National Consumer Disputes Redressal
Oriental Insurance Co. Ltd. vs Enamul Haque on 4 September, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3270 OF 2018 (Against the Order dated 16/08/2018 in Appeal No. 809/2017 of the State Commission West Bengal) 1. ORIENTAL INSURANCE CO. LTD. THROUGH THE CHIEF MANAGER, ORIENTAL INSURANCE CO. LTD. HEAD OFICE, 88 JANPATH, NEW DELHI-110001 ...........Petitioner(s) Versus 1. ENAMUL HAQUE S/O. LT. AINUL HAQUE, VILLAGE DADUPUR, P.O. KAMALAPUR, P.S. ENGLISH BAZAR, DISTRICT-MALDA-732103 WEST BENGAL ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. L.K. Tyagi, Advocate for
Mr. Kishore Rawat, Advocate For the Respondent : Mr. Sagar N. Pahune Patil, Advocate
Dated : 04 Sep 2019 ORDER
JUSTICE V.K. JAIN, PRESDING MEMBER (ORAL)
The complainant/respondent purchased a truck from its previous owner Mr. Santosh Sarkar. The truck was purchased by him on 26.07.2013. On that day, the truck was insured in the name of the previous owner Mr. Santosh Sarkar. The vehicle was stolen on 02.08.2013. The intimation of the theft vehicle was given by the complainant to the petitioner company. The claim however, was repudiated vide letter dated 28.12.2015. The said letter, to the extent it is relevant, reads as under:
"While acknowledging the receipt of your letter 06.08.2013 on 07.03.2013, in connection with the above, we are to inform you that as per Indian Motor Vehicles Act, following a transfer of ownership of a vehicle, the new owner has to get the Insurance Policy of the previous owner changed/transferred in his name within 14 days from the date of such transfer of ownership to avail the benefit of Insurance Policy of previous owner. The All India Motor Tariff effecting from 01.07.2002 vide GR-17 also states that in case of transfer of owner's name must be endorsed in the policy within the 14 days of such transfer by paying fees applicable to transfer of ownership. As per our record it is found that Santosh Sarkar was the insured person at the material time of accident. You are not the insured at the material time of accident in our books of account.
Since there is a violation of Motor Vehicles Act and Insurance Policy condition in this case, we regret our inability to consider your claim as per General Regulation-17.
However, you are being given one more opportunity to substantiate your claim. Your representation/clarification must reach to us within two weeks from the date of receipt of this letter. Please note that in case we have no response from you within two weeks from the date of receipt of this letter the claim shall stand repudiated for the reasons indicated without further advices from us."
2. Being aggrieved from the repudiation of the claim, the complainant/respondent approached the concerned District Forum by way of a Consumer Complaint. The complaint was resisted by the petitioner primarily on the ground that there was no contract of insurance between the complainant and the petitioner company.
3. The District Forum having allowed the complaint, the petitioner approached the concerned State Commission by way of an appeal. The said appeal also having been dismissed, the petitioner is before this Commission by way of this Revision Petition.
4. Section 157 of the Motor Vehicle Act which deals with the transfer of insurance, reads as under:
157. Transfer of certificate of insurance.--
(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.
(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance.
5. The above referred statutory provision came up for consideration of the Hon'ble Supreme Court in M/s Complete Insulations (P) Ltd Vs. New India Assurance Company Ltd. I (1996) CPJ 1 (SC). In the case before the Hon'ble Supreme Court, a Maruti car was purchased in the name of one Mrs. Archana Wadhwa and was insured in her name. The premium for the insurance was paid by the appellant company in whose favour the vehicle had been transferred. The registration of the vehicle was transferred to the appellant company on 15.06.1989. On 26.06.89, the appellant intimated the transfer of registration and asked for transfer of the insurance policies. There was no response to the said request till the vehicle met with an accident on 17.09.89 in which the Managing Director of the appellant got injured and his sister died. The appellant asked for assessment of the damage to the vehicle. There being no response from the insurer, the appellant approached the Consumer Forum at Chandigarh by way of a Consumer Complaint. The complaint was allowed but the order was set aside by this Commission. Being aggrieved, the appellant approached the Hon'ble Supreme Court. The question before the Hon'ble Supreme Court was as to whether the appellant was entitled to indemnity without the insurance policies having been transferred in its name. This Commission, while dismissing the Consumer Complaint, had taken a view that Section 157 of the Motor Vehicle Act applied only in relation to a third party risk and did not apply to a policy covering risk of damage to the vehicle or to the person of the insured. Dismissing the appeal, the Hon'ble Supreme Court interalia observed and held as under:
9. ............... Then comes Section 157 which we have extracted earlier. This provision lays down that when the owner of the vehicle in relation whereto a certificate of insurance is issued transfers to another person the ownership of the motor vehicle, the certificate of insurance together with the policy described therein shall be deemed to have been transferred in favour of the new owner of the vehicle with effect from the date of transfer. Sub-section (2) requires the transferee to apply within fourteen days from the date of transfer to the insurer for making necessary changes in the certificate of insurance and the policy described therein in his favour.
10. There can be no doubt that the said chapter provides for compulsory insurance of vehicles to cover third party risks.
Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157 of the New Act must be limited thereto. The certificate of insurance to be issued in the prescribed form (See Form 51 prescribed under Rule 141 of the Central Motor Vehicles Rules, 1989) must, therefore, relate to third party risks. Since the provisions under the New Act and the Old Act in this behalf are substantially the same in relation to liability in regard to third parties, the National Consumer Disputes Redressal Commission was right in the view it took based on the decision in Kondaih's case because the transferee-insured could not be said to be a third party qua the vehicle in question. It is only in respect of third party risks that Section 157 of the New Act provides that the certificate of insurance together with the policy of insurance described therein "shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred". If the policy of insurance covers other risks as well, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI of the New Act and in the realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle. In the present case since there was no such agreement and since the insurer had not transferred the policy of insurance in relation thereto to the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken by the National Commission is therefore correct.
6. Thus, the Hon'ble Supreme Court expressly held that Section 157 of the Motor Vehicles Act which provides for the deemed transfer of the certificate of insurance, applies only in respect of third party risk and it does not cover the damage caused to the vehicle or to the insured himself. The Hon'ble Apex Court expressly held that if the insurance policy covers risks such as damage caused to the vehicle of the insured himself, that would be a matter in the realm of the contract for which there has to be an agreement between the insurer and the transferee.
7. In the present case, there was no contract of insurance between the petitioner and the complainant on the date the vehicle was stolen, since the insurance policy had not been transferred in the name of the complainant on that date. Therefore, though the insurer would be liable in respect of a third party risk, it would not be liable in respect of damage to the vehicle of the insured himself. Since the claim lodged by the complainant/respondent was not a third party claim but was a claim on account of loss of his own vehicle and the insurance had not been transferred in his name on the date the vehicle was stolen, the petitioner company was not liable to reimburse him for the loss suffered by him.
8. For the reasons stated hereinabove, the impugned orders cannot be sustained and the same are accordingly set aside. The Consumer Complaint is consequently dismissed with no order as to costs. The amount if any deposited by the petitioner company, be refunded to it with interest which may have accrued on that amount.
......................J V.K. JAIN PRESIDING MEMBER