National Consumer Disputes Redressal
National Insurane Co. Ltd. vs Smt Princy Roy on 11 November, 2014
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION No. 3740 of 2012 (From the order dated 04.07.2012 of the Goa State Consumer Disputes Redressal Commission, Panaji in First Appeal no. 26 of 2010) National Insurance Company Ltd. Through its Duly Constituted Attorney Manager National Insurance Company Ltd. R O I, Level 4, Tower II Jeevan Bharati 124 Cannaught Circus Petitioner New Delhi 110 001 Vs Smt Princy Roy Wife of Late Shri Roy Baby House no. 435, Kamlamol Borim, Ponda, Goa Respondent BEFORE: HONBLE MR JUSTICE AJIT BHARIHOKE PRESIDING MEMBER HONBLE MRS REKHA GUPTA MEMBER For the Petitioner Mr Abhishek Kumar, Advocate For the Respondent Mr N M Varghese, Advocate Pronounced on 11th November 2014 ORDER
REKHA GUPTA Revision petition no. 3740 of 2012 has been filed against the order dated 4th July 2012 passed by the Goa State Consumer Disputes Redressal Commission, Panaji, (the State Commission) in First Appeal no. 26 of 2010.
2. The facts of the case as per the respondent/ complainant are that her husband during his life time on 25th May 2006 bought a Maruti Omni Van from one Mr M Shivanandan, a resident of Bicholim, Goa by making part payment of ₹ 50,000/- out of a total consideration of ₹ 90,000/-, the said vehicle bearing registration no. GA 01 J 1166 was registered with the office of the Assistant Director of Transport at Bicholim.
3. The respondent states that upon receipt of the part consideration, the said Mr Shivanandan allowed the respondents husband to renew/ transfer the insurance of the said vehicle in his name, after compliance of the requisite formalities as the said vehicle came to be insured by the petitioner/ opposite party in the name of respondents husband.
4. The respondent states that in terms of the said insurance policy inter alia was providing personal cover to the owner-driver of the said vehicle to the tune of ₹ 2.00 lakh, compulsory payable, in case of death of owner-driver in a mishap and had received a sum of ₹ 625/- under the head compulsory PA to owner Driver amount ₹ 2,00,000 WC to employee.
5. The respondent states that on receipt of the part consideration on 25th May 2006 for the said vehicle, the original owner Mr M Shivanandan had signed the requisite documents to be produced before the petitioner for transfer/ renewal of the said insurance policy in the name of respondents husband and on receipt of balance consideration which came to be paid on 9th March 2007, the said Mr Shivanandan signed the forms 29 and 30 for transfer of ownership of the said vehicle, for submitting it in the office of the Assistant Director of Transport, Bicholim for obtaining NOC as the respondents husband was residing within the limits of Ponda Taluka.
6. Pursuant to the signing of the forms 29 and 30, late Roy Baby immediately visited the office of the Assistant Director of Transport, Bicholim for obtaining NOC and handed over the said forms to the concerned official at the inward section, however, the concerned official refused to accept the said forms and informed Late Roy Baby to call the original owner M Shivanandan, who was required to sign the forms before the concerned authority and to comply with the further formalities of transfer of ownership of the said vehicle, at that time the said M Shivanandan was in Kerala at his native place and as such the said vehicle remained to be transferred in the name of the respondents husband in the records of the RTO.
7. Respondents husband Late Roy Baby was a civil contractor by profession. On 27th April 2007, while returning home in the said vehicle, respondents husband met with accident and died on the spot.
8. The respondent states that pursuant to the issuance of the said form, respondent lodged her claim in terms of the said insurance policy with the petitioner claiming a sum of ₹ 2.00 lakh. The original copy of the said insurance policy no. 271202/ 31/ 06/ 6100001257 dated 6th June 2006 was in possession and power of the petitioner as the same was submitted along with the application for claim on 26th June 2007.
9. The respondent also states that after the expiry of the said insurance policy period i.e., 7th June 2006 to 6th June 2007 standing in the name of her husband, the same was transferred and renewed in the name of the respondent for the period 7th June 2007 to 6th June 2008 on receipt of premium by the petitioner.
10. The respondent states that towards the repairs of the said vehicle, job estimate card dated 7th June 2007 was prepared by the Dhavalikar Automobiles, Ponda, authorized dealer for the Maruti vehicles. In terms of the said estimated report the damage to the said vehicle was estimated to the tune of ₹ 1,44,833.54/-.
11. The respondent submits that the conduct of the petitioner in rejecting and retaining the said insurance policy amount even after complying with the formalities on the pretext that in the registration certificate name of said M Shivanandan is reflected amounts to gross deficiency in service and unfair trade practice on the part of the petitioner. That apart, the petitioner has no right whatsoever to withhold the said insurance policy amount and to act against the very purpose of insuring the vehicle.
12. The respondent therefore prayed that:
(i) The Honble Forum may be pleased to direct the petitioner to pay the said amount of ₹ 2.00 lakh to the respondent with interest thereon @ 18% per annum from 26.06.2007 till full and effective payment and a further sum of ₹ 1,44,833.54/- towards the damage of the vehicle.
(ii) An order directing the petitioner to pay to the respondent damages in the sum of ₹ 10,000/- for withholding the legally payable dues/ amounts covered under the insurance policy.
(iii) An order directing the petitioner to pay compensation of ₹ 10,000/- to the respondent on account of gross negligence, serious deficiency in service and unfair trade practice, on the part of the petitioner, the respondent, her minor children and family members having suffered mental strain, stress, agony etc.
13. The petitioner/ opposite party in their written statement before the District Forum stated that the respondent was not a consumer as defined under Section 2 d of the Consumer Protection Act, 1986. It was admitted that the insurance company had issued a policy under policy no. 271202/ 31/ 06/ 6100001257 for the period 07.06.2006 to midnight of 06.06.2007 covering Maruti Omni GA 01 J 1166 in the name of Roy Baby deceased husband of the respondent. However, Roy Baby was not the owner of the Maruti Omni and the vehicle stood in the name of Mr M Shivanandan.
14. The registered owner at the relevant time of the accident was Mr M Shivanandan. However, the deceased took insurance in his name but failed to transfer the vehicle in the name of the deceased in the RTO Office. The deceased has also failed to submit the document in the RTO and to pay the prescribed fee.
15. It is true that the policy stood in the name of the deceased husband of the respondent, however, the vehicle stood registered in the name of Mr M Shivanandan and the cover note obtained for the owner-driver under was ₹ 2,00,000/-. However, the deceased husband of the respondent was not a owner-driver and P A to the owner-driver in the amount of ₹ 2,00,000/- could not be paid to the respondent as the vehicle was not transferred in the name of the deceased as the deceased has no insurable interest.
16. By mere signing of the documents by Mr M Shivanandan in favour of respondents husband, the transfer formalities were not completed unless the forms, i.e., 29 & 30 were submitted to the concerned department and the requisite transfer fee was paid. In the present case the vehicle stood in the name of Mr M Shivanandan, whereas insurance was in the name of Roy Baby. Hence, P A claim was not payable to the respondent as the respondents husband did not have insurable interest in the said vehicle.
17. Without prejudice to the above, it was denied that the estimate was to the tune of ₹ 1,44,833.54.
The IDV of the said vehicle was itself ₹ 96,000/-. However, as per the valuation report of surveyor the payable claim was ₹ 45,000/- as per the terms of the policy provided that the deceased was having insurable interest in the vehicle. The aforesaid amount was also not paid to the respondent as the respondents deceased husband is not an insured of the vehicle and hence, the claim was rejected.
18. The petitioner insurance company issued a letter after processing of the claim intimating to the respondent of the rejection of the claim of the respondent on the ground that the registration certificate of the Maruti Omni bearing no. GA 01 J 1166 stood in the name of Mr M Shivanandan and the deceased had no insurable interest in the vehicle.
19. The District Consumer Disputes Redressal Forum, North Goa at Porvorim, Goa (the District Forum) vide its order dated 28.06.2010 while allowing the complaint noted that:
vi. Both the above transfers, especially that at RTO involves a number of steps, various forms to be filled and follow-up visits lasting over a few days which can extent even to 1 to 2 months.
vii. It is hence, inconceivable, unpractical and unrealistic to expect transfer of the insurance (at insurance company) and transfer of the vehicle (at RTO) to happen simultaneously or even within a few days from each other.
viii. In fact, one of the documents that the RTO demands from the purchaser is an insurance policy for the vehicle in his name. There, hence, always exists a window of time during which the insurance policy has been transferred/ purchased but the vehicle is not yet be in the name of the purchaser.
x. Accepting opposite partys argument would mean that even in such an ideal situation, the purchaser remains unprotected during the drive from the insurance company to RTO for he will have the insurance in his name but not the vehicle and knowing life, thats when an accident may well occur.
xi. In the matter of the present complaint before us, the circumstances leading to the delay in transfer of the suit vehicle to the name of complainants husband have been explained above.
The District Forum gave the following order:
The complaint is upheld.
Opposite party is directed to pay death benefit of ₹. 2.00 lakh to complainant together with simple interest thereon at 9% per annum from 26.09.2007 (which is the date 3 months from filing of the insurance claim) till the date of actual payment.
Opposite party shall further pay an amount of ₹. 45,000/- towards the vehicle repairs as per the policy and the survey report. This sum shall also attract simple interest at 9% per annum from 26.09.2007 till date of actual payment.
20. Aggrieved by the order of the District Forum, the petitioner filed an appeal before the State Commission. The State Commission while dismissing the appeal with cost of ₹. 30,000/- observed as under:
16. On 25/5/06 the said Mr. Shivanandan had sold to the said Roy Baby the said van for ₹ 90,000/- and had delivered the possession of the same to him after accepting ₹50,000/- from him. Sale in its legal sense imports passing of property in goods sold. With the delivery of possession and accepting the payment the said Shivanandan had completed the sale of the said van in favour of the said Roy Baby and the latter had become the owner thereof. It is nobodys case that the said Mr. Shivanandan with the delivery of the van and accepting price in part did not intend to convey the said van to Roy Baby. The only right which Mr. Shivanandan had on the date of sale, was to recover the balance amount of ₹ 40,000/- which was in fact paid to him on 9/3/07, prior to the accident on 27/4/07. The complainants husband therefore, after purchasing the van and become the owner of the said van, had obtained the insurance policy from the O.Ps effective from 6/6/06. In fact the said M. Shivanandan had confirmed the said sale in favour of the said complainants husband. It is common knowledge that Insurance Company does not issue a policy to a proposer unless the proposer hands over a sale letter or a No Objection from the registered owner. Likewise, the registering authority does not register the name of the buyer unless a policy is obtained. Roy Baby was the owner in possession of the van from 25/5/06 and as such has obtained an insurance policy from the O.P. His widows claim could not be rejected only because he had not carried out the mutation of the registration certificate or because the registration certificate was in the name of the said M. Shivanandan.
18. Incidentally, we may observe that if the registration certificate had continued to be in the name of the said M. Shivanandan, and Roy Baby had no insurable interest on what basis did the OP accept the proposal of Roy Baby and issue a policy? In fact we fail to understand as to how the O.P. gave the insurance policy in respect of the vehicle and in the name of the complainants husband, if the van still continued to be in the name of the said Shri. M. Shivanandan on the registration certificate. We also fail to understand as to how the policy was then changed in the name of Complainant w.e.f.
7/06/07 when the registration certificate had still continued to be in the name of M. Shivanandan, and in case the Complainant had no insurable interest.
19. We proceed on the assumption that existence of an insurable interest, is a sine qua non, of a contract of insurance. A comprehensive definition of insurable interest has not been attempted in any statute. It can roughly speaking, be said to be an interest which can be protected by a contract of insurance. It is an interest of such a nature that the occurrence of the event insured against would cause financial loss to the insured or would otherwise affect him adversely. The assured, for example, obviously suffers in the case of personal accident insurance if he loses his life or limb, or, in the case of property insurance, if his goods are stolen. Undeniably, he has an insurable interest for the purpose of a personal accident and burglary insurance respectively. In third party insurance, the assured also has an insurable interest as he will suffer financially if an accident takes place for which he is liable to pay to another person (see page 11 of Law Relating to Insurance with special reference to the C.P. Act by R.M. Vats, Universal Law Publishing Company Pvt. Ltd.) In the case at hand, Mr. Shivanandan had not only sold the van but had also parted with the possession of the same. In case of theft from the possession of Roy Baby, Mr. Shivanandan would not have taken any responsibility. Roy Baby would be a loser. If an accident had taken place where a third party was involved there was every probability that the said M. Shivanandan would have disowned his liability. Assuming and we repeat the word assuming, the complainants husband had not become the owner of the van on 25/5/06, he at least had legal possession of the vehicle and he could always take a policy and insure himself against theft, damage, 3rd party risks, etc. We may again refer to page 12 of Vats commentary. A bailee who has undertaken responsibility for the safety of goods of another, though not himself the owner of goods, has an insurable interest in these goods. The insurable interest is valid even if it is defeasible. A smuggler, for example, has insurable interest in smuggled jewellery although such interest terminates or becomes defeasible if the jewellery is confiscated by the Customs. It follows that the existence of a vested or of a proprietary nature is not essential in a contract of insurance. Such interest may just be possessory, defeasible, contingent, temporary or even expectant. Assuming, Roy Baby had not become the owner of the van on 25/5/06, he could alway obtain a policy as a person in legal possession of the same and the benefits arising therefrom could not be denied to him and after his death, to his widow.
20. To conclude, Roy Baby had become the owner of the van in question. OP had issued a policy in his favour and were bound to honour the same. Benefits arising therefrom could not be denied to him and after his death to his widow on the specious ground that he had not carried out mutation of the registration certificate which stood in the name of its previous owner, the said M. Shivanandan. OP has wrongly repudiated a rightful claim of the widow of the said Roy Baby. The repudiation is fanciful, arbitrary, unreasonable and illegal. The complaint was rightly allowed by the Ld. District Forum. The O.P. ought to remember that they owe their existence for the benefit of policy holders and not vice versa and if any claim is to be rejected the same has to be done with some sense of responsibility. The Apex Court had occasion to observe in L.D.A v/s. M.K. Gupta, AIR 1994 SC 787, that the days of capricious or malafide exercise of power are over.
23. We find there is absolutely no merits in this appeal and accordingly we proceed to dismiss the same with exemplary costs of Rs.
30,000/-. O.P. would be free to recover the same from the concerned officers responsible to deny a just claim.
21. Hence, the present revision petition.
22. We have heard the counsels for the petitioner and the respondent and have carefully gone through the records of the case.
23. As per the order of the State Commission there is no dispute that prior to the death of the complainants husband on 27/04/07, the entire consideration of ₹ 90,000/- was paid by the complainants husband to the said Mr. Shivanandan and not only that the complainants husband was having the possession of the van and had also a valid insurance policy issued in his favour by the O.P. The said M. Shivanandan had also filed an affidavit in the proceedings stating that after accepting ₹ 50,000/- he had given permission to the said Roy Baby to transfer the insurance policy in respect of the said vehicle in his name and after receipt of the balance amount of ₹ 40,000/- he had signed forms No. 29 & 30 and that he had no right claim or interest whatsoever to the said vehicle.
24. Further, the State Commission observed that there is no doubt that Section 50 of the Motor Vehicle Act, 1988 deals with the transfer of ownership of a motor vehicle and, inter alia, provides that where the ownership of any motor vehicle registered is transferred, the transferor shall, in the case of a vehicle registered within the same State, within 14 days of the transfer, report the fact of transfer to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee. (see sub Section (1) (a) (i)). It also provides that the transferee, shall within 30 days of the transfer report the transfer to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward the certificate or registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration. (see sub-Section (1) (b)). It further provides that if the transferor or the transferee fails to report to the registering authority the fact of transfer within the period specified in clause (a) or clause (b) of sub-section (1), as the case may be, or if the person who is required to make an application under sub-section (2) fails to make such application within the prescribed period, the registering authority may, having regard to the circumstances of the case, require the transferor or the transferee, or the other person, as the case may be, to pay, in lieu or any action that may be taken against him under section 177 such amount not exceeding one hundred rupees as may be prescribed under sub-section (5) and where the person had paid the amount under sub-section (3), no action shall be taken against him under section 177. It further provides that on receipt of the report under sub-section (1), or an application under sub-section (2), the registering authority may cause the transfer of ownership to be entered in the certificate of registration.
25. Admittedly, the certificate of registration, in the case at hand had remained, as on the date of accident on 27/04/07, in the name of the said Shri. M. Shivanandan. There is no doubt that a certificate of registration is prima facie evidence of ownership of a Motor Vehicle but only because a persons name is shown on the registration certificate that will not make him an owner. If the vehicle is registered in the name of a minor, the guardian of such minor is the owner. In cases of agreements of hire purchase, of hypothecation or lease, the person in possession under such agreements is the owner. This is expressly provided by S 2(30) of the M.V. Act and this is for the purpose of the said Act. But, a motor vehicle, like the van in the case at hand, is also a movable property and being so, its sale is governed by the Sale of Goods Act, 1930.
26. Counsel for the petitioner drew our attention to the facts of the case. He then drew our attention to the conditions in the policy which states that as under:
This cover is subject to:
(a)The owner-driver is the registered owner of the vehicle insured herein;
(b)The owner-driver is the insured named in this policy;
(c) The owner-driver holds an effective driving licence, in accordance with the provisions of Rule 3 of the Central Motor Vehicles Rules, 1989 at the time of the accident.
27. Learned counsel for the petitioner states that since the petitioner was not a registered owner-driver of the vehicle and hence, he was not covered by a personal accident cover meant only for the owner-driver. The counsel for the respondent states that the petitioner had given the said insurance policy to the respondent on 06.06.2006 and no doubt in the proposal form submitted by the petitioners husband on 06.06.2006 he had shown himself as the registered owner. As per the general insurance hand-book filed by the petitioner, while procuring the general insurance business, the agent has to make reasonable enquiry about the proposed risk and bring it to the notice of the company about any adverse feature.
28. We find that the petitioner has failed to file the list of documentations required to take the insurance. It is not understood how the petitioner failed to ask for the registration certificate of the said vehicle to check and verify the details given in the proposal form. Had the petitioner insisted for the registration certificate, it would have come to their notice that on the date of filing the proposal form the deceased was not the registered owner of the vehicle and they would have advised and guided him accordingly regarding the requirements before the policy could be issued in his favour. The petitioner would have got adequate time and opportunity to make arrangements with the previous owner to avail the insurance policy. It is difficult to believe that the petitioner while issuing the insurance policy to the respondents husband on 06.06.2006, failed to take the copy of the registration certificate as also the earlier policy of the vehicle to renew/ transfer the insurance of the said vehicle in his name and thereafter now plead ignorance of the fact that they were not aware that he was not the registered owner of the vehicle and this fact came to their notice only after the claim was made upon his death. It is also surprising to note that the petitioner has since transferred/ renewed the said insurance policy in the name of the respondent for the period 07.06.2007 to 06.06.2008 when it is stated by the petitioner that the said vehicle still stands in the name of the original owner, i.e., Mr M Shivanandan. This only goes to show the gross negligence of the petitioner and the careless and casual manner of their working while processing proposal for insurance policies or their transfer/ renewal. It was for the petitioner to satisfy itself that all the requirements were met before transferring/ renewing the said policy in favour of Roy Baby and thereafter the respondent, which they failed to do. The benefit of the said insurance policy cannot be denied to the insured on specious grounds and due to the omission on the part of the petitioner in ensuring adherence to the requirements before issuing the said policy. The amount so paid should be recovered from the officials responsible for failing to conduct the necessary checks and verification prior to issuing the policies in favour of Roy Baby.
29. Thus, no jurisdictional or legal error has been shown to us to call for interference in the exercise of powers under Section 21 (b) of Act. The order of the State Commission does not call for any interference nor does it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is hereby, dismissed with no order as to cost.
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[Rekha Gupta] Sd/-
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[ Ajit Bharihoke, J.] Satish