PER MR SUBHASH CHANDRA, PRESIDING MEMBER

1.     This revision petition filed under section 21(b) of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order of the Rajasthan State Consumer Dispute Redressal Commission, Jaipur (in short, ‘State Commission’) in First Appeal Nos. 279 of 2011 and 2415 of 2011 which were disposed of by a common order dated 03.03.2015 dismissing the appeal against the order of the District Forum, Jaipur (in short, ‘District Forum’) in Consumer Complaint No. 864 of 2008 dated 23.11.2010.

2.     The facts of the case in brief as per the revision petitioner are that the respondent had taken two insurance policies with the petitioner viz., (i) Fire Policy B No. 11330120-2589 for Rs 3,00,000/- on 22.12.1997 for an Italian Softy Machine and (ii) Fire Policy B No. 11330120-2634 for Rs.14,00,000/- dated 23.10.1998 for an Ice Cream Parlour structure/cabin with electrical fittings and accessories. These policies were duly renewed on payment of requisite annual premium. On 06.05.1998 due to a fire accident the ice cream parlour, accessories and the softy machine were damaged.

3.      The claim for compensation was processed by the petitioner on the basis of the assessment report of the loss surveyors and an amount of Rs Rs.8,51,514/- under policy no.11/2639 and Rs.2,53,500/- under policy no.11/2589 was determined on depreciative value basis. However, the respondent has claimed Rs.17 lakh on the basis of reinstatement basis. The respondent accepted the full and final settlement of Rs.11,05,014/- on 04.12.1998 and thereafter sought arbitration on 09.12.1998 in the matter as she did not accept the award which was cited to have been under duress and coercion. The arbitration for enhancement of the quantum of claim was abandoned midway due to the demise of the arbitrator. A complaint was then filed by the respondent for settling the claim on re-instatement basis before the District Forum which was upheld with costs vide order dated 23.11.2010. The petitioner then approached the State Commission in appeal and the respondent also appealed against the order of the District Forum seeking enhancement of the award. By way of a common order by the State Commission on 03.03.2015 the petitioner’s appeal was allowed partly and the respondent’s cross appeal also disposed of. This order allowed the claim on re-instatement basis and directed payment of the difference in the claim amount of (Rs.9,54,170.48 – Rs.8,62,314/-) and (Rs.2,95,526/- - Rs.2,53,500/-). It is this order which has been impugned by the petitioner before this Commission.   

4.     The petitioner’s case is that the order of the State Commission correctly held that the claim was settled without any undue pressure, coercion or fraud by the petitioner or its officers as alleged by the respondent as it was a voluntary acceptance of the settlement of the claim. It is contended by the petitioner that the State Commission erred in partially allowing the cross appeal of the respondent and upholding the finding of the District Forum that the policies were on reinstatement basis after concluding that the complainant/respondent herein having accepted the settlement of his claim calculated on depreciative basis was not eligible to re-agitate the claim. It is therefore contended that the impugned order in so far as it allows the cross appeal in FA no.2415 of 2015 is illegal and be set aside. Petitioner has relied upon Kalakriti Cultural and Convention Centre vs Oriental Insurance Company Ltd., (CC no.639 of 2019 decided on 28.02.2020).

5.      The respondent has contended that the policies were taken on re-instatement basis and the order of the District Forum allowed the complaint on this basis. The State Commission’s order according to the respondent is erroneous since it allows the claim on re-instatement basis but allows the difference in the claim value Rs.17 lakh. The respondent has argued that the judgment in Kalakriti Cultural and Convention Centre (supra) is distinguishable from the present case since there was a dispute regarding whether the policy was on reinstatement basis or not. However, in the case at hand, the issue regarding the policy being reinstatement basis or on depreciation basis has been duly considered and by way of concurrent findings the forums below have categorically held that the insurance policy was on reinstatement basis. It is an admitted case of the insurance company that the policy was on reinstatement basis.

6.      The crux of the issue is therefore whether the policies were taken on depreciative value basis as claimed by the petitioner or on reinstatement basis as claimed by the respondent and whether the respondent having accepted a full and final settlement claim amount can reopen the matter citing coercion, fraud or undue pressure by the petitioner to accept the same.

7.      The order of the District Forum allowing the respondent’s complaint reads as under:

“In the context of the first objection taken by the opposite party, complainant has produced two proposal forms in respect of two insurance covers obtained by her wherein in the relevant column she had written insurance on re-investment value basis. Opposite party has not been able to establish that copy of insurance policy was given to the complainant. No receipt was produced showing receipt of the policies.

Opposite party has not given any reasons for issuing ordinary fire Policy B when the complainant wanted insurance on re-instatement value basis. The opposite party has not been able to explain why for three years after the policy in question which was issued on reinstatement basis and initially that is for 96-97 value was Rs.10,35,000/- then in the next year 97-98 it was increased to Rs.11,50,000/- and for the year in question value was increased to Rs.14,81,000/-. The opposite party has not given any reasons for increasing the value. Ordinarily on account of depreciation the sum insured is reduced next year. It is not contended before the forum that due to clerical mistake or due to increase in the sum insured in the year under reference value was increased. Increase in the sum insured substantiates the fact that insurance was done on re-instatement basis.

Complainant obtained information under TRI Act, 2005 from IRDA. On 22.07.2010 they informed that premium for Fire Policy and for re-investment value is same and different premium is not charged.

From this it is clear that opposite party has wrongly stated that different premium is charged. Hence, on the basis of premium it cannot be concluded that Fire Policy B was issued.

Senior Branch Manager wrote a detailed letter dated 09/11.02.1998 to his Divisional Officer wherein it is clarified that actually this policy was re-instatement policy and was not an ordinary Fire Policy. Hence, permission for accepting the claim be given. In support of this the Divisional Officer wrote a detailed letter to the Regional Officer.

It is correct that parties are bound by the terms of the contract but because of some clerical error on the part of any one party nature of the contract appears to be different, then it cannot be said that the Forum in order to adjudicate the dispute between both parties, has to swallow the live fly the error. In any way, in any circumstances there was no chance to issue Fire Policy B, only re-instatement policy was to be issued for this reason sum insured was increased and premium was paid on the increased sum otherwise premium would have been on depreciated value than the sum insured would have been reduced.

In this view of the case Forum has arrived at this conclusion that for the year in question complainant’s policy was re-instatement policy.

The surveyor himself has assessed the loss at Rs.13,59,822.34 paise and at Rs.2,98,500/-. This amount which is more than Rs.16,000,00/- has been restricted to Rs.11,05,014/- and the opposite party is unable t give a proper explanation for this.

On the other hand complainant has stated because her sole means of earning her livelihood was burnt in the fire, she was having great financial constraint in sustaining herself and because for three months the claim was not settled, in these circumstances she was forced to accept the amount that was offered t her in the twelve month of the year 98 and after 5 days she got a legal notice issued by her advocate. Therefore, under such constraints, the manner in which complainant took prompt steps to protest and which is backed by the senior manager and the divisional officer and that protest which is supported by the officers cannot be said to be false, baseless and manipulated, it cannot be said that by merely writing the words full and final settlement jurisdiction of the forum will be ousted and the civil court will have the jurisdiction to try the dispute. It is also clear that the opposite party was satisfied with the protest that is why after making payment they referred the dispute to an arbitrator. It is beyond comprehension of this Forum that how at this stage opposite party can take the plea of jurisdiction in the context of full and final settlement. This Commission is of the view that it has the jurisdiction to try this complaint.

As far as the question of limitation is concerned, complainant has given the date till which arbitration proceedings continued and after one month thereafter complaint was filed as such there is not necessity for the complainant to give details of the time spent during the arbitration period. It is sufficient that proceedings were held before the arbitrator and continued till a specific date. Arbitrator was appointed by the opposite party itself. This complaint was filed within three months from the date on which the proceedings came to an end. In such a situation it cannot be said that this complaint is time barred.

In the light of the above discussion the Forum is of the view that the amount assessed by the surveyor is on the basis of re-investment value, Rs.13,59,822.34 paise for parlour, Rs.15,000/- towards salvage total Rs.13,44,822.34 and for softy machine Rs.2,98,000/-. Total claim for Rs.16,43,322.34 was assessed. Out of which opposite party had paid Rs.11,05,014/-. By not paying remaining sum of Rs.5,38,308.34 the opposite party has committed deficiency in service.

In the facts of the case, the dispute was in regard to the interpretation of the policy, in the peculiar circumstances of the case this Forum does not consider it to be appropriate to grant any interest to the complainant nor it considers it to be correct to award any compensation towards mental agony and hardship.

Therefore, the opposite party insurance company is directed to pay to the complainant remaining sum of Rs.5,38,308.34p and Rs.2,000/- towards cost of litigation. The order shall be complied with within one month else the complainant shall be entitled for interest at the rate of 12% per annum. Remaining prayer of the complainant is rejected”.

8.     The State Commission’s order held as below:

“13.    To sum up our conclusion, we are of the view that these policies were re-instatement value basis. The proposal form was for obtaining the policies for re-instatement value basis and the insured value was continuously been increased for the last three years. Non-mention of the category of policies on the policy documents is deficiency on the part of the company and it cannot take any benefit now. Since the complainant had accepted the amount on depreciative value basis in full and final settlement of its claim, now he should not be allowed to agitate it. There is no evidence of any fraud, misrepresentation or undue influence on part of the company. However, the complainant can succeed on the point that the company had obtained two survey reports and the amount paid on the basis of second survey report. The complainant is entitled to receive the difference between the two reports.

14.     Consequently, the appeal of the Insurance Company is partially accepted and the judgment of the learned DCF allowing the claim on the basis of re-instatement value basis is set aside. The appeal of the complainant is also partially accepted to the extent that it is entitled to receive the difference between the assessed amount of two survey reports, i.e., (Rs.9,54,170.46 – Rs.8,62,314/-) and (Rs.2,95,526/-  - Rs.2,53,500/-) along with interest @ 10% per annum from the date of filing of the complaint. A sum of Rs.50,000/- shall also be paid to the complainant as compensation for mental agony. Order regarding cost of prosecution at Rs.2000/- is maintained.”

9.     Heard the learned counsel for the parties, perused the records carefully and considered the evidence carefully. The parties led their evidences and argued on the same lines before the lower fora. The petitioner’s case is that the policies in question were on depreciative basis as per their nomenclature of ‘Fire Policy – B’ and that following a full and final settlement of the claim, the matter cannot be reopened by the respondent. The respondents have placed reliance on the fact that as per the premium paid which was on an escalatory basis, the policies were on a reinstatement basis. It has also been argued by the learned counsel for the respondent that based upon documents obtained under the Right to Information Act by the respondents, internal communications of the petitioner provide a clear admission that the policies were in fact on reinstatement basis although they were both inadvertently prepared by the petitioner as Fire Policy ‘B’ indicative of being on depreciative basis. It is argued on behalf of the respondent that he was forced to accept the settlement and that even the IRDAI recognizes the prevalence of such a practice of settling claims by insurance companies and is the reason for the issuance of circular instructions dated 09.11.1998 and 18.11.1998 as part of its effort to curb such practices.

10.   In the case of Singureddy Ramana Murthy vs National Insurance Company Ltd., and Ors., this Commission in FA No. 219 of 1995 decided on 08.03.2002 has held that:

It cannot be disputed that the insurance company is the dominant party when it goes to the settlement of the claims and it is very often in a position to dominate the Will of insured. A party who is faced with the situation like a disaster and who is c ash starved on account of calamity that has befallen it is not in a position to resist the pressure of the Insurance Company to sign the receipts on the dotted lines in order to receive whatever payment is becoming available to it. Such receipt will have no meaning if the party has immediately refuted it and repudiated its receipt or discharge voucher if the circumstances show that the party protested soon after signing.

11.    In the instant case it is evident that the revision petitioner had accepted the full and final settlement of Rs.8,62,314/- under Fire Policy no.11/2634 and of Rs.2, 53,500/- under Fire Policy no.11/2589 offered by the petitioner on 01.12.1998 and had immediately, thereafter on 09.12.1998 had filed a legal notice contesting the discharge voucher and seeking appointment of an arbitrator as the claims had been settled on depreciative basis whereas the policies were on re-instatement basis. These circumstances clearly indicate that the respondent had protested soon after signing the full and final settlement and therefore the full and final settlement had been contested immediately after signing of the discharge voucher.

12.   While this Commission has revisional jurisdiction under section 21 (b) of the Act, in exercise of this jurisdiction, it is not required to re-assess and re-appreciate the evidence on record and substitute its own conclusion on facts especially when the findings on the facts of the lower fora are concurrent. This Commission can interfere with the concurrent findings of the foras below only on the grounds that the findings are perverse or fora below have acted without jurisdiction. Findings can be concluded perverse only when it is based on other evidence that have not been produced or based on conjecture or surmises. In other words, evidence which are either or not part of the record or when material evidence on record is not considered. The Hon’ble Supreme Court in Rubi (Chandra) Dutta vs United India Insurance Co. Ltd., - (2011) 11 SCC 269, has held as under:

“23. Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two Fora.”

13.   The Hon’ble Supreme Court has reiterated this principle in the case of Lourdes Society Snehanjali Girls Hostel and Ors vs H & R Johnson (India) Ltd., and Ors – (2016) 8 Supreme Court Case 286 and held as under:

“17. The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has either failed to exercise their jurisdiction or exercised when the same was not vested in them or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons.”

14.   In T Ramalingeswara Rao (Dead) Through LRs and Ors vs N Madhava Rao and Ors, dated 05.04.2019, the Hon’ble Supreme Court has also again held as under:

“12. When the two Courts below have recorded concurrent findings of fact against the Plaintiffs, which are based on appreciation of facts and evidence, in our view, such findings being concurrent in nature are binding on the High court. It is only when such findings are found to be against any provision of law or against the pleading or evidence or are found to be perverse, a case for interference may call for by the High Court in its second appellate jurisdiction.”

15.   The power of this Commission to review under section 21 (b) of the Consumer Protection Act, 1986 is therefore, limited to cases where some prima facie error appears in the impugned order and different interpretation of same sets of facts has been held to be not permissible by the Hon’ble Supreme Court.

16.   It is apparent that the petitioner has challenged the impugned order on the very same grounds which were raised before the District Forum as well as the State Commission in the appeal. Findings on facts of the District Forum are based on evidences and documents on record. The present revision petition is therefore an attempt by the petitioner to urge this Commission to re-assess, re-appreciate the evidence which cannot be done in revisional jurisdiction.

17.   The impugned order is perverse in that it considers the assessment reports of the Surveyors appointed by the insurance company to determine the claim on re-instatement basis and disallows the appeal of the respondent seeking finalization of the claim on that basis, as was done by the District Forum.

18.   From the foregoing it is apparent that the impugned order of the State Commission is perverse and suffers from material irregularity. It is therefore liable to be set aside. The revision petitions are accordingly dismissed and the order of the State Commission is set aside.