Delhi District Court
Jaiveer Singh S/O Sh. Charan Singh vs Bajaj Allianaz General Insurance Co. ... on 8 May, 2013
IN THE COURT OF SH. REETESH SINGH
ADDITIONAL DISTRICT JUDGE-01 (NORTH-EAST)
KARKARDOOMA COURTS, DELHI
CS No. 212/2011
Date of Institution of Suit : 21.04.2011
Date on which Reserved for Judgment : 28.01.2013
Date of Judgment/Order : 08.05.2013
Case I.D. Number :02402C0120772011
IN THE MATTER OF:-
1. Jaiveer Singh S/o Sh. Charan Singh
R/o A-34, Meet Nagar,
Delhi - 110093.
2. Suneet Finman Pvt. Ltd.
101, Hargobind Enclave,
Delhi-110092.
.....Plaintiffs.
Versus
Bajaj Allianaz General Insurance Co. Ltd.
2nd Floor, DLF Industrial Estate,
Moti Nagar,
Delhi-110015
.......Defendant
ORDER
1. By this order I shall decide an application of the plaintiff under Order 12 Rule 6 CPC (filed on 20.12.2011) praying for a decree on the admissions stated to have been made by the defendant in its written statement. Reply to this application has been filed by the plaintiff. Arguments of the parties have been heard.
Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 1/11
2. The brief facts of the case are that the plaintiff had filed this suit praying for a decree for recovery of Rs.4,07,360/- along with interest pendente lite and future @ 12% p.a. The plaintiff has averred that plaintiff no. 1 is a self employed individual who entered into a Hire Purchase agreement dated 13.10.2003 with the plaintiff no.2 in respect of motor vehicle Toyota Qualis. Plaintiff no.2 for this purpose had disbursed Rs.4,25,000/- to the plaintiff no.1 for purchase of the said vehicle which was to be repaid in 36 monthly installments of Rs.17,200/-p.m. It is averred that the plaintiff no.1 purchased the said motor vehicle Toyota Qualis bearing registration no.DL1VB 0856 with the loan amount and as per the agreement, the said vehicle was hypothecated in favour of plaintiff no.2.
3. It is averred that plaintiff no.1 was unable to pay monthly installments and surrendered the vehicle to the plaintiff no.2 on 07.06.2007 with the request to dispose the vehicle and to adjust the proceed against the outstanding amounts. It is averred that there was tacit understanding between plaintiff to use the said vehicle for commercial purpose in case any prospective buyer was not readily available and also to adjust the earning from such commercial use towards the outstanding loan amount.
4. It is averred that the vehicle in question was got insured by the plaintiff no.2 although the plaintiff no.1 was the user. The insured value of the vehicle was Rs.3,04,000/-. The defendant had issued the insurance policy which was valid w.e.f. 13.09.07 to 12.09.08.
5. It is averred that after the vehicle was surrendered, the plaintiff no.2 got an offer over for commercial use of the vehicle in a call centre. It is averred that on 11.12.07 the driver of the said vehicle Sh. Manoj Kumar parked the same at his residence but next morning found that the same had been stolen. FIR no. was instituted on 12.12.07 and a claim was lodged with the defendant which was repudiated. It is averred that on 30.07.08, a legal notice was sent to the defendant regarding the repudiation to which the defendant replied that since the vehicle was handed over to Mr. Manoj Kumar there was a breach of the terms of the insurance policy. In these Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 2/11 circumstance, plaintiff no.2 file a consumer complaint before the District Consumer Forum bearing CC no.737/08 against the defendant. The said complaint was allowed and the defendant was directed to pay the insured value of Rs.3,04,000/- besides Rs.90,000/- towards compensation and Rs. 10,000/- towards cost. It is averred that in an appeal filed by the defendant the order of DCDRF was reversed by the State Consumer Dispute Redressal Commission. Further appeal of the plaintiff no.2 before the National Commission was dismissed. It is averred that the national commission held that since plaintiff no.1 had not assigned the insurance policy, the plaintiff no. 2 did not have the locus to claim the alleged insurance claim as the same should have been lodged by the plaintiff no.1
6. It is averred that repudiation of the claim by the defendant on technical ground was illegal and thus the plaintiff filed present suit for recovery of the insured amount.
7. The defendant in its written statement has raised preliminary objections to the effect that the suit was barred by limitation as the theft of the vehicle took place on 11.12.07 but the present suit was filed in the year 2011. It is averred that both plaintiffs did not have any insurable interest in the vehicle in question and were not entitled to file the suit. It is averred that suit of the plaintiff was barred under the principle of res-judicata. Such dispute had already been decided by the National Consumer Disputes Redressal Commission. It is further averred that the vehicle in question was insured in the name of plaintiff no.1. During the period of the policy, insurance claim was lodged on account of theft of the vehicle on 12.12.2007. Investigation of the defendant found that the vehicle in question was financed by the plaintiff no.2 and since the loan was not repaid, the plaintiff no.2 repossessed the vehicle and gave the same to one Dalip Kumar who further handed over the same to a call centre with the vehicle being driven by Manoj Kumar. Manoj Kumar driver was an employee of Dalip Kumar. On the date of theft, the vehicle was parked on the residence of Manoj Kumar. The defendant company has averred that by its letter dated 23.04.2008 it had Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 3/11 sought explanation from plaintiff no.2 regarding its insurable interest in the vehicle at the time of issuance of the insurance policy as well as at the time of the loss. It is averred that same was in accordance with All India Motor Tariff framed by the insurance regulatory and development authority.
8. It is averred that plaintiff no.2 gave a reply dated 30.04.08 which was not found to be satisfactory and it therefore repudiated its claim on the ground that there was no insurable interest with the plaintiff no.2 as it had acted beyond the purview of the hypothecation agreement.
9. Issues in this suit were framed on 07.09.2011 and evidence by way of affidavit on behalf of plaintiff no.2 had already been filed. It is at this stage that the plaintiff moved an application under Order 6 Rule 12 of the Code of Civil Procedure.
10. Counsel for the plaintiff had argued that insurance claim had been rejected only on the ground of alleged lack of insurable interest. He submitted that the vehicle was admittedly hypothecated to plaintiff no.2 which had financed its purchase and the same was apparent from the registration certificate. In this view of the matter the plaintiff no.2 had a insurable interest in the matter. Reliance was placed by the counsel for the plaintiff on the following judgments:-
1. State Bank of India Vs. Suresh Kumar reported in 58(1995) DLT 199
2. M/s. Krishna Food & Baking Industries Vs. Rajendera Kumar Sawhney reported in AIR 2009 SC 1000
3. M/s. Skylark Motors (I) and Ors. Vs. Lakshmi Commercial Bank, AIR 1997 Delhi 46
4. Uttam Singh Duggal VS. United Bank of India & Ors (2000) 7 Supreme Court Cases 120
5. Ramsons Southend Vs. Divisional Manager, New India Assurance Co. Ltd., 1998 (44) DRJ (DB)
6. Malwa Strips Pvt. Ltd. Vs. Jyoti Limited (2009) 2 SCC 426.
11. Counsel for the defendant on the other hand argued that there is no admission on the part of the defendant on the basis of which the plaintiff could claim any decree. He submitted that the insurance claim of the plaintiff no.2 was rejected since there was no insurable interest with the plaintiff no.2. He submitted that since plaintiff no.1 surrendered the vehicle Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 4/11 to plaintiff no.2, the plaintiff no.1 was also not left with any insurable interest. He further submitted that the repudiation of the claim could not be called into question. Counsel for the defendant relied on the following judgments:
1. Ashwin Lal Vs. Aruna Lal 177 (2011) DLT 335
2. Himani Alloys Vs. Tata Steel Ltd. reported in 2011 (3) RCR Civil 729
3. Sushil Bhardwaj Vs. Ved Prakash Shastri 163 (2009) DLT 287
12. I have heard the counsel for the parties and perused the record. The question which arises for determination is whether on the basis of above admitted facts that plaintiff would be entitled to a decree under the provisions of Order 12 Rule 6 Code of Civil Procedure. The plaintiff no.2 had lodged its claim on account of loss of the vehicle to the defendant. The defendant by its letter dated 23.04.08 wrote to the plaintiff no.2 seeking an explanation. Since the letter is brief, the same is reproduced as under:-
"Dear Sir This has reference to the claim lodged with us under above mentioned policy number, in respect of theft of the vehicle reg. No.DL1VB 0856 dated 17th December 2007.
On Scrutiny of documents submitted by your goodself, it is observed that at the material time of loss, the vehicle had been repossessed from the insured by the financers, Surmeet Finance Ltd. With whom we do not have any contractual liability.
Please note that as per All India Motor Tariff formulated by IRDA there should exist insurable interest at the time of taking policy as well as at the time of loss, in this particular claim the same was not in position. In the circumstance, we are not liable under the policy terms and condition in respect of the above loss. This is Without Prejudice to our right to repudiate our liability on any specific ground/grounds which are available to us for the time being or which may be available to us in future, which please kindly be noted.
Therefore, in the view of the above, kindly explain within 7 days from the date of this letter as to why you claim should not be repudiated."
Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 5/11
(emphasis supplied)
13. The plaintiff no.2 through its advocate wrote a letter dated 30.04.2008 to the defendant stating that the insurance policy cover note mentioned that the vehicle was hypothecated to the plaintiff no.2 and thus it did have an insurable interest in the matter. The defendant thereafter by its letter dated NIL wrote back to the defendant no.2 that it had repudiated the claim due to the reason that it did not have any insurable interest and that possession of the vehicle had been handed over to a person without intimation to the defendant.
14. 'Insurable interest' has been the subject matter of several decisions of the Hon'ble Supreme Court and of the Hon'ble High Court. In the case of New India Assurance Company Ltd. Vs. G.N. Sainani reported in (1997) 6 SCC 383, the Hon'ble Supreme Court was pleased to hold that insurable interest in the property would be such interest as shall make loss of the property to cause pecuniary damage to the assured. A similar question arose before the Hon'ble High Court of Delhi in the case of The New India Assurance Co. Ltd. Vs. M/s. T.T. Finance Ltd., reported in AIR 2011 Delhi. Placing reliance on the judgment of the Hon'ble Supreme Court in the New India Assurance Company Ltd. Vs. G.N. Sainani (supra) the Hon'ble High Court of Delhi was pleased to hold as under:-
"8. The question is what is an insurable interest? Insurable interest is not complete ownership. It need not necessarily even strictly be title and interest in the object insured. Insurable interest qua a vehicle policy is such interest in the subject matter of insurance whereby the insured can seek to recover the monetary claim for any damage or loss to the insured vehicle."
15. In the case of The New India Assurance Co. Ltd. Vs. M/s. T.T. Finance Ltd. (Supra), the facts were that the original plaintiff M/s. T.T. Finance Ltd. had entered into a lease agreement with one Sh. Jagdish Prasad for finance of a motor vehicle. Since Sh. Jagdish Prasad was unable to pay the installments, possession of the vehicle was taken back by M/s. T.T. Finance Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 6/11 Ltd and a fresh hire purchase agreement was entered into with Sh. Prem Pal Kashyap. The insurance policy was issued in favour "M/s. T.T. Finance A/c Jagdish Prashad" and the registration certificate of the vehicle was in the name of Sh.Prem Pal Kashyap. The financed vehicle was stolen while in the possession of Sh. Prem Pal Kashyap. Insurance claim was lodged by M/s. T.T. Finance which was repudiated by the New India Assurance Co. Ltd. on the ground that (a) there was no privity of contract between the insurance company and M/s. T.T. Finance Ltd and (b) that M/s. T.T. Finance did not have any insurable interest since the registration certificate of the vehicle was in the name of Sh. Prem Pal Kashyap.
16. The Trial Court decreed the suit in favour of the plaintiff M/s. T.T. Finance Ltd. Appeal was filed before the Hon'ble High Court by the insurance company New India Assurance Co. Ltd. The same grounds were canvassed by the insurance company before the High Court. With respect to the first ground regarding privity of contract the Hon'ble High Court upheld the finding of fact of the trial court that the insurance policy had been issued in favour of M/s. T.T. Finance Ltd.
17. With respect to the other ground regarding insurable interest, the Hon'ble High Court looked into the clauses of the hire purchase agreement between M/s. T.T. Finance and Prem Pal Kashyap and found that M/s. T.T. Finance which had been described as "owner" under the agreement had the right to repossess the vehicle in case of default of payment of installments and also the right to sell the vehicle and adjust the sale proceeds towards the amount due and payable. Hon'ble High Court held that by virtue of these clauses M/s. T.T. Finance had an insurable interest in the financed vehicle and its claim for insurance could not be rejected merely because it was not the owner of the vehicle as per the registration certificate.
18. Let us now examine the clauses of the agreement between the plaintiff no.1 and plaintiff no.2. The agreement between both the plaintiffs dated 13.10.2003 is called "Agreement of Hire Purchase". The plaintiff no.2 is referred to as "owner" and the plaintiff no.1 is referred to as "hirer". Clause Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 7/11 I of the agreement states that the owners are the absolute owner of the Motor vehicle and they have agreed to let the same on hire to the hirer. Clause-II and III state that Rs.6,17,780/- would be the hire amount to be paid by the hirer in 36 monthly installments.
19. Clause-4 of the terms and conditions forming part of the agreement provides that the owner shall have the right to repossess the motor vehicle upon default of payment of any monthly installments; upon breach of the conditions of the agreement; upon cause of damage to the vehicle by the hirer etc. Clause-8 provides that the owner shall have the right to dispose the vehicle after repossession by sale or rehire. Clause-9 provides that the hirer is under obligation to get the vehicle insured and to have an endorsement for assignment of the policy in favour of the owner. It is further provided that the owner shall have the right to receive all the claims payable by the insurance company for any loss or damage to the motor vehicle.
20. The certificate of registration of the vehicle is in favour of the plaintiff no.1, but the same bears an endorsement of HP/Lease Agreement in favour of the plaintiff no.2. The cover note of the insurance policy issued by the defendant bears the name of the plaintiff no.1 as the insured but the mentions "hypothecated with Suneet Finance P. Ltd.". The clauses of the hire purchase agreement dated 13.10.2003 between the plaintiff no.1 and 2 in the present suit are identical to the clauses of the hire purchase agreement that was the subject matter in the case of The New India Assurance Co. Ltd. Vs. M/s. T.T. Finance Ltd. (supra). In the present matter as well the financer has the right to take possession of the vehicle and to sell the same in case of default by plaintiff no.1 in payment of the installments. In case of loss or damage of the vehicle, the plaintiff no.2 is entitled to receive the claims payable by the insurance company to be applied to the outstanding amounts payable by the plaintiff no.1 on the date of the loss. In case no further installments were due, the plaintiff no.1 would then receive the claims payable by the insurance company. The plaintiff no.2 therefore Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 8/11 would be interested in the preservation of the vehicle financed by it since it would suffer prejudice if the vehicle suffered damage or loss.
21. The defendant in its letter dated Nil, by which it repudiated the claim has also taken a stand that the vehicle at the time of loss was in the possession of one Mr. Dalip and this fact was not informed to the defendant company. The cover note of the insurance policy mentions that 'any person' including the insured is entitled to drive the insured vehicle. The defendant has not been able to point out any clause in the insurance policy which required the insured to intimate the insurer about the details of the person who was driving the vehicle. Even this ground for repudiation of the claim is not borne out from the terms of the insurance policy.
22. In these facts and circumstances and keeping in view the judgment of the Hon'ble High Court in the case of The New India Assurance Co. Ltd. Vs. M/s. T.T. Finance Ltd., (supra) the plaintiff no.2 will have an insurable interest in the matter. The repudiation of the insurance claim by the defendant through its letter dated 23.04.2008 and subsequent letter dated Nil on the ground of lack of insurable interest are not legally sustainable.
23. The defendant had claimed that the suit was barred by limitation since the loss of the vehicle took place on 11.12.07 but suit was filed in the year 2011. Article 44 of the schedule to the Limitation Act prescribes a period of limitation of three years beginning from the denial of the claim on the policy. In the present matter, the insurance claim was denied by letter dated 23.04.08. Suit has been jointly filed by both plaintiffs on 20.04.2011. The same is within three years from the date of denial of the claim. Suit of the plaintiffs is therefore within limitation.
24. The defendant had also contended that in view of the proceedings before the Consumer Fora, the suit of the plaintiff was barred under the principles of res judicata. The plaintiff no.2 had filed CC No.737/08 titled Suneet Finman Pvt. Ltd. Vs. M/s. Bajaj Allianz General Insurance Co. Ltd. The said complaint was allowed by the DCDRF, K.G. Marg, New Delhi by order dated 14.10.09. Against the same, the defendant had filed appeal FA Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 9/11 no.09/907 before the State Commission, Delhi. The said appeal was allowed by order dated 16.08.2010 holding that M/s. Suneet Finman Pvt. Ltd. was not entitled to maintain a consumer complaint. It is stated by the defendant that the order dated 16.08.2010 was upheld by the National Commission. However, copy of the said order has not been placed on record.
25. From the order dated 16.08.2010 it is clear that the State Commission Delhi allowed the appeal of the defendant holding that the plaintiff no.2 could not be held to be a 'consumer' for the purposes of the Consumer Protection Act 1986. In these circumstances it cannot be said that the orders of the State Commission would operate as resjudicata for the purposes of the present suit as the appeal was allowed on a technical ground.
26. The counsel for the defendant had placed reliance on certain judgments. In the case of Ashwin Lal Vs. Aruna Lal (supra), the Hon'ble High Court was pleased to hold that in the absence of clear and unambiguous admission made by the defendant, the plaintiff could not be entitled to any decree. In the facts of that case, the Hon'ble High Court found that there was no admission of the defendant. In the case of Himani Alloys Ltd. (supra) the Hon'ble Supreme Court found in the facts of that case that there were no admissions made by the defendant in the minutes of meeting dated 09.12.2000 of the appellant company. In the case of Sushil Bhardwaj Vs. Ved Prakash Shastri (supra) the Hon'ble High Court reiterated that in the absence of an unambiguous admission, no decree could be passed under Order 12 Rule 6 CPC.
27. There can be no quarrel with the proposition of law as laid down by the Hon'ble High Court and the Hon'ble Supreme Court. In the present case the plaintiffs have sought recovery of the insured amount from the defendant and have called into question the repudiation of the claim by the defendant. None of the facts pleaded by the plaintiff in the plaint are in dispute. The defendant has contended that the claim was rejected on the ground that there was no insurable interest with the plaintiffs. Thus, in view of these Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 10/11 admitted facts the court was to consider whether the repudiation by the defendant of the insurance claim of the plaintiffs was justified. Therefore, the matter falls within the purview of Order 12 Rule 6 CPC.
28. For the reasons recorded above, the application of the plaintiff under Order 12 Rule 6 CPC is allowed. Plaintiff is held entitled to recovery of Rs.4,07,360/-. Plaintiff has claimed interest @ 12% p.a. on the decreetal amount. In the opinion of this court, the contract between the parties was commercial in nature and the plaintiffs will be entitled to the same.
29. Plaintiffs are therefore granted a decree for recovery of Rs. 4,07,360/- along with interest @ 12 % p.a. From the date of filing of the suit till the date of payment. Plaintiffs shall also be entitled to cost of the suit. Decree sheet be drawn. File be consigned to record room.
Announced and Dictated to the Steno in Open Court today i.e. 08.05.2013 (REETESH SINGH) Addl. Distt. Judge-01 (NE) Karkardooma Courts, Delhi Jaiveer Singh Vs. Bajaj Allianaz CS No.212/11 11/11