IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.A.T.Munnoli<br /> B.A., L.L.B (Spl.) - President <br /> <br /> 2. Smt.Y.V.Uma Shenoi<br /> M.Sc., B.Ed., - Member<br /> <br /> <br /> CC 167-2010 DATED 11.06.2010<br /> ORDER<br /> <br /> Complainant H.B.Sunil Kumar, <br /> S/o B.Basave Gowda, R/at No.960, 15th Cross, D Block, J.P.Nagar, Mysore-8.<br /> <br /> (By Sri V.S., Advocate)<br /> <br /> Vs. <br /> Opposite Party Branch Manager, M/s Reliance General Insurance Company Ltd., O/at I Floor, Mysroe Trade Centre, Opp. KSRTC Sub-Urban Bus Stand, Bangalore-Nilagiri Road, Mysore.<br /> <br /> (By Smt.K.L.Sugandhi, Advocate)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 22.04.2010<br /> Date of appearance of O.P. : 07.05.2010<br /> Date of order : 11.06.2010<br /> Duration of Proceeding : 1 MONTH 4 DAYS<br /> <br /> <br /> <br /> <br /> PRESIDENT <br /> <br /> <br /> <br /> <br /> <br /> MEMBER<br /> <br /> <br /> Sri. A.T.Munnoli,<br /> President<br /> <br /> 1. The complainant has filed the complaint under section 12 of the C.P.Act, alleging deficiency in insurance service on the part of the opposite party stating that, though the vehicle was duly covered by the insurance policy issued by the opposite party, which met with an accident and damage was caused. The expenses towards the damage, has not been paid in spite of the demand made.<br /> <br /> 2. The opposite party in the version has contended that, it is not aware of the transfer of the vehicle by the earlier owner to the complainant and there is no contractual obligation between the complainant and the opposite party and interest of the complainant has not been covered by the policy. Further, it is contended that, no claim has been registered with opposite party and there is repudiation, consequently the complaint is pre-mature and that there is no deficiency in service.<br /> <br /> 3. In support of his claim, the complainant has filed his affidavit and produced certain documents. On the other hand, officer of the opposite party by name Chandrashekar has filed his affidavit and produced certain documents. We have heard the arguments of learned advocates for both the parties and perused the records.<br /> <br /> 4. Now the points arises for consideration are as under:-<br /> 1. Whether the complainant has proved any deficiency in service on the part of the opposite party and that he is entitled to the reliefs sought?<br /> 2. What order?<br /> <br /> <br /> 5. Our findings are as under:-<br /> Point no.1 : Negative.<br /> Point no.2 : As per the order.<br /> <br /> REASONS<br /> <br /> 6. Point no. 1:- One Mr.S.Rajanna was the owner of car No.KA-09-O-1035. The complainant purchased the said car of 27.10.2009. Said car was insured with opposite party for the period from 26.06.2009 to 25.06.2010. On 18.01.2010, said car sustained damages. Vehicle was handed over to authorized dealer for repairs. On 28.01.2010, complainant made representation to the opposite party with details of the damages requesting him to access the damage and to make payment of the expenses for repairs. The opposite party did not even receive the representation. Legal notice was issued on 29.01.201. The complainant got the vehicle repaired paying Rs.80,034/-. The opposite party having refused to receive the claim and in spite of receipt of notice, failed to pay the amount, the act amounts to deficiency in service.<br /> <br /> 7. Considering the facts averred in the complaint and stated in the affidavit of the complainant, as well as the contention of the opposite party, the main point that needs to be considered is, whether insurable interest has been created in favour of the complainant. <br /> <br /> 8. To decide the said point, relevant provisions of the Motor Vehicle Act, are sections 103 A and section 157, which reads thus:- <br /> <br /> “103A: (1) Where a person in whose favour the Certificate of Insurance has been issued in accordance with the provisions of this Chapter proposes to transfer 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, he may apply in the prescribed form to the insurer for the transfer of the certificate of insurance and the policy described in the certificate in favour of the person to whom the motor vehicle is proposed to be transferred, and if within fifteen days of the receipt of such application by the insurer, the insurer has not intimated the insured and such other person his refusal to the other person, the certificate and the policy to the other person, the certificate of insurance 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 his transfer.<br /> (2) The insurer to whom any application has been made under sub-section 91) may refuse to transfer to the other person the certificate of insurance and the policy described in that certificate if he considers it necessary so to do, having regard to-<br /> (a) the previous conduct of the other person.<br /> (i) as a driver of motor vehicles; or<br /> (ii) as a holder of the policy of insurance in respect of any motor vehicle; or<br /> (b) any conditions which may have been imposed in relation to any such policy held by the applicant; or<br /> (c) the rejection of any proposal made by such other person for the issue of a policy of insurance in respect of any motor vehicle owned or possessed by him.<br /> (3) Where the insurer has refused to transfer, in favour of the person to whom the motor vehicle has been transferred, the certificate of insurance and the policy described in that certificate, he shall refused to such transferee the amount, if any, which, under the terms of the policy, he would have had to refund to the insured for the unexpired term of such policy.”<br /> <br /> “157 – Transfer of Certificate of Insurance – (1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of the 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 it’s transfer.<br /> 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 in regard to the policy insurance.<br /> (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.”<br /> 9. With reference to these provisions, learned advocate for the opposite party submitted that, as provided in the explanation within 14 days from the date of transfer, the complainant has not applied for transfer of the policy in his name and hence, he is not entitled for benefit of the insurance policy, since there is no contract between the complainant and the opposite party.<br /> <br /> 10. In support of the submission, learned advocate for the opposite party, relied on the ruling reported in 2010 (2) AIR Kar. R 557. First of all in this ruling our Hon’ble High Court of Karnataka had to consider with reference to section 157 (2) of the M.V.Act that, whether the insurer is liable to pay the compensation covering the risk of third party. In the case on hand, third party risk is not the point for consideration. With reference to third party risk, the Hon’ble High Court of Karnataka in this ruling has held that, liability of insurer is not restricted for want of necessary intimation in so far as third party is concerned. The learned advocate referred to the observations made by the Hon’ble High Court of Karnataka, in this ruling in paragraph 16 that, the transferee is required to give intimation of the transfer to take benefit of the policy for coverage of person and property damage. In paragraph 15 of the judgement, it is observed that, the transferee may not be able to get benefit of any claim for his person or property loss. However, in this regard, no principle is laid down. At the cost of repetition, the law laid down by the Hon’ble High Court of Karnataka, in this ruling is that, so far concerned to liablility of third party intimation is not necessary. At the same time, it is important to note further observations made by the Hon’ble High Court of Karnataka in the said ruling in paragraph 13 which reads as under:-<br /> <br /> “13. From the reading of the provisions of sub-section (1) of section 157 of the Act, it is clear that, in case of transfer of vehicle insured with the insurer on its transfer, 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. No doubt, sub-section (2) of the section 157 requires that, within fourteen days from the date of such transfer, an intimation is required to be given to the insurer. However, sub-section (2) of the section 157 makes it clear that, such intimation is required only for the purpose of making necessary changes in the certificate as regard to the transfer. There is no provision, which provides for any consequence on failure to issue intimation of transfer.”<br /> <br /> 11. Hence, as observed by the Hon’ble High Court of Karnataka, and provided in the sub-section (1) section 157 of the Act, 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. So also, we have to note that, the Hon’ble High Court has observed that, there is no provision, which provides for any obligation on failure to issue intimation of transfer. At the end of 17th paragraph relying the on ruling reported in 2009 KCCR SN 215, it is stated that, the intimation of transfer of vehicle to the insurance company is not mandatory, but is directory. Hence, as held by the Hon’ble High Court, the required intimation is to be given is not mandatory, but only directory.<br /> <br /> 12. Learned advocate for the opposite party relied on the ruling reported in III (2009) CPJ 260. In that case, the purchaser did not get the registration certificate transferred in his name from the original owner and also, did not get the insurance of the vehicle transferred in his name, but went on paying the insurance premium on behalf of the registered owner. In view of those facts, it is held by the Hon’ble National Commission in this ruling that, the purchaser was a defacto owner and real owner had no insurable interest and there was no privity of contract between the purchaser and the insurance company. It is further observed by the Hon’ble National Commission that, defacto possession of the vehicle will not confer any legal right on the purchaser to avail the benefit under the policy. Such are not the facts of the case on hand. In the case on hand, in fact, the vehicle has been duly transferred in the name of the complainant.<br /> <br /> 13. Another ruling reported in III (2009) CPJ 230, is relied upon. The Hon’ble Chatishghad State Commission has held that, for own damage application for transfer of policy to be made by previous owner within 14 days and shelter of deeming provisions cannot be taken in own damages. Another ruling reported in III (2009) CPJ 13 on the same point is relied upon. Hon’ble Rajasthan State Commission has held that, the complainant-purchaser was not insured person and hence, no right to claim compensation. One more ruling reported in AIR 2009 (NOC) 1654 (NCC) is relied upon. In this short note, Hon’ble National Commission has held that, there being no agreement of transfer of insurance policy between the insurer and the transferee, accident claim filed by transferee cannot be entertained.<br /> <br /> 14. On the other hand, advocate for the complainant has relied on the ruling reported in I (2009) CPJ 138. In this ruling, Hon’ble National Commission has not accepted the contention that, since insurance policy was not transferred after vehicle was transferred in the name of the purchaser, the purchaser has no insurable interest created in favour of the complainant-purchaser, in view of GR-10 issued by Tariff Advisory Committee on sale of vehicle being under the policy on the date of transfer automatically accrued to new owner. Relevant GR quoted reads as under:<br /> <br /> “on transfer of a vehicle, the benefits under the policy in force on the date of transfer shall automatically accrue the new owner.” <br /> <br /> 15. Thus, the learned advocate submitted that, irrespective of the provisions of the Motor Vehicle Act referred to in the rulings relied upon by the advocate for the opposite party, in view of the said GR issued by the Tariff Advisory Committee, the benefit being under the policy in force on the date of the transfer, shall automatically accrued to the new owner. Also, learned advocate points out that, this aspect has not at all been considered in any of the rulings relied upon by the advocate for the opposite party. Further, learned advocate submitted that, many a times, vehicles insured with company paying huge insurance premium, some times even in lakhs, may be transferred on the very next day of taking policy and in such a case, if the policy is not transferred to the purchaser, then the insurance company will be unduly enriched. Further, learned advocate submitted that, as held by our Hon’ble High Court, making application within 14 days as provided in the explanation is not mandatory, but only directory. Also, he states, if the contention of the advocate for the opposite party that, making application within 14 days from the date of transfer of the vehicle is necessary and then, only the company is liable, a situation may arise that on the very next day of purchase insured vehicle may be damaged, before 14 days and under such circumstances, what would be the consequence, nothing could be found in law particularly, the ruling relied upon by the learned advocate for the opposite party. Absolutely, we have no reasons to dis-card this submission. Because, soon after transfer of the vehicle, the earlier owner ceases to be owner of the vehicle in whose name policy stood and unless, application is made by the purchaser to the company to get his name mentioned in the policy as argued for the opposite party, there may be no contractual obligations between the seller and the purchaser on one hand and the insurance company on the other hand. This aspect in fact has rightly been observed by our Hon’ble High Court in the ruling of new India Assurance Company Ltd., cites supra relied upon by the learned advocate for the opposite party that, there is no provision which provides for any consequences on failure to issue intimation of transfer.<br /> <br /> 16. Further, it is relevant to note that, Hon’ble National Commission in the ruling reported in II (2008) CPJ 324 has made certain important observations and for our benefit, we would like to quote paragraphs 5, 6 and 7 which reads thus:-<br /> II (2008) CPJ 324 NC<br /> “As the circular issued in the year 1994 by the General Insurance Company is relevant to the case, the extract is reproduced below:<br /> 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 Rs.15. If the old certificate is not surrendered, a declaration is to be taken from the new owner before issuing a new certificate.”<br /> “In this connection, the National Commission has observed in Revision Petition No.566 of 2002, Shri Narayan Singh V. New India Assurance Company Ltd., in its judgement and order of 22.5.2007, as under:<br /> It appears that in a number of cases Insurance Companies are suppressing this regulation and take undue advantage and contend with all force that as the Insurance Policy was not transferred in favour of the new purchaser, Insurance Companies are not liable to reimburse the insurers or the transferees of the vehicle because the transferees were not having any insurable interest.”<br /> “In fact, in the aforesaid case, the National Commission imposed Rs.1 lakh as punitive costs under section 14(1)(d) of the Consumer Protection Act, 1986 on the Insurance Company for taking an unjustified stand in not disclosing the India Motor Tariff Regulations which were applicable and the amount was ordered to be credited to the Consumer Legal Aid Account.”<br /> <br /> 17. Thus as noted above in the ruling relied upon by the advocate for opposite party in the short note, by the order dated 02.12.2008, Hon’ble National Commission has held that, there being no agreement of transfer of insurance policy, the accident claim of the transferee cannot be entertained. Hon’ble Chatishghad and Hon’ble Rajasthan State Commissions are also, of the same opinion as considered here before. But, in these rulings GR 10 issued by Tariff Advisory Committee under Indian Motor Tariff has not been considered. At the same time, the Hon’ble National Commission in the ruling cited supra relied upon by the advocate for the complainant by the order dated 03.12.2008, has held that, as per GR 10 the benefit under policy on the date of transfer automatically accrued to new owner. It is subsequent ruling. Hence, recent or subsequent decision shall have to be followed. Moreover, at the cost of repetition in the earlier ruling, Hon’ble National Commission as well as State Commissions have not considered GR 10. At the same time, also, it is relevant to note that, the judgement relied upon by the advocate for opposite party has been rendered by Hon’ble Present and two members, whereas the ruling relied upon by the advocate for complainant has been rendered by the Hon’ble President and one member. But, at the cost of repetition, in all the rulings relied upon for the opposite party, GR 10 has not been considered. Under the circumstances, law should be interpreted in favour of the consumer.<br /> <br /> 18. But, unfortunately, the complainant has not at all submitted claim petition to the opposite party and as such, rightly, opposite party in the version has contended that, there being no claim and no repudiation of the same, the present complaint is pre-mature and not maintainable in law. There cannot be any dispute that, there must be cause of action. In the case on hand, since no claim was submitted and that has not been repudiated, we have to hold that, the complaint is pre-mature. For this reason, only our finding is in negative.<br /> <br /> 19. Point No. 2:- Considering the discussion made above and conclusion arrived at, we pass the following order:- <br /> <br /> ORDER<br /> <br /> 1. The Complaint is dismissed, with liberty to file fresh one if desired, in accordance with law.<br /> 2. There is no order as to costs.<br /> 3. Give a copy of this order to each party according to Rules.<br /> <br /> (Dictated to the Stenographer, transcribed by her, transcript revised by us and then pronounced in the open Forum on this the day 11th June 2010)<br /> <br /> <br /> <br /> <br /> <br /> (A.T.Munnoli) <br /> President <br /> <br /> <br /> <br /> (Y.V.Uma Shenoi)<br /> Member<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />