DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB : PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Sri.V. BALAKRISHNAN, M Tech, MBA, LL.B, FIE: MEMBER
Thursday, the 12th day of September 2024
CC. 84/2021
Complainant
Sathian, S/o Nanu Nair,
Korattachammal House,
Raroth, Thamarassery Post,
Kozhikode.
Opposite Party
Administrative Officer,
National Insurance Company,
Natmar Hub, Kozhikode D.O-I,
Parco Towers, PM Taj Road,
Kozhikode.
(By Adv. Sri. Sadasivan.P)
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By Sri. P.C. PAULACHEN – PRESIDENT
This is a complaint filed under Section 35 of the Consumer Protection Act, 2019.
- The case of the complainant, in brief, is as follows:
The complainant is the owner in possession of Maruti Wagon R Car bearing registration No. KL-10-AE-4364. He purchased the vehicle from the previous owner Sri. Anil Kumar. The vehicle was duly insured with the opposite party. The transfer of ownership was effected in the registration certificate on 05/11/2020 and this was duly intimated to the opposite party on 15/11/2020.
- On 23/03/2020 the vehicle met with an accident causing damaged to the vehicle. The vehicle was entrusted for repairs to Indus Motors, Thamarassery, along with insurance claim application. The repair charges amounted to Rs. 65,023/-. But the claim preferred was not honoured by the opposite party.
- On 02/02/2021 the complainant issued a lawyer notice to the opposite party, for which, they sent a reply raising untenable contentions. The claim was repudiated stating the reason that the change of ownership in favour of the complainant was not intimated to the insurance company. There is no valid reason for repudiating the claim. The act of the opposite party amounts to deficiency of service. Hence the complaint to direct the opposite party to pay an amount of Rs. 65,023/- as own damage claim and Rs. 10,000/- as compensation.
- The opposite party has resisted the complaint by filing written version wherein all the allegations and claims made against them in the complaint are denied. It is admitted that the vehicle was insured with the opposite party during the period from 05/03/2020 to 04/03/2021 in the name of Sri. Anil Kumar. K. The complainant is the RC owner of the vehicle with effect from 05/11/2020. The allegation that the transfer of ownership was informed to the opposite party is false and hence denied.
- It is true that the vehicle was involved in an accident on 23/12/2020. An insurance claim was received through Indus Motors, Thamarassery and the complainant had signed the claim form. On receipt of the claim the opposite party had sent a registered notice to the complainant on 06/01/2021 asking to produce the copy of valid name transfer endorsement in policy in his name. But since he failed to produce the same, the claim was repudiated and intimated to the complainant. Though the complainant was the registered owner of the vehicle at the time of accident, he was not the insured to whom the policy was issued. Neither the insured owner nor the transferee had intimated the transfer of ownership of the vehicle to the opposite party within 14 days from the date of transfer. The compliant with whom the opposite party is not having any contract of insurance cannot legally sustain a claim of indemnity for the loss suffered by him. The lawyer notice was duly replied. The claim was rightly repudiated by the opposite party. With the above contentions, the opposite party prays for dismissal of the complaint.
- The points that arise for determination in this complaint are; 1) Whether there was any unfair trade and business practice or deficiency of service on the part of the opposite party, as alleged?
2) Reliefs and costs.
- Evidence consists of the oral evidence of PW1 and Exts A1to A7 on the side of the complainant. No oral evidence was let in by the opposite party. Exts B1 to B6 were marked.
- Heard both sides.
- Point No 1: The complainant has approached this Commission with a grievance that the claim put in by him in connection with the damage caused to the vehicle in an accident was repudiated by the opposite party without valid reason and thereby there was unfair trade and business practice and deficiency of service on the part of the opposite party.
- In order to substantiate his case, the complainant got himself examined as PW1, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. Ext A1 is the copy of the certificate of registration, Ext A2 is the copy of the certificate cum policy schedule, Ext A3 is the letter dated 14/01/2021 issued by the opposite party, Ext A4 is the copy of the estimation details, Ext A5 is the copy of the lawyer notice dated 02/02/2021, Ext A6 is the postal acknowledgement card and Ext A7 is the reply notice dated 05/02/2021.
- As we have already stated, that the opposite party did not adduce any oral evidence. The documents produced along with the version were marked Exts B1 to B6. Ext B1 is the copy of the policy with conditions, Ext B2 is the motor insurance claim form, Ext B3 is the copy of the notice dated 06/01/2020 issued by the opposite party, Ext B4 is the copy of the notice dated 14/01/2021 issued by the opposite party, Ext B5 is the lawyer notice by the opposite party and Ext B6 is the copy of the reply notice dated 05/02/2021 issued by the opposite party.
- The complainant is the registered owner of KL-10-AE-4364 Maruthi Wagon R Car as can be seen from Ext A1. He purchased the vehicle from one Sri. Anil Kumar. K. The ownership was transferred in his name in the registration certificate with effect from 05/11/2020. The vehicle was insured with the opposite party for the period from 05/03/2020 to 04/03/2021 by the previous owner Sri. Anil Kumar. K as evidenced by Ext A2. There is absolutely nothing in evidence to show that neither the insured nor the complainant had intimated the fact of transfer of ownership of the vehicle to the insurance company within 14 days from the date of transfer as mandated in Sec. 157(2) of the Motor Vehicles Act. The vehicle met with an accident on 23/12/2020 and damage was caused to the vehicle. The estimate for repairs was Rs. 65,023/- as can be seen from Ext A4. Ext B2 claim was preferred by the complainant before the opposite party. The claim was repudiated by the opposite party as per Ext A3 letter dated 14/01/2021.
- Ext.A3 shows that the claim was repudiated for the reason that the insurance was not transferred to the name of the complainant within14 days from the transfer of ownership of the vehicle and as such there was no privity of contract between the complainant and the opposite party. Admittedly, the complainant, who is the subsequent purchaser of the vehicle, did not get the insurance policy transferred in his name within the prescribed time.
- The crucial point to be considered in this case is as to whether the insurance company was justified in repudiating the claim on the above ground. In this context, it is worthwhile to have a glance at section 157 of the Motor Vehicles Act, 1988 which reads as follows;
“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 in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.
Explanation – For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of right and liabilities of the said certificate of insurance and policy of insurance.
(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the act of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance”.
- Going by section 157 of the Motor Vehicles Act, we are of the view that the insurance company is not under obligation to indemnify the subsequent purchaser for the damage caused to the vehicle unless the subsequent purchaser has got the insurance policy transferred in his name. The above position is supported by the decision of the Honourable Apex Court in Complete Insulation Private Ltd. Vs. New India Assurance Company Ltd. reported in (1996) (1) SCC 221 wherein it has been held;
“Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157of 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 Kondaihs 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 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 X1 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. The view taken by the National Commission is therefore correct.”
- Similar view was taken by the Honourable Supreme Court in Rikhi Ram & Anr. Vs. Sukhrania & Ors. (2003) 3 SCC 97 wherein it was observed:
“On an analysis of Section 94 and 95, we further find that there are two third parties when a vehicle is transferred by the owner to a purchaser. The purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer.”
- In the instant case, the complainant / transferee did not intimate the transfer of ownership of the vehicle in his name and get the insurance policy transferred in his name. That being so, there is no privity of contract between the complainant and the opposite party in respect of ‘own damage’ section of the policy. In the light of the dictum of the Honourable Supreme Court referred to above, the insurance company is not under any obligation to indemnify the purchaser for the damage caused to the vehicle since the complainant has not transferred the insurance policy in his name. Therefore, the insurance company was justified in repudiating the claim for the reasons stated in Ext.A3. The repudiation of the claim was on justifiable, valid and legal grounds and hence it would not amount to deficiency in service or unfair trade practice and consequently the complaint must fail.
- Point No.2: In view of the finding on the above point, the complainant is not entitled to claim and get any relief.
In the result, the complaint is dismissed. However, no order as to costs.
Pronounced in open Commission on this, the 12th day of September, 2024.
Date of Filing: 16/04/2021
Sd/ Sd/- Sd/-
PRESIDENT MEMBER MEMBER
APPENDIX
Exhibits for the Complainant :
Ext A1 is the copy of the certificate of registration.
Ext A2 is the copy of the certificate cum policy schedule.
Ext A3 is the letter dated 14/01/2021 issued by the opposite party.
Ext A4 is the copy of the estimation details.
Ext A5 is the copy of the lawyer notice dated 02/02/2021.
Ext A6 is the postal acknowledgement card.
Ext A7 is the reply notice dated 05/02/2021.
Exhibits for the Opposite Party
Ext B1 - Copy of the policy with conditions.
Ext B2 - Motor insurance claim form.
Ext B3 - Copy of the notice dated 06/01/2020 issued by the opposite party.
Ext B4 - Copy of the notice dated 14/01/2021 issued by the opposite party.
Ext B5 - Lawyer notice by the opposite party.
Ext B6 - Copy of the reply notice dated 05/02/2021 issued by the opposite party. Witnesses for the Complainant
PW1 - Sathian.K (Complainant).
Witnesses for the opposite party
NIL
Sd/ Sd/- Sd/- PRESIDENT MEMBER MEMBER
True Copy,
Sd/-
Assistant Registrar.
