NATIONAL INSURANCE COMPANY LTD.versusNIPHA EXPORTS PVT. LTD.

                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 offinal 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

           2. From the letter dated 17.3.1991, it is clear that it was not the
D 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. 619 of2005.

           From the Final Judgment and Order dated 8.9.2004 of the National
H
       NATIONAL INSURANCE COMPANY LTD. l'. NIPHA EXPORTS rvr. LTD. [SEMA, J.]   721

   Consumer Disputes Redressal Commission, New Delhi in Original Petition No.         A
 . 42of1996.

        Vishnu Mehra, Sakshi Mittal and B.K. Satija for the Appellant.

        Mahendra Anand, Ray Sharat Prasad and Rajan Narain for the
   Respondent.                                                                        B
        The Judgment of the Court was delivered by

        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. 42of1996.          c
  By the aforesaid order, the Commission directed the appellant, National
  Insurance Company Ltd., to pay interest @ 6% on Rs. 70,38,038/- from I0th
  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 D
   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 ofRs.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.                                                       E

        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 F
   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 G
   would be entitled to receive the claim amount as the shipment was on C.l.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
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     722                     SUPREME COURT REPORTS [2006J SUPP. 6 S.C.R.

A     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,
B    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 Mis Webster & Co. for making the
C    investigation into the possible cost involved from Mis Nipha and their local
     suppliers, respondent herein.

           Ultimately, Mis Webster by its letter dated 8.4.1994 settled the claim on
     the basis of consignment as done by the Surveyors.

D         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.AO equivalent to Rs. 70,38,0381- 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
E   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
F 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 Mis
  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
G 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 1:-e 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.
H
     NATIONAL INSURANCE COMPANY LTD. v. NIPHA EXPORTS PVT. LTD. [SEMA, J.] 723

      The next question to be considered is as to whether after giving a clean       A
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      B
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.                                                      c
      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."                                   D
        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 bargaining. In the case of United India Insurance v. Ajmer
Singh Cotton & General Mills, [1999] 6 SCC 400, it was pointed out by this E
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 F
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
justi tied in granting appropriate relief.
                                                                                     G
      This Court in Polymat India P.Ltd. v. National Insurance Co.Ltd.,
(2004) JO 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            H
     724                       SUPREME COURT REPORTS [2006] SUPP. 6 S.C.R.

A 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 I. 7.1994 for approval of the claim under both
B 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
C 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.
D
        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,
E 2004 of the Commission is set aside. The appeal is allowed. No costs.
    K.K.T.                                                         Appeal allowed.