State Consumer Disputes Redressal Commission
National Insurance Co. Ltd vs Rajesh Gupta on 9 March, 2006
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: 9th March, 2006 Appeal No. A-1086/2002 (Arising from the order dated 14-08-2002 passed by the District Forum (Central), ISBT, Kashmere Gate, Delhi in Complaint Case No. 1126/2001) National Insurance Co. Ltd. Appellant. Through its Manager Through DRO-II, 2E/9, Jhandewalan Extn., Mr. Kamal Deep, New Delhi-110005. Advocate. Versus Shri Rajesh Gupta, Respondent. A-266, Pandara Road, In person. New Delhi-110002. 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) Respondent purchased one Tata Sumo from one Shri Vijay Veer Chabra on 23rd June 1999 and obtained the insurance policy from the appellant against theft and other incidence for Rs. 3,36,000/- on 25th June 1999.
Insurance Cover Note was issued in the name of respondent on receipt of cheque issued by him and on the strength of insurance receipt and sale letter and other documents. However, the vehicle was still registered in the name of the original owner in the Regional Transport Authority where the formalities for issuing registration certificate in the name of respondent were pending that in the meantime the vehicle was stolen on 4th November 1999.
The claim of the respondent was repudiated solely on the ground that he was not the registered owner of the vehicle and as such insurable interests were not transferred in his name.
2. Feeling aggrieved the respondent approached the District Forum and obtained the impugned order dated 14-8-2002 whereby the appellant has been directed to pay a sum of Rs. 2,30,000 along with interest @ 12% and Rs. 1,000/- as litigation expenses.
3. Feeling aggrieved the appellant has preferred this appeal.
4. The main contention of the Counsel for the appellant is that in terms of Sub-section (30) of Section 2 of Central Motor Vehicle Act the respondent is not the registered owner and since the registration in the instant case was still in the name of the original or first owner the respondent had no locus standi to file claim nor was entitled to receive the same. It is however, contended by the Counsel for the appellant that Insurance Cover Note was issued to the respondent merely on handing over the sale letter and form 29 and 30 under Motor Vehicle Act but it did not mean that the insurance policy was subsisting in the name of the respondent.
5. It is further contended by the Counsel for the appellant that merely because Form No. 29 and 30 were handed over to the agent of the Insurance Company did not shift the onus to the appellant for getting the vehicle registered in the name of the respondent as it was the sole duty of the respondent to get the vehicle registered in his name and unless and until the vehicle was registered in his name the respondent did not have insurable interest. In this regard the counsel for the appellant has referred to the procedure as to how the registration of the vehicle is done prescribed by Chapter IV, Section (41) of the Motor Vehicle Act.
6. Let us assume that the respondent had the onus in getting the vehicle registered in his name but it is the factual position that determines the insurable interest. Had the appellant company not been satisfied with the requisite documents having been executed in favour of the respondent by the original owner it was not supposed to issue insurance cover note.
7. We even go to the extent that even if the insurance company did not issue the insurance cover note in favour of the respondent still it was liable to indemnify the loss as the fact remains that the insurance was that of a vehicle and not a person. By executing various documents as referred in the provisions of Motor Vehicle Act for effecting transfer of registration the original owner of the vehicle had for all practical purpose sold the vehicle to the respondent. Transfer of registration certificate in favour of respondent was only an official formality as the first owner gave the sale letter after accepting the consideration thereof and executed the requisite forms No. 29 and 30 as prescribed under the Motor Vehicle Act. With the execution of these documents original owner had transferred the insurable interest also in favour of the respondent.
If the contention of counsel for the appellant is accepted then the situation will boil down to the point that the appellant will not be liable for indemnification of loss against insurance policy. On the one hand the appellant is taking the plea that respondent was not a registered owner and therefore the insurable interest was not transferred in his favour while on the other hand the appellant may take the plea if the claim is filed by the registered owner that since he had also sold the vehicle he has no locus standi. What a strange and clandestine way of defeating the rightful claim against the insurance policy!
8. According to the counsel for the appellant the insurance policy has two parts namely part A and part B. Part A deals with owners liability whereas Part B deals with third party liability. As regards the owners liability, the owner is supposed to be vigilant and cautious enough to get the vehicle transferred in his name within a reasonable period of 14 days after paying the requisite fee with the Registration Authority for registration of the vehicle so that he becomes the actual owner and the insurable interest are transferred in his name.
9. We find it difficult to ram this contention down the throat so far as the insurable interests are concerned. Provisions made under Motor Vehicles Act are independent provision and failure of a person to get vehicle registered in his name on purchase from the original owner have no relevance with the insurable interest. So far as the insurable interests are concerned these are vis-a-vis the vehicle. Once the vehicle is sold by the first owner against consideration Insurance Company is bound to indemnify the subsequent purchaser as to the loss or damage to the vehicle. At the most it can ask for indemnity bond to avoid double payment and undertaking that he will refund the amount if the first owner prefers the claim.
10. However, the instant case is on much stronger footing as the respondent had not only purchased the vehicle from the original owner but also obtained a fresh insurance policy from the appellant who issued insurance cover note on the strength of sale letter and form 29 and 30 prescribed under the Motor Vehicle Act. If there was any negligence on the part of the agent of the appellant in issuing the insurance cover note on the strength of aforesaid documents and not on the strength of registration certificate, the respondent cannot be put to jeopardy nor the appellant can be allowed to take advantage of its own acts of omission and commission.
11. In the same vein we also find that the onus which the counsel for the appellant is harping upon is of the same nature upon the appellant also that before issuing insurance policy and the insurance cover note it should have satisfied the status of the insured-respondent whether he is the actual owner of the vehicle or not.
The very fact of issuing insurance cover note by the insurance company shows that the insurance company itself was satisfied as to the ownership of the respondent and issued the policy on the premise that transfer of registration certificate in the name of respondent was mere an official formality.
12. By repudiating the claim of the respondent the appellant company has indulged in highly unfair trade practice. By indulging in such practice the insurance company has not only clandestinely duped the respondent by issuing insurance cover note by accepting the premium without ensuring whether the respondent was the actual owner of the vehicle or not. Once the cover note was issued it no more lies in the mouth of the insurance company to repudiate the claim for want of registration certificate.
13. Foregoing reasons persuade us to dismiss the appeal being misconceived and wholly devoid of merit.
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.
15. Announced on the 9th day of March, 2006.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj