IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 27th day of September, 2022
Present: Sri. Manulal V.S. President
Smt. Bindhu R. Member
Sri. K.M. Anto, Member
C C No. 85/2020 (filed on 03-07-2020)
Petitioner : Sandeep R.
S/o. Ratheesan,
Kambiyil House,
Punnapra P.O.
Alappuzha – 688004.
(Adv. Ajin Thomas)
Vs.
Opposite Party : (1) The Manager,
SBI General Insurance
Company Ltd.
DD Trade Tower, 3C
3rd Floor, Kaloor,
Kochi – 682036.
(2) The Manager,
SBI General Insurance
Company Ltd.
Rukmini Towrs, 3/1,
Platform Road, Diagonally
Opp. Mantri Mall, Sheshadripuram
Bangalore – 560020
(For Op1 and 2, Adv. Agi Joseph)
O R D E R
Sri. Manulal V.S. President
Crux of the complaint is as follows:
The complainant is the owner of the Hyundai Grand i10 car bearing registration number KL-4-AH-5092. The complainant had availed a valid bumper to bumper full cover insurance policy from the first opposite party on 25-9-2019 vides policy no. HSB/00301153. The said vehicle met with an accident on 10-12-20 at Mulakkulam near Ambalappady Junction, Piravom. At the time of accident one. Mr. Arun Ravi was driving the vehicle. General diary entry was made in Vellore police station on 13-12-20. The vehicle was taken to m/s Veeteejay Motors Pvt Ltd. Maradu, Kochi which is an authorized service centre for its repair and service. They informed the complainant that an amount of Rs. 3,50,000/- would be necessary for the purpose of repair of the vehicle. Subsequently the complainant made a claim for Rs.350,000/- towards the total damages caused to the vehicle on 18-12-20 to the first opposite party. The vehicle was inspected by IRDAI licensed surveyor and a report on the damages caused to the vehicle was intimated to the first and second opposite parties. Contrary to the general practice the second opposite party denied the claim issuing notice dated 9-1-20 by stating false contentions and allegations. The said notice says about some other policy and policy subscription, which was not associated and related to the complainant. The complainant is entitled to get the claim of Rs.3,50,000/- from the opposite parties as the vehicle involved in the accident was validly insured with the first opposite party. In spite of receipt of lawyers notice issued by the complainant the second opposite party never turned to make a reply. According to the complainant, the act of the opposite parties amounts to deficiency in service and unfair trade practice and the complainant is entitled to get Rs. 25,000/- as compensation. Hence this complaint is filed by the complainant praying for an order to direct the opposite parties to pay Rs.3,50,000/- along with interest and Rs.25,000/- as compensation.
Upon notice opposite parties appeared before the commission and filed joint version as follows:
The complainant had taken a private car package policy from the opposite parties for the car bearing registration number KL-AH-5092 .the policy was issued for the period 29-9-2019 to 28-9-2020. The complainant had claimed for 20% no claim bonus discount and the same was granted by the opposite party in utmost good faith. Subsequently as per G.R. 27 (f) of the Motor Tariff, the details were verified by the opposite party with the previous insurer i.e. M/s Reliance General Insurance Co. Ltd. They informed the opposite parties that a claim was lodged during the policy tenure and settled the same. Thus, the complainant was not eligible for No claim bonus but the benefit was availed by misdeclaration. Therefore, the opposite parties issued notice to the complainant on 22-10-2019 calling upon him to pay the difference premium for reinstatement of the policy. However the complainant did not bother to pay the difference amount thus, the policy stood cancelled and was intimated vide letter dated 20-11-2019. That being so, there is no insurance coverage for own damage section -1.
As the claim was intimated under the policy alleging damage to the insured vehicle in accident , the opposite party appointed a statutory surveyor to assess the loss. The surveyor vide his report assessed the loss to the tune of Rs. 2,21,566/-. However, the surveyor observed the fact as no insurable interest. Opposite party verified the claim documents and it was noted that the vehicle was sold by the insured to one Arun Ravi on 28-6-2019, while the vehicle being under the possession and enjoyment of the purchaser the accident was occurred. Therefore the complainant has no insurable interest in the vehicle and there is no finical loss to the complainant due to the alleged loss. It is submitted in the version that there is no coverage under the policy for own damage and the complainant has no insurable interest . There is no deficiency in service or unfair trade practice on the part of the opposite parties.
Complainant filed proof affidavit in lieu of chief examination and marked exhibit A1 to A10. Leo John who is the deputy manager of the first opposite party filed proof affidavit in lieu of chief examination and marked exhibits B1 to B8 from the side of the opposite parties.
On evaluation of complaint version and evidence on record we would like to consider the following points.
- Whether the complainant had succeeded to prove any deficiency in service or unfair trade practice on the part of the opposite parties?
- If so what are the reliefs and costs?
Point number 1 and 2 together.
Before dealing with the rival submissions and contentions advanced by the learned advocate appearing for complainant as well as opposite parties, it will be pertinent to point out certain undisputed facts. There is no dispute that the complainant had taken a private car package policy from the opposite parties for the car bearing registration number KL-AH-5092. The policy was issued for the period 29-9-2019 to 28-9-2020. There is also no dispute that the said vehicle met with an accident on 10-12-20 at Mulakkulam near Ambalappady
Junction, Piravom. Thereafter the vehicle was taken to Veetejay Motors Pvt Ltd maraud which is an authorized service centre for its repair and service and said Veetejay Motors Pvt Ltd prepared an estimate for Rs. 3,50,000/- for the purpose of repair of the vehicle vide exhibit A4. The opposite parties on receiving claim intimation appointed a statutory surveyor to assess the loss and the surveyor vide exhibit A5 and B5 report assessed the loss to the tune of Rs.2,21,566/-.
The specific case of the complainant is that though he had lodged a claim for Rs.3,50,000/- towards the total damages caused to the vehicle on 18-12-20 with the first opposite party, the same was illegally repudiated by the opposite parties.
The complaint was resisted by the opposite parties on the ground that the own damage section 1 of the motor policy was cancelled after observing that no claim bonus was obtained by the complainant by misdeclaration and the complainant has no insurable interest in the subject vehicle.
Exhibit A1, which is the photo copy of the registration certificate of Hyundai grand i10, Magna 1.2BSIV vehicle bearing registration No. KL-AH-5092 proves that the owner of the vehicle is Sandeep. R. Kambiyil house. Exhibit A2 is the photocopy of the insurance policy no. HSB/00301153 which was issued by the opposite parties in the name of the complainant proves that the Insured declared value of the vehicle is Rs. 2,70,281. It is proved by Exhibit A3 General Dairy abstract of Velloor police station that the said vehicle met with an accident on 10-12-2019 at Mulakkulam near Ambalappady Junction,Piravom while the vehicle was driven by one Arun Ravi. It can be seen from the perusal of Exhibit A1 that the vehicle was hypothecated to HDFC Bank Ltd Cochin.
LAWS (SC) 2020 6 35 (SC)in case of Surendra Kumbar Bhilve vs. New India Assurance Co. Ltd. wherein, it is held as under: "31. In our considered opinion, Sections 19 and 20 of the Sale of Goods Act, 1930, which deal with the stage at which the property in movable goods passes to the buyer, is of no assistance to the Insurer. There can be no doubt that property in a specific movable property is transferred to the buyer at such time as parties to the contract intend it to be transferred, provided such immovable property is free to be transferred, and/or in other words capable of being transferred.
32. If there is an impediment to the transfer, as in the instant case, where „No Objection‟ of the financier bank was imperative for transfer of the said truck, there could be no question of transfer of title until the impediment were removed, for otherwise the contract for transfer would be injurious to the financier bank, immoral, unlawful and void under Section 10 read with Sections 23 and 24 of the Contract Act, 1872.
33. It was thus, an implicit condition of the agreement for transfer of the said truck, that the transfer would be complete only upon issuance of „No Objection" by the financier bank and upon compliance with the statutory requirements for transfer of a motor vehicle.
34. The contract in this case, could not possibly have been an unconditional contract of transfer of movable property in deliverable state, but a contract to transfer, contingent upon „No Objection" from ICICI Bank, and compliance with the statutory provisions of the Motor Vehicles Act, 1988 and the Rules framed thereunder. Sections 19 and 20 of the Sale of Goods Act are not attracted.
36. It would also be pertinent to note the difference between the definition of owner in Section 2(30) of the Motor Vehicles Act, 1988 and the definition of owner in Section 2(19) of the Motor Vehicles Act, 1939 which has been repealed and replaced by the Motor Vehicles Act, 1988. Under the old Act „owner‟ meant the person in possession of a motor vehicle. The definition has undergone a change. Legislature has consciously changed the definition of „owner‟ to mean the person in whose name the motor vehicle stands.
41. It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws.
47. In Pushpa @ Leela And Others vs. Shakuntala and 3 Others, the question before this Court was, whether liability to pay compensation to third parties as determined by the Motor Vehicles Accidents Claims Tribunal in case of an accident, was that of the purchaser of the vehicle alone, or whether the liability of the recorded owner of the vehicle was coextensive, and from the recorded owner it would pass on to the Insurer of the vehicle. This Court found that the person whose name continued in the records of the registering authority as the owner of the truck was equally liable for payment of the compensation, having regard to the provisions of Section 2(30)read with Section 50 of the Motor Vehicles Act, 1988 and since an insurance policy had been taken out in the name of the recorded owner, he was indemnified and the Insurer would be liable to satisfy the third party claims.
49. The Judgment of this Court in Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident.”
As ratio laid down by Hon‟ble Supreme Court in case of Surendra Kumbar Bhilve (supra) if, there is an impediment to the transfer, there could be no question of transfer of title until the impediment was removed, or otherwise the contract for transfer would be injurious to the financer, immoral and unlawful and void under section 10, 23 and 24 of the Contract Act. If registration continue to remain in the name of owner and when vehicle is insured in the name of owner, insurance company remain liable to compensate any damage.
In view of the ratio laid down in above referred judgments the complainant was the owner on the date of incident and the insurance policy was in existence therefore, it cannot be denied that the complainant has no insurable interest
Coming into the next contention of the opposite parties that the own damage section 1 of the motor policy dispute was cancelled after observing no claim bonus was obtained by the complainant by wrongful representation. On perusal of exhibit A2, we can see that there was an endorsement regarding the previous policy. On a close scrutiny we can see that it was recorded in Exhibit A2 that previous policy number as 99149823110081705 and the name of the previous insurer as RGI. Exhibit B2 is the copy of the mail from Hon’ble NCDRC in Harjinder Singh Lal vs Branch Manager, Oriental decided on 15 February 2016 has held as follows:
“The contracts of insurance are based on the doctrine of Uberrima-fides, i.e. utmost good faith. The person, obtaining the insurance policy, is required to disclose all the material information in his knowledge, which may affect the mind of the insurer, to accept or reject the proposal made for the insurance. It is very much clear from the contents of the proposal form itself, that in case any information furnished by the complainant was found to be false, all the benefits under the insurance policy were to be forfeited. It is now well settled that the contracts of insurance are to be construed strictly. The facts were similar in Tata AIG General Insurance Company Limited & Another Vs. Gulzari Singh (2010) (2) CPJ (NC) 272. In that case, also the insurance policy regarding the vehicle was obtained by suppressing the material facts regarding making of claims under the previous insurance policy and by giving wrong declaration regarding "No Claim Bonus". By relying upon the judgment of the Hon'ble Supreme Court reported in (1991) 1 SCC 357 (LIC of India Vs. G.M. Channabasamma); wherein it was held that a contract of insurance is a contract of Uberrima-fides and there must be complete good faith on the part of the assured and the assured is under a solemn obligation to make full disclosure of material facts which may be relevant for insurer to take into an account the claim of the complainant was disallowed by the Hon'ble National Commission. It was held therein that the directions, to adjust "No Claim Bonus" against the amount of damage assessed, passed by the State Commission clearly violates the settled principle of law and, therefore, cannot be sustained. In view of the ratio of those judgments, it is to be held that the opposite parties were justified in repudiating the claim of the complainant, on the ground of obtaining the "No Claim Bonus", by concealing the material facts, rendering the contract of insurance void ab initio. In these circumstances, the findings recorded by the District Forum, to the contrary, cannot be sustained and are set aside”.
In the light of above discussed evidence and the judgment we are of the opinion that the complainant failed to prove deficiency in service or unfair trade practice on the part of the opposite parties and the complaint is liable to dismiss. Hence, the complaint is dismissed.
Pronounced in the Open Commission on this the 27th day of September, 2022
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R. Member Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 – Copy of RC book (KL-04-AH-5092)
A2 – Copy of insurance policy
A3 –Copy of General Diary Abstract dtd.06-07-2020 from Sub Inspector of Police, Velloor police station
A4- Copy of estimate from M/s. Veeteejay Motors dtd.20-12-19 (subject to proof)
A5- Copy of survey report by Jagadeesh M.
A6 –Copy of claim declination letter dtd.09-01-2020
A7 – Copy of lawyers notice dtd.23-03-2020
A8 – Copy of postal receipt and acknowledgement card
A9 – Letter dtd.10-08-2020 by opposite party to Adv. Ajin Thomas
A10- Copy of lawyers notice dtd.22-05-2020 by Adv. Nidhi Singh to Adv.Ajin Thomas
Exhibits marked from the side of opposite party
B1 – Copy of policy with terms and conditions
B2 – Copy of E-mail from Confirmation NCB to Confrimation NCB
B3 – Copy of letter dtd.22-10-2019 by opposite party to petitioner
B4 – Copy of letter dtd.20-11-2019 by opposite party to petitioner
B5- Copy of survey report by Jagadeesh M.
B6 – Copy of sale agreement
B7 – Copy of General Diary abstract
B8 – Copy of claim declination letter
By Order
Sd/-
Assistant Registrar
