BEFORE THE PRESIDENT, DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SAMBALPUR

C.C NO-45/2018

Present-Sri Dipak Kumar Mahapatra, President, Smt. Smita Tripathy,Member (W).

Nawab Alam,aged about 32 years,                                                   

S/O- Md. Sabir,

R/O-Near Noor Masjid, Mtijharan,

Sambalpur,P.s-Kherajpur,Dist-Sambalpur.                                                             …Complainant

Vrs.

1. The Authorised Signatory,

Oriental Insurance Co. Ltd.,

Division Office, Nayapara, Sambalpur,

2. Binod Agrawal,

S/O-Satyanarayan Agrawal,

At/Po/PS-Bolangir, Dist- Sambalpur

Counsels:-      For the Complainant-              Sr. B.Sathua, Advocate & Associates,

For the O.P-1                         Sri. G.C.Panda,Advocate.

For the O.P-2                         None

DATE OF HEARING: 31.03.2020, DATE OF ORDER: 13.04.2021

Sri Dipak Kumar Mahapatra, President-Brief facts of the case is that the Complainant purchased a Maruti Swift Dezire VDI OR-02-BL-9031 from Binod Agrawal S/O- Satyanarayan Agrawal who is the O.P-2 in this case. The Car was having with an Insurance policy in the name of the O.P-2 which was valid from dtd. 17.03.2018  to 16.03. 2019. The Complainant has transferred the ownership in to his name afterwards from the concerned Registering Authority (RTO Bhubaneswar). On dtd.21.08.2018 the said Car met with an accident at Masnakani  Toll gate  in the district of Sundargarh.  The Complainant informed the matter to the O.P-2 who lodged a FIR in Bhasma Police Station. The police released the car in favour of the existing owner Md. Nawab Alam, the Complainant. The O.P-2 with the consent of the Complainant lodged a claim with the O.P-1 as the insurance was still lying with the O.P-2.  The Complainant submitted all relevant documents along with claim application and estimate cost of Rs. 67,966/- towards repair of the Car. It is alleged that till filing of this case O.P-1 did not for which the Complainant is suffering from financial and mental pain. Since the Complainant claim was not settled for long time, a complaint was filed praying for directions to the O.P-1 to pay the claim amount of Rs. 67,996/-with interest, Rs.5,000/- for harassment, mental pain etc.

In their reply the Advocate for the O.P-1 averred that he has repudiated the Claim on the ground that as per the Insurance policy Binod Agrawal (O.P-2) is the Insured and the O.P-1 have not made any contract with the Complainant, as the Complainant has no Insurable Interest over the subject matter of Insurance. He added that though the Complainant has purchased the Car from the O.P-2, he has transferred the ownership of the car in his name but did not apply to change the Insurance in his name.

Here he clarified that neither the Complainant nor the Previous owner/Insured has the Insurable Interest and they have not complied the above section hence the O.P-1 is not liable to indemnify the damaged Car. Again he added that the Complainant has no privity of contract with the O.P-1/the Insurer of the Car. The O.P-2 being the is the previous owner of the car, made as a party to the proceeding who has filed a no objection to the O.P-1 contending that he has a no objection if the claim amount is paid to the Complainant, which is of no help as he has already sold the Car to the Complainant and has no Insurable interest on the date of accident though the policy was existed in his name. Hence the Advocate for the O.P-1 prayed to dismiss the case with cost.

The O.P-2, despite of service of notice he did not bother to appear before this Commission thus challenging the allegations made by the Complainant. So taking it in to consideration as “IT IS A YEAR OLD CASE”, this Commission has rightly decided to dispose the case as well setting the O.P-2 as ex-parte in this case. Hence hearing conducted exparte under Rule-6 of Order-9 of Civil Procedure Code.

POINTS OF DETERMINATION:-

1. Whether the Complainant is comes under the purview of Consumer Protection Act.-2019?
2. Whether the Insurance Company is liable to pay the damage claim?
3. Whether the O.Ps has committed any Deficiency in Service and unfair trade practice to the Complainant?

From the above discussion and material available on records we inferred that the Complainant comes under the purview of consumer of the O.Ps as he has purchased the Car from the O.P-2 who got the Car Insured from the O.P-1 on payment of premium. Section-157 of the Motor Vehicle Act which provides for deemed transfer of the certificate of Insurance reads as under:-

Transfer of Certificate of Insurance – (1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this chapter transfers to another person the ownership of the motor vehicle in respect of which such 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 with effect from the date of its transfer.”

As per the view taken by the Apex Court, the matter of “Insulations Pvt. Ltd vs. New India assurance Co. ltd.”  (1996)1SCC 221, the above referred Section comes under Chapter-XI of Motor Vehicle Act-1988 which provides for compulsory insurance of vehicles to cover third party risks. In the case of property, the coverage extends to property of a third party i.e. a person other than the insured. This is clear from Section 147 (1)(b)(i) which clearly refers to “damage to any property of a third party” and not damage to the property of the ‘insured’ himself. 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 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 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 the 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. 

Since the insurance policy is nothing but a contract between the insurer and the insured, the insurance company, in a case of theft or damage to the vehicle, which does not involve a third party right, would be liable to pay only to the insured and not to the transferee of the vehicle in a case where the transferor did have an insurable interest in the vehicle at the time the loss took place. If, however, the insured did not have such an interest in the vehicle at the time the loss occurred, he would not be entitled to any payment from the insurance company. But, if the insured had an insurable interest in the vehicle, at the time the policy is taken as well as at the time the vehicle gets stolen or damaged, he would be entitled to have a claim against the insurance company.” The above matter is well explained in the case of “United India Insurance vs. Dada Miyan” decided on dtd. 01.09.2014 by National Consumer Disputes Redressal Commission, New Delhi)

In the case before us, though in view of the mandate of Section-157 (2) of the Motor Vehicle Act, the complainant was required to apply to the insurance company within 14 days of transfer of ownership of the vehicle, for transfer of the certificate of insurance in his name, admittedly, no such application was made within the aforesaid period. Consequently, there was no policy of insurance in respect of the aforesaid vehicle in the name of the Complainant, on the date the vehicle was damaged.  It is needless to state that unless the Insurance Company is informed by the purchaser of the vehicle or its seller, the Insurer cannot be expected to come to know of the alienation of the vehicle. It is only after the Insurer is informed of the transfer of the vehicle, if anything is not done by the insurer in the matter of effecting a transfer of the policy, then only the Insurance Company can be accused of. As a matter of fact, it is only the purchaser who is in law duty bound to inform the Insurance Company about his purchase of the vehicle and demand a transfer of the insurance policy in his name, and the said application has to be sent within a reasonable time.  In the instant case, it is seen that at no time was any application made by the purchaser of the vehicle or the seller informing the Insurer of the alienation of the Car  in favour of the Complainant. The Insurance Company was kept in the dark about the transfer of the vehicle that took place between the Complainant and the O.P-2. In the case of “Jaswinder Singh Vrs. New India AssuranceCo. Ltd. And Anrs. ”, Hon’ble National Consumer Disputes Redressal Commission on dtd. 15the April 2015 has rightly explained the matter about the responsibilities/liabilities of the Purchaser/transferee. Further Hon’ble National Commission in case of “Om Prakash Sharma vrs. National Insurance Company Ltd. & Ors.” 2009CTJ313 (CP)(NCDRC) upheld the repudiation of the claim by the Insurance Company as the Complainant/Transferee did not get the policy in his name. Therefore, we hold that the Insurance company is not liable to pay any compensation in this case.

The date of accident is 21.04.2018. Admittedly on that date the Complainant was not Insured. Thus there was no privity of contract between the Complainant and the Insurance Company  on the date of accident. More ever the Complainant did not comply with the provisions f Motor Vehicle Act-1988 within the specified time. Again the no objection filed by the O.P-2 in the matter of payment of damage claim to the Complainant is of no meaning as the O.P-2 has no Insurable Interest on the date of accident.

Hence the Insurance Company was fully justified in repudiating the damage claim of the Complainant. The Complainant petition is disallowed and disposed of being devoid of any merit.

Order pronounced in the open court today i.e, on 13^th day of April 2021 under my hand and seal of this Commission.

Office is directed to supply copies of the Order to the parties free of costs receiving acknowledgement of the delivery thereof.

I agree,                                             

            -Sd/-                                                                                                                 -Sd/-

MEMBER(W)                                                                                                PRESIDENT

                                                            Dictated and Corrected

                                                                             by me.              

                                                                           -Sd/-

PRESIDENT