National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs Ashok Kumar on 19 March, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2118 OF 2012 (From the order dated 2.3.2012 in First Appeal No.537/2009 of the State Commission Delhi) New India Assurance Co. Ltd. Regional Office-I, 5th Floor, Tower-2, Jeevan Bharti Building, Connaught Place, New Delhi Through its Authorised Signatory ... Petitioner Vs. Sh. Ashok Kumar 39, Rashid Market, Gali No.7, Geeta Colony, Delhi-110 051 ... Respondent BEFORE: HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER HON'BLE MR. SURESH CHANDRA, MEMBER For the Petitioner : Mr. J.P.N. Sahi, Advocate For the Respondent : Mr. Gaurav Malhotra, Advocate PRONOUNCED ON 19TH MARCH, 2013 ORDER
PER JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER This revision is directed against the order of the State Commission, Delhi dated 2.3.2012 whereby the State Commission upheld the order of the District Consumer Forum partly allowing the complaint and directing the petitioner/opposite party to pay to the respondent/complainant a sum of Rs.80,000/- alongwith Rs.10,000/- as compensation for physical and mental harassment and Rs.5,000/- as cost for litigation.
Briefly stated, facts relevant for the disposal of this revision petition are that on 30th November, 2006 the respondent/complainant purchased Maruti Car No.DL-2C-S-0215 from M/s Gee Cee Exim Pvt. Ltd. for Rs.80,000/-. The car was insured with the petitioner/opposite party by the earlier owner from 26.5.2006 to 25.5.2007. Respondent/complainant got the registration of car transferred in his name on 15th January, 2007. The complainant however failed to inform the insurance company about the aforesaid transfer of vehicle within the requisite period of 14 days and also did not ask for transfer of insurance policy in his name.
The vehicle was stolen on 12.3.2007.
The theft was reported to police control room on 13.3.2007 at 7.15 a.m. The FIR was however registered by the police on 17.3.2007. The intimation regarding theft was given to the insurance company on 30.3.2007. The insurance company appointed a Surveyor, who submitted his survey report on 8.5.2007 stating therein that since the insurance was not transferred in the name of the respondent/complainant, he had no insurable interest in the vehicle. On the basis of the report of Surveyor, petitioner/opposite party repudiated the claim of the respondent/complainant. The complainant therefore filed consumer complaint before the District Forum seeking direction to the opposite party to indemnify him to the tune of Rs.80,000/- against loss of car and also to pay Rs.10,000/- towards damages for physical and mental harassment and Rs.10,000/- for cost of litigation.
On being served with the notice of the complaint, petitioner failed to put in appearance as such the complaint was decided ex-parte on the basis of the affidavit evidence of the respondent/complainant. The District Forum allowed the complaint and directed the petitioner/opposite party to pay to the respondent/complainant a sum of Rs.80,000/- against loss of the car besides Rs.10,000/- as compensation for physical and mental harassment and Rs.5,000/- as cost of litigation. Being aggrieved of the order of the District Forum, the petitioner preferred appeal before the State Commission and the State Commission vide impugned order did not find any error in the order of the District Forum and dismissed the appeal as devoid of any merit.
Learned counsel for the petitioner submits that the impugned order of the State Commission is not sustainable in law because the foras below have failed to appreciate the principles of insurance and mandatory provisions of IRDA Regulations, particularly GR-17 which deals with the transfer of ownership of vehicle. Learned counsel submitted that as per GR-17 of IRDA Regulations, it is obligatory on the part of the transferee of an insured vehicle to intimate the insurance company about the transfer of ownership within 14 days from the date of transfer of registration in the name of transferee. In the instant case no such intimation was given by the respondent/ complainant as such the insurance policy was not endorsed in the name of respondent transferee. Therefore, the insurance company was not liable to pay the claim because there is no privity of contract between the petitioner/opposite party and the respondent/complainant.
Learned counsel for the respondent on the contrary has argued in support of the orders of the fora below.
We have considered the rival contentions of learned counsel for the parties and perused the record.
It is admitted case of the parties that the vehicle was insured in the name of the previous owner M/s Gee Cee Exit Pvt. Ltd. and the respondent/complainant is the transferee of the vehicle. It is not disputed that the registration of car was transferred in the name of the respondent/complainant on 15.1.2007 and that the theft of car took place on 12.3.2007. Undisputedly the complainant failed to inform the insurance company about the transfer of vehicle in his name within the requisite period of 14 days and he also did not apply for transfer of insurance policy in his name. Transfer of insurance policy in the event of the sale of vehicle by the insured is governed under GR-17 issued by the Tariff Advisory Committee which provides that the transferee has to apply for transfer of insurance policy in his name within 14 days of transfer of registration in his name so that the insurer may make necessary changes in his record and issue fresh certificate of insurance. Earlier the transfer of insurance policy was governed by GR-10 issued by the Tariff Advisory Committee applicable for the period w.e.f. 01.04.1990 to 30.06.2002 which reads as under: -
10. Transfers On transfer of a vehicle the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. If the transferee is not entitled to the benefit of the bonus or subjected to malus already shown on the policy, the recovery of the differences between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy. However, on expiry and/or termination of the existing Policy the transferee will be eligible for Bonus or subjected to malus as per his own entitlement On perusal of GR-10 it would be seen that on the sale of vehicle the benefit under the policy in force automatically accrued to the new owner. GR-10 was replaced by GR-17 issued by TAC w.e.f. 01.07.2002 and it reads as under:
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 changes in his record and issue fresh Certificate of Insurance.
Since the vehicle was purchased by the petitioner on 30.11.2006 the provisions of GR-17 are applicable. On reading of the GR-17 it transpired that on the transfer of ownership the transferee of the vehicle is required to apply in writing for transfer of the policy in his name within 14 days from the date of transfer under recorded delivery to the insurer who had insured the vehicle, with the details of registration of vehicle, date of transfer of the vehicle, previous owner of the vehicle and the number of the policy so that the insurer may make necessary changes in the record and issue fresh insurance certificate in favour of the transferee. Unless the aforesaid procedure is complied with, the transferee does not get insurable interest under the insurance policy in the name of previous owner. In the instant case, as noted earlier admittedly the transferee i.e. the respondent/complainant did not intimate the insurance company about the transfer of the vehicle within 14 days of transfer of registration in his name to enable the petitioner-Company to make necessary changes in the record and issue fresh certificate of insurance. The respondent/complainant thus did not get the insurance contract transferred in his favour. Therefore, he did not acquire any insurable interest in the stolen vehicle on the date of theft.
Section 157 of the Motor Vehicles Act also deals with the transfer of certificate of policy and it reads thus:
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.
1 [Explanation.-For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.] (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.
On bare reading of the above provision it is clear that Section 157 mainly deals with the protection of third party interest. This provision came up for interpretation before the Supreme Court in the case of Insulation Pvt. Ltd. vs. New India Assurance Co. Ltd. (1996) 1 SCC 221 wherein it was held:
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 Kondaihs 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.
Similar view was taken by the Supreme Court in the case of Rikhi Ram & Anr. Vs. Sukhrania & Ors. (2003) 3 SCC 97, and it was observed:
6. On an analysis of Sections 94 and 95, we further find that there are two third parties when a vehicle is transferred by the owner to a purchaser. The purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer.
7. .
8. For the aforesaid reasons, the appeal, is allowed. We set aside the order and judgment under challenge. It is hereby directed that the insurer shall pay compensation to the victims within eight weeks along with the interest @ 11% p.a. from the date of incident and it will be open to the insurer to recover the said amount either from the insured or from the transferee of the vehicle. However, there shall be no order as to the costs.
In view of the above noted provisions of Motor Vehicles Act and the Tariff Regulations as also the decision of Supreme Court it is clear, if the transferee fails to inform the insurance company about the transfer of registration of vehicle in his name and the policy is not transferred in the name of the transferee, then the insurance company is not liable to pay the claim to the transferee in case of theft of the vehicle. Thus, we are of the view that petitioner insurance company was justified in repudiating the claim and there is no deficiency in service on their part.
As a consequence of above discussion, we set aside the orders passed by the fora below and the complaint is dismissed. Accordingly, revision petition is allowed and parties are left to bear their own costs.
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(AJIT BHARIHOKE, J.) PRESIDING MEMBER Sd/-
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(SURESH CHANDRA) MEMBER Raj/