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"Once an insurance policy for a specific amount is issued against the requisite payment, it is no more open to the insurance companies to re-open the issue as to the market value of the vehicle," Delhi State Consumer Disputes Redressal Commission observed.
Directing the appellant National Insurance Co Ltd to pay Rs 1,80,000 with nine per cent interest from the date of filing the claim to the date of its order, the commission comprising Justice J D Kapoor as president and Rumnita Mittal as member asked the body to pay Rs 3,000 also as litigation cost to the respondent Dharam Pal Machocha of Lajpat Nagar in New Delhi.
The commission further stated that if the insurance companies were allowed to re-assess the market value of the vehicle after the event then the very purpose of receiving the premium against the specific insurance amount would be rendered meaningless and of no significance.
National Insurance Co Ltd has preferred an appeal before the commission following an order by the district consumer forum to pay Rs 2,00,000 with interest of nine per cent per annum to Machocha, who had lost his vehicle on May 25, 1999, whereas it was insured on August 26, 1998.
The insurance company, in its appeal stated that the respondent was not entitled for any more amount as the latter has already received Rs 95,000 as full and final settlement ofthe claim, which was assessed by a surveyor.
"Covenants like full and final settlement or without protest have in themselves an element of coercion, arbitrariness and blackmailing the consumer who is caught in the dilemma whether to wait for years to secure the actual loss or accept whatever is offered," the commission observed.
Partly allowing the insurance company's appeal by reducing the amount of Rs 2,00,000 by 10 per cent as depreciated value, the commission stated that the legal right of a person always survived if it had been abridged or incised by way of negotiation.