Delhi District Court
Chiranje Lal vs Iffco-Tokio General on 15 December, 2022
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT-2)
SOUTH DISTRICT, SAKET COURTS : NEW DELHI
CS (Comm.) 57/2021
Chiranje Lal ........Plaintiff
S/o Sh. Charan Singh
R/o Village Tusyana,
Plot No. 172-A,
Gali no. 6, Sarin Farms,
Police Lines, Kulesara, Surajpur, Noida
District Gautam Budh Nagar, UP-201306
versus
IFFCO-TOKIO General
Insurance Co. Ltd. ......Defendant
at IFFOC Sadan, C-1,
District Centre, Saket, New Delhi-110017
Date of institution : 27.01.2021
Date of arguments : 16.11.2022
Date of judgment : 15.12.2022
JUDGMENT
1. This is a suit seeking compensation.
2. In brief, facts are that defendant is a company engaged in insurance business having registered office at C-1, District Centre, Saket, New Delhi -110017. Plaintiff is the registered owner of vehicle make Tata Dumper Truck bearing registration no. HR-55R-3466 (hereinafter referred to as "the vehicle") insured by the defendant company vide Insurance Policy issued on 17.10.2017 for the period w.e.f. 19.10.2017 to 18.10.2018.
2.1 The vehicle is stated to be financed by Indus Ind Bank at the time of its purchase in November 2012 and the loan Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 1 was paid by the year 2015. IndusInd Bank had issued No Objection Certificate (NOC) in this regard. Documents i.e. vehicle particulars dated 02.01.2018 obtained from the Transport Department, Gurugram Haryana and letter of plaintiff for the purpose of tax endorsed and replied by RTA Gurugram, letter dated 02.01.2018 issued by the plaintiff to the Registering Authority, Gurugram, Haryana and Report to the National Crime Records Bureau (NCRB) show that the plaintiff is the owner of the vehicle. It is pleaded that the vehicle was associated with Sh. Yogendra Nagar, who was in the business of transport and supply of building material and plaintiff used to do business and ply the vehicle under the directions of Sh. Yogendra Nagar, who also used to help the the plaintiff financially including in making the payments towards EMIs of the vehicle and he used to adjust this amount in payments given to plaintiff for utilizing services of truck.
2.2 It is stated that vehicle alongwith its original documents was stolen during the night of 22.12.2017 from Building Material Supply Market, Sector-49, Noida and information of the theft was given to the police officials through a PCR call by the driver of the vehicle and FIR no. 1276 u/s 379 IPC PS Sector-49, Noida, was registered. The information of the theft of the vehicle was given by Sh. Yogendra Nagar, as the vehicle used to be parked at his stock/stand in the Building Material Supply Market, Sector-49, Noida and the driver of the vehicle worked under the direct order and supervision of Sh. Yogendra Nagar, who used to instruct drivers for their respective destinations for delivery of building materials. It is stated that despite extensive search, vehicle could not be located. Police Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 2 finally filed a Final Closure report no. 75/2018 in the Court at Noida, District Gautam Budh Nagar, which was accepted by the Court of ACJM-II, Noida, District Gautam Budh Nagar, UP vide order dated 29.01.2019.
2.3 It is averred that immediately after the theft, the plaintiff informed the defendant and lodged claim for compensation with the defendant and kept visiting the registered office of the defendant until his claim was rejected by the defendant on the ground that plaintiff had sold the vehicle to Sh. Yogendra Nagar vide its letter dated 21.05.2018 issued from its registered office at South Delhi. It is stated that the true facts are that the plaintiff had never sold the vehicle to Sh. Yogendra Nagar or to anyone and plaintiff remained the lawful owner and in possession of the vehicle until the day the same was stolen. It is stated that the claim of the plaintiff was rejected by the defendant in a mechanical manner despite being aware of the fact that Registration Certificate, Insurance Police, Fitness Certificate etc., bear the name of the plaintiff alone and that the ownership of a vehicle is transferred only with a change in the name of the registered owner.
2.4 It is stated that plaintiff is an illiterate person and for the last more than two years is pursuing for claim of the insurance amount but the defendant had not bothered to give any amount to the plaintiff. It is stated that a policy holder takes an insurance police with a view to secure himself from anticipated or possible loss in future and thus, the rejection of the plaintiff's claim by the defendant on the fictional ground of plaintiff having sold the vehicle to somebody is not tenable had caused hardship to the plaintiff. It is pleaded that the vehicle was insured with the Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 3 defendant as on the date of its theft and therefore, defendant is liable to indemnify the plaintiff by paying Rs. 9,37,440/-, out of which Rs. 7,56,000/- is the Insured Declared Value (IDV) and Rs. 1,81,440/- is the interest calculated @8% since the date of theft i.e. 22.12.2017 till 21.12.2020 . Hence, plaintiff preferred the present suit.
3. The suit is contested by the defendant by filing written statement. In the preliminary objections it is stated that suit is liable to be dismissed as the plaintiff has not approached the Court with clean hands and withheld material information. It is stated that policy was issued from Faridabad, Haryana and vehicle was stolen from Noida and material facts related to the insured vehicle was not disclosed correctly. It is stated that plaintiff approached the defendant for obtaining insurance policy for vehicle registration no. HR-55R-3466 and provided his previous insurance policy no. 101046/31/17/008057 issued by Shriram General Insurance Co. Ltd. which was valid upto 18.10.2017 and upon request of plaintiff, insurance policy no. 27532258 was issued to the plaintiff for the period 19.10.2017 to 18.10.2018.
3.1 It is stated that intimation of theft of registered vehicle was received on 22.12.2017 as claim no. 37332161. Accordingly, sh. Vikas Kumar & Associates were appointed to investigate and verify the theft claim, who submitted his report alongwith documents to the defendant.
3.2 It is stated in the report that fact of insured vehicle already sold to Sh. Yogender in the year 2013 is duly proved. It is stated in the report that claim of plaintiff (Chiranje Lal) is not maintainable since he did not have insurable interest in the Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 4 insured vehicle since he had already sold the said vehicle. It is stated that claim is not not payable to purchaser of the insured vehicle I.e sh. Yogender Nagar since there is no contract of insurance between the defendant and Sh. Yogender Nagar. It is stated that insurance policy stands issued in the name of Chiranje Lal subject to terms, provisions, exceptions, conditions contained in the policy and endorsed and forming part of the said policy and Indian Motor Tarrif Regulations.
3.3 It is stated in the report that as per GR 17 of the Indian Motor Tarrif, there is an obligation to transfer the insurance policy immediately after the purchase of the vehicle. It is stated that the second owner of the vehicle had not transferred the RC and insurance in his own name till date which clear shows violation of terms and conditions of the insurance policy and Section 157 of the Motor Vehicle Act 1988. It is stated in the report that the RC of the vehicle in question also states that the vehicle was registered on 23.11.2012 in the name of Sh. Chiranje Lal and same was not transferred in the name of Sh. Yogender. It is stated that plaintiff had already sold his vehicle to third party and the plaintiff does not have any insurable interest in the insured vehicle and plaintiff has violated the terms and conditions of the insurance policy and therefore, defendant had to reject the claim of the plaintiff vide letter dated 21.05.2018. It is stated that facts of the ownership of the vehicle was misrepresented by the plaintiff before the insurance company and present suit is not maintainable.
3.4 On merits, it is stated that the plaintiff has put signatures on the proposal and statement given before the investigator. It is stated that the policy was issued from Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 5 Faridabad, Haryana and vehicle was stolen from Noida, UP and plaintiff is resident of Noida, UP. It is stated that insured vehicle was sold to Chiranje Lal to Sh. Yogender Nagar on 11.05.2013 for an amount of Rs. 16,84,000/- and that after sale of the vehicle, Sh. Yogender Nagar had not transferred the registration certificate or insurance certificate in his name and using the vehicle for commercial purpose, but had given application to finance bank to change the account details of EMIs deduction from his account on 27.02.2014.
3.5 It is stated that statement regarding selling of vehicle made by plaintiff himself before the investigator and original RC was never handed over to insurance company and same was misplaced by the owner Sh. Yogender Nagar and NCRB record. It is stated that vehicle was used by the second owner Sh. Yogender Nagar in his commercial business and all the expenses related to the vehicle was borne by Sh. Yogender Nagar only. It is stated that in FIR , it is stated by Sh. Yogender Nagar that his vehicle was stolen from the open area and when his driver was not able to trace the vehicle at the stand, then he called Sh. Yogender Nagar at the parking lot where the insured vehicle was last parked. It is stated that Repudiation Letter dated 21.05.2018 was already sent on the addresses of the plaintiff. It is stated that claim is repudiated by the defendant on the ground of no insurable interest as insured vehicle was old in the year 2013. 3.6 It is stated that after rejection of the claim , on the basis of documents submitted by second owner , they are misrepresenting the facts before this Court to extract claim amount on wrong facts. It is stated that no deficiency of service was done on behalf of D-1 and there is misrepresentation of Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 6 facts and disclosure of sale of vehicle by plaintiff himself before the investigation team and that claim of the plaintiff was repudiated by the insurance company on the basis of investigation report, documents and statements made by the plaintiff and second owner before the investigator. Defendant has prayed that the suit of the plaintiff be dismissed and same is not maintainable. Defendant denied that any cause of action arose against the defendant as claim of the plaintiff is already repudiated by the insurance company on 21.05.2018.
4. Plaintiff has filed replication and reiterated that vehicle was not sold to anyone and it is only the plaintiff, who was the exclusive owner as well as registered owner of the same till date of theft. Plaintiff further reiterated that the officials of defendant company and the investigators had conspired amongst themselves to cause wrongful loss to the plaintiff and to cause wrongful gain to the defendant company. It is stated that plaintiff is an illiterate person and signed on various blank papers as asked by the investigator hoping for expeditious release of claim money. It is stated that none of the documents filed by the defendant have been written by the plaintiff.
4.1 Plaintiff reiterated that the only role of Sh. Yogendra Nagar is that the vehicle was associated with him in his business of transport and supply of building material and the plaintiff used to do business and ply the vehicle under the directions of Sh. Yogender Nagar, who used to help the plaintiff financially including in marking the payments towards the EMIs of the vehicle and then he would later adjust this amount in payments which he would give to the plaintiff for service of his truck i.e. the vehicle. It is stated that the information of theft of the vehicle Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 7 was given by him as the vehicle used to be parked at his stock/stand in the Building Material Supply Market, Sector 49, Noida and the driver of the vehicle worked under the direct order and supervision of Sh. Yogender Nagar as he would tell the drivers their respective destinations for delivery of building materials. It is stated that repudiation is illegal 4.2 Plaintiff further stated that the he is the owner of the vehicle and vehicle registration, insurance policy and all other documents are in the name of plaintiff only and there is not a single document shown by the defendant which could suggest otherwise. It is stated that ownership of a vehicle can be transferred only with change in the name of the registered owner and plaintiff was the owner of the vehicle on the date of theft and therefore, there was no need to transfer the insurance policy or the RC. Plaintiff reiterated that the plaintiff is the only owner and there has been no violation of any terms of the insurance policy. Written statement is not as per law and cannot be read as the same has not been filed in proper manner.
5. On 01.02.2022, the matter was referred for mediation to explore the possibility of settlement. Parties failed to arrive at the settlement as per the report received from the Mediation Center. From the pleadings of the parties, following issues arise for consideration :-
Issues:
1. Whether the defendant is liable to indemnify the plaintiff by paying Rs.9,37,440/-which inclusive Rs.7,56,000/- as IDV (Insured Declared Value) and Rs.1,81,440/-as interest, calculated @ 8% per annum since the date of theft i.e. 22.12.2017 till 21.12.2020? OPP Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 8
2. Whether plaintiff is entitled to pendent-lite and future interest @ 12% per annum, as claimed? OPP
3. Whether vehicle in question is already sold by the plaintiff to the third party on 11.05.2013? OPD
4. Relief
6. To prove its case plaintiff examined Sh. Chiranje Lal as PW-1; Sh. Kashmir Khan as PW-2 and Sh. Abhishek Legal Manager, IndusInd Bank as PW-3 whereas defendant examined Sh. Amit Kumar as DW-1 and Sh. Vikas Kumar as DW-2. PW-1 Sh. Chiranje Lal s/o Sh. Charan Singh placed and proved on record Aadhar Card Ex. PW1/1; Registration Certificate (RC) Ex. P-1 ; Insurance Policy Ex. P-2; NOC dated 16.02.2019 issued by InduInd Bank, New Friends Colony Ex. P-3; document titled as Vehicle Particulars dated 02.01.2018 obtained from the Transport Department, Gurugram, Haryana Ex. P-4 and Ex. P-4A ; letter dated 02.01.2018 issued by me to Registering Authority, Gurugram, Haryana requesting the authority to keep the papers in safe custody Ex. P-5; Report to the National Crime Records Bureau (NCRB) made by me on 04.01.2018 Ex. P-6 ; Original RTI reply in regard to PCR call 22.12.2017 Ex. P-7; FIR No. 1276; u/s 379 IPC dated 22.12.2017 PS Sector 49, Noida Ex. P-8; copy of letter to PS Sector 49 intimating about stolen of vehicle alongwith document Ex. P-9 ; certified copy of Final report No. 75/2018 Ex. P-10 ; Certified copy of Court order dated 29.01.2019 accepting the Final report Ex. P-11 ; Claim Rejection letter dated 21.05.2018 issued by defendant Ex. P-12; Original Non-Starter report dated 10.11.2020 Ex. P-13.
Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 9
7. This Court has heard submissions advanced by Sh. Nagendra Kasana Learned counsel appearing for plaintiff and Sh. Yogeshwar Singh Learned counsel appearing for defendant and perused the material on record.
8. Findings of this Court on the issues are as under:-
Issue no. 1 & issue no. 3
9. Whether the defendant is liable to indemnify the plaintiff by paying Rs.9,37,440/- (inclusive of Rs.7,56,000/- as IDV (Insured Declared Value) and Rs.1,81,440/- as interest, calculated @ 8% per annum since the date of theft i.e. 22.12.2017 till 21.12.2020) and whether vehicle in question is already sold by the plaintiff to the third party on 11.05.2013. These issues are taken up together being interconnected.
10. Ld. counsel for the plaintiff submitted that the only issue that needs to be decided is that whether the plaintiff is the legal owner of the vehicle. It is submitted that in view of the admission by the defendant of the Registration Certificate, Insurance Policy, FIR and the Closure Report filed by the police, the onus was on the defendant to prove its case that the plaintiff is not the legal owner of the vehicle which the defendant has failed to do. It is submitted that defendant, in support of its claim, relied on certain documents allegedly signed by plaintiff, Yogender and Kashmir (driver) but did not even attempt to prove the same. It is submitted that the plaintiff alone is the owner of the vehicle in question entitle to be indemnified by defendant. Reliance is placed on a decision of Hon'ble Supreme Court's titled as of 'Surendra Kumar Bhilawe Vs. The New India Assurance Company Limited'; Civil Appeal No. 2632 of 2020; Decided on 18.06.2020. It is further submitted that there is No Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 10 authorization/Authority letter or Board Resolution/Minutes of Meeting/Notarized Power of Attorney on record issued by defendant company in favour of Alok Gupta to defend the suit and there is no mention of any authorised representative in the written statement, which is to be treated as non-estin the eyes of law as it is an irregularity going to the root of the matter. There is not even an averment in the written statement to the effect that Sh.Alok Gupta has been authorized by the defendant company to act on its behalf and defend the suit.
11. Admittedly, written statement was filed by one Sh.Alok Gupta, General Manager of Defendant Company and he is not the secretary or director or principal office of defendant company. Ld. Counsel placed reliance in the matter of 'State Bank of Travancore Vs. M/s Kingston Computers Pvt. Ltd.' Supreme Court; Civil Appeal No. 2014 of 2011 decided on 22.02.2011. Indisputably, the defendant company being a juristic person, any person on behalf of the company would have to be authorised by the company in the Articles of Association or by a separate resolution passed by the Board of Directors in their meeting held in this regard which is completely absent in the present case. Order XXIX Rule 1CPC reads as under:
"Subscription and verification of pleading - In suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case".
12. In M/s Nibro Limited vs National Insurance Co. Ltd., MANU/DE/0138/1991, it was observed that ordinarily the court will not unsuit a person on account of technicalities.
Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 11 However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far reaching effects. Thus, unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say such a power can be conferred by the board of directors only by passing a resolution in that regard. This authorization, in the case of a company can be given only after a decision to institute a suit is taken by the board of directors of the company, the board of directors may in turn authorize a particular director, principal officer or the secretary to institute a suit. To the same effect is the decision of our High Court in Rajghria Paper Mills Ltd vs The General Manager, Indian Security Press and Anr. AIR 2000 Del 239. Thus, it must, therefore, follow that the pleadings are required to be signed and verified by duly authorized person on behalf of the juristic persons.
13. Ld. counsel for defendant submits that registered vehicle no. HR 55R-3466 had already been sold to Yogender Nagar on 11.05.2013 by registered owner Chiranje Lal. It is submitted that statements dated 29.12.2017 and another undated by Yogender Nagar and Chiranje Lal before the investigator Sh. Vikas Kumar , were duly signed by all of them and payment of due EMIs was made from the account of Yogender Nagar after substitution made by Chiranje Lal before the Indusind Bank vide application dated 27.02.2014. It is submitted that statement of account of Yogender Nagar was already filed alongwith investigation report dated 17.01.2018. 14 . It is submitted that intimation regarding the theft claim made by Yogender Nagar and insured, the investigator Sh. Vikas Kumar, after investigation and taking statements of the parties filed his Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 12 report (Ex. D-8 and its bill Ex. D-9 alongwith statement of Chiranje Lal dated 29.12.2017 (Ex. D-3 and Ex. D-4) and documents i.e. authority letter Ex. D-1, claim form Ex. D-2, four photographs Ex. D-4 to D-8; copy of insurance valid from 19.10.2017 to 18.10.2018 Ex. D-5 alongwith terms and conditions. It is submitted that as per the current status, he did not have insurable interest in the subject matter and investigator also filed statements made by the insured, Chiranje Lal and Yogender Nagar before him in the claim form which was duly signed by Chiranje Lal and Yogender Nagar. It is submitted that in the statement made by Chiranje Lal, he admitted that the vehicle was sold in the year May 2013 to Yogender Nagar for a sum of Rs. 16,84,000/- out of which Rs. 5 lakhs was paid in cash by Yogender Nagar to Chiranje Lal and all the outstanding EMIs would be paid by Yogender Nagar till the loan would be fully paid and cheques would be substituted by Chiranje Lal and would be paid by the account of Yogender Nagar. It is submitted that in the claim form Ex. D-1 it has been mentioned that on 22.12.2017 , Yogender Nagar had called Chiranje Lal and intimated him that vehicle was stolen . It is submitted that Chiranje Lal also stated that all the maintenance and profits made from the vehicle in question would be enjoyed by Yogender Nagar and he had no objection regarding the same.
15. Ld. Counsel for defendant submits that as per the undated joint statement Ex. D-11 of Yogender Nagar, Chiranje Lal, Sunil and Kashmiri Lal, recorded and signed by Sunil - friend of Yogender Nagar, during the visit of investigator, Chiranje Lal purchased the vehicle in question in 2012 and same was sold to Yogender Nagar in May 2013 and all the pending dues of Indus Ind Bank were to be paid by Yogender in future. In joint statement Ex. D-11, they have stated at the end that this statement was made read over by Yogender and after Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 13 that same was signed by all of them. It is submitted that at last Sh. Amit Kumar (DW-1) has placed report of the investigator Ex. D-8 on which the claim of the insured was repudiated by the insurance company vide repudiation letter Ex. D-7. It is submitted that as per copy of FIR no. 1276/2017 dated 22.12.2017 Ex. D-13 , the place of occurrence was at Sector 101, Noida whereas in the cross-examination , PW-1 stated the place of occurrence as Sector 49, Noida. In the complaint dated 03.01.2018 made by Yogender Nagar has mentioned "meri gaadi chori ho gai hai" . It is submitted that Yogender Nagar has given one application to the Manager IFFCO Tokio on 29.12.2017 stating that vehicle in question was purchased from Chiranje Lal for a sum of Rs. 16,84,000/- was taken in the year 2013 and repudiation letter of the claim was already sent on the registered address of Chiranje Lal, who admitted in his affidavit that his claim was repudiated by the insurance company few years back as there was no insurable interest.
16. It is submitted that as per Indian Motor Tariff dated 30.06.2017 , GR 17, para 2 it has been stated that "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. Reliance is placed in the matter of M/s Complete Insulation (P) Ltd vs New India assurance Company decided on 21.11.1995 passed by Hon'ble Supreme Court; Oriental Insurance Co. Ltd vs Enamul Haque of National Consumer Disputes Redressal decided on 04.09.2019; IFFCO Tokio vs Ashok Laxman Mane & ors of National Consumer Disputes Redressal decided on 27.07.2020 and Surender Kumar Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 14 Bhilawe vs The New India Assurance Company ltd. Civil Appeal No. 2632/2020 decided on 18.06.2020 Hon'ble Supreme Court.
17. Before embarking upon further discussion of evidence, regarding the question of ownership, the observation made in Surendra Kumar Bhilwae vs The New India Assurance Company Limited (supra) which are useful in the present context may be noted:
35 The National Commission overlooked the definition of 'owner' in Section 2(30) of the Motor Vehicle Act, 1988.
In Section 2(30) 'owner' has been defined to mean "a person in whose name a motor vehicle stands registered and, where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement". Even assuming that Mohammad Iliyas Ansari was in possession of the said truck at the time of the accident, such possession was not under any agreement of lease, hire purchase or hypothecation with ICICI Bank.
36. It would also be pertinent to note the difference between the definition of owner in Section 2(30) of the Motor Vehicles Act, 1988 and the definition of owner in Section 2(19) of the Motor Vehicles Act, 1939 which has been repealed and replaced by the Motor Vehicles Act, 1988. Under the old Act 'owner' meant the person in possession of a motor vehicle. The definition has undergone a change. Legislature has consciously changed the definition of 'owner' to mean the person in whose name the motor vehicle stands.
37. The National Commission also overlooked other applicable provisions of the Motor Vehicle Act 1988, particularly Sections 39 to 41, 50, 51, 66, 69, 82, 84(g), 86(c), 146, 157, 177 and 192A.
40. The finding of the National Commission that the fact of registration of the said truck in the name of the Appellant was inconsequential is also not sustainable in law. Section 2(30) of the Motor Vehicles Act, 1988 defines 'owner' to mean the person in whose name the motor vehicle stands registered. The definition of 'owner' has been overlooked and ignored by the National Commission. Had ownership of the said truck intended to be transferred Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 15 forthwith, the registration would have been transferred in the name of the transferee, as also the permit to operate the said truck for carriage of goods.
41. It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws. It does not also stand to reason why a person who has transferred the ownership of the vehicle should, for over three years, benevolently go on repaying the loan for purchase of the vehicle, take out insurance policies to cover the vehicle or otherwise discharge obligations of ownership.
43. The National Commission also failed to appreciate that Section 157 of the Motor Vehicles Act provides that where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, 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 are to 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.
44. The explanation to Section 157 clarifies, for the removal of all doubts, that such deemed transfer would include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. The transferee might, within 14 days from the date of transfer, apply to the Insurer in the prescribed form, for making requisite changes in the certificate of insurance and the policy of insurance with regard to the factum of transfer of insurance. There could be no reason for a transferee of an insured motor vehicle, to refrain from applying for endorsement of the transfer in the Insurance Policy Certificate when insurance covering third party risk is mandatory for using a vehicle.
48. In Naveen Kumar vs. Vijay Kumar and Others 4, a three- Judge Bench of this Court held that in view of the definition of the expression 'owner' in Section 2(30) of the Motor Vehicles Act, 1988, it is the person in whose name the motor vehicle stands registered, who, for the purposes of the said Act, would be treated as the owner of the Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 16 vehicle. Where the registered owner purports to transfer the vehicle, but continues to be reflected in the records of the Registering Authority as the owner of the vehicle, he would not stand absolved of his liability as owner.
49. The Judgment of this Court in Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section49. The Judgment of this Court in Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident.
50. The policy of insurance in this case, was apparently a comprehensive policy of Insurance which covered third party risk as well. The Insurer could not have repudiated only one part of the contract of insurance to reimburse the owner for losses, when it could not have evaded its liability to third parties under the same contract of Insurance in case of death, injury, loss or damage by reason of an accident.
18. Now, the testimony of plaintiff's witness (PW-1 and PW-
2) may be considered. PW-1 deposed during cross-examination that at the time of theft, he was in Surajpur and he was told about the theft by his driver late night. PW-1 did not lodge the FIR regarding the theft of his truck and the FIR was lodged by his friend Sh. Yogendra, who was known to him for the last 15-16 Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 17 years. PW-1 deposed that after the FIR, police never visited his home for further investigation. PW-1 deposed that his truck was financed by IndusInd Bank in 2012 and the same was closed in 2015. PW-1 further deposed that he had given application to the bank for loan account which was against his vehicle to deduct the EMIs from the account of Sh. Yogendra. PW-1 deposed that on the date of theft, Sh. Kashmir was driver of the truck, and DW-1 used to pay his driver Sh. Kashmir on daily basis on the basis of work done by him during the day.
19. In his deposition, PW-1 further deposed that Sh. Yogendra was engaged in the business of supply of building material at Salarpur, Sector-49, Noida. PW-1 did not know how to read documents and he filled claim form with the assistance of Sh. Yogendra with the Insurance Company. PW-1 deposed that an investigator, whose name he did not aware of, had come on behalf of insurance company for investigation and obtained his signatures on blank papers by telling him that the same were needed for his claim. PW-1 did not remember whether the investigator had taken his photograph alongwith the application form and statements purported made by him and Sh. Yogendra. PW-1 deposed that he used to earn about Rs. 50-60,000/- per month after paying the EMIs of the truck . PW-1 deposed that he had an oral agreement with Sh. Yogendra with whom his truck used to ply. PW-1 deposed that he and Sh. Yogendra , both were present before the investigator for claimed investigation. PW-1 denied the suggestion that vehicle was already sold to Sh. Yogendra in the year 2013. Now, Sh. Kashmir Khan (PW-2) driver of dumper truck bearing no. HR-55R-3466 has deposed Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 18 that the truck was stolen in the year 2017 and he had informed the police. Truck used to be parked at the building material stock of Sh. Yogendra at Sector-49, Noida. He deposed that he used to get his salary of Rs. 8,000/- per month from Chiranje Lal in cash.
20. Defendant has admitted the Registration Certificate, Insurance Policy of the vehicle and has not disputed the FIR or the Closure Report filed by the police in the case. Defendant's witness DW-1 has also admitted during his cross-examination that "Plaintiff Shri Chiranje Lal is the owner of vehicle in question". Defendant has although denied the NOC given by financier bank IndusInd but PW-3 has come to the witness box and identified the same and has also stated in his cross- examination that the said NOC i.e. Ex.P-3 was issued to the plaintiff. The defendant was required to prove the alleged statements of plaintiff, Yogender and Kashmir made before the claim investigator, letter allegedly written by Yogender to IndusInd bank but it has not done so nor any suggestion in these regards was given to any of the plaintiff's witness including the bank witness.
21. Defendant did not give any suggestion to PW-1 that the plaintiff is not the owner of the vehicle or that Sh. Yogender is the owner of the vehicle or that despite selling the vehicle the plaintiff did not transfer the RC and Insurance policy in favour of Sh.Yogender. No suggestion had been given to PW-1 or that PW-3 Kashmir was not the driver of plaintiff and that PW-3 was in fact employed by Sh. Yogender or that the vehicle was sold for 'x' amount by the plaintiff to Sh. Yogender and that the plaintiff has sold the vehicle and has thus violated the terms and conditions of the policy.
Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 19
22. PW-2 was not confronted with the documents relied upon by the defendant in support of its claim. Defendant did not give any suggestion to PW-2 that he is not the driver of plaintiff or that PW-2 is the driver employed by Sh. Yogender or that the plaintiff is not the owner of the vehicle and has sold the same to Sh.Yogender. This assumes significance in view of the fact that the defendant relied upon documents allegedly bearing signatures of plaintiff, Yogender or PW-2. DW-1 admitted that that there is no authority letter/board resolution/minutes of meeting on record authorizing Shri Alok Gupta to defend the present suit. DW-1 admitted that he did not have personal knowledge of the facts pertaining to the present case. DW-1 deposed that the defendant company does not have the record pertaining to the appointment of investigator Shri Vikas in cases handed over to him by the defendant company.
23. DW-2 testified that original appointment letter issued by the defendant company was returned by me to the defendant company. DW-2 could not tell as to who had issued his authority letter nor he could identify signatures appearing thereon. DW-1 deposed that by insured he mean the person in whose favour the insurance policy was issued. He admitted that the name name of the driver was Kashmir. DW-2 testified that the document Ex. D-3 was not in his handwriting and the same was in the handwriting of the person who accompanied Chiranje Lal at that time. He could not tell who that person was. DW-2 stated that the document Ex.D-11 was not in his handwriting and the same was written by one person namely Shri Sunil Kumar. DW-2 admitted that at the time of theft of vehicle, the insurance as well as the RC of the vehicle were in the name of Chiranje Lal. DW-2 admitted Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 20 that the vehicle in question used to be stationed and operated from the building material stock of Sh.Yogender.
24. In view of Section 2(30) of the Motor Vehicle Act, Owner is a person in whose name a motor vehicle stands registered. Having regard to the provisions of section 2(30) and section 50 of the Act, as noted above, the ratio of the aforenoted decision shall apply with equal force to the facts of the case.
25. On appreciation of the material and evidence on record, this Court finds that the driver Sh. Kashmir Khan was the employee of Sh. Chiranje Lal, who is the registered owner of the vehicle. Constructive possession and control of the vehicle in question was in the hands of Sh. Chiranji Lal-plaintiff. Therefore, this Court finds plaintiff is the owner of the vehicle for the purposes of the Act. The inescapable conclusion is that person whose name continued in the records of the registering authority as the owner of the truck is entitled to the payment of the compensation amount from the insurance company and has to be indemnified.
26. In view of the aforenoted discussion, this Court finds that PW-1 has established that defendant is liable to indemnify the plaintiff by paying the Insured Declared Value of Rs.7,56,000/-. Issue no. 1 and 3 are accordingly decided in favour of plaintiff and against the defendants.
Issue no. 2
27. Whether plaintiff is entitled to pendent-lite and future interest @12% per annum, as claimed? In the prayer clause, plaintiff has claimed pendente lite and future interest @12%. Plaintiff has added Rs. 1,81,440/- as the interest @8% from the date of theft. Plaintiff has not pleaded or proved any Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 21 agreed rate of interest payable by the defendant to the plaintiff. Where interest is sought in suit, the plaint shall contain a statement to that effect alongwith the details set out under sub- rules (2) and (3). As per sub-rule (2), plaintiff shall state whether the he is seeking interest in relation to a commercial transaction within the meaning of Section 34 of the Code of Civil Procedure and furthermore, if the plaintiff is doing so under the terms of a contract or under an Act, in which the Act is to be specified in the plaint ; or on some other basis and shall state the basis of that.
28. As per Section 34 CPC, wherein and in so far as a decree is for payment of money, the court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of suit to the date of decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding 6% pa at Court deems reasonable on such principal sum from the date of decree to the date of payment or to such earlier date as the Court deems thinks. As per proviso to sec 34 CPC, where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions. Explanation I. -In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970. Explanation II.- For the purposes of this Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 22 section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
29. Having regard to the lending rate of the bank in the commercial transaction, this Court is of the view that interest @6% is reasonable and would serve the ends of restitutive justice. Plaintiff is entitled to the said interest from the date of filing of present suit till the realization of the entire amount.
Costs
30. The present suit was filed on 27.01.2021. Plaintiff shall be entitled to costs. In the circumstances noted above, pleader's fee and litigation expenses are assessed as Rs.22,000/- and Court fee deposited by the plaintiff is Rs. 11,494/-. This Court finds that plaintiff is entitled to total costs of Rs.33,494/- (inclusive of Court fees).
Relief
31. In view of above noted findings on the issues, a decree is passed in favour of the plaintiff and against the defendants in the principal sum of Rs. 7,56,000/- alongwith interest @ 6% per annum from the date of filing of present suit till its realization and costs of Rs.33,494/-. Decree sheet be drawn up accordingly. File be consigned to record room.
(dictated and announced
in the open Court (VINAY KUMAR KHANNA)
th
on 15 December 2022) District Judge
(Commercial Court-02)
South Distt., Saket, New Delhi
Chiranje Lal vs IFFCO Tokio General Insurance Co. Ltd. Page no. 23