State Consumer Disputes Redressal Commission
United India Insurance Co. Ltd. vs Sanjeev Kumar Garg, on 17 March, 2008
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 :17.03.2008 Appeal No. FA-08/70 (Arising from order dated 20.6.2007 passed by the District Forum-II, Udyog Sadan, C-22 & 23 Institutional Area, Behind Qutab Hotel, New Delhi in Compliant case No. C-125/05) United India Insurance Co. Ltd. Through its Regional Office, 8th Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi Through its Dy. Manager Sh. V.P. Kaul ..Appellant Through P.R. Sikka, Advocate Versus Sh. Sanjeev Kumar Garg, C-4, 180 Yamuna Vihar, Delhi 110053 ..Respondent CORAM Justice J.D. Kapoor President Ms. Rumnita Mittal Member1
Whether reporters of local newspapers be allowed to see the Judgement.
2. To be referred to the Reporter or not.
Justice J.D. Kapoor (Oral)
1. Short question arising for determination in this appeal is whether transfer of insurable interest in respect of insurance policy takes place the moment the name of the owner of vehicle is changed in the certificate of registration.
2. Vide impugned order dated 20.6.2007 passed by the District Form the appellant has been directed to pay Rs. 95,000/- the sale price, to the respondent, the subsequent purchaser of the vehicle and Rs. 5000/- as compensation including cost of litigation.
3. Feeling aggrieved the appellant has preferred this appeal under section 15 of the Consumer Protection Act, 1986.
4. The case of the respondent leading to the impugned order, in brief, is that respondent purchased a vehicle i.e DL-5CB-4372 from Supreme Industries on 21.7.2005. The above said vehicle was insured with the appellant. The effective date of insurance was 8.6.2005 to 7.6.2006. The IDV of the vehicle was for Rs. 1,75,000/- and insurance was in the name of Ms. Supreme Industries.
5. After purchase of vehicle, the respondent applied for transfer of Insurance Certificate in his name on 2.8.2005 . The respondent handed over request in writing to appellant along with Cover Note, letter of transfer and copy of Delivery Report. Appellant informed the respondent to obtain Registration Certificate in his name, then transfer would be duly done. The respondent applied to RTO for transfer of RC in his name on 24.8.2006 and it was effected on 9.9.2006. However, unfortunately on 7.9.2006, the vehicle met with an accident and was badly damaged. The respondent informed appellant about the accident. An estimate of repair was obtained and it was more than Rs. 1,80,000/-. The respondent informed appellant about the estimate and prayed for reimbursement. But appellant repudiated the claim on the ground that since the vehicle is insured in the name of M/s supreme Industries, 3/182, Jawahar Nagar, Loni Road, New Delhi, respondent has no liability under the Policy towards the accident. The respondent prayed for direction to appellant to pay Rs. 1,75,000/-, compensation and cost.
6. While justifying the repudiation of the claim, appellant averred that the vehicle was insured in the name of M/s Supreme Industries and appellant has no liability under the Policy for the said alleged accident towards the respondent herein. Appellant referred to Section 157 of the Motor Vehicle Act. Appellant did not plead anything on merit. Appellant prayed for dismissal of complaint.
7. In order to appreciate the contention of the learned counsel of the appellant that unless and until the insurable interest are transferred in the Insurance Policy, the prospective purchaser of vehicle is not entitled for benefit derived from the insurance policy standing in the name of the original owner. Provisions of section 157 of the Motor Vehicle Act relied upon needs to be reproduced and are as under:
Where a person in whose favour the Certificate of Insurance has been issued in accordance with provisions of this Chapter transfers to another person the ownership of Motor Vehicle in respect of which insurance was taken together with the Policy of Insurance relating thereto, the Certificate of Insurance and the Policy described in the Certificate shall be deemed to have been transferred in favour of the person to whom the Motor Vehicle is transferred with effect from the date of its transfer.
8. Section 157(2) also requires the Transferee to make an application to Insurer for making necessary changes and the Insurer will make necessary changes in the Policy in regard to transfer of Insurance.
9. On the face of it the appellant has misconstrued and misunderstood section 157 of the Motor Vehicle Act and also has not considered the facts in the right perspective. Learned counsel has placed reliance on the decision of the National Commission in cases titled New India Assurance Vs. Rakesh Kumar (IV) (2005) CPJ 442 and Narain Singh Vs. New India Revision Petition No. 556/02 and lately by the Honble Supreme Court in case titled Complete Insulation Vs. New India Assurance AIR 1995 SC 586 whereby the matter was remanded to National Commission for considering aforesaid provision of law.
10. All these cases pertain to third party claim whereas the instant case is claimed against the own vehicle. The question to be determined is on different premises altogether and as such decisions referred by the learned counsel in the revision petition are not applicable.
11. Whenever any insured intends to sell the vehicle to third party and all the formalities are completed for transfer of the name in the RC the change in the insurance certificate remains mere formality. Insurable interest automatically gets transferred in the name of the subsequent purchasers. This is what is the mandate of section 157 and 157(2) of the Motor Vehicle Act. Section 157 of the Motor Vehicle Act provides in categorical terms that if a person in whose favour the Certificate of Insurance has been issued in accordance with provisions of this Chapter transfers to another person the ownership of Motor Vehicle in respect of which insurance was taken together with the Policy of Insurance relating thereto, the Certificate of Insurance and the Policy described in the Certificate shall be deemed to have been transferred in favour of the person to whom the Motor Vehicle is transferred with effect from the date of its transfer.
12. There is no dispute nor has it been denied that M/s Supreme Industries sold the vehicle to the respondent. No party can be allowed to take advantage of its own acts of omission and commission. The application for transfer of the RC with the RTO was made in name of the respondent on 24th August, 2006 and change, which was official formality, was effected on 9th September, 2006. Unfortunately the vehicle met with an accident on 7th September, 2006. To say that there was no contract of transfer of insurable interest in favour of respondent is self defeating and entirely against the concept and provision of section 157 of the Motor Vehicle Act. For the purpose of transfer in the RC, transfer is deemed to have taken place on the date when the application was made i.e. 24.8.2006. RTO may take one year to effect the transfer and for this the insured can not be penalized or interest of insured derived from the policy cannot be jeopardized or denied.
13. Similarly the insurance company also may take months or years to effect the change in the insurance certificate after receiving application for transfer of vehicle. The common experience is that the work culture of these public authorities has degenerated into work house of inefficiency. For such misconduct of public officers , appellant should have taken its officers to task as these officers find out lame excuses and false ground to reject the rightful claim of the insured without realizing that the contract of insurance is a beneficiary contract and is for the benefit of the consumer and, therefore, has to be provided the beneficial meaning and interpretation.
It is for such acts of the public officers the Supreme Court has come down heavily in Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65, and has held that:
The Consumer Protection Act, 1986 has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities. Such authorities become liable to compensate for misfeasance in public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. The Commission / Forum must determine that such sufferance is due to mala fide or capricious or oppressive act. It can then determine the amount for which the authority is liable to compensate the consumer for this sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of the law. It acts as a check on arbitrary and capricious exercise of power. It helps in curing social evil. It will hopeful result in improving the work culture and in changing the outlook of the officers / public servant. No authority can arrogate to itself the power to act in a manner which is arbitrary. Matters which require immediate attention should not be allowed to linger on. The consumer must not be made to run from pillar to post. Where there has been capricious or arbitrary or negligent exercise or non-exercise of power by an officer of the authority, the Commission / Forum has a statutory obligation to award compensation. If the Commission / Forum is satisfied that a complainant is entitled to compensation for loss or injury or for harassment or mental agony or oppression, then after recording a finding it must direct the authority to pay compensation and also direct recovery from those found responsible for such unpardonable behaviour.
15. Further in the above referred case, the Supreme Court has observed that while awarding compensation the Consumer Forums and Commissions should keep in mind all the elements of sufferings the consumer suffered at the hands of the service provider, namely, mental agony, harassment , emotional suffering, physical discomfort, insult, humiliation and other suffering and injustice done to him. Again these observations are quote worthy and 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.
16. Foregoing reasons, persuade us to dismiss the appeal being devoid of merit with the observations that the District Form has not awarded adequate compensation to the respondent as the repudiation by the appellant was unjustified and illegal.
17. Impugned order shall be complied within one month after receipt of this order.
18.
F.D.R./ Bank Guarantee, if any, furnished by the appellant be returned forthwith after completion of due formalities.
19. A copy of this order as per statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to the record room.
Announced on the 17th March, 2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member rk