State Consumer Disputes Redressal Commission
The National Insurance Co. vs Smt. Princy Roy, on 4 July, 2012
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA Appeal No. 26/2010 The National Insurance Co. By its Divisional Office at Vasco-Subraya Chambers F.L. Gomes Road Vasco-Goa Appellant/O.P. v/s Smt. Princy Roy, W/o Late Roy Baby H. No. 435, Kalmamol Borim-Ponda-Goa Respondent/Complainant Appellant/O.P. is represented by Adv. Shri E. Afonso. Respondent/Complainant is represented by Adv. Shri. V. Pangam. Coram: Shri Justice N.A. Britto, President Shri Jagdish Prabhudesai, Member Dated:04/07/2012 ORDER
[Per Shri Justice N.A. Britto, President] This appeal is filed by the O.P. in CC. No. 39/2008. It is directed against order dated 28/6/10 of the Lr. District Forum, North Goa at Porvorim, by which the Lr. District Forum has directed the O.P. to pay to the complainant Rs. 2 lacs with simple interest at the rate of 9% from 26/9/07 and Rs. 45,000/- also with interest at the rate of 9% from 26/9/07, till the date of actual payment.
2. Some facts are required to be stated to dispose off the appeal.
3. Complainants husband on 25/5/06 purchased a Maruti Omni Van, bearing No. GA-01-J-1166 from one Mr. M. Shivanandan resident of Bicholim for a sum of Rs. 90,000/-.
Complainants husband paid a sum of Rs. 50,000/- to the said Shri. M. Shivanandan and the latter handed over the possession of the van to the complainants husband, Roy Baby. The complainants husband approached the O.P. and the O.P issued a policy in favour of the complainants husband valid from 6/6/06. This was done after necessary formalities were complied with by the complainants husband. The van was insured for Rs. 96,000/-. The complainants husband also purchased additional cover of Rs. 2 lacs in case of death of owner driver. The complainants husband paid the balance of Rs. 40,000/- to the said Shri. M. Shivanandan on 9/3/07 and the latter issued forms Nos. 29 & 30 to enable the complainants husband to transfer the ownership of the vehicle with the Astt. Director of Transport, Bicholim.
4. The Complainant alleged that soon thereafter the complainants husband visited the office of Asst. Director of Transport with the said form Nos. 29 & 30 but the said forms were not inwarded as the presence of M. Shivanandan was insisted to sign the said forms before the said Asst. Director of Transport and the said M. Shivanandan had proceeded to his native place at Kerala. The said van remained without being transferred in the name of the complainants husband in the records of the Asst. Director of Transport.
5. The complainants husband, Roy Baby on 27/4/07 while returning home in the said van met with an accident. He died on the spot. The van was damaged.
6. The complainant on or about 31/5/07 was provided with a form to lodge her claim which was lodged on 26/06/07. The said policy after it expired on 6/6/07 was transferred and renewed in the name of the complainant from 7/6/07 to 6/6/08.
7. The complainant addressed a letter dated 26/6/07 to the O.P. The complainant brought a job estimate prepared to the tune of Rs. 1,44,833.54/- from M/s. Dhavalikar Automobiles, Ponda, an authorized dealer for the Maruti vehicles. OPs surveyor assessed the damage at Rs. 45000/- The complainant then sent a legal notice on 29/10/07. Complainants claim was repudiated stating that in the registration certificate name of said M. Shivanandan is reflected. The complainant then filed the complaint on or about 24/3/08 claiming a sum of Rs. 2 lacs with interest at 18% from 26/06/07 and Rs. 1,44,833.54/- towards the damage of the vehicle. Besides damages of Rs. 10,000/- and compensation of Rs. 10,000/-, with cost. The Lr. District Forum has allowed the complaint to the extent indicated hereinabove.
The Lr. District Forum in allowing the said complaint, inter alia, held that:
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 vehicleand knowing life, thats when an accident may well occur!
8. The understanding and based on it the reasoning of the Lr. District Forum in passing the impugned order, may not be right but the conclusion is not wrong.
9. We have heard the arguments at length from Shri. E. Afonso, the Lr. Advocate on behalf of the appellant/O.P. and Shri. V. Pangam, the Lr. Advocate on behalf of the Respondent/Complainant.
10. There is no dispute that prior to the death of the complainants husband on 27/04/07, the entire consideration of Rs.
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 Rs. 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 Rs. 40,000/- he had signed forms No. 29 & 30 and that he had no right claim or interest whatsoever to the said vehicle.
11. The O.P. resisted the complaint, inter alia, pleading that the said Roy Baby was not the owner-driver as the vehicle was not transferred in his name and he had no insurable interest and as such he could not be paid the sum of Rs. 2 lacs.
As regards the surveyors report, O.Ps stated that sum of Rs. 45,000/- as assessed by him would be payable in terms of the policy only in case the deceased - Roy Baby was having insurable interest in the vehicle.
12. Shri. E. Afonso, the Lr. Advocate on behalf of the O.P. would submit that the said Roy Baby was not the owner of the vehicle and he obtained the policy by misrepresenting the O.P. that he had purchased the said van. Shri. Afonso would contend that no ownership of the van would have passed on to the said Roy Baby unless his name was changed in the registration certificate.
Lr. Advocate referring to Section 50 of M.V. Act, 1988, submits that the said M. Shivanandan had 15 days to inform the RTO and the said Roy Baby had 30 days, to effect the necessary changes in the registration certificate which they failed to do. Lr. Advocate submits that complainant nor her husband had an insurable interest in the van as their names were not shown in the registration certificate.
13. Shri. V. Pangam, on the other hand, would submit that the said Roy Baby had obtained an NOC from the said Shivanandan and submitted it to the O.P. at the time when the insurance policy was obtained. Lr. Advocate further points out that there is no prohibition in the M.V. Act to say that necessary changes in the registration certificate of the vehicle cannot be carried out after the time limit set out by Section 50 of the M.V. Act and he could have changed the name at any time. Lr. Advocate further points out that subsequently the said van was sold as a scrap, though he has not been able to give the date of such sale. Lr. Advocate refers to the definition of goods in Section 2(i) of the C.P. Act.
14. We do not propose to reproduce Section 50 of the M.V. Act, 1988, in extenso. It 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.
15. 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 not 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.
16. On 25/5/06 the said Mr. Shivanandan had sold to the said Roy Baby the said van for Rs. 90,000/- and had delivered the possession of the same to him after accepting Rs. 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 Rs. 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.
17. The O.P. has not produced either the sale letter or the no objection given to Roy Baby by Shri. M. Shivanandan. In the absence of the same, OP cannot be heard to say that Roy Baby had obtained the policy under misrepresentation. Adverse inference needs to be drawn against the OP. Changing the name on the registration certificate was like carrying out mutation, consequent to completion of sale which took place on 25/5/06. It was merely a procedural formality which could be carried out at any time with or without payment of fine. As a owner in possession he had every insurable interest in the policy and therefore the benefits arising from the policy could not be denied to his widow, after his death.
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 Lr. District Forum. The O.P. ought to remember that they owe their existance 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.
21. The case of Haji Daud Haji Haran Abu, II(1995)CPJ 1(NC) decided by the National, is similar to the case at hand. In this case the vessel was sold but the sale was pending for registration in the records of Government Departments. The insurer had taken the stand that the Complainant Haji Daud had no insurable interest as the vessel continued to be in the name of Shri. Faldu, the seller of the vessel. The National Commission observed:
The possession of the vessel and its custody was with the complainant.
It was the duty of the Insurance Company to have verified the title of the insured at the time of insuring the vessel and issuing the policy of insurance. This was not a matter in the special and exclusive knowledge of the insured only. The proposer of insurance could have been easily asked to produce his title to the vessel which he was getting insured by payment of premium from time to time.
From the facts of the case we have no doubt that the complainant was the de facto owner of the vessel. He had its possession and he had paid the premium by getting insured his vessel. He could not have done this, if he had no insurable interest in the said property
22. Before parting we would like to observe that the C.P. Act was meant to provide less expensive and more expeditious remedy to the consumers. It is now more than 5 years, and the complainant is yet to get her rightful dues. Whatever may be the reasons for the delay, and that is no consolation to a seeker of justice, the Lr. District Forum has taken more than 2 years 3 months to dispose off the complaint. Not that this Commission has taken less. Consumers in this State do not seem to have bright days ahead if insurers reject their just claims for fanciful reasons and the Fora under the C.P. Act take so much time to decide the same, as against 3/5 months contemplated by C.P. Act.
23. The Lr. District Forum did not grant any costs nor compensation for harassment, mental tension, etc., caused in favour of the complainant, though sometimes we see that in some cases excessive costs are being awarded without rhyme or reason by the same members of the Lr. District Forum. The normal rule is that costs should follow the event. For a change interest is awarded at current rate of interest, and that is as it should be. 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.
[Shri. Jagdish Prabhudesai] [Shri. Justice N.A. Britto] MEMBER PRESIDENT