STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA
Date of Institution: 19.12.2018
Date of final hearing: 27.04.2023
Date of pronouncement: 16.05.2023
First Appeal No.1355 of 2018
In the matter of :-
Royal Sundaram General Insurance Company Ltd., Nelson Mandela Road, Vasat Kunj, New Delhi through Mr. Omkar, Manager Legal, Royal Sundaram General India Insurance, No.1, II Floor, Subramaniam Building, Club House Road, Chennai. .…..Appellant
Versus
- Pravinder son of Shri Ved Parkash, aged 35 years, R/o village Maheshwari, Sub Tehsil Dharuhera, Tehsil and Distt. Rewari, Haryana.
- Royal Sundaram Alliance Insurance Company Ltd. at Maruti Suzuki Authorized Dealer, Bawal road, Rewari through its Branch Manager/Agent. …..Respondents
CORAM: Naresh Katyal, Judicial Member
Argued by:- Sh.Sachin Ohri, Advocate for the appellant.
None for the respondent No.1.
Presence of respondent No.2 already dispensed with.
ORDER
NARESH KATYAL, JUDICIAL MEMBER:
Delay of 13 days in filing of present appeal stands condoned for the reasons mentioned in the application for condonation of delay.
OP No. 1-Royal Sundaram Alliance Ins. Co. Ltd. is in appeal. Insurer has invited a challenge to the legality of order dated 26.10.2018 passed by District Consumer Disputes Redressal Forum, Rewari (In short “District Commission”) in complaint case No.122 2017, which has been allowed.
2. Factual matrix in brief is: complainant’s vehicle-Swift Dezire car bearing No. HR-36V1839, insured with opposite party No. 1-appellant for period from 12.10.2014 to 11.10.2015 was stolen in the intervening night of 28/29.06.2015 in front of house of Amar Singh S/o Shri Lal Singh. On search, it was not found. FIR No. 285 was lodged on 30.6.2015 u/s 379 of IPC in P.S. Dharuhera by Amar Singh. Insurer was informed about theft and necessary documents were submitted to it but claim has not been paid to complainant. It is alleged that an agreement was executed between complainant and Amar Singh for sale and purchase of this vehicle, but since, entire amount has not been given by Shri Amar Singh to complainant; all rights in the vehicle are still in favour of complainant. He is still its owner. Insurance and RC of the vehicle is still in his name and thus he is entitled to claim insured amount. On these premises, complaint for seeking claim of Rs.5,35,158/- with interest and compensation was filed. Compensation of Rs.50,000/- on account of deficiency in service and unfair trade practice of appellant and amount of Rs.11,000/- towards litigation charges has also been claimed.
3. Appellant/insurer raised contest. In defence so entered, it is pleaded complainant did not have insurable interest in vehicle. Fact as to change in ownership was willfully suppressed in complaint. Complainant has no locus-standi to file complaint considering change in ownership. There is gross violation of policy condition as there is delayed intimation of theft. Complainant took Private Car Package Policy from insurer for his car bearing No. HR-36V-1839, Engine and Chassis No. as 2225447 & 410085 respectively. Policy was issued for period from 12.10.2014 to 11.10.2015 subject to its terms and conditions. Claim was intimated by Amar Singh on 07.07.2015 alleging theft of insured vehicle on 28.06.2015 i.e. after 9 days of alleged loss. It is necessary to intimate a claim immediately on occurrence of loss, giving rise to a claim under policy. Delay (9days) is violation of policy condition No.1. On inquiry, it was clarified that Amar Singh had bought the vehicle from complainant-Parvinder. Sale deed transferring the interest in vehicle from complainant Parvinder to Amar Singh mentions that vehicle was sold for consideration of Rs.1,85,000/-. At the time of loss; complainant did not have any insurable interest in vehicle, so there was no valid contract of insurance. There is no liability cast on insurer to entertain claim considering absence of insurable interest, which forms the basis for any insurance contract. Investigation was arranged by it and conducted by M/s Allied Recovery and Investigation Bureau. It established the change of ownership. Written statement was obtained from Amar Singh confirming sale and consideration. Even neighbourer’s statement confirmed Amar Singh’s ownership. On these pleas, and by relying on Indian Motor Tariff GR-17 (it is reproduced in para No. 8 of its written version); dismissal of compliant has been prayed, on ground of blatant violation of policy condition.
4. Parties led their respective evidence oral as well as documentary.
5. After subjectively analyzing the same, learned District Commission, Rewari has allowed the complaint and directed appellant/insurer to pay the claim of complainant on nonstandard basis i.e. 75% of insured declared value i.e. Rs.5,35,158/- within 45 days from receipt of order, failing which, the amount will carry 9% interest p.a. from date of order, till payment.
6. Feeling aggrieved, insurer has filed this appeal.
7. During proceedings of this appeal, as it is apparent from previous zimni orders; Parvinder (contesting respondent No.1) did not appear, despite service. For once, Ms Ishita Jain, Advocate had appeared on his behalf on 02.08.2022. Subsequently, even she did not appear. There is no power of attorney of complainant in favour of Ms. Ishita Jain, Advocate. This being the position learned counsel for insurer has argued this appeal on 27.04.2023.
8. Learned Counsel appearing for insurer/appellant has raised two contentions. First contention is that: the District forum cannot award compensation (75% of IDV) on non-standard basis to complainant. The award to that effect, is grossly erroneous, illegal and contrary to settled law. Second contention is that: on the date of theft; complainant has no insurable interest as he had already transferred the physical possession of vehicle in favour of Amar Singh. It is urged that even if Registration Certificate and insurance policy of stolen vehicle were still in the name of complainant –Parvinder, yet it will not make any majestic difference to confer insurable interest upon complainant particularly when claim lodged with the insurer/appellant by complainant, was founded on the basis of “own damage claim”, so resulted due to theft of vehicle occurred on intervening night of 28/29-06-2015. It is urged that there is delay of 9 days in intimating the incident of theft to insurer and there is gross violation of GR-17 pertaining to transfer of vehicle. Insurer has no surviving liability toward insured in the absence of insurable interest of insured, after transfer of vehicle by insured to any other person.
9. On critically analyzing the submissions of learned counsel for appellant; this Commission is of firm view that impugned order dated 26.02.2018 is legally unsustainable. Complainant is registered owner of Swift Dezire No. HR-36V-1839. It was insured with appellant and currency of insurance was from 12.10.2014 to 11.10.2015. This vehicle was stolen in the night of 28/29.06.2015 in front of house of Amar Singh S/o Lal Singh who lodged FIR No. 285 dated 30.06.2015 in P.S. Dharuhera (Annexure A-4). Text of FIR is very important. Complainant therein (Amar Singh) has alleged that he purchased Swift Dezire No. HR-36V-1839 for personal work from Parvinder S/o Ved Parkash (Complainant herein). This quality recital is fortified by complainant’s (Parvinder’s) own statement on stamp paper (Annexure A-5) which also bears his signature and signature of purchaser Amar Singh. There is corresponding statement (Annexure A-6) as well confirming the sale. Therefore, Amar Singh (purchaser) did had a concern with stolen vehicle No. HR-36V-1839 and that is how; he lodged FIR. From conjoint reading of documents Annexure A-5 and Annexure A-6 it is evident that sale transaction of Vehicle No. HR-36V-1839 had taken placed on 20.01.2015 i.e. more than five months prior to theft.
10. Learned District Commission is swayed away by the mere fact that registration of stolen vehicle and insurance policy are still in the name of complainant-Parvinder. May be that; still no insurable interest is devolved upon complainant. Vehicle (HR-36V-1839) was stolen on 28/29.06.2015. Though, insurer was intimated about the theft after 09 days on 07.07.2015 yet its ownership was not transferred in the record of Registering Authority and complainant-Parvinder continued to remained as insured in policy (Annexure A-2). This is evident from phraseology of para No. 7 of complaint. This fact, as pleaded, will not stimulate any cause of complainant and his right to lodge claim with insurer, stood foreclosed because transaction of sale stood complete, for all intends and purposes, on delivery of vehicle to Amar Singh.
11. Hon’ble National Consumer Commission, New Delhi in case titled as “V.A. Sreekumar versus Sr. Divisional Manager, New India Assurance Co. Ltd. and others” Revision Petition No. 3732 of 2017 in Appeal No. 184 of 2014 decided on 30.01.2018 has held in Para No. 3 to Para No. 6 of its judgment in following terms:-
“3. It is submitted by the learned counsel for the petitioner/complainant that the sale transaction was not complete as the vehicle stood in the name of the complainant/petitioner in the record of the concerned licensing authority on the date it was stolen.
4. Section 19 of the Sale of Goods Act to the extent it is relevant provides that where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. Unless a different intention appears, the rules contained in section 20 to 24 are the rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. Section 20 of the Act provides that where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed.
Section 157(2) of the Motor Vehicle Act, requires transferee of the vehicle to apply within 14 days from the date of the transfer to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described therein, in his favour.
5. Dealing with this issue, this Commission in Revision Petition No.1347 of 2008, New India Assurance Co. Ltd. Vs. Smt. Bimlesh decided on 03-09-2014 inter alia held as under:
“13. In our view, when the owner of a vehicle sells the said vehicle to another person, and executes a sale letter, without in any manner postponing the passing of title/property in the vehicle, the ownership in the vehicle passes to the purchaser on execution of the sale letter itself. The delivery of the vehicle only reinforces the title which the purchaser gets to the vehicle on execution of the sale letter in his favour. As far as transfer of the vehicle in the name of the purchaser in the record of the RTO is concerned, that is a requirement for the purpose of the Motor Vehicle Act but that does not postpone the transfer of the ownership in the vehicle to the purchaser till the time the vehicle is transferred in his name in the purchaser in the record of the concerned RTO.”
Section 50 of The Motor Vehicles Act casts an obligation upon the transferor and the transferee to report the factum of transfer to the Registering Authority. But this obligation arises only after the transfer of the vehicle has already taken place. The aforesaid provision does not envisage any kind of reporting to or permission of the registering authority even before the ownership of the vehicle is transferred from one person to other. Thus, the above referred provision in my view, only reinforces the view that the ownership of a vehicle is transferred on the sale and delivery of the vehicle and the requirement of informing the transfer to the registering authority is only a post transfer statutory requirement.
Once it is proved that the ownership of the vehicle had transferred from the insured to another person before the theft or accident of the vehicle, as the case may be, the transferee of the vehicle, having no insurable interest in the vehicle at the time of the theft / accident, will not be entitled to any reimbursement from the insurer. He having already sold the ownership of the vehicle, if the insurer is made to pay to him, it will not be a reimbursement but will become a bounty for the person who has already sold the vehicle. The insurance policy entitles the insured only to reimbursement for the loss suffered by him. If no loss has been suffered by him, there can be no question of any reimbursement from the insurer.
6. For the reasons stated hereinabove, I hold that the petitioner/complainant did not have an insurable interest in the vehicle on the day it was stolen.”
Consequently, in present appeal before this Commission it is held that complainant-Parvinder who had already sold the vehicle and delivered its possession to Amar Singh before theft, had no surviving insurable interest despite he continue to be registered owner in the record of Registering Authority and continued to remain insured in the policy. Above cited judgment (V.A. Sreekumar’s case) is squarely applicable to facts of this case. Section 157 (2) of the Motor Vehicle Act apparently runs inconsonance with recital of GR-17. The legal implications flowing therefrom, cannot be ignored. Hence, this poser, put before this Commission is answered in favour of appellant/insurer.
12. Now, the second poser before this Commission is: Can direction to insurer to make payment on non-standard basis be issued, particularly where, insurer is a private company, like in present case, appellant/insurer is a private player. This poser has got its answer from the judgment of Hon’ble National Commission passed in case titled as “Iffco Tokio Gen. Ins. Co. Ltd. versus Gaurav Bhargava” Revision Petition No. 4290 of 2010 decided on 28.01.2015. In that judgment Hon’ble National Commission has allowed Revision Petition; set aside the order of State Commission which had ordered private insurance company to pay sum of Rs.1,98,000/- along with 6% interest on non-standard basis, and dismissed the complaint. In this judgment (Iffco tokio’s case supra) ratio of law laid down by Hon’ble Apex Court in case titled as “United India Insurance Company Ltd. versus Manubhai Dharmasinhbhai Gajera and ors” 2008 CTJ 794 (SC) has been cited in which it has been held that:-
“51. We, however, do not mean to say that even in the field of contract, qua contract, the State is not free to negotiate its terms; what we mean to say is that its action cannot be arbitrary. Role of both are different. A private player, as the law stands now, may not be bound to comply with the constitutional requirements of the equality clause the appellants are.
53. There exists a distinction between a private player in the field and a public sector insurance company. Whereas, a private player in the field is only bound by the statutory regulations operating in the field, the public sector insurance companies are also bound by the directions issued by the General Insurance Corporation as also the Central Government. They cannot be ignored. The said directions are not said to be in derogation of the statutory provisions. Their validity is not under challenge.”
Hon’ble National Commission in (Iffco Tokio’s case supra) has further taken note of order of the Hon’ble Supreme Court in cases titled as “National Insurance Co. Ltd. Vs. Nitin Khandelwal” reported in 2008 (7) Scale 351 and “National Insurance Co. Ltd. Vs. Meena Aggarwal”, IV (2009) CPJ 25 (SC) and while agreeing to the contentions of learned counsel for appellant/insurer has observed that payment of non-standard basis is not applicable to the case before it.
13. Learned counsel for the appellant has argued accordingly on the force and strength of above cited judgment (Iffco Tokio’s case) by urging that while issuing direction to pay 75% of IDV value i.e. Rs.5,35,158/- an illegality has been committed by learned District Commission because here in present case also the appellant is a private insurer. This contention of learned counsel for appellant carries weight. Here, it has to be borne in mind that nature of claim lodged by complainant-Parvinder was of the type of ‘own damage claim’. It was not a claim of any third party. Hence, the well settled legal adage that: liability of insurer would still continue to subsist in case of transfer of vehicle to any third person by insured, despite no transfer of ownership is effected in record of Registering Authority, will not be attracted. There is gross violation of mandatory provision of Motor Vehicle Act and instructions of GR-17 on the part of insured of vehicle (Parvinder/Complainant) and subsequent purchaser (Amar Singh). Notwithstanding that claim form was also signed by subsequent purchaser Amar Singh yet, this Commission is not oblivious of the fact that policy was not transferred in the name of Amar Singh. It continued in the name of complainant. Therefore, neither complainant/Parvinder, nor Amar Singh have any surviving insurable interest. In wake of above critical discussion, it is held that direction to pay compensation on non-standard basis cannot be issued to private insurance company. Private insurer cannot be fastened with any liability, in factual scenario of this case. This being so, impugned order dated 26.10.2018 is legally unsustainable. It is accordingly set aside. This appeal is accepted. As a corollary so flowing; the complaint filed by complainant before learned District Commission stand dismissed.
14. If, appellant has deposited any amount on the basis of order of this Commission dated 02.09.2019 before learned District Commission, then appellant is at liberty to retrieve back the deposited amount by filing execution on the force of this order.
15. Statutory amount of Rs.25,000/- deposited by appellant at the time of filing of this appeal be refunded to it, after due identification and verification as per rules and on expiry of period meant for further appeal /revision, if any.
16. Applications pending, if any stand disposed of in terms of the aforesaid judgment.
17. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
18. File be consigned to record room.
Date of pronouncement: 16th May, 2023
