National Consumer Disputes Redressal
National Insurance Company Ltd. vs Charanjit Singh Sandhu on 13 January, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.3158 OF 2008 (From the order dated 21.04.2008 in F.A. No.1439/2007 of the Punjab State Consumer Disputes Redressal Commission, Chandigarh) NATIONAL INSURANCE COMPANY LTD. REGIONAL OFFICE NO.1 JEEVAN BHARTI 124 CONNAUGHT CIRCUS NEW DELHI AND ALSO DIVISIONAL OFFICE PHAGWARA ROAD, HOSHIARPUR (PUNJAB)-146001 ... PETITIONER Versus 1. CHARANJIT SINGH SANDHU (NOW DECEASED) THROUGH HIS LRS (i) Navpreet Singh Sandhu (son) (ii) Gurbinder Pal Kaur (daughter) (iii) Harmanjit Kaur (daughter) ALL R/O WARD NO.8, H.NO. 632, KEHARWALI, DASUYA, DISTT. HOSHIARPUR, PUNJAB. 2. KULJIT SINGH S/O SH. KULWANT SINGH H.NO. 150, MAJITHA ROAD TEHSIL BATALA DISTT. GURDASPUR (PUNJAB). RESPONDENTS BEFORE: HON'BLE MR.JUSTICE V.B. GUPTA, PRESIDING MEMBER HONBLE MR.SURESH CHANDRA, MEMBER For the Petitioner : Mr. Pradeep Gaur, Advocate For the Respondents : Dr. Chander Shekhar Marwaha, Advocate PRONOUNCED ON: 13th January, 2015 ORDER
PER SURESH CHANDRA Kuljit Singh, respondent No.2 was the owner of the vehicle bearing Registration No. HR-55-7421 and got it insured with the insurance company for the period 24.08.2005 to 06.02.2006. Respondent No.1 Charanjit Singh Sandhu (now deceased and represented by his LRs) purchased the said vehicle from the respondent no.2 in the first week of November, 2005.
Respondent No.1 parked the said vehicle in front of his residential house at about 10 PM but in the morning of 13.11.2005 the said vehicle was found to have been stolen. FIR was registered with the police but subsequently the case was filed as Untraced. Respondent No.1 lodged the claim with the petitioner insurance company but the same was repudiated vide letter dated 09.01.2007 on the ground that the vehicle was purchased by respondent no.1 in November, 2005 but policy was not transferred in his name. Respondent no.2 made a request to the petitioner insurance company to pay the claim to either of the respondents as the vehicle at the time of theft was under insurance cover. The petitioner insurance company refused to agree to the request and hence, both the respondents jointly filed the complaint before the District Forum, Hoshiarpur. On notice, the petitioner insurance company filed its reply in which preliminary objections were taken and insurance company also contested the case on merits. It was pleaded that the petitioner insurance company was never informed by the respondents-complainants regarding the sale of the vehicle and as such the insurance policy was not transferred in the name of the respondent no.1-complainant no.1. Respondent No.1 failed to provide any document with regard to the sale of the vehicle in his favour and hence he was not admitted to be a consumer of the petitioner-OP insurance company. It was submitted that the parties were bound by the terms and conditions of the insurance policy and since the insurance policy has not been transferred in the name of the respondent no.1, he had no insurable interest and as such the claim was rightly repudiated by the OP-insurance company.
Denying any deficiency in service on its part, the insurance company prayed for dismissal of the complaint.
2. Evidence was led by the respective parties in support of their respective contentions. The District Forum after considering the matter, accepted the complaint with cost of ₹1,000/- vide its order dated 03.10.2007 and directed the petitioner-OP insurance company to pay the amount of ₹6 Lakhs being the insured value with interest @ 9% per annum from the date of filing the complaint, i.e., 11.04.2007 till realization.
3. Aggrieved of the order of the District Forum, the petitioner insurance company filed an appeal bearing No.1439 of 2007 before the State Consumer Disputes Redressal Commission, Chandigarh, Punjab which dismissed the same vide its order dated 21.04.2008 and upheld the order of the District Forum.
Aggrieved of this order of the State Commission, the petitioner insurance company has now filed the present revision petition challenging the same.
4. We have perused the record and heard Mr. Pradeep Gaur, Advocate for the petitioner and Dr. Chander Shekhar Marwaha, Advocate for the respondents.
5. In the given facts and circumstances of the case, we condone the delay of 8 days in filing of this revision petition.
6. Coming to the merits, learned counsel for petitioner has contended that the impugned order of the State Commission is perverse and reflects non-appreciation of the facts and law applicable. He submitted that respondent No.1 had purchased the insured vehicle from the respondent no.2 prior to the alleged theft.
In view of this, when he lodged the claim, he was neither insured nor he had made any request to the petitioner insurance company for transfer of the insurance policy from the name of the insured to his own name. He further submitted that there was no dispute that there was no contract between respondent no.1 and the petitioner insurance company. In these circumstances, the repudiation made by the petitioner while rejecting the claim of respondent no.1 was just and sustainable in the eye of law and as such, the finding of both the District Forum and the State Commission are liable to be set aside. He further submitted that the respondent no.2, who was the registered owner and insured by the petitioner company, had also sold the vehicle. Keeping this in view, learned counsel contended that respondent no.2 cannot be treated as a consumer because neither the claim was lodged nor intimation was made to the insurance company by him regarding claiming the insured amount and in this view of the matter also, the finding of the State Commission is liable to be rejected.
Another aspect which goes to support the case of the petitioner according to the counsel is that the FIR was lodged by the respondent no.1. But since neither respondent no.1 nor respondent no.2 had made any request to transfer the insurance policy from the respondent no.2 to the name of respondent no.1, respondent no.1 did not acquire any insurable interest in his favour so far as the petitioner insurance company is concerned and hence, the repudiation made by the petitioner company was just and reasonable. Finally, it was contended by learned counsel that the State Commission wrongly applied the ratio of the judgment passed by the National Commission in the case of M/s Banowarilal Agrawalla Vs. National Insurance Co. Ltd. [(2005 (2) CPR 130 (NC)]. In this context, learned counsel pointed out that the State Commission ignored the judgment of the Apex Court in the case of Complete Insulations Pvt. Ltd. Vs. New India Assurance Co. Ltd. (1996 ACJ 65) filed on record by the petitioner insurance company before the State Commission in which the Apex Court has discussed the insurable interest and provision of Section 157 of the M.V. Act in detail.
Learned counsel submitted that in the said judgment the Apex Court held in para 10 that it is only in respect of third party risk that Section 157 of the New Act provides that the certificate of the insurance together with the policy of the insurance described therein shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred. If the policy of the insurance covers other risks as well such as 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 the 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. Learned counsel contended that in the present claim since there was no such agreement and since the insurer had not transferred the policy of the insurance relation thereto to the transferee, the insurer was not liable to make payment regarding damage/loss of the vehicle due to any reason. Lastly, the counsel for petitioner argued that the repudiation in the present claim was fully justified keeping in view serious breach of an important condition of the policy regarding immediate intimation about the incident of theft to the police as well as to the petitioner insurance company.
He stated that the theft in question reportedly took place on 12/13.11.2005 but the FIR was lodged on 22.01.2006 i.e. after more than two months of the incident. Not only this, the petitioner insurance company was intimated about the incident in February, 2006. Both these details were in gross violation of condition No.1 of the insurance policy and this being the case of theft, the delay was disastrous to the interests of the insurance company and as such as per the settled law, would amount to fundamental breach of the contract which goes to the very root thereof thereby vitiating the contract.
He submitted that both the fora below ignored this important aspect of this case while returning their finding.
In view of these facts, learned counsel submitted that the impugned order cannot be sustained in the eye of law and is liable to be set aside.
7. On the other hand, learned counsel for the respondents supported the impugned order and submitted that both the fora have returned their concurrent finding of fact in favour of the respondents and as such, the same could not be interfered with under the limited jurisdiction available to this Commission under Section 21 (b) of the Consumer Protection Act, 1986 while deciding this revision petition. Regarding the conditions contained in the insurance policy, learned counsel submitted that no policy document had been provided to respondent no.1 and as such, he could not be aware of the conditions of the policy. He therefore submitted that there is no substance in the revision petition and the same deserves to be dismissed.
8. We have given our anxious thought to the contentions raised by the parties before us. The legal issue involved in the revision petition is as to whether the insurance company could have allowed the claim of respondent no.1 who is the transferee of the vehicle but had not got the insurance transferred in his name within the prescribed period in accordance with the conditions of the insurance contract and provision of law in respect of his own loss. In this context, we find that both the fora below while returning their finding in favour of the respondents have basically relied on the judgment of this Commission in the case of M/s Banowarilal Agrawalla (Supra). We have gone through this judgment and also two other judgments relied upon by the learned counsel for the petitioner in the cases of Complete Insulations Pvt. Ltd. (Supra) and National Insurance Co. Ltd. Vs. Shri Ram Gopal Sharma (R.P. No.1586 2007) of the National Commission delivered on 12.07.2011. The legal issue involved in this case is no longer res-integra. While dealing with this question and interpreting the provision of Section 157 of the M.V. Act, the Apex Court in the case of Complete Insulations Pvt. Ltd. (Supra) had held:-
Thus, the requirements of that Chapter are in relation to third party risks only and hence the fiction of Section 157 of the new Act must be limited thereto. The certificate of insurance to be issued in the prescribed form [See Form 51 prescribed under rule 141 of the Central Motor Vehicles Rules, 1989] must, therefore, relate to third party risks. Since the provisions under the new Act and the old Act in this behalf are substantially the same in relation to liability in regard to third parties, the National Consumer Disputes Redressal Commission was right in the view it took based on the decision in Kondaiahs case, because the transferee-insured could not be said to be a third party qua the vehicle in question. It is only in respect of third party risks that Section 157 of the new Act provides that the certificate of insurance together with the policy of the insurance described therein shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred. If the policy of the insurance covers other risks as well as, i.e., 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 the contract for which there must be an agreement between the insurer and transferee, the former undertaking to cover the risk of 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 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.
9. We are of the considered view that the judgment of this Commission in the case of Banowarilal Agrawalla (Supra) is not applicable to the facts and circumstances of this case keeping in view the position of law as settled by the Apex Court in the case of Complete Insulations Pvt. Ltd.
(Supra). The impugned order passed by the State Commission therefore cannot be sustained in the eye of law because it is not based on correct appreciation of the legal position which is applicable to the present case. Besides this, it cannot be disputed that there was huge delay in filing the FIR as well as intimating the petitioner company about the loss of the insured vehicle. As per the settled law, this would constitute the fundamental breach of condition of the insurance policy and on this ground also the insurance company would be justified in repudiating the claim.
10. In view of the above discussion, we allow this revision petition, set aside the impugned orders of the State Commission and the District Forum and dismiss the complaint filed by the respondents. There shall be no order as to costs.
Sd/-..
(V.B. GUPTA, J.) PRESIDING MEMBER .Sd/-.
(SURESH CHANDRA) bs MEMBER