CONSUMER DISPUTES REDRESSAL COMMISSION – X

                           GOVERNMENT OF N.C.T. OF DELHI

                     Udyog Sadan, C – 22 & 23, Institutional Area

                                       (Behind Qutub Hotel)

                                        New Delhi – 110016

  Case No.:102/19

Prayas Rana

S/o Shri Surinder Rana

R/o-3324, Sector-A, Pocket-B,

Vasant Kunj, New Delhi- 110070                                 …..COMPLAINANT

Vs.   

M/s IIFCO Tokio General Insurance Company Ltd.

Office Address at:

Unit No.A & B-4, 3^rd Floor,

TDI Centre, Commercial Plot No.7,

Commercial Centre Jasola,

New Delhi-110025.     

Through its

Managers/ Director                                                          …..RESPONDENTS

          Date of Institution-22.05.2019

          Date of Order-        25.10.2024

  O R D E R

RITU GARODIA-MEMBER

1. The complaint pertains to deficiency in service on part of OP in rejecting the claim of the complainant.

2. The Complainant had purchased one Toyota Innova Car bearing no. HR55U-3682 from one Mr. Osamu Shoji, a resident of Japan, on 18.03.2018 for a consideration price of Rs.9,50,000/-.

3. On 25.03.2018, the vehicle was stolen from ATS Society, Indrapuram, Uttar Pradesh, in a short span of seven days from the date of purchase. The said vehicle was not transferred in the name of the complaint before the theft. Relevant documents such as Form 29 and Form 30 signed and executed by actual owner Mr. Osamu Shoji was handed over to the complainant.

4. The complainant immediately called on 100 number on the same date and also filed written police complaint which was subsequently converted into FIR bearing no. 0775 dated 05.04.2018. Mr. Rajiv was appointed by the OP to prepare a surveyor report. As Mr. Osamu Shoji is a citizen of Japan and had to travel from India to his home country, the surveyor advised the complainant to execute a sale agreement of the abovementioned vehicle and file the claim in his name

5. As per surveyor’s instruction, the complainant submitted all the required documents including the sale agreement, affidavit by Mr. Osamu Shoji confirming sale of Toyota Innova, Model-2014.

6. The police submitted their closure report and Hon’ble CJM Court, Ghaziabad, vide its order dated 16.07.2018 accepted the closure report filed by the police.

7. Thereafter, the complainant contacted OP regarding his claim. His claim was rejected vide letter dated 30.05.2018 on the account of non-disclosure of material facts. Thereafter, several communications were exchanged between the parties regarding the claim. It is imputed by the complainant that he became the absolute owner of the vehicle and all the rights including the insurable rights were vested in him the moment the sale of the vehicle took place.

8. The complainant prays for settlement of the claim of Rs.9,50,000/-, Rs. 5,00,000/- for mental pain and Rs.22,000/- towards litigation costs.

9. OP in its reply states that Mr. Osamu Shoji had obtained a Private Car Package Policy bearing No. TIT/91604237 for a Toyota Innova bearing Registration No. HR 55 U3682 for the period from 22.08.2017 to 21.08.2018 for an IDV of Rs.8,74,914/-. A claim was lodged by the complainant stating that the insured vehicle was stolen on 25.03.2018 at ATS Advantage, Outside Gate No. 1, Indrapuram.

10. A claim has been filed by the complainant Mr. Prayas Rana. The claim of the complainant was promptly processed and an investigator namely ‘Vikaas Kumar & Associates’ were appointed for verifying the facts. The said investigator submitted its report dated 14.05.2018. As per the report, it was found that “The Sale / Purchase of the vehicle was done on 03.04.2018 via affidavit No.45AA177499”.

11. The possession of the vehicle in question was given to the complainant on 18.03.2018 from the then insured, Mr. Osamu Shoji. It is alleged by OP that only part payment of Rs.6,50,000 was made by the complainant on 15.03.2018. An outstanding sum of Rs.3,00,000/- was made /realized on 03.04.2018 i.e., after the subject vehicle was stolen.

12. The present complainant has been filed by the complainant, Mr. Prayas Rana, who has no insurable interest in the policy in question as the said policy pertains to Mr. Osamu Shoji (the then insured) and there is no privity of contract between the OP and the Complainant.

13. It is alleged that the complainant filed the claim under the policy which was neither issued to him nor endorsed. It is alleged that the said conduct amounts to violation of GR-17, wherein the complainant was required to submit the sale agreement proof along with fresh proposal form duly filled and signed.

14. It is further stated by OP that the FIR was lodged on 05.04.2018 i.e. 10 days after the alleged theft. OP further states that the erstwhile policy holder, Mr. Osamu Shoji, had availed the benefit of 35% of NCB amounting to Rs.8,155/- which is required to be paid by the Complainant.

15. OP states that there was non-disclosure of material facts and this resulted in no insurable interest with the Complainant. Therefore, the claim was repudiated vide letter dated 30.05.2018.

16. The complainant in his rejoinder states that in the process of sale of the car, the consideration was transferred in two different instalments to the previous owner, on 15.03.2018 and 16.03.2018.  Thereafter, the possession was received from the previous owner, Mr. Osamu Shoji, on 18.03.2018. The complainant and the previous owner of the vehicle were about to begin the procedure of formal documentation to record the sale, but the unfortunate incident of theft occurred on 25.03.2018 and the same was duly informed to the OP on the said date.

17. The complainant further submits that GR-17 and section 157 of the Motor Vehicles Act, 1988, allows a period of 14 days to record the transfer of ownership with the insurance company. The Rules also allows 30 days to transfer the name in the RC with RTO. The complainant reiterates that the procedure for transfer of ownership had been initiated by submitting the Forms 29 and 30 to RTO.

18. The complainant has also highlighted that OP has contradicted their own statement by demanding that the complaint incurred the cost of NCB of 35% availed by the previous owner.

19. Complainant has filed its evidence by way of affidavit and exhibited the following documents:-

1. Copy of Adhaar Card is exhibited as Ex/CW1/A
2. Copy of RC is exhibited as Ex/CW1/B.
3. Original copy of payment is exhibited as Ex/CW1/C
4. Original copy of Form 29 & 30 are exhibited as Ex/CW1/D.
5. Original copy of police complaint is exhibited as Ex/CW1/E.
6. Copy of FIR is exhibited as Ex/CW1/F.
7. Affidavit is exhibited as Ex/CW1/G.
8. Statement regarding sale is exhibited as Ex/CW1/H.
9. Copy of police final report is exhibited as Ex/CW1/I.
10. Copy of Court order is exhibited as Ex/CW1/J.
11. Copy of letter dated 30.05.2018 is exhibited as Ex/CW1/K.
12. Copy of letter dated 16.08.2018 is exhibited as Ex/CW1/L.
13. Copy of letter dated 18.09.2018 is exhibited as Ex/CW1/M.
14. Document demanded by the surveyor with his signature is exhibited as Ex/CW1/N.
15. Copy of insurance policy is exhibited as Ex/CW1/O.

20.  OP has filed its evidence by way of affidavit and exhibited the following documents:-

1. A copy of the insurance policy is exhibited as Ex/R-1
2. A copy of the Claim Form is exhibited as Ex/R-2
3. A copy of the investigation report is exhibited as Ex/R-3
4. A copy of the affidavit no.45AA177499 is exhibited as Ex/R-4.
5. A copy of the statement of the complainant is exhibited as Ex/R-5.
6. A copy of the Repudiation Letter dated 30.05.2018 is exhibited as Ex/R-6

21.  The Commission has considered the material and documents on record. The policy certificates shows that the vehicle was insured in the name of Mr. Shoji for a period from 22.08.2017 to 21.08.2018. The insured declared value was Rs.8,74,914/- with 35% NCB. The Certificate of Registration confirms that Mr. Shoji was the owner of the said vehicle.

22. A receipt for RTGS/NEFT remittance from State Bank of India dated 15.03.2018 shows that Rs.6,50,000/- has been transferred. OP has not disputed the same. A copy of a cheque for Rs.3,00,000/- dated 16.03.2018 from the complainant to Mr. Shoji has been placed on record. The complainant has filed a letter dated 13.03.2023 from State Bank of India. The relevant portion is as follows:

Details of cheque no.456729 of SB – 20009409298 (Mrs. Pankaj Rana) dated 16.03.2018 AMT- 3.0 Lacs presented to Mr. Osamu Shoji.

The captioned cheque no. 456729 of Rs. 3,00,000/- dated 16.03.2018 has been presented in clearing session dated 31.03.2018 by HSBC and the Beneficiary details can be provided by the Presenting Bank only (HSBC Bank)

23. Vide letter dated 26.04.2018 addressed to the insurance company, Mr. Shoji confirmed that he had sold the vehicle to the complainant for a total consideration of Rs. 9,50,000/-. He further clarified that a sum of Rs. 6,50,000/- was paid to him via NEFT, and a cheque for Rs. 3,00,000/- was handed over to him. The vehicle was delivered to the complainant on 18.03.2018. Due to a business trip to Japan, Mr. Shoji was unable to present the cheque for encashment promptly, and it was deposited on 03.04.2018.  Mr. Shoji executed an affidavit and a sale letter stating that he had sold the vehicle to the complainant and had no objection to the complainant submitting an insurance claim. The original Forms 29 and 30, duly signed by Mr. Shoji, are on record.

24.  A Police complaint shows that the complaint was filed on 25.03.2018 stating that the vehicle in question was stolen on the same day. i.e. 25.03.2018. FIR dated 05.04.2019 was registered. An untraced report was accepted by CJM vide Order dated 16.07.2018.

25. The investigation report dated 14.05.2018 verifies the authenticity of the theft and the First Information Report (FIR); however, it concludes that the claimant lacks an insurable interest.

26.  OP rejected the claim of the complainant vide letter dated 30.05.2018. Relevant portion is as follows:

Please refer to your above mentioned claim lodged with us for theft of you vehicle, wherein we had deputed M/S VIKAS KUMAR & ASSOCIATES for investigation and verification of facts. The report of the investigator has been received,

Based on the investigation report and as per your written statement we observe that you have sold the vehicle to Mr. Prayas Rana on 15.03.2018 i.e. before the theft on the vehicle. Further, new owner Mr. Prayas Rana did not get the RC and policy transfer in his name and it continued in you name.

In the light of the above it is clear that there has been non-disclosure of material facts and this has resulted in having no insurable interest either for you or Mr. Prayas Rana.

27. Hon’ble Supreme Court in Surendra Kumar Bhilawe vs The New India Assurance Company Ltd. AIR 2020 SUPREME COURT 3149 has observed as follows:

43.The National Commission also failed to appreciate that Section 157 of the Motor Vehicles Act provides that where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, 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 are to 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.

44. The explanation to Section 157 clarifies, for the removal of all doubts, that such deemed transfer would include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. The transferee might, within 14 days from the date of transfer, apply to the Insurer in the prescribed form, for making requisite changes in the certificate of insurance and the policy of insurance with regard to the factum of transfer of insurance. There could be no reason for a transferee of an insured motor vehicle, to refrain from applying for endorsement of the transfer in the Insurance Policy Certificate when insurance covering third party risk is mandatory for using a vehicle.

28. Hon’ble National Commission in Liberty General Insurance Limited vs. Sheela decided on 03.06. 2022 has observed as follows:

Learned counsel could also not be able to reconcile to our satisfaction the paradoxical dichotomy on the part of the insurance co. in contending that on the one hand Mr. Mahesh P. had transferred the vehicle on 29.04.2017 to the complainant and as such he did not have any insurable interest in the vehicle on 02.06.2017 on the date when the theft took place while on the other hand the transferee i.e. the complainant too was not having any interest under the insurance policy since information of the transfer had not been made within 14 days of the transfer and as such the insurance co. was not liable to pay either of the two irrespective of the fact that it had received the premium and there was no objection from the one Mr. Mahesh P. apropos settling the claim with the transferee i.e. the complainant.

It is not disputed that the premium had in fact been paid, the theft had in fact occurred, an F.I.R. had in fact been registered. Neither was GR 17 placed before the two fora below nor is it placed before this Commission with the petition. Nor has it been shown either before the two fora below or during the revisional proceedings before this Commission that the requirement of applying for transfer within 14 days had been built into the policy terms and conditions. In such facts the period of 33 days (i.e. from 26.04.2017, the date of transfer to 02.06.2017, the date of theft) or of 39 days (i.e. from 26.04.2017, the date of transfer to 08.06.2017, the date of information to the insurance co.) in the present case appears to be a reasonable and acceptable period and we do not feel that just this trifling aspect of period or this trivial hiatus can in any way be treated as fatal to the claim.

29. The chronology of events establishes that the complainant acquired a Toyota Innova from Mr. Shoji, with the vehicle being duly handed over to the complainant on 18.03.2018. The complainant remitted a total of ₹9,50,000 to Mr. Shoji via NEFT and cheque. Mr. Shoji has elucidated that he was unable to encash the cheque until 03.04.2018, due to his return to Japan. Moreover, Mr. Shoji has expressed no objection to the complainant’s claims. The vehicle in question was stolen on 25.03.2018. A police complaint was lodged on the same day, although the FIR was filed subsequently.

30. Hon’ble Apex Court in its judgement has observed that upon the transfer of ownership of a vehicle, the associated insurance policy is automatically deemed to be transferred as well. The Hon'ble National Commission has also scrutinized the practices of insurance companies that, upon receipt of premiums, deny liability to both the transferor and transferee of the vehicle.

31. Accordingly, it is evident that the complainant possesses an insurable interest in the vehicle.

32. Hence, we find OP guilty of deficiency in service in rejecting the claim of the complainant. We direct OP

1. to pay the IDV i.e. Rs.8,74,914/- with 7% interest from the date of the theft till payment .
2. to pay Rs.1,00,000/- as compensation for mental harassment and physical inconveniences.
3. to pay Rs.10,000/- towards litigation expenses.

33. Order to be uploaded within 30 days and file be consigned to Record Room.