State Consumer Disputes Redressal Commission
P.S. Handa, vs National Insurance Company Limited on 10 September, 2008
Complaint No IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b) of the Consumer Protection Act, 1986) Date of Decision: 10.09.2008 Complaint NO.C-271/2001. Mr. P.S. Handa, ..Complainant K-92, Hauz Khas Enclave, Through New Delhi- 1100 16. Mr. Deepak Kr. Vijay & Ms. Neeru Sharma Advocates Versus National Insurance Company Limited, ...OP 617A-620, Som Dutt Chambers-II, Through 9, Bhikaji Cama Place, Mr. Kamal Deep New Delhi-110066 Advocate CORAM: Ms. Rumnita Mittal Presiding Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Ms. Rumnita Mittal, Member Through this complaint, the complainant has sought directions to the OP to pay him the insured amount of Rs.5,17,150/- with pendilite and future interest @ 24% per annum with compensatory damages for deficiency in service on account of wrongful repudiation of his claim on the pretext that the complainant was not the registered owner of the vehicle at the time of theft or even at the time of taking insurance policy.
2. The brief undisputed facts of this case are that the complainant had purchased a Cielo GLE-MT-CL passenger car having registration No. UP 16 3516 from M/s Chandra International, C-1/30, Sector-36, Noida (U.P), who were the original owners of the vehicle for a sum of Rs.3,75,000/- on 23.06.2000. At the time of the first purchase of the said car, the same was hypothecated to M/s Kotak Mahindra Primus Ltd.
3. After making full and final payment of the vehicle, complainant obtained a No Objection Certificate dated 23.06.1999 from M/s Kotak Mahindra Primus Ltd. Thereafter the complainant took out a comprehensive Insurance Policy for Rs.3, 70,000/- from the OP on 22.06.1999 at 3.55 p.m. and the policy was valid till 21.06.2000. At the time of taking out the issue of the said policy, the car was duly inspected by the officers of OP Company. All the documents relating to the car, such as Registration certificates, papers regarding sale/purchase etc were all inspected and the premium of Rs.13,928/- was accepted by the OP company from the complainant after being satisfied about the condition of the car and verification of the documents and the car was insured by the development officer Sh. J.S. Bajaj of the OP company. The car of the complainant bearing registration NO.UP163516 was stolen from outside the residence of the complainant, K-92 Hauz Khas Enclave on 14.04.2001 at about 2.45 p.m. and an FIR being 223 of 2000 was lodged in this regard. Intimation of the theft of the car was also given to OP Company on telephone and also vide letter dated 17.04.2000 written by the complainant. As required, in terms of the Insurance Policy, an untraced Report with regard to the car in question alongwith the FIR No.223 of 2000 was also issued by the SHO. Police Station, Hauz Khas, New Delhi. The complainant filed all the relevant documents for settlement of his claim with the Branch of OPs on 17.07.2000 and followed up the same vigorously for settlement of the claim by complainant. Sometimes in June 2001, complainant was informed by Sh. J.S. Bajaj that the claim of the complainant has been passed for Rs.2,70,000/-. Though the cost of the vehicle was much more than even the insured value of Rs.3,70,000/- still with a view to settle the claim once for all without prejudice to his rights and contentions, the complainant agreed for the said amount. The complainant was assured by the Branch that the payment for the above amount would be remitted to him in due course. The complainant waited for sometime. However, on enquires made by the complainant he was informed in April 2001 that the claim amount cannot be paid to him since the vehicle was not registered in his name. Since right from the beginning the OPs and officials knew very well that the vehicle was owned by the complainant as he had bought a second hand car though was registered in the name of the previous owner and documents to this effect were always available with the OPs. The complainant sent a legal notice dated 10th August 2001 through its lawyer calling upon the OPs to pay the insurance amount within 7 days, since there was no response, the complainant was constrained to file the instant complaint for redressal of his grievances.
4. While denying the averments of the complainant, the OP has taken several preliminary objections that the complaint is not maintainable before this Commission, as the complainant has concealed the material facts from this Commission;
the claim is highly exaggerated and as such does not fall within the preview of State Commission; the complainant has breached the conditions of policy; the vehicle was never registered in the name of the complainant and hence the complaint is not maintainable against the insurance company; on merits it is alleged by the OP that the complainant was not registered owner of the vehicle at the time of theft and even at the time of taking insurance policy. The original owner of the vehicle as per the record of RTO Noida was M/s Kotak Mahindra Primus Ltd. and even at the time of seeking insurance on 22.06.1999, the complainant was not the owner of the vehicle and as such there was no insurable interest in the vehicle. The car was duly inspected by the development officer before issuing the insurance policy, which is the essential requirement at the time of insurance. It is also the duty of the complainant to inform the insurance company about the transaction or changes if made at the time after the issuance of insurance policy. The complainant failed to insure the vehicle in his own name, therefore, is not the consumer and complainant within the ambit of the Consumer Protection Act, 1986 .
5. We have heard the arguments advanced on behalf of both the parties and have duly considered the documents and evidence produced by them. The contention of the OP that because the complainant had no insurable interest and as such, is not entitled to the claim not being the registered owner of the vehicle in question at the time of theft and even at the time of insurance policy, is not tenable in view of the fact that the complainant has placed on record a document whereby the registration of the vehicle in question has been already transferred in the name of the complainant as on 25.4.2000. Not only this but a letter of the OP dated 3.3.2001 also endorses the fact that the transfer of registration of the vehicle in question was well within the knowledge of the O.P Insurance Company.
6. However, be that as it may, let us assume that the complainant had the onus in getting the vehicle registered in his name but it is the factual position that determines the insurable interest. Had the OP company not been satisfied with the requisite documents having been executed in favour of the complainant 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 complainant 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 complainant. Transfer of registration certificate in favour of complainant 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 complainant.
If the contention of counsel for the OP is accepted then the situation will boil down to the point that the OP will not be liable for indemnification of loss against insurance policy. On the one hand the OP is taking the plea that complainant was not a registered owner and therefore the insurable interest was not transferred in his favour while on the other hand the OP 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. 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.
9. However, the instant case is on much stronger footing as the complainant had not only purchased the vehicle from the original owner but also obtained a fresh insurance policy from the OP 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 OP in issuing the insurance cover note on the strength of aforesaid documents and not on the strength of registration certificate, the complainant cannot be put to jeopardy nor the OP can be allowed to take advantage of its own acts of omission and commission.
10. In the same vein we also find that the onus which the counsel for the OP is harping upon is of the same nature upon the OP also that before issuing insurance policy and the insurance cover note it should have satisfied the status of the insured-complainant 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 complainant and issued the policy on the premise that transfer of registration certificate in the name of complainant was merely an official formality.
11. By repudiating the claim of the complainant the OP company has indulged in highly unfair trade practice. By indulging in such practice the insurance company has clandestinely duped the complainant by issuing insurance cover note by accepting the premium without ensuring whether the complainant 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. As such the complainant is entitled not only to the claim but to a reasonable compensation as well.
12. The word compensation has been given very vide connotation by the Supreme Court in Ghaziabad Development Authority Vs Balbir Singh in (2004) 8 CLD 861(SC) and encompasses in its fold each and every element of sufferings suffered by the consumer for instance mental agony, harassment, physical discomfort, expenses incurred by him for taking the vehicle time and again to the workshop, loss of business, emotional sufferings etc. Observations of the Supreme Court are as under:-
The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/ Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law.
13. Therefore, keeping in view the conspectus of the above facts, we allow the present complaint in the following terms:-
(i) The OP is directed to pay the insurer an amount of Rs.5,17,150/- minus depreciated value at the rate of 5% per annum.
(ii) We award a compensation of Rs.25,000/-
including the cost of litigation.
14. The complaint is disposed of in the aforesaid terms.
15. The payment shall be made within one month from the date of receipt of this order.
16. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to record room.
(Rumnita Mittal) Presiding Member vs