Forum. The District Forum after a review of the facts and documents placed before it came to the conclusion that a sum of Rs. 2,88,415/- should be paid to the complainant and also awarded interest @ 15% per annum. The insurance Company went up on appeal before the State Commission and argued that the claim had already been settled fully and finally with the Bank. There was no scope for entertaining any further claim of the claimant.

The State Commission held that there could not be a full and final satisfaction of the claim behind the back of the Complainant. The complainant did not have any notice of the proposed settlement with the State Bank of India and was not aware of the settlement of the claim. Under these circumstances, the complainant cannot be said to be bound by the agreement to settle.

The second contention was about the physical verification of the loss suffered. The State Commission came to the conclusion that the assessment of loss made by the Surveyor was perfunctory. Moreover, the Insurance Company had not called upon the Complainant to offer comments on the report of the Surveyor. The Insurance Company on the perusal of the report of the Surveyor settled the claim ex-parte and rejected the claim put forward by the complainant without any discussion. The Bank in its anxiety to realise the dues outstanding against the Complainant accepted whatever amount was offered to it without any reference to the Complainant. Such a settlement is not binding on the Complainant and the receipt granted by the Bank in full and final settlement cannot estop the Complainant from lodging this complaint. 

It was next noted by the State Commission that during the course of hearing before the District Forum no attempt was made by the Insurance Company to justify the finding of the Surveyor that the articles which were completely burnt by the firm were not noticed or assessed by the Surveyor.

Basically, all these are findings of fact. We are not inclined to reassess the evidence at this stage.

The argument about 'full and final settlement' is entirely without any substance. The Complainant did not state anywhere that the money was being accepted by him in full and final satisfaction of its claim. What the Bank had done cannot bind the Complainant. The Complainant had no prior notice of this settlement.

Lastly, a point was taken about delay in lodging the complaint. The point does not appear to have been taken before the State Commission. Moreover, this again entails investigation of facts. The amount was paid to the State Bank of India. The Insurance Company did not inform the Respondent in writing how much of his claim was being accepted or how much was being rejected. The only correspondence that the Insurance Company had was with the Bank. The Respondent later gathered some information from the Bank about the payment of the amount of Rs. 1,81,595/-. After getting that information, he protested to the Insurance Company. This led to further exchange of letters. Ultimately, when the Respondent realised that the Insurance Company will not pay any further sum he lodged a complaint before the District Forum. In fact the claim of 

the complainant was never formally repudiated by the Insurance Company nor did the Insurance Company inform the complainant in writing about the settlement of the case with the Bank.

Therefore, in the facts of this case, the question of complainant's loss of right to move Court after the period mentioned in the Insurance contracts does not arise.

Our attention has been drawn to a judgment of the Supreme Court in the case of National Insurance Co. Ltd. Vs. Sujir Ganesh Nayak & Co. & Anr. Reported in II (1997) CPJ 1 (SC). In that case it was held that if the claim was not lodged within the time specified in the insurance policy from the date of repudiation of the claim, the right of the insured got extinguished. In this case, the Insurance Company never repudiated the claim. It paid the admitted amount of its liability to the Bank and obtained a receipt from the Bank in full and final settlement of the claim of the complainant. This was without any notice to the complainant and behind his back. This sort of receipt does not bind the Complainant nor does it amount to repudiation of the balance amount of the claim nor does it curtail his right to move the Court. The Insurance Company did not bother to inform the Complainant that his claim was going to be settled by making a payment of Rs. 1,62,295/- to the Bank.

For all these reasons we are of the view that there is no merit in this petition. The Revision Petition is not admitted and is dismissed.