Delhi High Court - Orders
Iffco Tokio General Insurance Co. Ltd. ... vs 1. Amarjit Singh Bagga S/O Rajinder ... on 26 February, 2026
Author: Neena Bansal Krishna
Bench: Neena Bansal Krishna
$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA 662/2022 & CM APPL. 55227/2022
IFFCO TOKIO GENERAL INSURANCE CO. LTD.
Insurance Co. Ltd.
IFFCO Tower, Plot No. 3,
Sector -29, Gurugram, Haryana. ......Appellant
Through: Mr. Shubham Janghu, Advocate
versus
1. AMARJIT SINGH BAGGA
S/o Rajinder Singh Bagga
R/o C-10, Second Floor,
Ram Pura, Hari Nagar, New Delhi,
through GPA Holder
Smt. Manju
2. SMT. MANJU LUTHRA
W/o Sh. Sandeep Luthra
R/o 12/20, Upper Ground Floor,
West Patel Nagar, New Delhi. .....Respondents
Through: Mr. Avtar Singh & Mr. Shauryanker
Kaushik Advocates for R-2.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
ORDER
% 26.02.2026 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38
1. The present Appeal has been preferred under Section 96 read with Section 96 read with Section 151 CPC against the Judgment and Order dated 29.07.2022, whereby the Suit of Plaintiffs/ Respondents for recovery of Rs.4,00,000 along with interest @ 6% p.a., has been decreed by Learned Additional District Judge-05, Delhi.
2. The Plaintiffs/ Respondents has filed Civil Suit No. 613868/2016 for recovery of Rs.4,00,000/- along with pendent lite and future interest.
3. Learned Counsel for the Appellant, at the outset, states that since the Respondent No.1 was the erstwhile owner of the vehicle and the vehicle already stands transferred in the name of Respondent No.2, the Legal Heirs of Respondent No.1 are not required to be brought on record.
4. The facts in brief as stated in the plaint, are that Plaintiff No. 1 Amarjit Singh Bagga had purchased the car of model Maruti Swift VDI BS4 bearing No. DL 12CH 3064, from Rana Motors. He got the vehicle insured from Defendant/Appellant Company, for the period 09.04.2016 to 08.04.2017.
5. The vehicle was purchased by Plaintiff No. 2, Smt. Manju Luthra from Appellant No.1, in the month of May 2016 and the vehicle was duly transferred in her name by the Transport Authority, in the first week of June, 2016. However, due to inadvertence, the Insurance Policy validly existing in the name of Plaintiff No. 1 from 09.04.2016 to 08.04.2017, could not be transferred in the name of Plaintiff No. 2.
6. On 23.08.2016, the vehicle got stolen, about which due intimation was given to the Police and later, FIR bearing No. 024727 dated 24.08.2016 was registered under Section 379 IPC at PS e-Police Station-M.V., Theft District Crime Branch.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38
7. The Plaintiff No. 2 thereafter, also got the stolen vehicle insured vide Policy effective from 10.09.2016 to 09.07.2017.
8. The Police filed an Untraced Report, which was accepted by the concerned ACMM, West District, vide Order dated 17.10.2016.
9. Thereafter, the Plaintiff No. 1 applied for the loss qua the vehicle on account of theft and demanded amount of Rs.4,00,000/-, which was covered under the Insurance Policy. However, the claim of Plaintiff No. 1 was rejected by the Insurance Company/Appellant vide Letter dated 08.11.2016. Aggrieved by such rejection, Plaintiff No. 2 had written an e-complaint to the Chief Grievance Officer on 26.11.2016 and one complaint to Ombudsman dated 26.11.2016, but no compensation/losses for the car theft, was given to her.
10. The Plaintiffs asserted that there was privity of contract between Plaintiff No. 1 and Defendant, to whom the premium had been duly paid for the vehicle up to 08.04.2017 and the contract had not been terminated when the vehicle was stolen. The claim has been rejected on frivolous grounds. Hence, the Suit was filed for recovery of Rs.4,00,000 along with pendent lite and future interest @ 18% p.a.
11. The Suit was contested by the Appellant/Defendant - Iffco Tokio General Insurance Company, who in its Written Statement, took a preliminary objection that the present Suit was bereft of any substance and was frivolous as it disclosed no cause of action, in favour of the Plaintiffs. It was asserted that there was no Agreement, since the Insurer had not transferred the Insurance Policy in relation thereto, to the Transferee/subsequent purchaser of the vehicle.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38
12. Therefore, the Insurer was not liable to make good the damage to the vehicle, as per Section 157(1) of the Motor Vehicle Act, 1988 (hereinafter referred to as the "MV Act"), which provides that deemed transfer of insurance which can be assumed, after compliance of the condition of 14 days, as mentioned in Section 157 (2) MV Act.
13. Moreover, Section 157 is a part of Chapter XI MV Act, which deals with the third-party claims and is not applicable to the present case. Moreover, GR-17 of India Motor Tariff Regulations, imposes a duty on the subsequent purchaser/Plaintiff No. 2, to make an Application within 14 days of acquiring the ownership of the vehicle, failing which the subsequent purchaser would not be eligible to get the claim for the theft of the vehicle.
14. Therefore, Plaintiff No. 1 having sold the car in May 2016, had ceased to be the owner of the vehicle, and the Plaintiff No. 2, though had purchased the car, but had not got the Insurance Policy transferred in her name. Therefore, the Plaintiffs had no claim under the Insurance Policy and the Suit was liable to be rejected.
15. No formal Replication was filed by the Plaintiffs to the Written Statements.
16. Issues were settled on 20.09.2017 as under:
"(1) Whether the suit of the Plaintiff is not maintainable as the Plaintiffs failed to inform the Defendant regarding the transfer of the vehicle within the stipulated period of 14 days? OPD (2) Whether the Plaintiffs are entitled for recovery of Rs.4 lacs as prayed for? OPP This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 (3) Whether the Plaintiffs are entitled for interest on the aforesaid amount, if so, at what rate and for which period? OPP (4) Relief."
17. The PW1 / Plaintiff No. 2 Smt. Manju Luthra tendered her evidence by way of Affidavit as Ex. PW-1/A. She deposed that Plaintiff No. 1 had executed the Power of Attorney as Ex. PW1/1 in her favour and that she was competent to institute the Suit and to depose in regard to the facts of the case.
18. PW2 / Plaintiff No. 1 Sh. Amarjt Singh Bagga, the original owner of the vehicle tendered his evidence by way of Ex. PW2/A and corroborated the evidence of PW1.
19. PW3 Head Constable Sombir Singh proved the certified copy of the FIR bearing No. 024727 dated 24.08.2016 under Sec 379 IPC which was exhibited as Ex.PW3/A. The copy of untraceable report dated 17.10.2016 was exhibited as Ex.PW3/B.
20. The Appellant/Defendant examined DW1 Sh. Amit Kumar, AR of the Defendant Company, who deposed on similar lines, as the assertions made in the Written Statement.
21. The learned Additional District Judge while referring to Section 157 MV Act, observed that there was a valid Insurance Cover of the stolen vehicle on the date of its theft and even thereafter, a fresh Insurance Policy in respect of the same vehicle, had been issued on 05.09.2016. The learned Additional District Judge had relied heavily on Section 157 MV Act, to observe that once there was a valid Insurance Policy which was neither This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 cancelled nor revoked even after the theft of the car, its benefit could not be denied to Respondent No. 2/ Plaintiff No. 2/ the subsequent purchaser.
22. Reliance was placed on M/s Complete Insulation (P) Ltd. vs. New India Insurance Company Ltd. (1996) 1 SCC 221 and Mallamma vs. National Insurance Co. Ltd. (2014) 14 SCC 137, to conclude that the benefit of the Insurance Policy shall also be transferred to the new owner and accordingly, the instant insurance policy benefits would also be available to the subsequent purchaser of the vehicle.
23. The Suit of the Plaintiff was accordingly, decreed vide impugned Judgement and Decree dated 29.07.2022 for Rs.4,00,000/- along with interest @ 6% p.a.
24. Aggrieved by the said Judgment, the present Appeal has been preferred by the Insurance Company.
25. The grounds of challenge are that Respondent No. 1/ Sh. Amarjit Singh Bagga had no insurable interest left after the sale of the car to Respondent No. 2. Moreover, there was no privity of contract between the Appellant and Respondent No. 2. Both the Plaintiffs / Respondents had violated the principle of utmost good faith, in the facts and circumstances of the case.
26. Pertinently, Respondent No. 2/ Transferee was required to seek novation of contract in her favour, but the same was not done. Without there being any express contract between Respondent No. 2 and the Insurance Company, the Suit could not have been decreed.
27. It is further submitted that the learned ADJ grossly erred in holding that the previous Policy was continued, in the light of purchase of subsequent policy. Such finding has been given without appreciating that on This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 the date of inception of Second Policy which is 05.09.2016, the vehicle had already been stolen. The Insurance Policy had been taken by Plaintiff No. 2 through online portal, without disclosing that the vehicle had already been stolen.
28. It is further asserted that admittedly, there was no transfer of Insurance Policy in favour of Plaintiff No. 2 / Respondent No. 2 and therefore, the second Insurance Policy cannot be considered to be valid.
29. The Respondent No. 2 had no insurable interest in the present circumstances, on account of failure to intimate the Appellant Insurance Company about the transfer of ownership and to seek transfer of certificate of insurance, till the date of occurrence of the theft.
30. The Respondents do not fall under Section 157 MV Act, as it is applicable only to third party risk and cannot be extended to the Plaintiffs, who fall within the realm of contract; without there being any novation in favour of Respondent No. 2, their claim could not have been decreed.
31. The GR-17 Motor Tariff Regulation mandated the transfer of vehicle, which has not been complied with. For an Insurance Contract, there has to be a prior meeting of minds and unequivocal terms of offer and acceptance. Since there was no such Agreement between the Insurance Company and Respondent No. 2, who was the transferee owner of the stolen vehicle, the claim could not have been allowed. It is, therefore, submitted that the impugned Judgement is liable to be set aside.
32. The Plaintiffs in their reply to the Appeal, have reaffirmed the assertions made in their Plaint and have submitted that the Suit of the Plaintiffs has been rightly decreed. It is denied that there was no privity of contract between the Insurance Company and Respondent No. 2. The mere This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 fact that there was a continuation of the Insurance Policy as Respondent No. 2 took second Insurance Policy, it clearly makes them entitled to the benefit under the Insurance Policy. It is denied that there was no valid Insurance Policy on the date of theft of the vehicle, i.e. 23.08.2016. The Suit has been rightly decreed in favour of the Respondents and the Appeal is liable to be dismissed.
33. The Appellants in their Rejoinder, have reaffirmed the assertions as made in the Appeal.
Submissions heard and record perused.
34. It is an undisputed fact that the stolen car had been purchased by Respondent No. 1 / Plaintiff No. 1, vide Invoice Ex.PW1/2 issued by Rana Motors. It is further not in dispute that the vehicle was duly insured with the Insurance Policy vide first Insurance Policy for the period 09.04.2016 to 08.04.2017, in the name of the Respondent No. 1, Sh. Amarjit Singh Bagga, Mark Y.
35. It is further an admitted fact that the vehicle was thereafter, purchased by Respondent No. 2 in May 2016 and the name of the subsequent purchaser/ Respondent No. 2 was duly endorsed in the Transport Authority, in the first week of June 2016. Undeniably, while the requisite transfer had been recorded in the Transport Authority, the Insurance Policy was not transferred and it continued to be in the name of Respondent No. 1 / Plaintiff No. 1. As the fate would have it, the vehicle got stolen on 23.08.2016 in respect of which an e-FIR under Section 379 IPC, Ex.PW3/A was registered on 24.08.2016. After due investigation, an Untraced Report Mark X3 dated 17.10.2016, which was duly accepted by the concerned ACMM.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38
36. The Respondent No. 2 thereafter, got the stolen vehicle re-insured afresh vide the second Insurance Policy for the period 05.09.2016 till 04.09.2017.
37. The Respondent No. 2/ Plaintiff No. 2 who is also the attorney holder of Respondent No. 1/ Plaintiff No. 1, submitted the claim of Rs.4,00,000 for which the vehicle was insured, under the first Insurance Policy in the name of Plaintiff No. 1, which was repudiated by the Insurance Company, leading to the present litigation.
38. The sole question which arises is whether the Plaintiff No.2/ Subsequent purchaser, is entitled to the claim under the Insurance Policy in the name of original purchaser of the stolen car.
39. The main contention of the Appellant is that Section 157 MV Act forms part of Chapter XI under the Motor Vehicles Act, which deals with insurance of motor vehicles against third party risk and since it is the loss of the car to the owner herself, Section 157 MC Act cannot be invoked. It is further contended that the Insurance Contract between Respondent No. 2 and Appellant, came within the realm of contract and there being no privity of contract between the Respondent No. 2/ Plaintiff No. 2 and the Insurance Company, no benefit of the Insurance Policy could have been granted to Respondent No. 2 / Plaintiff No. 2.
40. The first aspect which requires to be high-lighted, is that the Motor Vehicle Act is a beneficial legislation and the provision for Insurance has been made only to provide a cover the insured, in case of damage or injury to not only the owner, but also to the third parties. While Section 157 MV Act is a part of Chapter XI, which is essentially dealing with third party rights, but it being a beneficial legislation, its provisions cannot be denied, This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 especially when Section 157(2) MV Act itself recognizes that merely because the vehicle has been transferred, the benefit cannot be denied to the transferee. To say that in every situation, it should be limited to the third parties, would in fact be against the letter and spirit of the Insurance Contract. In each case, the facts and circumstances, need to be considered.
41. Having said this, it is significant also to refer to the Insurance Policy in the name of Respondent No. 1 w.e.f. 09.04.2016 to 08.04.2017, Mark Y. The bare perusal of the Insurance Policy shows that it covered not only third party premium in the sum of Rs.2,387/-, but also own damage premium had also been paid, in the sum of Rs.7,222.60/-. A total premium of Rs.11,002.98/- was thus, paid. It would, therefore, not be appropriate for the Insurance Company, to claim that the own damage/loss was not covered in the Insurance Policy.
42. The next aspect which is of significance is that the Section 1 of Insurance Policy dealt with loss or damage to the vehicle insured. Clause 2 of Section 1 specified that the Insurance Company shall indemnify the insured against loss or damage to the vehicle on account of burglary, housebreaking or theft.
43. From the terms of the Insurance Policy itself, it is evident that there was a premium paid for own damage, which covered the theft of the car.
44. It is also pertinent to refer to Clause 3 of the Insurance Policy, which read as under:
"3. The Company may at its own option repair reinstate or replace the vehicle or part thereof and/or its accessories or may pay in cash the amount of the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 loss or damage and the liability of the Company shall not exceed:
a) for total loss/constructive total loss of the vehicle
- the Insured's Declared Value(IDV) of the vehicle {including accessories thereon as specified in the Schedule less the value of the wreck.
b) for partial losses, i.e. losses other than Total loss/Constructive Total loss of the vehicle- actual and reasonable costs of repair and/ or replacement of parts lost/ damaged subject to depreciation as per limits specified."
45. Clause 5 further provided that the Insurance Company may cancel the Policy by sending 07 days' Notice by recorded delivery to the insured, at insured's last known address and in such event, shall return to the insured the premium paid less the pro rata portion thereof, for the period the Policy had been in force or the Policy may be cancelled at any time by the insured, by giving 07 days' Notice.
46. It may also be noted that Clause 1 of the conditions provided in the Insurance Policy provided that Notice shall be given in writing to the Company immediately, upon the occurrence of any accidental loss or damage and also if any impending prosecution, inquest or fatal inquiry in respect of any incident, which may give rise to a claim under this Policy.
47. In the present case, it is not disputed that immediately when the car was stolen, the Insurance claim was filed by the Respondent No. 2 on This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 24.08.2016. Despite being informed about the theft and the transfer, the Insurance Policy was not cancelled by the Appellant.
48. From the terms of the Insurance Policy as discussed above, it is evident that the Insurance Company had an option to cancel the Insurance Policy if not before, at least on being informed about the theft of the vehicle and of it being transferred to Respondent No. 2/ Plaintiffs No. 2. Neither has been done by the Insurance Company.
49. Furthermore, Clause 9 provided that in the event of death of the insured, the Policy would not lapse immediately, but would remain valid for a period of 03 months from the date of death of the insured or until the expiry of this policy (whichever is earlier).
50. From this Clause 9 of the Insurance Policy, it emerges that the Policy itself recognized that validity of the Insurance Policy for 03 months, in case of demise of the insured.
51. In the present case, situation was similar, where the first insured cease to exist, on account of sale. Applying the same analogy, the Insurance Policy can be deemed to be valid, at least for 03 months from the date of sale of vehicle, in May, 2016 and its transfer in the records of Transport Authority, in first week of June, 2016. The theft happened on 23.08.2016, i.e. within three months of transfer of the vehicle, in the name of the Plaintiff No2 and in terms of the Insurance Policy, it is held to be valid on the date of theft.
52. It cannot be pleaded that the Insurance Policy automatically came to an end, when it is a settled proposition of law that the Insurance Policy travels with the vehicle and not with the insured. It is, therefore, evident from the terms of the Insurance Policy and the own damage premium that This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38 has been paid by the Insured, that the theft of the vehicle, was very well covered within the terms of the Insurance Policy.
53. From the aforementioned discussion, it emerges that the vehicle was duly insured with the Insurance Company at the time of the vehicle's theft dated 23.08.2016, and the Respondents/ Plaintiffs were entitled to the recovery of Rs.4,00,000, i.e., the insured IDV value of the stolen car.
54. The Suit has therefore, been rightly decreed in favour of the Plaintiffs/ Respondents.
55. There is no merit in the present Appeal, which is hereby, dismissed along with pending Application.
NEENA BANSAL KRISHNA, J FEBRUARY 26, 2026/va/N This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 20:41:38