National Consumer Disputes Redressal
Banowarilal Agrawalla vs National Insurance Co. Ltd. And Anr. on 30 May, 2005
Equivalent citations: IV(2005)CPJ110(NC)
ORDER
B.K. Taimni, Presiding Member
1. The petitioner was the complainant before the District Forum, where he had filed a complaint alleging deficiency in service on the part of the respondents.
2. Brief facts of the case are that the complainant had purchased a second hand vehicle from one B.C. Bose & Co. for a consideration, which was insured with the respondent No. 1, which was damaged extensively by fire on 10.9.1995. On a claim being preferred by the purchaser/complainant, the claim was repudiated on the ground that since the policy has not been transferred in the name of the complainant, the claim cannot be settled in his favour. Thus, alleging deficiency in service, a complaint was filed before the District Forum, which was dismissed.
3. An appeal being filed by the petitioner before the State Commission, met with the same fate, hence this revision petition has been filed before us.
4. We heard the learned Counsel for the parties and perused the material on record. The basic facts are not disputed, which are that the vehicle was originally owned by M/s. B.C. Bose & Co. and on being transferred to Maharashtra, the vehicle was registered afresh, which was also insured for the period 30.9.1994 to 29.9.1995 and insurance policy was in the name of M/s. B.C. Bose & Co. Pvt. Ltd. During the life of the policy, the vehicle was sold to the petitioner in whose favour the registration was transferred on 6.7.1995.
5. Between 6.7.1995 and 10.9.1995 no effort appears to have been made by the petitioner/ complainant to get the Insurance Policy transferred in his favour.
6. Petitioner heavily relies upon Section 157 of the Motor Vehicles Act, 1988, on which the learned Counsel laid great emphasis before the District Forum, State Commission. This Section reads as under:
" 157. Transfer of certificate of insurance- (I.) 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 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."
7. Learned Counsel for the petitioner wishes to support his contentions relying upon the judgment passed by the High Court of Rajasthan in Civil Spl. Appeal Nos. 28 and 30 to 33 of 1985 decided on 5.7.2000, wherein it was held by the Hon'ble High Court:
"While under the Act of 1939 the making of an application was an integral and imperative part of securing a transfer of policy in the name of transferee of vehicle and even after intimation was given it was for the insurance company to accept or refuse to treat the transferee as holder of the policy. In case of refusal the policy would stand revoked. In contrast, under the Act of 1988, the transfer of policy takes place automatically with the transfer of vehicle by force of statutory provisions. Sub-section (I) of Section 157 does not leave it to insurance company's discretion to accept or refuse the transfer of certificate of insurance in favour of transferee of vehicle. Sub-section (2) which is not at all a condition of securing the transfer of the insurance policy in favour of the transferee of the vehicle, but only prescribes the procedure for setting the record correct does not affect the operation of Sub-section (1). Under Sub-section (1) the transfer of policy along with transfer of vehicle are co-existence. Even assuming the Sub-section (1) operates only an mutation of owners name in registration certificate, during transitional period the liability of insurance company still continues on principle laid by A.P. High Court in Madineni Kondaiah case which has been unstintedly approved by the Apex Court. Therefore, the provisions of Subsection (2) of Section 157 of the Act of 1988 cannot be elevated to the same level to which the provisions of Section 103-A(1) had been held by the Courts in decisions rendered under the Act of 1939. Subsection (2) of Section 157 of the Act of 1988 in the context of the mandate of Subsection (1) can only be taken to be a procedural requirement not mandatory but directing for correcting the record on information not affecting the continued liability of insurance company in respect of a vehicle on transfer which has a subsisting policy. This is so because the transfer of policy takes place simultaneously along with the transfer of vehicle by virtue of operation of Subsection (1) of Section 157. The transfer of the policy no more depends on any discretion to be exercised by the insurance company or on the foundation of privity of contract between the insurer and the transferee of the vehicle from the holder of the Policy."
8. Dealing with the judgment of the High Court first, the Hon'ble Supreme Court in the case of Complete Insurance Ltd. v. New India Assurance Company Ltd., , held that the meaning of the words used in Section 157(1) "shall be deemed to have been transferred in favour of the person to whom the motor-vehicle is transferred" covers only in respect of third party risk, learned Counsel for the petitioner was candid enough to admit that this judgment of the Hon'ble Supreme Court passed in 1996 after the amendment of the Motor Vehicles Act, was not considered or referred to in the judgment of the Hon'ble High Court, hence as per position of law, the judgment of the Hon'ble Supreme Court becomes law of the land, in view of which the petitioner cannot take advantage of Section 157(1) of the Motor Vehicles Act.
9. In any case the heading of the Chapter 11 of the Motor Vehicles Act, clearly states that section contained therein de with "Insurance of Motor Vehicles against 3rd Party Risk". In view of the fact that it is not a third party claim provisions of the Chapter including Section 157 does not apply in the present case. The law position is quite clear that the policy was issued in favour of M/s. B.C. Bose & Co. The vehicle was transferred in favour of the complainant on 6.7.1995 but there is nothing on record to support the fact that the petitioner at any time approached the Insurance Company to transfer the policy in his favour, which should have been done but not done in this case. In view of this, Section 157 does not help the petitioner/ complainant at all.
10. Be that as it may, it has also been held that since it is the vehicle which is insured and that cover is not disputed, only question involved is who should have preferred the claim? As rightly interpreted above, the petitioner has got no locus to file this complaint as he was not the insured. The only flaw in this case is that the claim should have been filed by the original policy holder and not by the complainant/purchaser of the vehicle. In this slightly technical situation, what could have been done was to have the complaint filed by the insured. Keeping in mind the principle of indemnification of loss by the insurers, in our view, this technicality should not come in the way of the Insurance Company honouring its part of the contract. In the facts and circumstances of the case, we direct that the claim before the respondent: Insurance Company be filed by the insured as per Policy, within a period of 6 weeks of passing of this order upon which the respondent shall consider the case as per law. The time spent before the Consumer Forums in pursuing his remedy by way of filing this complaint, shall have to be condoned, as it appears that it was on account of some wrong advice that this procedure was initiated. Upon filing a complaint by the insured as per policy, the respondent shall sympathetically consider the claim in view of the report of the Surveyor which is on record and settle the claim as per terms of the policy, expeditiously.
11. The Revision Petition is disposed of in above terms.
No order as to costs.