State Consumer Disputes Redressal Commission
National Insurance Company Ltd., vs Arjun Singh Son Of Shri Daljeet Singh on 19 January, 2010
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
S.C.O. NO. 3009-10, SECTOR 22-D, CHANDIGARH.
First Appeal No.794 of 2004
Date of institution : 7.7.2004
Date of decision : 19 .1.2010
National Insurance Company Ltd., SCO No.332-334, Sector 34-C, Chandigarh.
.......Appellant
Versus
Arjun Singh son of Shri Daljeet Singh, r/o 35, Krishan Nagar, Lawrence,
Amritsar, District Amritsar.
......Respondent
First Appeal against the order dated 2.6.2004 of the
District Consumer Disputes Redressal Forum,
Amritsar.
Before :-
Hon'ble Mr. Justice S.N. Aggarwal President.
Lt. Col. Darshan Singh (Retd.), Member.
Shri Piare Lal Garg, Member.
Present :-
For the appellants : Shri Rajesh Verma, Advocate. For the respondent : Ex parte.
JUSTICE S.N. AGGARWAL, PRESIDENT:
Randeep Singh was the owner of Ford Ikon car of 2001 model bearing registration certificate No.PB-02-AB-7777. It was insured with the appellants for the period from 10.7.2001 to 9.7.2002. Said Randeep Singh sold the vehicle to Arjun Singh respondent. The respondent being the owner of the vehicle got the insurance policy renewed from the appellants for the period from 10.7.2002 to 9.7.2003. Since the ownership was not transferred in the name of the respondent, therefore, the insurance policy was issued in the name of the original owner, namely, Randeep Singh. The vehicle was got transferred by the respondent in his name on 28.7.2002.First Appeal No.794 of 2004. 2
2. It was further pleaded that the vehicle met with an accident on 25.2.2003 and it was badly damaged. The respondent spent an amount of Rs.55,802.35P in getting the vehicle repaired. The insurance claim was lodged with the appellants but it was repudiated. Alleging deficiency in service on the part of the appellants, the respondent filed the complaint in the District Consumer Disputes Redressal Forum, Amritsar (in short "District Forum") for insurance claim. Compensation, interest and costs were also prayed.
3. The appellants filed the written reply. It was admitted that Randeep Singh was the owner of Ford Ikon Car of 2001 Model bearing registration certificate No.PB-02-AB-7777 and it was insured with the appellants for the period from 10.7.2001 to 9.7.2002. It was also admitted that the appellants had issued the insurance policy for the period from 10.7.2002 to 9.7.2003 in the name of the owner, namely, Randeep Singh while the vehicle was transferred in the name of Arjun Singh respondent on 28.7.2002.
4. It was not denied that the vehicle had met with an accident on 25.2.2003. On the receipt of the information about the accident, the appellants had appointed M/s Jasjeet Singh Hora and Co. as the surveyors/loss assessors, who assessed the loss to the tune of Rs.39,305/-. The insurance policy was not issued in favour of the respondent nor it was got transferred in the name of the respondent. Since the respondent did not have the insurable claim, therefore, he was not entitled to any insurance claim. It was denied if there was any deficiency in service on the part of the appellants or if the respondent was entitled to any insurance claim. Dismissal of the complaint was prayed.
5. The respondent filed his affidavit Ex.C1 and supplementary affidavit Ex.C2. The respondent also proved documents Ex.C3 to Ex.C10. On the other hand, the appellants filed the affidavit of P.S. Bhatti, Senior Divisional Manager as Ex.R1, affidavit of Jasjeet Singh Hora, proprietor of M/s Jasjeet Singh Hora & Co. as Ex.R2. The appellants also proved documents Ex.R3 and Ex.R4. First Appeal No.794 of 2004. 3
6. After considering the pleadings of the parties and the affidavits/documents placed on file by them, the learned District Forum accepted the complaint with costs of Rs.500/- vide impugned order dated 2.6.2004. The appellants were directed to make the payment of Rs.39,305/- to the respondent with interest at the rate of 9% per annum.
7. Hence the appeal.
8. Submission of the learned counsel for the appellants was that the appeal be accepted and the impugned judgment dated 2.6.2004 be set aside.
9. Record has been perused.
10. The basic law on the subject is laid in the judgment of the Hon'ble Supreme Court reported as "COMPLETE INSULATIONS (P) LTD. v. NEW INDIA ASSURANCE COMPANY LTD." I(1996) CPJ 1 (SC) in which it was held that there was nothing like automatic transfer of insurance policy in vehicle damage cases. The facts of that case were as under:-
"A Maruti Car with registration No.CHK-8253 was purchased in the name of Mrs. Archana Wadhwa for which the respondent, M/s New India Assurance Company Ltd., had issued a comprehensive insurance policy. The premium for the insurance was paid by the appellant-Company in whose favour the car was transferred. The registration of the car was transferred to the appellant on 15.6.89. On 26.6.89 the appellant intimated the transfer of registration and asked for transfer of the insurance policy. A reminder was sent on 24.7.89. The respondent did not reply to the two letters. On 17.9.89 the car met with a serious accident in which the Managing Director of the appellant suffered serious injuries and his sister died. On
11.10.89 the appellant asked for the assessment of the First Appeal No.794 of 2004. 4 damage as the car was a total loss. The respondent did not respond. A reminder dated 26.12.89 met the same fate. The appellant got a notice issued to which the respondent replied that the appellant had no insurable interest in the car. The appellant filed the complaint before the Consumer Disputes Redressal Commission, Chandigarh, which directed the respondent to pay Rs.83,000/- i.e., the insured value of the vehicle, as the vehicle was a total loss, along with costs and interest.
The National Consumer Disputes Redressal Commission set aside the order of the Commission at Chandigarh, dismissed the complaint and granted cost of the appeal. Hence the appeal."
11. The whole law was discussed by the Hon'ble Supreme Court in the aforesaid judgment and it was observed as under:-
"The next important provision which we may notice of is Section 156 which sets out the effect of the certificate of insurance. It says that when the insurer issues the certificate of insurance, then even if the policy of insurance has not as yet been issued, the insurer shall, as between himself and any other person except the insured, be deemed to have issued to the insured a policy of insurance conforming in all respects with the description and particulars stated in the certificate. It is obvious on a plain reading of this provision that the Legislature was anxious to protect third party interest. 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 First Appeal No.794 of 2004. 5 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 to the insurer for making necessary changes in the certificate of insurance and the policy described therein in his favour. These are the relevant provisions of Chapter XI, which have a bearing on the question of insurer's liability in the present case."
12. On the facts of that case and after holding detailed discussion, it was concluded by the Hon'ble Supreme Court in Complete Insulations (P) Ltd. case (supra) as under:-
"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 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."
13. This judgment was followed by the Hon'ble National Commission in the judgment reported as "United India Insurance Company vs. Harinder Kaur"
III(2007) CPJ 411 (NC).First Appeal No.794 of 2004. 6
14. Thereafter contrary view was taken by the Hon'ble National Commission in the judgment reported as "Narayan Singh vs. New India Assurance Company Ltd." 2008(1) CLT 46 (NC) for the following reasons:-
"2. It is highly deplorable on the part of the Insurance Company to take undue advantage of the ignorance of the consumers. In 1994, a circular has been issued by the General Insurance Company with regard to the transfer of the vehicles and the transfer of insurance benefits automatically in favour of the transferee. The said regulation is part of the India Motor Tariff Regulations."
15. Reliance was placed by the Hon'ble National Commission in Narayan Singh's case (supra) on the judgment of the Hon'ble Chhatisgarh Consumer Commission and it was observed as under:-
"9. As stated above, the second ground given by the State Commission cannot be justified in view of the India Motor Tariff Regulation. Further, on this aspect, learned counsel for the petitioner has produced on ecord the judgment rendered by the Chattisgarh State Commission in the case of Ajimuddin vs. The New India Assurance Company Ltd. reported in 2006 (2) CPR 124 wherein the Commission has observed in paragraph 7 as under:-
"Learned counsel for the appellant submitted that GIC has issued special instructions regarding settlement of claim in case of transfer of policy. It was submitted that as per the said instructions the transfer of policy in favour of the First Appeal No.794 of 2004. 7 purchaser the Complainant/Appellant should be treated as automatic. It appears that the Tariff Advisory Committee issued a circular regarding automatic transfer of the policy to the new owner/purchaser of the vehicle. In the said circular the decision of Supreme Court in Complete Insulations (P) Ltd. vs. New India Assurance Co. Ltd. was referred to. In the said circular it was stated that for policies issued as per revised Motor Tariff, own damage claim which fall within the purview of GR 10 provisions may be settled in full subject to the other terms and conditions of the policy."
16. This view of law was reiterated by the Hon'ble National Commission in the judgment reported as "Oriental Insurance Co. Ltd. vs. Om Parkash Gupta & Anr." I(2009) CPJ 183 (NC).
17. Even this Commission followed this view in the judgment dated 3.9.2009 passed in First Appeal 699 of 2003 "The Oriental Insurance Company Limited Vs. Kulvir Singh".
18. However the Hon'ble National Commission has followed the judgment of the Hon'ble Supreme Court in Complete Insulations Pvt. Ltd.'s case (supra) in the judgment reported as "MADAN SINGH v. UNITED INDIA INSURANCE CO. LTD. & ANR." (2009) CPJ 158 (NC). It was held as under:-
"13. Section 157(2) provides that transferee shall apply within 14 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 First Appeal No.794 of 2004. 8 certificate of insurance and the policy described in the certificate in his favour and insurer shall make the necessary changes in the certificate and the policy of insurance in regard to transfer of insurance. The vehicle, in question, was transferred in the name of the petitioner on 10.6.1993, but he did not get the change effected in the insurance policy in terms of Section 157(2) of the Act. However, the petitioner took policy in the name of the previous owners w.e.f. 22.3.1994 till 21.3.1995. The said policy is on record in which, the number of the vehicle is shown as RJ-23/T-0030 and it is shown as insured in the name of the previous owners. The petitioner obtained the benefit of no claim bonus to the extent of 45% for the said policy, which he would not be otherwise entitled. The petitioner had thus suppressed material fact of transfer in his name from the Insurance Company. The contention of the petitioner that the Development Officer was duly informed about the change of ownership that the policy should be issued in the name of the petitioner has been denied by the insurance policy in the affidavit. In the case of Hazi Bashir Ahmad (supra), the transferee/new owner had obtained a fresh policy in his favour but the registration formalities had not yet been completed. It was in this context that the observations, upon which the petitioner has placed reliance, had been made. There being no agreement of transfer of the insurance policy First Appeal No.794 of 2004. 9 between the insurer and the transferee, the claim filed by the petitioner cannot be entertained."
19. The submission of the learned counsel for the appellants was that general regulations 10 (in short "GR-10") of the India Motor Tariff on the basis of which contrary view was taken by the Hon'ble National Commission in Narayan Singh's case (supra) was valid only upto 30.6.2002 and another set of Regulations had come into force with effect from 1.7.2002. In the new set of Regulations, no provision corresponding to GR-10 was incorporated.
20. This submission has been considered.
21. Earlier GR-10 of the India Motor Tariff provided that on the transfer of a vehicle, the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. The new India Motor Tariff came into force with effect from 1.7.2002 which is apparent from the emblem reproduced below:-
"THE TARIFF ADVISORY COMMITTEE (HEREIN AFTER CALLED ACT) HAS LAID DOWN RULES, REGULATIONS, RATES, ADVANTAGES, TERMS AND CONDITIONS, AS CONTAINED HEREIN, FOR TRANSACTION OF MOTOR INSURANCE BUSINESS IN INDIA IN ACCORDANCE WITH THE PROVISIONS OF PART II B OF THE INSURANCE ACT, 1938.
THIS TARIFF SUPERSEDES THE PROVISIONS OF THE INDIA MOTOR TARIFF IN EXISTENCE UPTO 30TH JUNE 2002.
THE PROVISIONS OF THIS TARIFF ARE BINDING ON ALL CONCERNED AND ANY BREACH OF THE TARIFF SHALL BE A BREACH OF THE PROVISIONS OF THE INSURANCE ACT, 1938." First Appeal No.794 of 2004. 10
22. Under the new India Motor Tariff applicable with effect from 1.7.2002, GR-10 relates to Geographical Zones only. GR-17 deals with the transfer of ownership of the vehicles. It reads as under:-
"GR.17. Transfers On transfer of ownership, the Liability Only cover, either under a Liability Only policy or under a Package policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer.
The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy so that the insurer may make the necessary charges in his record and issue fresh Certificate of Insurance.
In case of Package Policies, transfer of the "Own Damage" section of the policy in favour of the transferee, shall be made by the insurer only on receipt of a specific request from the transferee along with consent of the transferor. If the transferee is not entitled to the benefit of the No Claim Bonus (NCB) shown on the policy, or is entitled to a lesser percentage of NCB than that existing in the policy, recovery of the difference between the transferee's entitlement, if any, and that shown on the policy shall be made before effecting the transfer. First Appeal No.794 of 2004. 11 A fresh Proposal Form duly completed is to be obtained from the transferee in respect of both Liability Only and Package Policies.
Transfer of Package Policy in the name of the transferee can be done only on getting acceptable evidence of sale and a fresh proposal form duly filled and signed. The old Certificate of Insurance for the vehicle, is required to be surrendered and a fee of Rs.50/- is to be collected for issue of fresh Certificate in the name of the transferee. If for any reason, the old Certificate of Insurance cannot be surrendered, a proper declaration to that effect is to be taken from the transferee before a new Certificate of Insurance is issued."
23. From the above discussion, it is clear that GR-10 which was made the basis by the Hon'ble National Commission in Narayan Singh's case (supra) was no longer in force with effect from 1.7.2002 and under the new general regulations the transferee is required to apply for the transfer of the insurance policy in his favour to draw the insurable interest against the Insurance Company.
24. Since the insurance policy in this case pertained to the period from 10.7.2002 to 9.7.2003 and since the accident had taken place after 1.7.2002, therefore, the old GR-10 did not exist and the new GR-17 was applicable. Since the respondent had not taken the insurance policy in his own name and by the date of accident also the insurance policy was not got transferred by the respondent in his name, therefore, he had no insurable interest against the appellants.
25. In view of the discussion held above, this appeal is accepted and the impugned order dated 2.6.2004 is set aside.
26. The appellants had deposited an amount of Rs.22,050/- with this Commission at the time of filing of the appeal on 7.7.2004. This amount of Rs.22,050/- with interest accrued thereon, if any, be remitted by the registry to the First Appeal No.794 of 2004. 12 appellants by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants.
28. The arguments were heard in this case on 7.1.2010 and the order was reserved. Now, the order be communicated to the parties.
29. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE S.N. AGGARWAL)
PRESIDENT
(LT. COL. DARSHAN SINGH [RETD.])
MEMBER
January 19 , 2010 (PIARE LAL GARG)
Bansal MEMBER