State Consumer Disputes Redressal Commission
The New India Assurance Company Limited vs Tirath Ram Tejpal on 8 June, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.1665 of 2007
Date of institution : 28.12.2007
Date of decision : 8.6.2012
The New India Assurance Company Limited, SCO No.36-37, Sector 17-A,
Chandigarh through its Manager/Deputy Manager.
.......Appellants
Versus
Tirath Ram Tejpal s/o Mansa Ram r/o H.No. B-6/312, Rahon Road,
Nawanshahr.
...Respondent
First Appeal against the order dated 15.11.2007
of the District Consumer Disputes Redressal
Forum, Nawanshahr.
Before :-
Hon'ble Mr. Justice S.N. Aggarwal President.
Mr. Jasbir Singh Gill, Member.
Mr. Vinod Kumar Gupta, Member.
Present :-
For the appellants : Shri V. Ramswaroop, Advocate.
For the respondent : None.
JUSTICE S.N. AGGARWAL, PRESIDENT:
VERSION OF THE RESPONDENT:
M/s Ved Parkash Vijay Kumar of Dana Mandi, Nawanshahr were the owners of vehicle bearing Registration Certificate No.PB-12-D-0088. It was insured with the appellants for the period from 15.2.2006 to 14.2.2007. The owners, namely, M/s Ved Parkash Vijay Kumar had sold this vehicle to Tirath Ram Tejpal respondent along with its insurance policy on 30.10.2006.
2. It was further pleaded that the respondent was driving the vehicle on 29.1.2007 when it met with an accident. It's intimation was given to the appellants. The appellants had deputed the surveyor for inspection. As per First Appeal No.1665 of 2007. 2 the instructions of the appellants, the respondent got repaired the vehicle by spending an amount of Rs.75,735/-. The insurance claim was lodged with the appellants. It was repudiated vide letter dated 8.5.2007. Hence the complaint for recovery of the insurance claim. Compensation, interest and costs were prayed.
VERSION OF THE APPELLANTS:
3. The appellants filed the written reply. The case was contested. It was denied if the respondent was the insured or if he had ever applied for transfer of the insurance policy in his name or if he had ever deposited the amount of premium. It was denied if there was any deficiency in service on the part of the appellants. Dismissal of the complaint was prayed.
PROCEEDINGS BEFORE THE DISTRICT FORUM:
4. Parties produced affidavits/documents in support of their respective versions.
5. Learned District Forum accepted the complaint with costs of Rs.1,000/-
and compensation amount of Rs.20,000/- vide impugned judgment dated 15.11.2007. The appellants were directed to pay the insurance claim of Rs.75,735/- along with interest at the rate of 9% per annum.
6. Hence the appeal.
DISCUSSION:
7. The submission of the learned counsel for the appellants was that the original owners had transferred the vehicle in the name of the respondent but the insurance policy was not got transferred. Therefore the respondent was not entitled to any insurance claim. Hence it was prayed that the appeal be accepted and the impugned judgment dated 15.11.2007 be set aside.
8. Record has been perused. Submissions have been considered.
9. The respondent has filed his affidavit Ex.CW-1/A. A copy of the insurance policy has also been proved as Ex.C-1, according to which, the First Appeal No.1665 of 2007. 3 vehicle bearing registration certificate No. PB-12-D-0088 was owned by M/s Ved Parkash Vijay Kumar of Dana Mandi, Nawanshahr. It was insured with the appellants for an amount of Rs.2,25,000/- for the period from 15.2.2006 to 14.2.2007. The respondent has also proved a copy of the letter written by M/s Ved Parkash Vijay Kumar as Ex.C-2 by which owners informed the appellant Insurance Company that they want to transfer the insurance policy in favour of Tirath Ram Tejpal respondent because they had already sold the said vehicle to him. This letter was received in the office of the appellants on 30.10.2006. The bills of repairs have been proved as Ex.C-3 to Ex.C-9. The letter of repudiation dated 8.5.2007 has been proved as Ex.C10 in which it is mentioned that since the insurance policy was not got transferred by the respondent in his name, therefore, he was not entitled to the insurance claim.
10. On the other hand, the appellants have also proved the affidavit of Parvinder Singh, Senior Divisional Manager as Ex.R-1. The letter of repudiation has been proved as Ex.R-2. Insurance policy has been proved as Ex.R-3.
11. These documents clearly reveal that M/s Ved Parkash Vijay Kumar were the owners of vehicle bearing Registration Certificate No.PB-12-D-0088. They had sold this vehicle to the respondent and they had also written letter to the appellants which was received by the appellants on 30.10.2006 (Ex.C-2) for transfer of the insurance policy but the fact remains that the insurance policy was not transferred which was originally in the name of M/s Ved Parkash Vijay Kumar.
12. The accident had taken place on 29.1.2007. On that day the insurance policy was in the name of the original owners and not in the name of Tirath Ram Tejpal respondent. It is, therefore, clearly proved that the insurance policy was not in the name of the respondent. First Appeal No.1665 of 2007. 4
13. In this context, reference may be made to the judgment dated 19.1.2010 passed by this Commission in First Appeal No.794 of 2004 "National Insurance Company Ltd. vs. Arjun Singh" in which it was held as under:-
"10. The basic law on the subject is laid in the judgment of the Hon'ble Supreme Court reported as "COMPLETE INSULATIONS (P) LTD. v. NEW INDIA ASSURANCE COMPANY LTD." I(1996) CPJ 1 (SC) in which it was held that there was nothing like automatic transfer of insurance policy in vehicle damage cases. The facts of that case were as under:-
"A Maruti Car with registration No.CHK-8253 was purchased in the name of Mrs. Archana Wadhwa for which the respondent, M/s New India Assurance Company Ltd., had issued a comprehensive insurance policy. The premium for the insurance was paid by the appellant-Company in whose favour the car was transferred. The registration of the car was transferred to the appellant on 15.6.89. On 26.6.89 the appellant intimated the transfer of registration and asked for transfer of the insurance policy. A reminder was sent on 24.7.89. The respondent did not reply to the two letters. On 17.9.89 the car met with a serious accident in which the Managing Director of the appellant First Appeal No.1665 of 2007. 5 suffered serious injuries and his sister died. On 11.10.89 the appellant asked for the assessment of the damage as the car was a total loss. The respondent did not respond. A reminder dated 26.12.89 met the same fate. The appellant got a notice issued to which the respondent replied that the appellant had no insurable interest in the car. The appellant filed the complaint before the Consumer Disputes Redressal Commission, Chandigarh, which directed the respondent to pay Rs.83,000/- i.e., the insured value of the vehicle, as the vehicle was a total loss, along with costs and interest. The National Consumer Disputes Redressal Commission set aside the order of the Commission at Chandigarh, dismissed the complaint and granted cost of the appeal. Hence the appeal."
11. The whole law was discussed by the Hon'ble Supreme Court in the aforesaid judgment and it was observed as under:-
"The next important provision which we may notice of is Section 156 which sets out the effect of the certificate of insurance. It says that when the First Appeal No.1665 of 2007. 6 insurer issues the certificate of insurance, then even if the policy of insurance has not as yet been issued, the insurer shall, as between himself and any other person except the insured, be deemed to have issued to the insured a policy of insurance conforming in all respects with the description and particulars stated in the certificate. It is obvious on a plain reading of this provision that the Legislature was anxious to protect third party interest. Then comes Section 157 which we have extracted earlier. This provision lays down that when the owner of the vehicle in relation whereto a certificate of insurance is issued transfers to another person the ownership of the motor vehicle, the certificate of insurance together with the policy described therein shall be deemed to have been transferred in favour of the new owner of the vehicle with effect from the date of transfer to the insurer for making necessary changes in the certificate of insurance and the policy described therein in his favour. These First Appeal No.1665 of 2007. 7 are the relevant provisions of Chapter XI, which have a bearing on the question of insurer's liability in the present case."
12. On the facts of that case and after holding detailed discussion, it was concluded by the Hon'ble Supreme Court in Complete Insulations (P) Ltd. case (supra) as under:-
"If the policy of insurance covers other risks as well, e .g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI of the New Act and in the realm of contract for which there must be an agreement between the insurer and transferee, the former undertaking to cover the risk or damage to the vehicle. In the present case since there was no such agreement and since the insurer had not transferred the policy of insurance in relation thereto to the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken by the National Commission is therefore, correct."
13. This judgment was followed by the Hon'ble National Commission in the judgment reported as "United India First Appeal No.1665 of 2007. 8 Insurance Company vs. Harinder Kaur" III(2007) CPJ 411 (NC).
14. Thereafter contrary view was taken by the Hon'ble National Commission in the judgment reported as "Narayan Singh vs. New India Assurance Company Ltd." 2008(1) CLT 46 (NC) for the following reasons:-
"2. It is highly deplorable on the part of the Insurance Company to take undue advantage of the ignorance of the consumers. In 1994, a circular has been issued by the General Insurance Company with regard to the transfer of the vehicles and the transfer of insurance benefits automatically in favour of the transferee. The said regulation is part of the India Motor Tariff Regulations."
15. Reliance was placed by the Hon'ble National Commission in Narayan Singh's case (supra) on the judgment of the Hon'ble Chhatisgarh Consumer Commission and it was observed as under:-
"9. As stated above, the second ground given by the State Commission cannot be justified in view of the India Motor Tariff Regulation. Further, on this aspect, learned counsel for the petitioner has produced on ecord the judgment First Appeal No.1665 of 2007. 9 rendered by the Chattisgarh State Commission in the case of Ajimuddin vs. The New India Assurance Company Ltd. reported in 2006 (2) CPR 124 wherein the Commission has observed in paragraph 7 as under:-
"Learned counsel for the appellant submitted that GIC has issued special instructions regarding settlement of claim in case of transfer of policy. It was submitted that as per the said instructions the transfer of policy in favour of the purchaser the Complainant/Appellant should be treated as automatic. It appears that the Tariff Advisory Committee issued a circular regarding automatic transfer of the policy to the new owner/purchaser of the vehicle. In the said circular the decision of Supreme Court in Complete Insulations (P) Ltd. vs. New India Assurance Co. Ltd. was referred to. In the said circular it was stated that for policies issued as per revised Motor First Appeal No.1665 of 2007. 10 Tariff, own damage claim which fall within the purview of GR 10 provisions may be settled in full subject to the other terms and conditions of the policy."
16. This view of law was reiterated by the Hon'ble National Commission in the judgment reported as "Oriental Insurance Co. Ltd. vs. Om Parkash Gupta & Anr." I(2009) CPJ 183 (NC).
17. Even this Commission followed this view in the judgment dated 3.9.2009 passed in First Appeal 699 of 2003 "The Oriental Insurance Company Limited Vs. Kulvir Singh".
18. However the Hon'ble National Commission has followed the judgment of the Hon'ble Supreme Court in Complete Insulations Pvt. Ltd.'s case (supra) in the judgment reported as "MADAN SINGH v. UNITED INDIA INSURANCE CO. LTD. & ANR." (2009) CPJ 158 (NC). It was held as under:-
"13. Section 157(2) provides that transferee shall apply within 14 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 the policy described in the certificate in his favour and insurer shall make the necessary changes in the certificate and the policy of insurance in regard to transfer of insurance. The vehicle, in First Appeal No.1665 of 2007. 11 question, was transferred in the name of the petitioner on 10.6.1993, but he did not get the change effected in the insurance policy in terms of Section 157(2) of the Act. However, the petitioner took policy in the name of the previous owners w.e.f. 22.3.1994 till 21.3.1995. The said policy is on record in which, the number of the vehicle is shown as RJ-23/T-0030 and it is shown as insured in the name of the previous owners. The petitioner obtained the benefit of no claim bonus to the extent of 45% for the said policy, which he would not be otherwise entitled. The petitioner had thus suppressed material fact of transfer in his name from the Insurance Company. The contention of the petitioner that the Development Officer was duly informed about the change of ownership that the policy should be issued in the name of the petitioner has been denied by the insurance policy in the affidavit. In the case of Hazi Bashir Ahmad (supra), the transferee/new owner had obtained a First Appeal No.1665 of 2007. 12 fresh policy in his favour but the registration formalities had not yet been completed. It was in this context that the observations, upon which the petitioner has placed reliance, had been made. There being no agreement of transfer of the insurance policy between the insurer and the transferee, the claim filed by the petitioner cannot be entertained."
19. The submission of the learned counsel for the appellants was that general regulations 10 (in short "GR-10") of the India Motor Tariff on the basis of which contrary view was taken by the Hon'ble National Commission in Narayan Singh's case (supra) was valid only upto 30.6.2002 and another set of Regulations had come into force with effect from 1.7.2002. In the new set of Regulations, no provision corresponding to GR-10 was incorporated.
20. This submission has been considered.
21. Earlier GR-10 of the India Motor Tariff provided that on the transfer of a vehicle, the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. The new India Motor Tariff came into force with effect from 1.7.2002 which is apparent from the emblem reproduced below:-
"THE TARIFF ADVISORY COMMITTEE (HEREIN AFTER CALLED ACT) HAS LAID DOWN RULES, REGULATIONS, RATES, First Appeal No.1665 of 2007. 13 ADVANTAGES, TERMS AND CONDITIONS, AS CONTAINED HEREIN, FOR TRANSACTION OF MOTOR INSURANCE BUSINESS IN INDIA IN ACCORDANCE WITH THE PROVISIONS OF PART II B OF THE INSURANCE ACT, 1938.
THIS TARIFF SUPERSEDES THE PROVISIONS OF THE INDIA MOTOR TARIFF IN EXISTENCE UPTO 30TH JUNE 2002.
THE PROVISIONS OF THIS TARIFF ARE BINDING ON ALL CONCERNED AND ANY BREACH OF THE TARIFF SHALL BE A BREACH OF THE PROVISIONS OF THE INSURANCE ACT, 1938."
22. Under the new India Motor Tariff applicable with effect from 1.7.2002, GR-10 relates to Geographical Zones only. GR- 17 deals with the transfer of insurance policy of the vehicles. It reads as under:-
"GR.17. Transfers On transfer of ownership, the Liability Only cover, either under a Liability Only policy or under a Package policy, is deemed to have been transferred in favour of the person to whom the motor First Appeal No.1665 of 2007. 14 vehicle is transferred with effect from the date of transfer.
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 charges in his record and issue fresh Certificate of Insurance. In case of Package Policies, transfer of the "Own Damage" section of the policy in favour of the transferee, shall be made by the insurer only on receipt of a specific request from the transferee along with consent of the transferor. If the transferee is not entitled to the benefit of the No Claim Bonus (NCB) shown on the policy, or is entitled to a lesser percentage of NCB than that existing in the policy, recovery of the difference between the transferee's entitlement, if any, and that shown on the policy shall be made before effecting the transfer. First Appeal No.1665 of 2007. 15 A fresh Proposal Form duly completed is to be obtained from the transferee in respect of both Liability Only and Package Policies.
Transfer of Package Policy in the name of the transferee can be done only on getting acceptable evidence of sale and a fresh proposal form duly filled and signed. The old Certificate of Insurance for the vehicle, is required to be surrendered and a fee of Rs.50/- is to be collected for issue of fresh Certificate in the name of the transferee. If for any reason, the old Certificate of Insurance cannot be surrendered, a proper declaration to that effect is to be taken from the transferee before a new Certificate of Insurance is issued."
23. From the above discussion, it is clear that GR-10 which was made the basis by the Hon'ble National Commission in Narayan Singh's case (supra) was no longer in force with effect from 1.7.2002 and under the new general regulations the transferee is required to apply for the transfer of the insurance policy in his favour to draw the insurable interest against the Insurance Company.
24. Since the insurance policy in this case pertained to the period from 10.7.2002 to 9.7.2003 and since the accident had taken place after 1.7.2002, therefore, the old GR-10 did not exist First Appeal No.1665 of 2007. 16 and the new GR-17 was applicable. Since the respondent had not taken the insurance policy in his own name and by the date of accident also the insurance policy was not got transferred by the respondent in his name, therefore, he had no insurable interest against the appellants."
14. In Complete Insulation's case (supra) also the owners as well as the transferees had written letters to the Insurance Company for the transfer of the insurance policy but on the date of accident the insurance policy had stood in the name of the original owners and not transferred in the name of transferee and it was held by the Hon'ble Supreme Court that in such circumstances the transferee has no right to claim the insurance amount.
15. Reference can also be made to the judgment of Hon'ble Supreme Court reported as "POLYMAT INDIA PVT. LTD. & ANR. v. NATIONAL INSURANCE CO. LTD. & ORS" IV(2004) CPJ 49 (SC) in which it was held as under:-
"20. In this connection, it may also be relevant to mention here that when this proposal was approved the same was sent to the complainant and the complainant wanted some amendments in both policies i.e., coverage of goods lying outside plant including the expression factory- cum-godown as there was no godown in existence but those amendments were not agreed to by the Insurance Company, they only agreed to make amendment of incorporation of name of the Bank, i.e., Allahabad Bank in the policy. When the terms of the contract have been reduced in writing it cannot be changed without the mutual agreement by way of both the parties. In the present case, they did not agree for amendment of the policies, if the First Appeal No.1665 of 2007. 17 complainant was vigilant and wanted this expression to be deleted he should have prosecuted the matter seriously or repudiated the policy. The only defence pleaded was that they were assured orally but no evidence was led by the complainant. On the contrary, suggestion was denied by single witness produced by the Insurance Company before National Forum."
16. In the present case the insurance policy was not transferred in favour of the transferee and it stood in the name of the original owners on the date of accident i.e. 29.1.2007. Therefore the respondent was not entitled to any insurance claim.
17. Keeping in view the discussion held above, this appeal is accepted and the impugned judgment dated 15.11.2007 is set aside.
18. The appellants had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal on 28.12.2007. This amount of Rs.25,000/- with interest accrued thereon, if any, be refunded by the registry to the appellants by way of a crossed cheque/demand draft after the expiry of 45 days.
19. The arguments in this case were heard on 29.5.2012 and the order was reserved. Now, the order be communicated to the parties.
20. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE S.N. AGGARWAL)
PRESIDENT
(JASBIR SINGH GILL)
MEMBER
June 8 , 2012 (VINOD KUMAR GUPTA)
Bansal MEMBER
First Appeal No.1665 of 2007. 18