BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.197 of 2015

Date of Instt. 12.05.2015

Date of Decision :09.09.2015

1.Gurpreet Singh son of Barjinder Singh R/o H.No.45-D, Division No.2, now R/o H.No.9, Bhupinder Nagar, Nagra Road, Maqsudan, Jalandhar.

2. Ashok Kumar aged about 46 years son of Amir Chand R/o H.No.42, Mohalla Suraj Ganj, Jalandhar and C/o Transport Nagar, Jalandhar.

..........Complainants

Versus

National Insurance Company Limited, Branch No.2, 89, Mahavir Marg, BMC Chowk, Jalandhar through its Branch Manager.

.........Opposite party.

Complaint Under the Consumer Protection Act.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Sh.Parminder Sharma (Member)

Present: Sh.Anuj Mehta Adv., counsel for complainants.

Sh.RS Arora Adv., counsel for opposite party.

Order

J.S.Bhatia (President)

1. The complainants have filed the present complaint under the Consumer Protection Act, against the opposite party on the averments that the complainant No.1 is registered owner of LPT Truck bearing registration No.PB-08AB-9639, Model 2000 bearing Engine No.00862136393, Chasis No.388002 BZZ103653. Due to busyness in his work, the complainant No.1 authorized complainant No.2 to ply the above said vehicle on his behalf and had also given his power of attorney to the complainant No.2. The said vehicle was duly got insured with the opposite party regularly and the opposite party was regularly accepting the premium from the complainants and have not raised any objection upon any act of the complainants. Unfortunately, the said vehicle was stolen on the intervening night between 17.11.2014 and 18.11.2014 from the outside area of the driver of the truck and FIR was duly registered regarding the said occurrence before P.S. Division No.8, Jalandhar, vide FIR No.224 dated 26.11.2014. Thereafter, the complainant lodged the claim before the opposite party and also submitted all the necessary documents and completed all the formalities, as sought by the opposite party. Thereafter, the opposite party started linger on the genuine claim of the complainant on one pretext to the other and started harassing without any sufficient reason. Thereafter, the complainants were surprised to get the letter from the opposite party on 27.2.2015, in which, they have alleged that their claim has been repudiated on flimsy grounds by saying that the complainant No.1 is not having insurable interest in the vehicle. The complainant No.1 is registered owner of the vehicle in question and the insurance policy is also in his name and he had lodged the claim before the opposite party for getting the same and there is no law that the complainant no.1 can not give his authority to any person to ply his vehicle, so there is no illegal act on the part of the complainant No.1 by giving his attorney to complainant No.2, as such, the act and conduct of the opposite party is against the law and also against the principle of natural justice. On such like averments, the complainants have prayed for directing the opposite party to pay the claim amount.

2. Upon notice, opposite party appeared and filed a written reply pleading that once the vehicle was in custody and control of Ashok Kumar with whom the opposite party had no connection or fiduciary relationship of insurer and insured, the opposite party is not liable. The test to be applied is, that insured must have the insurable interest both at the time of taking of the insurance and also at the time of the loss. In this case, the complainant no.1 had no insurable interest at the time of obtaining the insurance nor at the time of loss, and similarly the complainant No.2 had no privity of contract with the opposite party, therefore, the opposite party is not liable to either of the complainants. It was only the complainant No.2 who had the possession and had the insurable interest. The vehicle was sold by the complainant No.1 to the complainant No.2 as per the statement of the complainant No1. The enclosed statement of the complainant no.1 does nowhere state that due to busyness, he had authorized the complainant No.2 to ply the vehicle in question. The power of attorney is dated 2.8.2011 whereby among other the complainant No.1 had given full authority to sell the said vehicle to any other person/party of his own will and wish. Even in his statement, the complainant no.1 admits having sold away this vehicle. The insurance given by the insurance company was in good faith and the company could not know the inside reality. Had the company been told of this reality, the complainant No.1 would not have given him the insurance. It is submitted that his above statement does not say anywhere that the company had been told of the reality, and despite of the company being told, the company gave the insurance in his name. It is submitted that the insurance obtained by the complainant was with the concealment of material facts, therefore, the insurance is void. It is further submitted that when the complainant who claims himself to be the insured, had parted with the possession, given away the key and complete control over the vehicle after obtaining the full consideration of Rs.4.90 Lac now can not come to claim that he had the insurable interest. And the one Ashok Kumar who had the insurable interest had no privity of contract with the insurance company. It denied other material averments of the complainant.

3. In support of their complaint, learned counsel for the complainants has tendered into evidence affidavit Ex.CA alongwith copies of documents Ex.C1 to Ex.C12 and evidence of the complainants was closed by order.

4. On the other hand, learned counsel for opposite party has tendered affidavit Ex.OA alongwith copy of document Ex.O1 and closed evidence.

5. We have carefully gone through the record and also heard the learned counsels for the parties.

6. Ex.C6 is insurance policy issued by the opposite party insurance company in favour of complainant No.1 Gurpreet Singh and it was valid from 3.9.2014 to 2.9.2015. It is not disputed that insured truck was stolen on the intervening night between 17.11.2014 and 18.11.2014 when the same was in possession of complainant no.2 Ashok Kumar. Said Ashok Kumar lodged FIR Ex.C7. The complainant No.1 lodged the claim with the insurance company but it repudiated his claim vide letter dated 27.2.2015 on the ground that he has sold the vehicle on 2.8.2011 to Ashok Kumar, so he had no insurable interest in the vehicle and competent authority has repudiated the claim. Counsel for the complainants contended that complainant No.1 has only given the insured truck to complainant No.2 to ply on his behalf and has executed special power of attorney Ex.C4 on 2.8.2011 in his favour. He further contended that complainant No.1 never suffered statement Ex.O1 before the investigator voluntarily. He further contended that the certificate of registration is in the name of complainant No.1 and for all intents and purposes, he is owner of the same. On the other hand it has been contended by learned counsel for the opposite party insurance company that the insured truck was in possession of Ashok Kumar when it was stolen and even FIR Ex.C7 was lodged by him. He further contended that even complainant No.1 has executed special power of attorney Ex.C4 in favour of complainant No.2 giving him power even to sell the vehicle. He further contended that statement Ex.O1 was voluntarily suffered by the complainant before the investigator and from this statement it stands proved that complainant No.1 has sold the insured truck to complainant No.2 on 2.8.2011. We have carefully considered the contentions advanced by learned counsels for both the parties. Special power of attorney dated 2.8.2011 was executed by complainant no.1 in favour of complainant No.2 in the year 2011 and in case he has sold the same to Ashok Kumar in the year 2011 then there was no need for the complainant no.1 to obtain the insurance policy in question in the year 2014 in his own name. Counsel for the complainants contended that the truck has been attached with the M/s Ashok Transport and due to this reason power of attorney was executed in favour of Ashok Kumar. The opposite party insurance company has not examined the investigator nor tendered his affidavit who recorded the statement Ex.O1 of Gurpreet Singh. Ex.C1 is copy of certificate of registration of the insured truck and as per endorsement on it, the insured truck was under higher purchase/hypothecation agreement with M/s Mand Finance Limited. This endorsement was never got deleted at any point of time before theft and is still there in the certificate of registration. So when the insured truck was under higher purchase/hypothecation agreement with M/s Mand Finance Limited, the question of complete sale by complainant No.1 in favour of complainant No.2 does not arise. However, at the time of arguments, counsel for the complainant No.1 produced 'No Objection Certificate' given by the above said finance company which has been placed on record. The same is dated 21.9.2015. Even if, for the arguments sake, it is assumed that complainant No.1 has sold the insured truck in favour of complainant No.2, the opposite party insurance company can not evade its liability to pay the claim to the insured i.e complainant No.1. Recently in Prem Devi Vs. Cholamandalam MS General Insurance Company Limited, II (2015) CPJ 646 (NC), the Hon'ble National Commission has held as under:-

"6. Learned counsel for the insurance company further vehemently argued that as per sections 19 and 20 of the Sale of Goods Act, the sale already stands complete. Smt.Sita Devi has become the sole owner of the car. Consequently, the insurer is discharged from its liability. Again, it was intended that the sale should be completed as per the above said covenants of the agreement. This is unconditional sale and therefore, sections 19 and 20 come into play.

7. However, the arguments urged by learned counsel for the respondent pale into insignificance in view of the judgment reported in the case titled as National Insurance Company Ltd Vs. Jaipal Singh and Others, Revision Petition no.2262 of 2007, decided on 11.11.2011 by a Bench presided over by Hon'ble Mr.Justice Ashok Bhan, President. The relevant extract of this judgment runs as under:-

"The stand taken by the petitioner that it is not liable to pay either to the original owner, in whose name the insurance cover stands as he ceased to have any insurable interest after the transfer and to be subsequent vendee because it did not have any privity of contract with him, can not be accepted. The insurance cover was still valid. Insurance company would either is liable to pay the original owner or to the subsequent vendee. It can not absolve itself of its liability to pay by taking contradictory stands. In the case of subsequent vendee, the stand taken by the petitioner is that it does not have any privity of contract with him as the insurance cover had not been transferred in his name. It absolves itself of the liability to pay the original owner on the ground that he had divested himself of the insurance interest by transferring the property. This stand is contradictory. The insurance company would be liable to pay the person in whose name the insurance cover stands. The stand taken by the petitioner is neither legal nor morally acceptable.

8. A two Members Bench of this Commission in Banowarial Agarwalla Vs. National Insurance Company Ltd. & Anr, IV (2005) CPJ 110 (NC), taking into consideration the judgment of complete insurance's case (supra) has held that the transferee in the absence of transfer of the insurance cover can not claim compensation from the insurance company but such cover stands in the name of the original owner, the original owner could claim the damages from the insurance company. Relevant observations of the Bench reads as under:-

"10.Be that as it may,it has also been held that since it is the vehicle which is insured and that cover is not disputed, only question involved is who should have preferred the claim? As rightly interpreted above, the petitioner has got no locus to file this complaint as he was not the insured. The only flaw in this case is that the claim should have been filed by the original policy holder and not by the complainant/purchaser of the vehicle. In this slightly technical situation, what could have been done was to have the complaint filed by the insured. Keeping in the mind the principle of indemnification of loss by the insurers, in our view, this technicality should not come in the way of the insurance company honouring its part of the contract. In the facts and circumstances of the case, we direct that the claim before the respondent-insurance company be filed by the insured as per policy, within a period of 6 weeks of passing of this order upon which the respondent shall consider the case as per law. The time spent before the Consumer Forums in pursing his remedy by way of filing this complaint, shall have to be condoned, as it appears that it was on account of some wrong advice that this procedure was initiated. Upon filing a complaint by the insured as per policy, the respondent shall sympathetically consider the claim in view of the report of the surveyor which is on record and settle the claim as per terms of the policy, expeditiously".

7. The ratio of above cited authority is applicable on the facts of the present case. Since as per original RC, the complainant No.1 is still owner and insurance policy was also obtained by him. So, the insurance company can not evade its liability on the ground that it has no insurable interest in the stolen truck. The claim of the complainant has been repudiated only on this ground. As per certificate of insurance Ex.C6, the insured declared value i.e IDV of the insured truck was Rs.2,50,000/-. So insurance company is liable to pay this amount to the insured i.e complainant No.1.

8. In view of above discussion, the present complaint is accepted and opposite party insurance company is directed of pay Rs.2,50,000/- to complainant No.1 alongwith 9% interest from the date of repudiation of claim till the date of payment. However, it is made clear that interest amount is being granted by way of compensation. The complainant is also awarded Rs.3000/- on account of litigation expenses. Copies of the order be sent to the parties free of costs under rules. File be consigned to the record room.

Dated Parminder Sharma Jyotsna Thatai Jaspal Singh Bhatia

09.09.2015 Member Member President