MRS. NEENA SANDHU, MEMBER

1.       This is an appeal filed by the complainant against order dated 8.5.2009 passed by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (for short hereinafter to be referred as District Forum) passed in complaint case No. 1293 of 2008.

2.     The brief facts of the case are that in the month of October, 2007 the complainant purchased one secondhand Indica Car through a broker bearing registration No.HP-33-A-3893, which was impounded by ICICI Bank on account of non-payment of EMIs by its owner Mr.Mohinder Singh Guleria and the vehicle was registered in the name of Sh. Mohinder Singh Guleria, therefore the insurance policy was got issued in the name of Sh.Mohinder Singh Guleria C/o Madan Lal and the premium was paid by the complainant through cheque. It was alleged by the complainant that the said vehicle was belonged to District Mandi which was got transferred in the name of complainant from District Transport Officer, Mohali and a new registration bearing No. PB-65-G-3206 was allotted.  Unfortunately in the morning of 22.2.2008 the said vehicle was found stolen in front of the house of complainant and the matter was reported to the police and FIR No.35 was got registered in the Police Station, Phase VIII, Mohali dated 10.3.2008 and the theft was also reported to the insurance company, who appointed Mr.B.L.Sharma, Investigator to investigate the matter.  The complainant had supplied all the necessary documents to the said investigator and untraced report was sent by the police on 20.7.2008. Inspite of all this, the insurance company refused to settle the claim of the complainant on the ground that the complainant had no insurable interest as the vehicle was insured in the name of Sh.Mohinder Singh Guleria, whereas the premium was duly paid by complainant and the name of insured was mentioned as Sh.Mohinder Singh Guleria and address of the insured was mentioned as C/o Sh.Madan Lal, H.No.1412/12, Phase-XI, Mohali clearly shows that the complainant was having an insurable interest.  It was further alleged by the complainant that on 5.7.2007 the vehicle was transferred in the name of complainant, the date when the transfer fee for ownership was deposited with the District Transport Officer, Mohali and on 14.2.2008 R.C. was issued whereas the theft took place on 22.2.2008.   The above said act of OPs amount to deficiency in service and hence, the complaint was filed.

3.        Reply was filed by the OPs in which it was pleaded that the above said vehicle was purchased by the complainant from Sh.Mohinder Singh Guleria and this fact was never intimated to the OPs.  The complainant was bound to intimate the OPs to get necessary changes in the policy effected after paying the requisite premium as prescribed under GR-17 of the Indian Motor Tariff Act.  It was also pleaded that complainant never applied for the transfer of the policy in his name within the prescribed period and therefore the OPs repudiate the claim of the complainant.  It was further submitted that there was no insurable interest on the date of loss in favour of the complainant as the necessary changes were not got effected by the complainant in the insurance policy and the repudiation had rightly done by the OPs after due application of mind.   Rest of the allegations have been denied and prayed for dismissal of the complaint.

4.       The parties led their evidence in support of their contentions.

5.     The District Forum dismissed the complaint as there was no merit

6.        Aggrieved by the order of District Forum, the present appeal has been filed by the complainant.   

7.     In the appeal, it is submitted that the learned District Forum failed to appreciate the legal position that the vehicle was stolen and not damaged in accident and as such question of Section 157 of Motor Vehicle Act and concept of third party interest was not applicable in the present case. The appellant has stated that after the new registration was allotted, the appellant was in a process to inform the respondent about the new registration number, the vehicle was stolen on 22.2.2008. As per Section 157(2) the insurance company was to be intimated about the transfer of ownership within 14 days and situation did not arise in this case as before expiry of 14 days the vehicle was stolen on 22.2.2008 reckoning 14 days from 14.2.2008 it could be intimated upto 28.2.2008. So, it cannot be said that the appellant has violated the provision of Section 157(2) of the Motor Vehicles Act and as such appellant is entitled to get the insurance claim under the policy. The learned District Forum has failed to appreciate the legal position in this regard wherein it has been held by the Hon’ble National Commission in matter of transfer of the insurable interest, the same is deemed to have taken place automatically on the transfer of ownership of the vehicle in the name of purchaser. Reliance is placed upon the case titled as Narayan Singh Vs. New India Assurance Company Limited – 2008(1) CPC 257  wherein it has been held that in number of cases the insurance companies are suppressing a specific regulation issued vide circular in the year 1994 wherein it has been held that the transfer is automatic under the policy and the benefits will automatically accrue to the new owner. Therefore, the benefit under the policy automatically accrue to the appellant and he was entitled to be indemnified for the loss sustained. It has been submitted by the appellant that as per GR-10, after the sale of the vehicle, the benefits under the policy in force on the date of transfer automatically accrue to the new owner. However, this clause was not brought to the notice by the respondent company. Hence, it is prayed by the appellant that appeal may kindly be allowed and the impugned order passed by the learned District Forum may kindly be set aside.

8.     We have heard Sh.Prahlad Bhagat, Advocate for the appellant, Sh.Yogesh, Advocate along with Sh.Hitender Kansal, Advocate, proxy for Sh.Paras Money Goyal, Advocate for the respondents and carefully gone through the file. The main point for consideration before us is that whether the OPs was rightly repudiated the claim of the complainant. 

9.     After hearing the learned counsel for the parties, perusal of the record and the written submissions filed on behalf of appellant, we have come to the conclusion that the said vehicle was purchased from Sh.Mohinder Singh Guleria by the appellant/complainant. Since the vehicle was registered in the name of Sh.Mohinder Singh Guleria, due to this reason, the insurance policy was got issued in the name of Sh.Mohinder Singh Guleria C/o Sh.Madan Lal although the premium was paid by the complainant through cheque. In our view, the mere fact that the complainant had paid the amount of premium, this does not mean that by mere paying the amount of the premium on behalf of Sh.Mohinder Singh, the complainant stepped into the shoes of the previous owner i.e. Sh.Mohinder Singh. In this view of the matter, we are of the view that at the time of theft, there was no insurable interest in favour of appellant/complainant. A perusal of the file shows that the vehicle was got transferred in the name of appellant/complainant. The appellant/complainant was duty bound to intimate the respondent/OP to get the necessary changes in the policy effected after paying the requisite premium as per the provision and contents of which GR-17 of the India Motor Traffic Act which was effective w.e.f. 1.7.2002 as well as under Section 157(2) of Motor Vehicle Act. In this case the appellant/complainant never applied for the transfer of the insurance policy in his name within a period as prescribed by law. With these facts and circumstances, we are of the opinion that the OPs have rightly repudiated the claim of the appellant/complainant as on the date of theft of the vehicle, there was no insurable interest in favour of the appellant/complainant. The order passed by the learned District Forum is well reasoned and no interference is called for. Our view is fully supported by the order passed by the Hon’ble National Commission in Revision Petition No. 2299 of 2005 decided on 20.10.1999 titled as Oriental Insurance Company Limited Vs. Reeta. Therefore, there is no merit in the appeal and the same is accordingly dismissed with no order as to costs.

10.        Copies of this order be sent to the parties, free of charge.

Pronounced.

11^th March, 2010.