ORDER
PER SH. RAKESH KAPOOR, PRESIDENT
The complainant is the registered owner of a vehicle bearing registration no. DL 7SAP 2522 make Hero Honda Splendor. He had obtained a policy of insurance in respect of the aforesaid vehicle from the OP1 for the period 9.9.2010 to 8.9.2011. The vehicle was registered one in the name of the Arif from whom the same was purchased from the complainant on 19.12.2010. On 6.9.2011 the vehicle had been stolen from the possession of the complainant and an FIR in respect of the theft was lodged with the concerned police station on 12.9.2011 . The police could not trace out the vehicle and had filed an untraced report. The claim lodged by the complainant for the loss was repudiated by OP1 The complainant has claimed that the repudiation of the claim is unjustified and unwarranted. Hence the complaint.
OP1has contested the complaint and has filed a written statement. It has denied any deficiency in service and has claimed that the complaint is liable to be dismissed as there is no privity of contract between it and the complainant. Paras 3 and 4 of the preliminary objections to the written statement are relevant and is reproduced as under:
3.That the present complaint of the complainant is not maintainable and is liable to be dismissed because there is no insurance contract between the complainant and answering OP and there is no deficiency in service on the part of the answering OP in repudiating the claim of the complainant. It is submitted that the present complaint has been filed by the complainant by concealment/ suppression of material facts.and documents. It is worthy to mention here that One Mr. Arif the vehicle no. DL -7SAP-2522 insured with the answering OP by alleging himself to be the owner of the said vehicle and Mr. Arif had sold the said vehicle in question to the complainant before the material time of thefot of the vehicle in question, the insurance policy is still in thee his hame but the Registration Certificate has been transferred in the name of Mr. Gajender, complainant. Hence, the complainant does not have any insurable interest in it. Further, it is submitted here tha as per section 157 (2) of Motor Vehicles Act 1988, The transferee shall apply within fourteen days from the date of transfer in prescribed form to the insurer for making necessary changes in regard to the fact 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 but the complainant has failed to do so and violated the provision of Section 157 of Motor Vehicles Act, 1988. Therefore, the complainant does not come in the ambit of consumer and there is no insurance contract between the complainant and answering OP.
4. The loss surveyor Dheeraj Sood, license no. SLA-41033, presented his report on 11 Oct 2011 , which confirmed that “after going through the documents it is concluded that the regd owner has lost his vehicle but he loses the insurable interest as the vehicle was sold to Mr. Gajinder but the insurance policy is still in the name of the previous owner.” Hence, the theft claim was duly repudiated by the answering OP vide repudiation letter dated 30.12.2011 , on valid and legal grounds. The copy of letter dated 8.12.2011, subsequent reminder dated 21.12.2011 for providing explanantion and repudiation letter dated 30.12.2011 are enclosed herewith as Annexure R1, R2 and R3 respectively.
OP1 has contested the complaint on merits and has reiterated that the claim was not payable and had been rightly repudiated. It has prayed that the complaint be dismissed.
A separate written statement has also been filed by OP2 who has claimed that the complaint is not maintainable against it and is liable to be dismissed.
We have heard arguments advanced at the bar and have perused the record.
It is admitted by the complainant that the vehicle in question was earlier owned by one Mr. Arif. The complainant has admitted that he had purchased the vehicle in question from Mr. Arif on 19.12.2010. The policy of insurance issued by OP1 for the period 9.9.2010 to 8.9.2011 wasin favour Mohd. Arif and even though the complainant had got the registration transferred in his name the policy of insurance was not transferred in his name. OP1 has, therefore,contended that since the insurance policy continued to be in the name of Mr. Arif , there was no privity of contract between the complainant and as a result of this the present complaint is not maintainable nor is the claim payable to the complainant. We are in agreement with the defence of OP1. We refer to GR 17 of the Indian Motor Tariff which prescribes that a transferee was bound to intimate the insurance company about the transfer of the vehicle in his name within 14 days of transfer and to obtain a fresh policy in his name. There is no automatic transfer of the policy in the favour of the transferee. We may in this regard referred to the following judgments of the National Commission:
- New India Assurance Co. Ltd V/s Shaik Dawood , II (2013) CPJ 401 (NC)
- Madan Singh V/s United India Insurance Co. Ltd , 2009 STPL (CL) 1042 (NC)
We have gone through the judgments cited above. It would be of benefit to quote para 12 of the judgment of Madan Singh (Supra) which reads as under:
“12. In the case of M/s complete Insulation (P) Ltd . Supra, the Hon’ble Supreme Court had considered the scope of section 103 A and Sections 94 & 95 of the Motor Vehicles Act, 1939 and compared the same with Sections 157, 146,147 and 156 of the Motor Vehicles Act . In that case, the transferee had claimed compensation for the damage caused to the vehicle in an accident, which took place after transfer notwithstanding the fact that the insurance policy was not transferred in his name. The apex court held that it is only in respect of the third party risks that Section 157 of the Motor Vehicles Act, 1998 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 vehicle is transferred” and as such, the fiction of section 157 of the Act must be limited thereto. The liability extends to damage any property of a third party and not damage to the property of the owner of the vehicle i.e. the insured. It was further held that 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 failing 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 of damage to the vehicle. In the said case, since there was no such agreement and the insurer had transferred the policy of insurance in relation thereto the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken in this case has been affirmed by the Apex Court in the case of G. Govidam (supra).
It will also be of benefit to quote para 6,7 and 8 of the judgment of Shaik Dawood (supra) which reads as under:-
“6.We have heard the Ld. Counsel for the parties at length.The facts are not in dispute before us. Respondent purchased a second-hand Maruti Zen car bearing No. TN-2H-4230 from one, T. Sundhakar Reddy. The vehicle was insured with the Petitioner Insurance Company under policy bearing No. 612701/31/03/01454 for the period from 16.09.03 to 15.09.04. Respondent got the vehicle transferred in his name on 18.02.04. On 3.06.04, the vehicle met with an accident and was badly damaged. Respondent neither got the policy transferred in his name nor informed the Petitioner about transfer of the ownership of the vehicle. Under GR-10 issued by the Tariff Advisory Committee applicable for the period from 1.4.90 to 30.06.02, on transfer of a vehicle the benefits under the policy in force on the date of transfer automatically accrued to the new owner. GR-10 reads as under
“10. Transfers
On transfer of a vehicle the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. If the transferee is not entitled to the benefit of the bonus or subjected to malus already shown on the policy, the recovery of the differences between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy. However, on expiry and/or termination of the existing Policy the transferee will be eligible for Bonus or subjected tomalus as per his own entitlement”
7. GR-10 was replaced by GR 17 under which the transferee has to apply for transfer of insurance policy in his name within 14 days of the transfer of the registration certificate in his name. Under GR 17, in the case of third party’s interest, the transfer is considered to be automatically.
However, in the case of own damage, the transferee has to apply for transfer of insurance policy in his name. GR 17 came into force w.e.f. 1.7.02 and the same reads as under:
“On transfer of ownership, the Liability Only cover, either under a Liability Only Policy or under a Package Policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer.
The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy so that the insurer may make the necessary changes in his record and issue fresh Certificate of Insurance.”
8.Since the vehicle purchased by the respondent was got transferred in his name on 18.03.04 after coming into force of GR-17, the provisions of GR 17 would be applicable in the present case. As per GR 17, on transfer of ownership, transferee is required to apply within 14 days from the date of transfer in writing under recorded delivery to the insurer who had insured the vehicle, with the details of registration of vehicle, date of transfer of the vehicle, previous owner of the vehicle and the date and number of the policy so that the insurer may make necessary changes in the record and issue fresh Certificate of Insurance. Unless the aforesaid procedure of transfer of vehicle is followed and complied, the transferee has no insurable interest. It would be seen that on receipt of the information from the transferee the Insurance Company is required to make changes in its record and issue a fresh Certificate of Insurance. In the present case, admittedly as pointed out earlier the transferee, i.e., respondent did not intimate the Petitioner Insurance Company about the transfer of ownership of the vehicle within 14 days of the registration in his name to enable the petitioner to make necessary changes in its record and issue a fresh Certificate of Insurance. The transferee did not get any novation of contract of insurance in respect of the person or property and therefore, respondent did not have any insurable interest on the date on which the vehicle met with an accident.”
Coming to the facts of the case in hand, it is not disputed that the complainant did not inform about the transfer of the vehicle in question within 14 days of the transfer and also did not get the policy of insurance transferred in his name. The complainant, therefore, had no insurable interest in the vehicle in question. We are, therefore, inclined to hold that in view of the judgment quoted by us above, the OP was justified in repudiating the claim lodged by the complainant. Consequently, we hold that the complaint has no merits , the same is hereby dismissed.
File be consigned to record room.
Announced in open sitting of the Forum on.....................
