Following our report last month of the Supreme Court decision in
Genus Power, we now report a further welcome
judgment on the sanctity of discharge vouchers/settlement
agreements. This is a 16 December 2014 National Commission decision
in a case where the Insured claimed to have signed the discharge
voucher and accepted the settlement amount under duress. The case
is: Garg Acrylics Ltd v United India
The Insured took a Standard Fire and Special Peril Insurance
Policy from UII in March 2009. A fire occurred in December 2009.
The Insured claimed Rs.5 crores, but the surveyor assessed the loss
at c. Rs.2.67 crores, and in December 2010 the Insured accepted a
cheque of c. Rs.2.70 crores.
National Commission's Reasoning & Judgment
The Insured filed a complaint before the State Commission which
was rejected for lack of pecuniary jurisdiction and thereafter, the
Insured filed a complaint before the National Commission which
supported the Insurer, for the following reasons:
The discharge voucher was not dated but the Insured admitted
that it received payment by way of the cheque dated 1 December
2010. It, therefore, meant that the amount was paid on 1 December
The cheque was encashed before filing the complaint before the
National Commission and "this fact smacks of malafides of
intention on the part of the complainant". The Commission
"It appears that the complainant
wants benefit of both the worlds. It is trying to be smart. If it
was not satisfied with the above said settlement, it would have
kept the cheque without encashing it. The duplicity on the part of
the complainant is clearly discernible."
The Insured sent letters to the Insurer in 2010 (2 weeks after
the date of the cheque) and again in 2011 for further payment but
the Insurer reiterated that the claim had been settled fully and
finally as per the discharge voucher. In this regard, the
Commission observed that:
"There was no immediate reaction
to the discharge voucher. There was no immediate protest, whisper,
word or syllable for a period of seven days. The complainant
[Insured] should have protested immediately by sending a telegram
or sending the protest immediately."
In relation to the Insured's allegations against the
surveyor, the Commission observed that:
"The full and final settlement
discharge voucher clearly shows that it is in consonance with the
Surveyor's report, rather it is more than that. The Surveyor
without any allegation of ill will or malice appears to be a
sterling witness. This is settled Law that the report of the
surveyor is to be given much more weightage than any other piece of
The Commission rejected the Insured's arguments that: (a)
it had accepted the amount under duress because he had taken loan
from the Bank and he was being forced by the Bank to return the
money; (b) the execution of the discharge voucher as a
pre-condition to release the amount itself amounts to economic
duress and coercion and also to arm twisting tactics. The
Commission held that:
"There is not a single business
man on the earth, who does not have the economic pressure. No other
particulars of fraud, undue influence or coercion saw the light of
the day. There is no economic hardship."
"the complainant signed the
settlement discharge voucher with open eyes. The question of
economic pressure may be hovering around at that stage as well. It
could have refused to sign the settlement and waited for sometime
to put up his claim before the Court of Law."
For further information on this topic please contact Tuli &
Tel +91 11 4593 4000, fax +91 11 4593 4001 or email
Originally published 31 December 2014
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