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Tremchless Engineering Services Pvt. Ltd v/s ICICI Lombard General Insurance Company Ltd

    Consumer Case No. 932 of 2017

    Decided On, 04 February 2019

    At, National Consumer Disputes Redressal Commission NCDRC


    For the Complainant: Ankita Chaudhary, Advocate. For the Opposite Party: None.

Judgment Text

V.K. Jain, Presiding Member:

1. The complainant company obtained an insurance policy from the opposite party namely Erection All Risks Insurance Policy in respect of the installation of 8.625” OD pipeline across the Ganga River at Allahabad. The Drill Pipe String broke up while drilling. The loss having been intimated to the insurer, a surveyor was appointed to assess the loss. The opposite party offered to pay a sum of Rs. 1,99,91,247 to the complainant for the loss suffered by it. The case of the complainant is that it was forced to accept the said amount under threat of treating the claim as “no claim”. The said amount was credited in the account of the complainant. After accepting the said amount, the complainant is before this Commission, seeking payment of a sum of Rs. 5,35,98,671 with compensation etc.

2. When this complaint came up for hearing on 7.2.2018, the learned Counsel for the complainant having contended that the complainant had to accept the offer made by the insurer on account of its financial needs, was given an opportunity to file whatever evidence the complainant has to prove that it was in financial need and therefore, was compelled to execute the settlement agreement and accept the amount of Rs. 1,99,94,846 in full and final settlement of the claim. In particular, the complainant was directed to file its audited balance sheet for the financial years 2015-16 and 2016-17.

3. The complainant itself has placed on record a settlement agreement executed between it and the insurer on a Non-Judicial Stamp Paper. The said settlement agreement, to the extent it is relevant reads as under:

“1. The Insured had lodged a claim on the insurer under an Erection All Risk Insurance Policy bearing policy No. 5006/104251177/00 valid for the period 27.6.2015 to 26.12.2015.

2. The insurer had registered the said claim bearing claim No. GEN00017097 and had deputed M/s. Puri Crawford Insurance Surveyors and Loss Assessors India Pvt. Ltd. as Surveyor and Loss Assessor to assess the loss under policy terms and conditions.

3. As per the findings of Loss Assessor, considerable portion of the loss claimed by Insured was found falling under policy exclusion and not payable under policy terms.

4. Now by virtue of his agreement both the parties, after having agreed to the findings of the Surveyor, have decided to proceed towards full and final settlement of the said claim. The parties have agreed to settle the claim by the payment of a total amount of Rs. 1,99,94,846 by the insurer to the insured as full and final settlement of the claim.

5. By virtue of the agreement, Insured agrees:

(i). To accept payment of Rs. 1,99,94,846 as full and final settlement of the claim.

(ii). Upon receipt of such payment, the insurer shall be discharged from all their liability (ies) arising directly or indirectly out of the insurance policy and claim(s) for the present and future and no further request or demand would be made or raised for any additional payment under any circumstances.

(iii). All other direct or indirect beneficiary(ies) shall not have any right to make any further or future demand of claim(s) either in part or in full or initiate any proceedings for claim against the insurers.”

Thus as per the said settlement agreement, though as per the finding of the assessor considerable portion of the loss claimed by the complainant fell under policy Exclusion and was not payable the parties agreed to the settlement of the entire claim of payment of Rs. 1,99,94,846 by the insurer to the insured. The said amount having been received by the complainant, it is left with no right to claim any further amount from the insurer in respect of the loss, subject matter of this complaint.

4. As noted earlier, the contention of the learned Counsel for the complainant is that the said settlement was executed by the complainant on account of its financial needs, documents filed by the complainant do not substantiate the plea taken by the learned Counsel. The balance sheets of the complainant for the financial years 2015-16 and 2016-17 clearly show that the complainant company had profit before tax of Rs. 6,06,23,402 in the financial year ending 31.3.2015 and profit before tax of Rs. 8,55,76,310 in the financial year ending 31.3.2016. The profit after tax during the aforesaid period was Rs. 4,64,99,387 and 2,89,27,982 respectively.

Considering that the complainant company had made substantial profits in the financial years 2014-15 and 2015-16, it would be difficult to say that the complainant was compelled on account of its financial needs to accept the amount offered by the opposite party and duly accepted by it by way of settlement agreement.

5. The learned Counsel for the complainant relied upon a Circular dated 24.9.2015, issued by Insurance Regulatory and Development Authority of India (IRDA) in support of her contention that mere execution of the Discharge Voucher would not entitle the insurer to deny a claim, which is otherwise genuine. The said Circular dated 24.9.2015, was followed by another Circular No. IRDA/NL/CIR/MISC/113.6.2016 dated 7.6.2016. The aforesaid circular, to the extent it is relevant, reads as under:

“This refers to the Circular No. IRDA/NL/Cir/Misc./173.9.2015 dated 24.9.2015 on the captioned subject. Since then insurers, on various occasions, have submitted that the above circular is not in the line with the IRDA (protection of policyholders interests) Regulations, 2002 (PPI Regulations) and the Indian Contract Act.

The Authority has reviewed the matter taking into consideration the provisions of the Contract Act, PPI Regulations and Apex Court Judgments. Taking equal cognizance of the legal rights of the policy holders and insurers, the Authority hereby further directs that—

1.Wherever there are no disputes by the insured/s or claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued. However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimant/s.

2.If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.

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/> 3.Under no circumstances the Discharge Vouchers shall be collected under duress, by coercion, by force or compulsion.” 6. The circular issued by the IRDA, in my view, does not in any manner help the complainant in the facts and circumstances of the case since there was a written settlement executed between the parties and there is no evidence to prove that the said agreement was executed under duress by coercion, by force or compulsion. 7. For the reasons stated hereinabove, I hold that the complainant is not entitled to any further payment from the insurer. The complaint being devoid of any merit is hereby, dismissed, with no order as to costs. Complaint dismissed.