STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Reliance General Insurance Company Ltd., through Krishna Kant, Legal Manager, Power of Attorney holder of M/s Reliance General Insurance Company Ltd. SCO No.212-214, First Floor, Sector 34-C, Chandigarh.

Earlier Address - SCO No.145-146, Top Floor, VLCC Sector 9, Chandigarh.

……Appellant/Opposite Party No.1

V e r s u s

Rajinder Kaur w/o Sh.Ranjit Singh Chandok, r/o H.No.2110, Sector 38-C, Chandigarh.

....Respondent/complainant

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE: JUSTICE SHAM SUNDER, PRESIDENT.

              MRS. NEENA SANDHU, MEMBER.

Argued by:  Sh.Tajender K.Joshi, Advocate for the appellant.

              Sh.Varinder Arora, Advocate for the respondent.

PER  JUSTICE SHAM SUNDER, PRESIDENT

1.             This appeal is directed against the order dated 25.10.2011, rendered by the District Consumer Disputes Redressal Forum-I,  U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint, and directed the Opposite Parties(now appellant, as the appeal has been filed by Opposite Party no.1 only), as under:-

“In view of the above detailed analysis of the case, it is our considered view that the present case has a lot of merit, substance and weight and it deserves acceptance. Therefore, we accept the complaint and decide the same in favour of the Complainant and against the OPs. OPs No.1 & 2 are directed to pay Rs.6,20,000/- to the complainant towards the claim of the insured vehicle. The OPs are also directed to pay to the complainant a sum of Rs.50,000/- as compensation for physical harassment & mental agony, along with Rs.20,000/- towards costs of litigation. This order be complied with by the OPs, within one month, from the date of receipt of its copy, failing which they would be liable to pay the awarded amount, alongwith interest @ 15% p.a. from the date of filing the present complaint i.e. 24.12.2010, till the amount is actually paid to the complainant, besides paying the litigation cost of Rs.20,000/’’.       

2.              The facts, in brief, are that, the complainant purchased the vehicle, bearing registration No.HR-70-A-2367 from Sh. Gurinderpal Singh, and, subsequently, she got Registration Certificate transferred, in her name. The vehicle, in question, was got insured with the Opposite Parties, for the period from 30.10.2009 to 29.10.2010. Necessary changes were also got made, in the insurance policy. The complainant was allotted new registration No.CH-01-L-1622 (infact CH04L-1622). Thereafter, the complainant sold the vehicle to one Sunil Kumar. On 18.04.2010, during the currency of the policy, when the vehicle was being driven by Sunil Kumar, it caught fire. Mr. Sunil Kumar, called the Fire Brigade immediately,  but in the meanwhile, the car was found to be badly damaged.  DDR No.7 dated 18.04.2010 (Annexure C-4) was also lodged, in this regard. The surveyor carried out the spot inspection of the vehicle on 21.04.2010, at Panipat, and gave his report dated 17.05.2010,  mentioning therein, that few parts of the car were missing, as it was standing on the highway for 2-3 days unattended.  The surveyor demanded documents, such as Registration Certificate, Driving Licence, Identity proof, Fire Brigade report etc. It was stated that despite completion of all the formalities, and even after the service of legal notice dated 10.11.2010 (Annexure -5), upon the Opposite Parties, they did not settle the claim. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.

3.             The Opposite Parties, in their written version, admitted that the vehicle, in question, was insured with them for the period from 30.10.2009 to 29.10.2010. It was stated that since the complainant had already sold the vehicle, in favour of Sunil Kumar,  but neither the registration certificate nor the insurance policy had been transferred in his favour, and, as such, neither she, nor the vendee (Sunil Kumar), had insurable interest. It was further stated that, thus  the Opposite Parties were not liable to indemnify her (complainant). It was further stated that after the claim was lodged with the Opposite Parties, with regard to the damage, caused to the vehicle, in the aforesaid incident, M/s Royal Associates were appointed to investigate the matter. The Surveyor/Investigator, submitted his report, to the effect, that the claim was not genuine. It was further stated that the Surveyor/Investigator opined in his report (Annexure R-1) that the date, time and the place of fire were not correct and the insured did not cooperate with him fully. It was further pointed out by the Surveyor/Investigator that many discrepancies were found in the statements of the persons, who were travelling, in the vehicle, at the time of incident. It was further stated that the other Surveyor M/s Chawla Associates, in its report, pointed out  that many parts of the vehicle were missing and no efforts were made, nor reasonable care was taken, by the complainant, to safeguard the vehicle, by leaving the same, unattended at the place of incident. It was further stated that earlier the vehicle was insured with M/s National Insurance Company and the policy was valid for the period from 31.05.2008 to 30.05.2009. During that period, major loss to the vehicle occurred and the claim was settled on ‘NOS’ basis. It was further stated that the vehicle was got repaired, at that time and transferred, in the name of the insured, but this aspect of the case was never disclosed to the Opposite Parties. It was further stated that the vehicle was not got tested for road-worthiness, and, no certificate from the Motor Vehicle Inspector was obtained. It was further stated that there was suppression of material facts, and non-disclosure of the true facts, and, as such, no claim was payable. It was further stated that a letter dated 21.02.2011 (Annexure R-4) was also written to the complainant, to clarify the aforesaid facts,  but to no avail, and, as such, the claim was closed as ‘No Claim’.  It was further stated that during the course of investigation of the claim, the matter was discussed with the complainant, and she agreed to accept a sum of Rs.6,20,000/-, towards the said loss. It was further stated that, however, the said claim was not found to be payable to her, for the aforesaid reasons. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments were denied, being wrong.

4.             The Parties led evidence, in support of their case.

5.             After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

6.             Feeling aggrieved, the instant appeal, has been filed by the appellant/Opposite Party No.1.

7.             We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully. 

8.             The Counsel for the appellant/Opposite Party No.1, submitted that since, as per her own version, the complainant who was the registered owner of the vehicle, had already sold the same, in favour of one Sunil Kumar, she had no insurable interest, and, as such, the claim was not payable to her. It was further submitted that even Sunil Kumar, had also no insurable interest, and, as such, the claim could also not be settled in his favour. It was further submitted that the mere fact that during the course of investigation of loss, it was found to be to the tune of Rs.6,20,000/-, yet, the same was not found to be payable to the complainant, on the ground, that she had no insurable interest in the vehicle. He further submitted that the District Forum, did not take into consideration, this aspect of the matter, as a result whereof, it fell into  a grave error, in accepting the complaint, in the manner, referred to above, He further submitted that the order of the District Forum, being illegal and invalid, is liable to be set aside.

9.             On the other hand, the Counsel for the respondent/complainant,  submitted  that  since  the    vehicle,

though sold by the complainant, was still registered in the name of the respondent/complainant, in the Registration Certificate, and even the insurance policy was in her name, she had an insurable interest, in the vehicle, and, as such, she was entitled to the claim. He further submitted that even the repudiation of the claim of the complainant was not made by the Opposite Parties, on the ground, that she had no insurable interest, in the vehicle. He further submitted that the loss to the vehicle was assessed to the tune of Rs.6,20,000/-, by the Opposite Parties, themselves, and, once that was agreed  to be accepted, in full and final settlement, by the complainant, they (Opposite Parties) could not turn round to say that she was not entitled to the payment of any amount of loss. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.

10.           After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be accepted, for the reasons to be recorded hereinafter. Admittedly, Rajinder Kaur, was the registered owner of the vehicle, at the time of incident. There is also, no dispute, about the factum, that the insurance policy, in respect of the vehicle, at the time of incident, was also in her name.  She admitted, in the complaint, that she had sold the vehicle after obtaining consideration, from Sunil Kumar, before the incident took place. There is, no dispute, about the factum, that at the time of incident, when the vehicle caught fire and was badly damaged, neither the Registration Certificate of the same had been transferred, in his name, nor any intimation had been given to the Insurance Company, regarding the sale of the said vehicle, in his favour, nor the insurance policy had been transferred, in his favour. Since, the complainant had already sold the vehicle, in favour of Sunil Kumar, before the incident, she certainly had no insurable interest, in the same. Earlier GR-10, issued by the Tariff Advisory Committee, was in vogue from 01.04.1990 to 30.06.2002. According to GR-10, on transfer of vehicle, the benefits under the policy, in force, on the date of transfer were to automatically accrue to the new owner. However GR-10 was replaced by GR-17 w.e.f. 01.07.2002 and the same reads as under:-

“On transfer of ownership, the Liability Only cover, either under a Liability Only Policy or under a Package Policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer,

The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy so that the insurer may make the necessary changes in his record and issue fresh Certificate of Insurance.”

11.           Since, the vehicle had been purchased by Sunil Kumar, from the complainant, as admitted by her, after coming into force of GR-17, the provisions thereof would be applicable to the present case. According to GR-17, on transfer of ownership, transferee is required to apply within 14 days from the date of transfer, in writing, under recorded delivery to the insurer, which had insured the vehicle, with the details of registration of vehicle, date of transfer of the vehicle, previous owner of the vehicle and the date and number of the policy so that the insurer may make necessary changes in the record and issue fresh Certificate of Insurance. Unless, the aforesaid procedure of transfer of vehicle, is followed, and complied with, the transferee has no insurable interest. It would be seen that on receipt of the information from the transferee the Insurance Company is required to make changes, in its record, and issue a fresh Certificate of Insurance. In the present case, admittedly, as pointed out earlier, the transferee i.e. Sunil Kumar, did not get the vehicle transferred, in his name, nor did inform the Insurance Company, regarding such transfer. As stated above, the complainant, after selling the vehicle, in favour of Sunil Kumar, before the date of incident, after receipt of consideration, had no insurable interest, whatsoever, in the same. In this view of the matter, the Opposite Parties were not liable to pay any amount to her (complainant), on account of damage caused to the vehicle, in the fire incident. Similar principle of law, was laid down, in Oriental Insurance Company Limited Vs. Kamal Tours and Travels, III (2011) CPJ 39 (NC), New India Assurance Co. Ltd., Vs. Shri Divya Prashad, I(2011) CPJ 22 (NC) and New India Assurance Co. Ltd., Vs. Dalip Kumar, IV (2011) CPJ 579 (NC).  The District Forum, however, did not take into consideration, this aspect of the matter, and, thus, fell into a grave error, in holding, that the complainant was entitled to the amount of Rs.6,20,000/-, assessed on account of loss to the vehicle, by the Surveyor of the Opposite Parties. The findings of the District Forum, in this regard, being contrary to the provisions of GR-17, and the principle of law, laid down, in the aforesaid cases, being illegal are required to be set aside.

12.           The next question, that falls for consideration,  is, as to whether, the Opposite Parties, could repudiate the claim of the complainant, on the grounds, other than the one, taken by them in the repudiation letter or not, it may be stated here that  if the Insurance Company was not in the know of the sale of the vehicle, at the time of incident, by the registered owner, nor it was brought to its notice, by it (registered owner), then there was no question of repudiating the claim of the complainant,  by it, on that ground. Since, the factum of sale of the vehicle, in favour of Sunil Kumar, and the date, when the same was sold, in his favour, was not brought to the notice of the Insurance Company, earlier to the filing of the complaint, repudiation on the ground of no insurable interest, could not be incorporated in Annexure R-4, repudiation letter dated 21.02.2011. When this factum came to the notice of the Opposite Parties, they took up the objection, in the written version. Repudiation of the claim of the complainant, could certainly be made by the Opposite Parties, on such a ground at any point of time. Non-incorporation of such ground of repudiation, in repudiation letter Annexure R-4, for the reasons, referred to above, did not estop it, from doing so, once that ground came to its notice. Under these circumstances, the submission of the Counsel for the respondent, in this regard, being without merit, must fail, and the same stands rejected.

13.           The Counsel for the respondent, placed reliance on United India Insurance Company Vs. C.M. Ibrahim Kutty, II (2011) CPJ 480, in support of his contention, that since the

complainant, was still the registered owner of the vehicle and the insurance policy was also in her name, at the time of incident, she had insurable interest, in the vehicle. The submission of the Counsel for the respondent, in this regard, does not appear to be correct. A perusal of the facts of United India Insurance Company`s case (supra), relied upon by the  Counsel for the respondent, goes to show that no evidence was produced therein, that the vehicle, in question, had already been sold, in favour of a third party. It was, under these circumstances, held, in the aforesaid case, that the Insurance Company could not repudiate the claim of the registered owner. In the instant case, as stated above, in the complaint itself, the complainant admitted that she had sold the vehicle, in favour of one Sunil Kumar, before the incident. It was Sunil Kumar, who was driving the vehicle, as per admission of the complainant, at the time of incident. In the instant case, on account of unambiguous admission made by the complainant, that she had already sold the vehicle, in favour of Sunil Kumar, it could not be said that she had insurable interest, in the vehicle, at the time of incident. Even otherwise, the facts of United India Insurance Company`s case (supra), being completely distinguishable, from the facts of the instant case, no help can be drawn, by the Counsel for the respondent, therefrom. The submission of the Counsel for the respondent, being without merit, must fail, and the same stands rejected.

14.           The District Forum came to conclusion, that the Opposite Parties, assessed the loss of damage to the vehicle, to the tune of Rs.6,20,000/-, and once the complainant, submitted an affidavit, agreeing to accept that amount, in full and final settlement  of her claim, they (Opposite Parties), could not turn round  and say that she was not entitled to the amount, as she had no insurable interest. In the written version, in so many words,  it was admitted by the Opposite Parties, that loss had been assessed to the tune to Rs.6,20,000/-, but that amount was not payable to the complainant, on the ground, that she had no insurable interest in the vehicle. The affidavit which was submitted by the complainant, was not accepted by the Opposite Parties. Even otherwise, any admission contrary to GR-17, aforesaid, and the

principle of law, laid down, in Oriental Insurance Company Limited Vs. Kamal Tours and Travels, New India Assurance Co. Ltd., Vs. Shri Divya Prashad, and New India Assurance Co. Ltd., Vs. Dalip Kumar, cases (supra), could not estop the Opposite Parties, from repudiating the claim. Had the District Forum taken into consideration, the provisions of GR-17 of the Tariff Advisory Committee and the principle of law, laid down in Oriental Insurance Company Limited Vs. Kamal Tours and Travels, New India Assurance Co. Ltd., Vs. Shri Divya Prashad, and New India Assurance Co. Ltd., Vs. Dalip Kumar, cases (supra),, it would not have fallen into a grave error, in accepting the complaint of the complainant. The findings of the District Forum, in this regard, being illegal, are liable to be set aside.

15.           No other point, was urged, by the Counsel for the parties.

16.           In view of the above discussion, it is held that the order of the District Forum, being not based, on the correct appreciation of evidence and law, on the point, is illegal and perverse, warranting the interference of this Commission, and, the same is liable to be set aside.

17.           For the reasons recorded above, the appeal, is accepted, with no order as to costs. The impugned order dated 25.10.2011, of the District Forum, is set aside. The complaint shall stand dismissed.

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

19.           The file be consigned to Record Room, after completion

Pronounced.

April 16, 2012

Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Rg