State Consumer Disputes Redressal Commission
New India Assurance Company Limited vs Jagjit Singh, on 5 September, 2008
IN THE STATE COMMISSION: DELHI IN THE STATE COMMISSION: DELHI (Constituted under section 9 clause (b) of the Consumer Protection Act, 1986) Date of decision: 05.09.2008 First Appeal No.2008/651 (Arising from the order dated 15.04.2008 passed by District Forum(Central) Kashmere Gate, Delhi in Complaint Case No.97/2007) New India Assurance Company Limited, Appellant Regional Office No.2 through Mr. M.K. Kapoor Scope Minar, 10th Floor, Core I, advocate, Laxmi Nagar District Centre, Delhi. Versus Sh. Jagjit Singh, . Respondent 221, Gali No.2, Guru Ram Das Nagar, Delhi. CORAM: Justice J.D. Kapoor, ... President Ms. Rumnita Mittal Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor, President(ORAL)
1. Short question arising in this appeal is as to whether insurable interests stand transferred in the name of prospective purchaser to whom the original owner of the vehicle has sold the vehicle or not.
2. Vide impugned order dated 15.04.2008, the appellant has been directed to indemnify loss of the vehicle which was insured with it by paying a sum of Rs.2,10,000/- with interest. Feeling aggrieved the appellant has preferred this appeal.
3. Relevant facts leading to the impugned order in brief are that the respondent purchased a vehicle i.e. Indica Car No.DL 7CC 6976 from M/s. K.S. Engineers on 13.03.2006. The earlier owner was having insurance policy valid from 11.05.2005 to 10.05.2006. After purchase of the vehicle the respondent applied for transfer of insurance certificate in the favour of the respondent. After the lapse of policy on 10.05.2006 respondent applied to the appellant for renewal of the policy in his name and paid a sum of Rs.7116/- vide cheque No.590672 dated 10.05.2006 drawn on State Bank of India. The appellant issued renewed policy, which was valid from 11.05.2006 to 10.05.2007. Unfortunately, the vehicle was stolen on 01.06.2006, near the house of the respondent. Local police was informed. Police registered FIR. The appellant was also informed on 02.06.2006. The respondent furnished all papers to the appellant for processing the claim. The respondent cooperated with the appellant but the appellant rejected the claim of the respondent on false and frivolous grounds. The respondent terms the action of the appellant i.e. rejection of the claim on false and frivolous grounds as deficiency in service on the part of the appellant and prayed for direction to the appellant to pay a sum of Rs.2,10,000/- with interest, cost and compensation.
4. In reply the appellant averred that no privity exists between the respondent and the appellant as the insured was M/s. K.S. Engineers. Appellant also averred that the insured M/s. K.S. Engineers was having no insurable interest in the vehicle and that appellant gave no claim bonus to the extent of 20% to the insured.
5. The appellant has assailed the impugned order mainly on the ground that under Section 157 of Motor Vehicle Act, only third party interest are protected in case insurable interest are not transferred in the Insurance Policy. In support of this contention the counsel for the appellant has placed reliance upon the judgment of Supreme Court of India entitled Complete Insulation (P) Ltd. Vs New India Assurance Co. Ltd. Reported as 1(1996) CPJ 1 SC.
6. We have perused the provision of Section 157 of Motor Vehicle Act, as well as the facts of the cited case and the ratio. None of these provisions are applicable in respect of the facts of the instant case as it is a case of total loss by way of theft of a vehicle, which was insured with the appellant company and not a case in which question of third party claim arises. The case before Supreme Court was not in respect of damage of the vehicle out of total loss. Section 157 of Motor Vehicle Act provides as under:
"157: 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.(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 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. As is apparent wherever, a vehicle suffers total loss by way of accident or damage only then the concept of third party arises and not otherwise and that too can be taken care of by imposing certain conditions upon the beneficiary so as to avoid the double payment by the insurance company towards a single insurance policy.
8. Since in the instant case only vehicle was stolen and there was no damage by way of accident, therefore the question of Section 157 of Motor Vehicle Act and for that purpose the concept of third party interest was not at all applicable or invokable.
9. On the concept of equity, it is the vehicle which is insured and not the person and the only safeguard in such cases where total loss is by way of theft is that if the insurable interests have not been transferred in the name of the person who has purchased the vehicle inspite of being the actual owner, the No Objection Certificate from the original owner as well indemnity bond from the claimant should be obtained. But in no way the insurance company can escape from its liability against the policy. If such a benefit is given to the insurance companies then it will get unjustly enriched whereas the actual consumer would be at great jeopardy and his interest would suffer.
10. We have been deprecating the practice of the insurance companies to reject such claims as we have come across several cases of this nature also where the companies drag their feet to frustrate the rightful claim of the consumer by taking one or the other flimsy ground without realizing aims and object of the policy against a vehicle. Transfer of the name of the respondent in the registration certificate was merely an official formality because of respondents having already become the actual owner of the vehicle during the subsistence of the existing insurance policy. Once having accepted the respondent as the owner of the vehicle, there was no substantive obstacle or hindrance in indemnifying the loss of the vehicle by way of theft against subsisting insurance policy.
11. Whenever, any statute or contract between the parties is subject matter of interpretation, the interpretation should be always in consonance with the aims and object of the statute and the terms of the contract and not to the disadvantage of the person who is the beneficiary of the contract. This is universal rule of interpretation and it is also rule of interpretation that no term of the contract would be interpreted or read in isolation. The contract has to be read as a whole in order to provide meaningful interpretation of the contract or the term of the contract, which should never run counter, or against the aims and object of the contract.
12. With the aforesaid observations, we do not find any merit in the appeal and dismiss the same. The order shall be complied with wiithin one month from the date of receipt of this order.
13. Bank Guarantee/FDR, if any, furnished by the appellant be returned forthwith.
14. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room.
Announced today on 05th day of September 2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member Tri