Haryana

Ambala

CC/316/2018

Balraj Singh - Complainant(s)

Versus

M/s National Insurance Co Ltd - Opp.Party(s)

09 Aug 2021

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

 

                                                           Complaint case No.       :  316 of 2018.

                                                          Date of Institution           :  26.09.2018.

                                                          Date of decision              :  09.08.2021.

 

Balraj Singh S/o Sh. Gurmail Singh, R/o H.No.90, New Colony, Near Post Office, Industrial Area, Ambala Cantt-133001.

          ……. Complainant.

                                                       Versus

 

1. M/s National Insurance Co. Ltd., Office-II, Sector 34-A, Chandigarh Through its Regional Manager.
2. M/s National Insurance Co. Ltd., # 106, Railway Road, Ambala Cantt. through its Branch Manager.

 

               ….…. Opposite Parties.

3. Sh. Satpal Singh, S/o Sh. Munsha Singh, R/o H.No. 6/15, Puja Vihar, Industrial Area, Ambala Cantt.

    .......... Performa O.P.

 

Before:        Smt. Neena Sandhu, President.

                   Smt. Ruby Sharma, Member.

Shri Vinod Kumar Sharma, Member.         

                            

Present:       Shri Puneet Mittal, Advocate, counsel for complainant.

Shri Dev Batra, Advocate, counsel for the OPs No.1 &2.

Shri Sandeep Saini, Advocate, counsel for OP No.3

 

Order:        Smt. Neena Sandhu, President

Complainant has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To pay the claim amount of Rs.5,73,359/- to the complainant alongwith interest @ 18% per annum on whole amount from the date of loss, till its realization.
2. To pay Rs.2,00,000/- as compensation for the mental agony and physical harassment suffered by him.
3. To pay Rs.50,000/- as cost of litigation.

                              

382.  

                   Any other relief which this Hon’ble Commission may deem fit.

 

 

Brief facts of the case are that the complainant purchased a second hand car Make Renault Duster bearing Chassis No.MEHSRAWSE6065816, Engine No.E074796, having Registration No.HR-01K-2924 from the OP No.3 The OP No.3 got the said car insured with the OPs No.1 and 2 vide Policy No.420400/31/15/6100008176, for the period from 21.10.2015 to 20.10.2016, by paying premium amount of Rs.15,807/-. On 20.05.2016, Complainant had applied for transfer of the car in his name from the name of the OP No.3. RTO Ambala, transferred the said car in his name and also issued the Registration Certificate in his name.  On 25.05.2016, just after 5 days of the transfer, the ownership of the car, it met with an accident on G.T. Road near Rajpura when the complainant was returning back from Rajpura to Ambala Cantt., then, suddenly a stray animal came in front of his car and while saving the animal, the car got over turned on the road and badly damaged. He informed the police and got registered a DDR No.10 dated 26.05.2016. He also informed the OPs about the said accident and a Surveyor was appointed to access the loss of the said car of the complainant. The Surveyor had inspected the said car and access the loss to the tune of Rs.5,73,259/- on Net of Salvage basis and informed the complainant that he will submit his survey report with the OP No.1 within a day or two.  After waiting for some time, complainant requested the OPs, to settle his claim, but of no avail. On 27.09.2016, complainant supplied the copy of the DDR, Insurance cover note and the Registration Certificate of the car as demanded by the OPs. However, on 05.10.2016, OP No.1, vide letter No. 420000/420400/ODCL/2016 informed the complainant that his claim was repudiated on the ground that “It is gathered that you purchased above vehicle from Mr. Satpal Singh (OP No.3) and got the RC transferred in your name on 20.05.2016. On 25.05.2016 said vehicle met with an accident and you lodge a claim with our company through policy No.420400/31/15/6100008176 purchased by Mr. Satpal Singh. Please note there is no insurable interest in this case which is basic contract of insurance claim is not maintainable and Authority has repudiated said claim”. On 15.11.2016, complainant got served a legal notice upon the OPs. Complainant received a false and frivolous reply from the OP No.2. The OPs have wrongly repudiated the claim of the complainant on this flimsy ground, which tantamount to deficiency in service. Hence, the present complaint.

2.                 Upon notice, OPs No.1 and 2 appeared through counsel and filed written version, raising preliminary objections with regard to no cause of action, maintainability, Jurisdiction etc. On merits, it is stated that there was no privity of contract between answering OPs and the complainant, as there was no novation of the contract of the insurance in his favour and there was no insurable interest on the date, when the car was damaged. The insurance policy did not stand transferred in the name of the complainant as thus he was not covered under the deemed cover clause. The benefit of the deemed transfer under Section 157 is only applicable to a 3^rd party insurance. If the policy of the insurance covers other risks as well as damaged caused to the car of the insured himself that would be a matter falling outside the Chapter XI of the Act and in the realm of contract, for which there must be an agreement between the insurer and the transferee. It is further stated that according to GR No.17, in case of Package Policies, the transfer of ‘own damage’ in favour of the transferee can be made by the insurer, only on the receipt of the request/transfer fee, along with the consent of the transferor & after completing other documentation in this regard, which was never done in the said case. It is not that, the alleged 14 days are “Free Insurance Period” provided to the subsequent purchaser to ply the vehicle even without getting the policy transferred in his name. The claim has to be settled as per the terms and conditions of the policy and the insurance company has rightly repudiated the claim of the complainant. The present complaint filed by the complainant against the OPs No.1 & 2 is not maintainable and prayed that same may be dismissed with costs.

3.                Upon notice, OP No.3 appeared through counsel and filed written version, stating therein that the complaint filed by the complainant is not related to the answering OP, hence, needs no reply. It has no objection if the claim is passed in favour of the complainant as per the terms and conditions of the policy.  

4.                The ld. counsel for the complainant tendered affidavit of complainant as Annexure CA alongwith documents as Annexure C-1 to C-14 and closed the evidence on behalf of complainant. On the other hand, learned counsel for OPs No.1 & 2 tendered affidavit of Shri S.C. Dass, AM, National Insurance Company Limited, D.O. Ambala Cantt., as Annexure OP1/A alongwith documents Annexure OP1/1 to OP1/9 and closed the evidence on behalf of OPs No.1 and 2. However, it is pertinent to mention here that the OP No.3 failed to lead any evidence despite availing various opportunities, therefore, evidence of the OP No.3 has been closed by the order of this Commission on 14.01.2020.

5.                We have heard the learned counsel of the parties and carefully gone through the case file and the case laws referred by the ld. counsel for the complainant and ld. counsel for the OPs No.1 & 2.

6.                 The learned counsel for the complainant has vehemently argued that the complainant purchased the car in question, from OP No.3. Vide policy document Annexure C-2, the OP No.3 got insured the said car from the OPs No.1 and 2, for the period from 21.10.2015 to 20.10.2016. Complainant got registered the said car in his name on 20.05.2016. Under Section 157, of the Motor Vehicle Act and GR-17 of IMT, the complainant, could intimate the insurer, within 14 days, from the date of registration of the car, in his name. However, the said car met with an accident on 25.05.2016 i.e. before that time lapsed, thus it could not be said that, on the date of accident of the car, there was no insurable interest, or there was violation of Section 157 of Motor Vehicle Act and GR 17 of IMT. In support of his contention, the learned counsel for the complainant has placed reliance on the order dated 22.05.2007 passed by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in the case of Narayan Singh Versus New India Assurance Company Limited and also on the order dated 03.12.2008 passed by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, in the case of Oriental Insurance Company Limited Versus Om Parkash Gupta & Anr.

7.                On the contrary, learned counsel for the OPs No.1 and 2 has argued that on the date of accident i.e. 25.05.2016, the car in question was registered in the name of the complainant whereas the insurance policy was in the name of the previous owner. Complainant had no insurable interest on the date when the car was damaged and there is violation of Section 157 of the M.V Act and violation of GR 17, as such, the complainant is not entitled to get any claim under the policy in question. In support of his contention, the learned counsel for the OPs No.1 and 2 has placed reliance on the judgment of the Hon’ble Supreme Court of India, in the case of M/s Complete Insulations private Limited Vs. New India Assurance Company Limited, 1996 AIR 586, the order dated 14.12.2017 passed by the Hon’ble National Commission, New Delhi, in the case of Gurbinder Singh Bheema Vs. New India Assurance Company Limited & Anr. and the order dated 04.09.2019 of the Hon’ble National Commission, New Delhi in the case of Oriental Insurance Company Limited Vs. Enamul Haque.

8.                Learned counsel for the OP No.3 has argued that the complainant had purchased the car in question from the OP No.3 and no allegation whatsoever has been levelled by the complainant against him. Therefore, the complaint filed by the complainant against it may kindly be dismissed with costs.

9.                It may be stated here that as per the provisions of Section 157 of the Motor Vehicle Act, 1988 (in short the MV Act) reads as under:-

“157. Transfer of certificate of insurance:-

(1) Where a person in whose favour the certification 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. 1(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.) (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 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.”

                   It is mandated that on purchase of a vehicle, its insurance policy shall be deemed to have been transferred in the name of the purchaser, from the date of its transfer, qua statutory liability. However, in sub-section (2) of Section 157 of the MV Act, it was specifically stated that the transferee shall have to apply to the insurance company concerned, to get the insurance policy transferred in his/her name, by submitting a prescribed form and upon receipt of intimation, the insurer shall make necessary changes in the insurance certificate.

                   The Competent Authorities, in terms of Part II B of the Insurance Act 1938 has drafted India Motor Tariff, containing rules, regulations and terms and conditions qua transfer of insurance of vehicles, in India. GR 17 of IMT lays down the procedure to get insurance policy transferred, from one name to other person’s name, who has purchased the vehicle. The said provisions reads thus:-

“GR.17. Transfers 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 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.

                   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 the transferees` entitlement, if any, and that shown on the policy shall be 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 a fresh proposal form duly filled and signed. The old Certificate of Insurance for the vehicle, is required to be surrendered and a fee of Rs.50/- is to be collected for issue of fresh Certificate in the name of the transferee. If 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."

           It is specifically stated that on transfer of registration of the vehicle, the transferee shall apply within 14 days, from the date of transfer of the vehicle, in writing, under recorded delivery to the insurer, giving details of registration of vehicle; date of transfer etc. to get the insurance policy transferred in his/her name. Consent of the transferor to transfer the policy also needs to be supplied to the concerned insurance Company. The transferee needs to fill up fresh proposal form and submit it on time, on making payment of requisite fee.

        In the present case, we have seen that there was no compliance to the provisions of Section 157 of the MV Act and also the conditions contained in GR 17 of the IMT. The Supreme Court of India, in the case of M/s Complete Insulations private Limited Vs. New India Assurance Company Limited,  the Hon’ble National Commission, New Delhi, in the case of Gurbinder Singh Bheema Vs. New India Assurance Company Limited & Anr and in the case of Oriental Insurance Company Limited Vs. Enamul Haque  by noting the provisions of GR-17 of the IMT and provisions of Section 157 of MV, Act held that the insurance company remains liable towards third party risk/claim but the transferee can get any personal benefit, under the policy, only when there is compliance to the provisions of Section 157 of the MV Act and GR 17 of the IMT.  In the case of New India Assurance Company Limited Vs. Ashok Thakur decided on 03.12.2013, the Hon’ble National Commission, New Delhi in para No.9 of the order has held that in the case of Shri Narayan Singh Vs. New India Assurance Company Limited, in which in similar circumstances, Insurance Company was held liable. This judgement is not applicable to the facts of the present case because in that case accident took place in 1995 and the case was decided on the basis of old India Motor Tariff Regulations, whereas old Tariff Regulations have been replaced by New India Motor Tariff Rules applicable from 30.06.2002. 

                   In view of the provisions of the Motor Vehicle Act and the Motor Tariff Regulations and the law laid down by the Superior Courts in the cases referred to above that if the transferee fails inform the insurance company about transfer of the registration certificate in his name and the policy is not transferred in the name of the transferee then the insurance company cannot be held liable to pay the claim in the case of own damage of vehicle. We thus do not hesitate to conclude that the complainant is not entitled to get any claim from the insurance company. The complaint filed by the complainant is devoid of merits consequently we dismiss the same without any orders, as to costs. Certified copy of this order be supplied to the parties, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

 Announced on :09.08.2021.

 

 

          (Vinod Kumar Sharma)            (Ruby Sharma)               (Neena Sandhu)

              Member                                   Member                       President

 

Typed by-Rajni, S.G.