BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

HON’BLE DR. SADHNA SHANKER, MEMBER

For the Appellant                Mr Praveen Kapoor, Advocate

For the Respondent             Mr Tarkeshwar Nath, Advocate (VC)

ORDER

PER SUBHASH CHANDRA

1.     This first appeal under Section 19 of the Consumer Protection Act, 1986 (in short, ‘the Act’) challenges the order of the Delhi State Consumer Disputes Redressal Commission, Delhi (in short, ‘the State Commission’) in Case no. C – 34/ 09 dated 12.08.2013 rejecting the complaint.

2.     We have heard the learned counsel for the parties and have carefully considered the material on record.

3.     The relevant facts of the case, in brief, are that the complainant had entered into an agreement with one Mr Ayoob Hamid Ebrahim who was the registered owner of a Toyota Land Cruiser Prado VX make 2003 for lease of car on 11.05.2004 for a period of two years. According to the complainant the lease agreement was extended from time to time. As per the terms and conditions, the complainant was to get the vehicle insured in the name and obtain the policy from the insurer. According to the complainant, both the parties herein entered into a contract on 31.05.2006 whereby the vehicle was insured on payment of premium of Rs.45,665/- with effect from 31.05.2006 till 30.05.2007. The car met with an accident on 06.05.2007 enroute to Jaipur and the respondent was duly informed. The vehicle was brought to M/s Lakozy Motors Pvt. Ltd., Okhla Phase III, New Delhi, where the surveyor appointed by the respondent inspected the vehicle and declared it to be a case of total loss. The appellant submitted that the insurance claim which was repudiated on 22.11.2007 on the grounds that the vehicle was not registered in the name of the appellant who did not have any insurable interest. Repudiation was challenged before the State Commission praying for a sum of Rs.23 lakh with interest @ 18% per annum along with Rs.5.00 lakh as compensation and cost of litigation. The complaint was rejected on contest on the grounds that the complainant did not have any insurable interest or any right or title to the vehicle. It was also held that:

“the contract of insurance being a contract of indemnity, it was the duty of the complainant to have brought all these material facts to the notice of the OP. OP then will be in a position to accept or reject the proposal for issue of insurance policy. Mere allegation is not enough. There is nothing on record to convince us that all these material facts were brought to the notice of the OP. There appears some kind of misrepresentation in the whole matter of issue of the insurance policy and therefore, we come to the definite conclusion that OP Insurance Company was not guilty of deficiency in service. We also come to the conclusion that the principle of estoppel will not apply unless and until there is some sort of reliable evidence that the insurance policy was not obtained by exercising misrepresentation. Under the circumstances, we find the complaint incompetent and it stands rejected”.

This order is impugned before us.

4.     We have heard the learned counsel for both the parties and the parties have also filed their short synopsis of arguments and argued as per the same.

5.     It is the case of the appellant that the claim was covered under the insurance policy which was based on the lease agreement that had been renewed for a period of one year with effect from 05.05.2006. The original lease Ayoob Hamid Ebrahim had expired on 10.05.2006. It was argued on the basis of Indian Motor Tariff GR 20 that “policies and certificates of insurance are to be issued in the name of Lessee only and issuance in the joint names of Lessee and Lessor is prohibited”. It was contended that as observed in this Commission’s judgment in Shri Narayan Singh vs New India Assurance Co. Ltd., RP no.556 of 2002 dated 22.05.2007, insurance companies were willfully hiding the contents and regulations which are binding on them. Reliance was laid on the ratio laid down by the Hon’ble Supreme Court in Rajendra Pratap Singh vs Rameshwar Prasad (1998) 7 SCC 602) which held that “merely because the document shows only the signature of one of the parties, it is not enough to conclude that the non-signing party has not joined in the execution of the instrument”. It was therefore, contended that the petition be allowed.

6.      Per contra, it was contended by the counsel for the respondent that the State Commission had rightly held that the appellant was neither a registered owner nor had any insurable interest at the time the policy was issued. It was averred that the transfer of the name of the new owner in the Registration Certificate was mandatory as per the Motor Vehicle Act, 1988. It was contended that in the present case the appellant had failed to take such steps and therefore, could not claim any insurable interest or title in the vehicle, since he was neither the owner nor lessee as per lease agreement on the date of the accident. It was submitted that the lease agreement which was valid for a period of two years had expired on 10.05.2006 and therefore, the appellant had no authority to obtain any insurance against the said vehicle after 30/31.05.2006. It was also submitted that the lease agreement under which the earlier policy had been obtained had since expired and because the same had not been renewed on the date of renewal of the policy applied for, the same could not have been renewed. Furthermore, the lease agreement had also expired on 10.05.2006 and hence the insurance claim had been rightly rejected vide letter dated 22.11.2007.

7.     The issue which falls for consideration is whether the repudiation of the claim by the respondent is in order.

8.     It is seen that the Indian Motor Tariff GR 19 states as under:

        GR 19 – Vehicles subject to Hire Purchase Agreement

Policies and certificates of insurance are to be issued in the name of Hirer only and issuance in the joint names of the Hirer and owner is prohibited. If owner’s interest is to be protected it should be done by the issue of Endorsement IMT 5.

For the purpose of the personal accident cover for the owner-driver granted under the policy will continue to be deemed as the Owner-driver subject to condition of the policy relating to this cover.

        GR 20 – Vehicles subject to lease agreement

Policies and certificates of insurance are to be issued in the name of lessee only and issuance in the joint names of the lessee and lessor is prohibited. If lessor’s interest is to be protected, it should be done by the use of Endorsement IMT 6.

For the purpose of the personal accident cover for the owner-driver granted under the policy, the insured named in the policy will continue to be deemed as the owner – driver subject to conditions of the policy relating to this cover.

9.     In the instant case it is not disputed that the original lessor Ayoob Hamid Ebrahim had expired on 10.05.2006. There is no document brought on record by the appellant to establish that the lease had been extended by his successor in title. In fact, it is submitted that merely because both the lessee and the lessor had not signed on the document it could not be presumed that the lessee had no insurable interest in view of the clear position of the Indian Motor Tariff. The submissions cannot be sustained in view of the clear provision in the GR 19 and 20.  On the contrary, the respondent has fairly established that the appellant lacks insurable interest since it had obtained the insurance policy without full disclosure regarding the title of the vehicle in question. The finding of the State Commission is well reasoned and balanced and therefore, cannot be found fault with.

10.   For the aforesaid reasons, we do not find any reasons to disturb the findings of the State Commission holding the appellant did not have any insurable interest and in upholding the repudiation of the claim filed by the appellant seeking to be indemnified against the loss on account of accident.

11.   In view of the foregoing discussion, the revision petition is found to be without merit and is accordingly dismissed. Both the parties shall bear their own cost.

12.   All pending IAs, if any, also stand disposed of by this order.