D.o.F:1/ 7/2009D.o.O:6/8/2010IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD CC.NO. 144/09 Dated this, the 6th day of August 2010 PRESENT: SRI.K.T.SIDHIQ : PRESIDENT SMT.P.RAMADEVI : MEMBER SMT.P.P.SYAMALADEVI : MEMBER Kunhammed.T.V,S/o Hameed Rawther, Ambethody,Kakkadav,Cheemeni,Pettikundu. Rep. by P.A.holder N.Siddique, : Complainant S/o Abdulla(late) Ambethody,Kakkadav,Cheemeni,Pettikundu (Adv.Ashalatha.M,Hosdurg) 1.Manager, United India Insurance Co.Ltd Thara Building,Nileshwar. 2. M.P.Ahmed, S/o E.Muhammed Kunhi, : Opposite parties Al-Vaseela Manzil, Kadinhimoola. Thaikadappuram. (Adv.C.Damodaran Kasaragod) ORDER SRI.K.T.SIDHIQ : PRESIDENT The factual matrix of the complaint is as follows: Complainant purchased a TATA INDICA DLS V2 car bearing Reg.No.KL-60/A 3780 from one M.P.Ahamed who is arrayed in this case as 2nd opposite party. It involved in an accident on 25/2/09 and caused extensive damages. The RC of the vehicle was transferred in the name of complainant with effect from 22/1/09 and the RC after endorsement of transfer dispatched from the RTO Kanhangad through HPO Kanhangad. It was received by the complainant on 20/2/09. But the certificate of insurance was stood in the name 2nd opposite party at the time of accident. It was transferred in the name of complainant on 26/2/09 ie the next day of accident. The vehicle was insured by Ist opposite party for the period 13/10/08 to 12/10/09. The accident is occurred during the subsistence of policy. Complainant spent ` 103289/- towards the repair of the vehicle. Though a claim was preferred, Ist opposite party repudiated the claim on the ground that 2nd opposite party sold the vehicle to complainant and the change of ownership is recorded in the RC on 22/01/09. The vehicle met with an accident on 25/2/09 and the change of ownership is not informed the opposite party and it was effected only on 26/2/09. According to complainant as per the Motor Vehicles Act the transferee has 14 days of time for making necessary change regarding the fact of transfer in the certificate of insurance and in the policy and since the complainant received the RC only on 20/2/09 and informed the transfer of ownership to the insurer on 26/2/09 his claim ought to have been honoured. Therefore, the complaint alleging deficiency in service in the matter of repudiation of claim by opposite party No.1. 2. According to Ist opposite party, the policy has been issued in favor of 2nd opposite party and as such there is no privity of contract between the opposite party and the complainant. The complainant applied for transfer of the insurance policy on 26/2/09 and the transfer was effected on the same day. As per Sec.157(2) of Motor Vehicles Act transferee shall apply within 14 days from the date of transfer to transfer the certificate and policy of insurance. The RC is transferred on 29/1/09 and the transferee has not applied for transfer of the policy in his favour. Hence, the Ist opposite party has no liability to pay own damage compensation to the complainant. The allegation that complainant received the RC only on 20/2/09 and he is entitled to the benefits of Sec.157(2) cannot make the Ist opposite party liable. As against the delay the complainant can proceed against RTO only . As per Sec.2(30) of M.V Act a person in possession of the vehicle by virtue of an agreement is the owner and the application for transfer dt. 29/1/09 is more effective than any agreement between the parties and the said application evidencing the transfer of ownership from 2nd opposite party to the complainant. The repudiation of the claim is legal and based on policy conditions as per the provisions of law. Hence the complaint deserves dismissal. 3. Though notice is issued to 2nd opposite party by registered post it is returned unserved for the reason addressee is out of India. Thereafter several chances were given to the complainant to take appropriate steps against 2nd opposite party. But no steps were taken by complainant against 2nd opposite party. Since the dismissal of complaint for want of steps amounts to denial of justice, we proceed with the complaint as if there is no 2nd opposite party. Apart from that 2nd opposite party is not appears to be a necessary party for the fair adjudication of this complaint. 4. The P.A.holder of complainant filed a proof affidavit in support of his claim and faced cross examination by the counsel for Ist opposite party. Exts.A1 to A6 marked. On the side of opposite party Sri.N.Sudhakara Manager of United India Insurance Co. Ltd Kasaragod filed affidavit. Exts.B1 & B2 marked. The witness of Ist opposite party in his affidavit has stated that the claim of compensation is submitted before them by one Sri. Jaleel. Ext.B2 is the Motor claim form. In which the claimant is Sri.Kunhahammed i.e the complainant himself has signed and Sri.Jaleel is signed only as a witness. Therefore this contention is not acceptable. The other facts of the case are not in dispute. Hence the issue to be settled is whether the complainant is entitled to get the damages indemnified by opposite party or not. 5. In our view the complainant is entitled to get his loss indemnified by opposite party and therefore deserves an order in his favor in view of Sec.157(1) of the Motor Vehicles Act 1988 as amended upto date. In this case it is evident that the vehicle was transferred in the name of complainant as per the endorsement of the registering authority as on 29/1/09 itself and the accident was occurred only on 25/2/09. So if Sec.157(1) of M.V. Act is applied then it has to be considered that the certificate of insurance and policy described in the certificate shall be deemed to have transferred in favor of the complainant with effect from the date of transfer ie. 29/1/09 itself. Hence there is no iota of doubt that the complainant is entitled for the relief claimed. 6. According to the learned counsel for opposite party in view of Sec.157(2) of the Motor Vehicles Act the transferee (here the complainant) ought to have get the certificate of insurance and the policy described in the certificate there to transferred in his name within 14 days from the date of transfer of the vehicle to claim the benefits as per Sec. 157 (1) of the Act. 7. But on a close perusal of 157(1) and 157(2) of the M.V.Act it is vivid that now there is no requirement of applying to the insurer for transfer of the policy and it gets transferred to the transferee by operation of law. Even though Sec.157(2) of the Act gives 14 days time from the date of transfer to the transferee to make an application to the insurer for making necessary changes in regard to the effect of transfer in the certificate of insurance and the policy described in the certificate in his favor , the liability of the insurer cannot be absolved even if such transfer is not consequently effected by it since Sec.157(2) specifically says that the insurer shall make necessary changes in the certificate and in the policy of insurance with respect to the transfer of insurance when such application is made. Sub section 2 of Sec.157 of the M.V.Act provides only a procedure to intimate fact of transfer of vehicle to the insurer in order to make necessary changes in the certificate of insurance and the policy to bring it in conformity with the deemed transfer as contemplated U/s 157(1) of the Act for the purpose of indemnifying the transferee relating to the risk covered under the policy and that non compliance with this procedure does not automatically invalidate the deemed transfer that had taken place by virtue of the operation of law as contemplated U/s 157(1) of the M.V.Act. Hence the contention of the learned counsel for opposite party that the non-transfer of the certificate of insurance and policy within 14 days from the date of transfer of the vehicle invalidate the deemed transfer is not tenable. 8. Now the moot question that poses is whether the deemed transfer provision under sub section (1) sec.157 can be extended to the damages caused to the vehicle of the insured himself i.e., for own damages. The Hon’ble Supreme Court in the case of Complete Insulations (P) Ltd vs. New India Assurance Co.Ltd reported in I (1996) CPJ 1(SC) for the first time has held that the transferee is not entitled to be indemnified by the insurer without the insurance policy being transferred in his name since Sec.157 (1) of the Act is applicable in respect of third party only and if the policy of insurance covers other risks as well eg. Damages caused to the vehicle of insured himself that would be a matter falling out side chapter XI of the 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. 9. But the Hon’ble Supreme Court has rendered the aforesaid judgment by applying the unamended sub section (1) of Sec.157 of Motor Vehicle Act 1988. For a better understanding of the issue, it would be profitable to extract the relevant unamended section. Sec.157(1) Transfer of Certificate of Insurance (1) Where a person in whose favor 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 there to the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favor of the person to whom the motor vehicle is transferred with effect from the date of its transfer. The Motor Vehicles Act 1988 came in force w.e.f 1/7/1989 has undergone a large number of amendments in the year 1994. 10. Before proceeding further with the matter it will be in the fitness of things if a reference is made to the objects and reasons which were taken into note by the legislature when Amending Act No. 54 of 1994 was introduced and passed by it were as under :- Prefatory Note: - statement of objects and Reasons to Amending Act 54 of 1994- The Motor Vehicles Act 1988(59 of 1988) consolidated and rationalized various laws regulating transport. The act came into force with effect from 1/7/1989 replacing Motor Vehicles Act 1938. 2) After coming into force of the Motor Vehicles Act 1988, Government received a number of representations and suggestions from the state Government, transport operators and members of public regarding the inconvenience faced by them because of the operations of some of the provisions of the Act 1988. A Review Committee was, therefore constituted by the government in March 1990 to examine and review the Act 1988. 3) The recommendations of the Review Committee were forwarded to the State Governments for comments and they generally agree with these recommendations. Government also considered a large number of representations received after finalization of the Report of the Review Committee, from the transport operators and public for making amendments in the Act. The draft of the proposals based on the recommendation of the Review Committee and representations from the public were placed before the Transport Development counsel for seeking their views in the matter. The important suggestions made by the Transport Development council relate to are on account of:- (a) The introduction of newer type of vehicles and fast increasing number of both commercial and personal vehicles in the country. (b) Providing adequate compensation to victims of road accidents without going into long drawn procedure, © protecting consumers interests in transport sector: (d) Concerns for road safety standards transport hazardous chemicals and pollution control: (e) Delegation of greater powers to state transport authorities and rationalizing the role of police authorities in certain matters: (f) The simplification of procedures and policy liberalization in the field of transport: (g) Enhancing penalties for the traffic offenders: 4) Therefore the proposed legislators have been prepared in the light of the above background. The Bill, inter alia provides for:- (a) Modification and amplification of certain definitions of new type vehicles: (b) Simplification of procedure for the grant of driving licenses; (c) Putting restrictions on the alteration of vehicles: (d) Certain exemptions for vehicles running on non- polluting fuels: (e) ceilings on individuals or company holdings removed to curb benami holdings: (f) State authorized to appoint one or more State Transport Appellate Tribunals. (g) punitive checks on the use of such components that do not conform to the prescribed standards by manufacturers and also stocking/sale by the traders: (h) increase in the amount of compensation to the victims of hit and run cases: (i) removal of time –limit for filing of application by road accident victims for compensation (j) punishment in case of certain offences made stringent: (k) a new predetermined formula for payment of compensation to road accident victims on the basis of age/income. Which is more liberal and rational. 5. The Law commission in its 119th Report had recommended that every application for a claim be made to the claims Tribunal having jurisdiction over the area in which the accident occurred or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, at the option of the claimant. The Bill also makes necessary provision to give effect the said recommendation. 6. The Bill seeks to achieve the above objectives: Sec.157 (1) of the Motor Vehicles Act has also undergone an amendment, may be because of the inconvenience faced during its operation due to the frequent transfer of vehicles and therefore an explanatory note was added to Sec.157 (1) by way of amendment. The inserted explanation is reproduced below: Explanation: For the removal of doubts it is hereby declared that such deemed transfer shall ‘include’ transfer of ‘rights’ and liabilities’ of the said certificate of insurance and policy of insurance. 11. On a plain reading of this explanation added to Sec.157 (1) of the Motor Vehicles Act as per the amendment, itself it is apparent that after the amendment, not only the liabilities mentioned in the certificate of insurance and policy of insurance relating thereto but the ‘rights’ vested with the transfer or of the vehicle as per the certificate of insurance and the policy relating there to shall also deemed to have transferred in the name of transferee. 12. If the ‘rights ‘and ‘liabilities’ described in the certificate of insurance and the policy relating there to is deemed to have transferred in the name of transferee, then what is there remaining to be transferred . Therefore, it is necessary to explain the matter a little further. 13. As per the instructions of Tariff Advisory Committee there are two kind of policies. They are ‘package policies’ and ‘third party policies’. In case of third party policies, the owner of a vehicle has no rights but only liabilities. That is why a third party policy is known as liability only policy. The rights are included only in package or comprehensive policies. So by way of this amendment it is evident that transferee will get the absolute transfer of the certificate of insurance and policy relating there to in his name from the date of transfer of the vehicle and not only the liability part or the third party risk portion of the policy alone. 14. Moreover, what is ‘liability’ is defined U/S 145(c) of the Motor Vehicles Act. But neither under Sec.145 nor any other sections of Motor Vehicles Act defines ‘rights’. Then what are the rights deemed to have transferred as per the certificate or policy of insurance by way of amending Act shall be gathered from the context of the certificate of Insurance and the policy of insurance. No doubt in package policies only alone the insured enjoys rights against his insurer for getting his loses indemnified to the vehicle. 15. That apart, if the said amendment added by way of explanation for the removal of doubts does not make any difference to the applicability of the section then it has to be regarded that the legislature has done a futile exercise by this amendment. That would never have been the intention of the legislature. 16. The Hon’ble Supreme Court in the case of Kehar Singh v. State (Delhi Admn.) AIR 1988 (SC 1883), it has held:
"During the last several years, the ’golden rule’ has been given a go by. We now look for the ’intention’ of the legislature or the ’purpose’ of the statute. First we examine the words of the statute. If the words are precise and cover the situation on hand, we do not go further. We expound those words in the natural and ordinary sense of the words. But if the words are ambiguous, uncertain or any doubt arises as to the terms employed, we deem it as our paramount duty to put upon the language of the legislature rational meaning. We then examine every word, every section and every provision. We examine the Act as a whole. We examine the necessity which gave rise to the Act. We took at the mischiefs which the legislature intended to redress. We look at the whole situation and not just one-to-one relation. We will not consider any provision out of the framework of the statute. We will not view the provisions as abstract principles separated from the motive force behind. We will consider the provisions in the circumstances to which they owe their origin. We will consider the provisions to ensure coherence and consistency within the law as a whole and to avoid undesirable consequences". 17. Further the Hon’ble Supreme Court in the case of National Insurance Co.Ltd vs. Laxmi Narain Dhut reported in 2007 CTJ 445 (SC) has held as below. A statute is an edict of the Legislature and in construing a statute, it is necessary to seek the intention of its maker. A statute has to be construed according to the intent of those who make it and the duty of the court is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature. This task very often raises difficulties because of various reasons, inasmuch as the words used may not be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to convey one’s thought or that the assembly of Legislatures consisting of persons of various shades of opinion purport to convey a meaning which may be obscure. It is impossible even for the most imaginative Legislature to foresee all situations exhaustively and circumstances that may emerge after enacting a statute where its application may be called for. Nonetheless, the function of the Courts is only to expound and not to legislate. Legislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the Legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive approaches. In other words the legislative intention i.e. the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed. 18. Therefore applying the principles enunciated in the above judgment and also looking into the objects of the amendment brought to sub section 1 of Sec 157 we are of the view that the transferee of a vehicle is entitled to get his own damage claim indemnified even if he has not complied the procedure laid down in sub section (2) of Sec.157. 19. It is true that Sec.157 of the Motor Vehicles Act coming under Chapter XI which bears the head note ‘ Insurance of Motor Vehicles against Third Party Risks’. But it has to be taken note that even before the interpretation of the Hon’ble Apex Court in the case of Complete Insulations(P) Ltd vs. New India Assurance Co.Ltd that Chapter XI of Motor Vehicles Act is applicable to third party claims only the amending Act 50 of 1994 was come in to force and the Hon’ble Apex Court has rendered the said judgment without looking into the amendment. But only because of the fact that Sec.157 comes under Chapter XI of the Act a blanket denial of the application of the amended section would leads to failure of administration of justice. 20. In this regard it is worth to consider the view of the Hon’ble Apex Court. Hon’ble Supreme Court in the case of K.P.Varghese vs. The Income Tax Officer reported in 1981 AIR 1922 (SC) 1982 SCR (1) 629 has held: “It is undoubtedly true that the marginal note to a section cannot be referred to for the purpose of construing the section but it can certainly be relied upon as indicating the drift of the section or to use the words of Collins M.R in Bushel v Hemmond to show what the section is dealing with. It cannot control the interpretation of the words of a section particularly when the language of the section is clear and unambiguous but being part of the statute, it prima facie furnished some clue as to the meaning and purpose of the section”. 21 Apart from that the other amendments brought to other sections of M.V.Act contained in Chapter XI of M.V.Act is also not confined to third party interests alone. For eg. Sec.147 (1)(b)(i) is amended by which the owner of the goods or his authorized representative carried in the vehicle is also brought within the purview of this chapter. Prior to amendment the owner of goods or his authorized representative was not entitled for compensation arising out of the accident caused to the vehicle since he was not considered as a third party 22. The Hon’ble Apex court has rendered the judgment in the case of Complete Insulations(P) Ltd vs. New India Assurance Co.Ltd reported in 1996 CTJ 383 (SC) ( P) on 21/11/1995 that is more than one year after the amendment of Motor Vehicles Act in 1994 that came into force on 14/11/1994. But the Hon’ble Apex Court has applied the unamended Sec.157 of Motor Vehicles Act 1988 while considering the above case since the matter related to that case was occurred immediately after coming into force of the M.V.Act 1988 in place of M.V.Act 1939. As a result what happened is that the said amended piece of beneficial legislation was subjected to an odd precedential tyranny even without a whisper against it in the aforementioned judgment. 23. Another important and interesting aspect is that even the General Insurance Co. has appears to have conceived the legislative intention of the amendment to Sec.157(1). Therefore, in 1994 itself a circular has been issued by the General Insurance Co. with regard to the transfer of vehicles and the transfer of insurance benefits automatically in favour of the transferee. The said regulation is part of the Indian Motor Tariff Regulation. The Said regulation read as under: Transfers: On transfer of a vehicle, the benefits under the policy in force will automatically accrue to the new owner. The bonus/malus already applicable for the policy would continue until expiry of the policy. On expiry or cancellation of the policy, bonus/malus will apply as per the new owner’s entitlement. If the transferee wants to change the policy in his name, it may be done on getting evidence of sale and a proposal form duly completed. The old certificate of insurance must be surrendered to the insurance company and a new certificate of insurance can be issued by collecting a fee of `15/-. If the old certificate is not surrendered, a declaration is to be taken from the new owner before issuing a new certificate. 24. But the matters were went upside down when the Hon’ble Apex Court in the Complete Insulations’s case without looking into the amendment held that Sec.157(1) of the Motor Vehicles Act is applicable to third party claims only. The Insurance companies also then turn the plate and accordingly in the present India Motor Tariff which came into effect on 01/07/2002 the new regulation No.17 has inserted that is as follows : GR.17 Transfers: “ …….. In case of Package policies, transfer of the Own Damage section of the policy in favour of the transferee, shall be made by the insurer only on receipt of a specific request from the transferee along with consent of the transferor. If the transferee is not entitled to the benefit of the No Claim Bonus (NCB) shown on the policy or is entitled to a lesser percentage of NCB than that existing in the policy recovery of the difference between transferee’s entitlement, if any, shown on the policy shall is made before effecting the transfer. A fresh proposal Form duly completed is to be obtained from the transferee in respect of both Liability Only and Package Policies. Transfer of Package Policy in the name of the transferee can be done only on getting acceptable evidence of sale and fresh proposal from duly filled and signed the old certificate of insurance for the vehicle, is required to be surrendered and a fee of ` 50/- is to be collected for issue of fresh Certificate in the name of the transferee. It for any reason the old certificate of insurance cannot be surrendered , a proper declaration to that effect is to be taken from the transferee before a new certificate of insurance is issued.” But the General Regulation of the India Motor Tariff is at the most can be considered as subordinate legislation which has no independent existence when the statute poses a contradictory view. 25. Therefore, we are of the view that the dictum laid down by the Hon’ble Apex Court in the case of Complete Insulations(P) Ltd vs. New India Assurance Co.Ltd is applicable only to the cases in which the accidents were occurred in between Ist July 1989( the day on which Motor Vehicles Act 1988 is come into effect to till date of amending Act came into force. In the cases of own damage claims arising after the Motor Vehicle amending Act , Act 50 of 1994 the insurer is liable to make good the loss sustained to the vehicle irrespective of the non transfer of insurance certificate and policy of insurance in favor of the transferee as contemplated under subsection (2) of Section 157 of the Act. For the foregoing discussions we are of the view that Ist opposite party is liable to honor the claim of complainant and the repudiation of his claim amounts to deficiency in service. 26. Relief & Costs: Ext.B1 is the survey report pertaining to the assessment of damages caused to the complainant’s vehicle. As per Ext.B1 Surveyor has assessed the damage at ` 80203/-. The complainant is entitled to get the said amount with interest and costs. In the result, the complaint is allowed and opposite party is directed to pay ` 80,000/-(rounded figure) to the complainant together with interest @ 9% per annum from the date of complaint till payment and cost of ` 2500/-. Time for compliance is limited to 30 days from the date of receipt of copy of the order. Failing which opposite party shall further liable to pay interest @ 12% for ` 80,000/- from the date of complaint till payment. MEMBER MEMBER PRESIDENT Exts; A1-Power of attorney A2-13/5/09-Regd. Letter from OP.1 A3-postal cover A4- tax invoice A5&A6- Receipts. B1- 22/4/09-Motor Survey Report B2- Motor claim Form PW1-Sidhiq- P.A.holder of complainant MEMBER MEMBER PRESIDENT eva | 
