STATE CONSUMER DISPUTES REDRESSAL COMMISSION

BIHAR, PATNA

(Appeal No.216 of 2019)

Divisional Manager, United India Insurance company Ltd., Suraksha Bhawan, Akhara Ghat Road, Muzaffarpur-842001, Represented through Chief Regional Manager & dully Constituted attorney for & non behalf United India InsuranceCompany Ltd.

                                                                                                                                     ……………….. Appellant/ Opposite party

Versus

Shiveshwar Sah, S/O- Jagarnath Sah, Resident of Village- Etbarpur, P.O.- Jalapur, P.S.- Lalganj, District- Vaishali,

                                                                                                                                    ……………          Respondents/Complainant

BEFORE:

                               Hon’ble Mr. Justice Sanjay Kumar, President

  Mr. Ram Prawesh Das, Member

ORDER

Date: 28.08.2023

Per: Mr. Justice Sanjay Kumar, President

1.        Present appeal has been filed on behalf of appellant/opposite party United India Insurance Co. Ltd. through its Divisional Manager for setting aside the judgment and order dated 16.03.2019 passed by learned District Consumer Forum, Muzaffarpur in consumer complaint case no.208 of 2016 whereby and where under the learned District Consumer Forum has directed to pay compensation of Rs.2,83,500/- within 2 months to the complainant with interest @7% p.a. from the date of filing of complaint case till its payment failing which interest @9% shall become payable. District Consumer Forum has further directed to pay Rs.20,000/- as compensation for physical and mental harassment and Rs.10,000/- as cost of litigation.

2.        Briefly stated the facts of the case as disclosed in complaint petition is that complainant is an educated unemployed person and to earn his livelihood had purchased a Bolero Jeep on 20.02.2016 from Md. Abdullah Shola and Shafi Nisa Khan bearing registration no.BR-25P6293. The purchased vehicle was insured for the period from 30.11.2015 to 29.11.2016 for sum assured amount of Rs.2,83,500/- by United India Insurance Company Ltd.

3.       After purchasing the vehicle complainant filed an application before D.T.O for transfer of ownership of the vehicle for which  he deposited the requisite fee through chalan.

4.         It is further stated that on 14.03.2016 the driver  of the vehicle went  to a Marriage ceremony  and parked the vehicle near temple and went at about 11:00 P.M. to marrage party and when he returned at about 12:00 in night he found the vehicle to have been stolen

  5.         FIR was lodged by complainant at Hazipur Sadar Police Station giving rise to Hazipur Sadar, P.S.- Case no.1844 of 2016 dated 15.03.2016 which was investigated by the police however stolen vehicle could not be recovered and after completion of investigation police filed final form on 19.05.2016 in the Court of chief Judicial magistrate, Hazipur showing the case to be true but no clue, and same was accepted by learned C.J.M. Hazipur on 01.08.2016.

6.     Insurance company was also informed about the theft  of vehicle by complainant on 18.03.2016.

7.        Complainant submitted claim form for payment of insured amount to the insurance Company along with all relevant documents to settle the claim but same was repudiated by the Insurance Company on 14.09.2016 on the ground that insurance policy was not transferred in the name of complainant.

  8.     Aggrieved by repudiation of claim by order dated 14.09.2016 complainant filed consumer complaint case for setting aside  the order of repudiation dated 14.09.2016 and for  grant of insured amount with interest as well as grant of compensation for physical and mental harassment and cost of litigation.

9.           In support of this claim case complainant submitted documentary evidence which were photocopies of policy Bond (Anx.1) photocopy of insurance certificate (Anx.-2) photocopy of claim form (Anx.-3) photocopy of written complaint (Anx.-4) photocopy of sale letter (Anx.-5) photocopy of order dated 17.08.2016 (Anx.-6) photocopy of FIR of Hazipur, Sadar, P.S. case no.184 of 2016 (Anx-7) photocopy of final form (Anx-08) photocopy of information to D.T.O of theft of vehicle (Anx-9) photocopy of registration certificate in name of Shiveshwar Sah (Anx-9/A) complainant has adduced two oral evidence on affidavit which includes complainant himself (A.W.-1) and Shankar Sah (A.w.-2).

10.        Notices were issued to opposite party and they appeared and filed their written statement.  Opposite party/insurance company in their written statement have admitted that vehicle in question was insured by opposite party insurance company as private Car  Pakage policy and period of Insurance was from 30.11.2015 to 28.11.2016 in the name of Md. Abdullah Shola and Shafi Nisha Khan.

11.       It is further stated that complainant has failed to safeguard the vehicle from loss which shows his carelessness and negligence. Vehicle was insured under Private Car Package policy but vehicle was used for hire purpose on said date when it was stolen as such there was violation of terms and conditions of Insurance Policy.

12.      On the date of theft, ownership of vehicle was registered in the name of Md. Abdullah Shola and Shafi Nisa Khan which was sold on 20.02.2016 but before theft of the vehicle neither name of complainant was transferred  in owner Book nor in the insurance policy as such complainant had no insurable interest in the stolen vehicle.

13.    The District Consumer Forum, after hearing both the parties and considering the material available on record hold that the vehicle was registered on 04.01.2012 in the name of complainant whereas occurrence of theft took place on 14.03.2016 as such complainant was registered owner of the vehicle and vehicle was stolen during insurance period and according directed Insurance Company to pay the insured amount with interest and further directed to pay compensation as well as cost  of litigation.

14.     Aggrieved by judgment and order dated 16.03.2019 passed in complaint case no.208 of 2016 passed by District Consumer Forum, Muzaffarpur, appellant / Opposite party has preferred this appeal.

15.     It is submitted on behalf of the counsel for the appellant that under section 57 of M.V. Act 1988, the transferee has to apply within 14 days from the date of transfer in the prescribed form to the insurer to make necessary change in the policy of insurance with respect to the transfer of insurance policy and same being not done complainant had no insurable interest in the vehicle. It is further submitted that on the date of theft vehicle was not registered in the name of complainant as such he was not the owner of vehicle within the meaning of M.V. Act 1988 as the person whose name is recorded in registration certificate issued by District Transport Office is the owner of the vehicle.

16.   Heard the Parties.

             It is an admitted fact that vehicle in question was registered in the name of its original owner Md. Abdullah Shola and Shafi Nisha Khan and was also insured in their name under private Car insurance policy for the period from 30.11.2015 to 29.11.2016 for insured amount of Rs.2,83,500/-.

17.           Md. Abdullah Shola and Shafi Nisha Khan sold the vehicle to complainant Shiveshwar Sah on 20.02.2016 and vehicle was stolen on 14.03.2016 and registration certificate and insurance policy stood in the name of transferor (original owner) on said date.

18.      It is true that on the date of theft the name of complainant (purchaser) was neither transferred in the registration certificate nor in the insurance policy as such original owner had insurable interest in the vehicle and purchaser complainant had no insurable interest in the vehicle. However, original owner has not claimed insured amount from the Insurance Company.  The vehicle was sold on 20.02.2016 and complainant filed  application for change of ownership in the D.T.O Office, but before the name of complainant could be entered in registration certificate the vehicle was stolen on 16.03.2016. The change in name in insurance policy could have been done only after change in name in the registration certificate as such complainant cannot be faulted as during process the vehicle was stolen.  

19.       Insurance company has to pay insured amount either to the original owner or to purchaser. They cannot deny  payment of insured amount  to both. Insurance policy still remains in the name of original owner.  No prejudice will be caused to Insurance Company if insured amount is paid to complainant/ purchaser, if no such claim has been made by original owner.

20.   The finding recorded by the District Consumer Forum that on 04.01.2012 the vehicle was registered in the name of complainant is error of record as complainant himself as stated that he purchased the vehicle on 20.02.2016 and same was stolen on 14.03.2016 and on said date the registration certificate and insurance policy stood in the name of original owner.

21.      Vehicle was stolen on 14.03.2016 and FIR was instituted by the complainant on 15.03.2016 and intimation of theft was given to the insurance company on 18.03.2016.

22.       Counsel for the  appellant has relied upon the judgment passed by National Commission in case of  IFFCO TOKIO GENERAL INSURACE CO. LTD. versus ASHOCK LAXMAN MANE & ORS. (2020)  IV CPJ 248 (NC) in which it has been held that in absence of transfer of name in the registration certificate and insurance policy the purchaser has no insurable interest and as such repudiation of claim is justified.  It has been further held that neither original owner nor purchaser has any insurable interest in the vehicle. Paragraph No.7 reads as:- “since the insurance policy had not been transferred in favour of the complainant and in fact he had not even applied for such transfer by the date on which the vehicle was stolen, the petitioner company is not liable to reimburse the complainant for the loss alleged to have been suffered by him, there being no privity of contract between the complainant and the petitioner. As far as respondent No.3 is concerned he is also not entitled to any reimbursement he having no insurable interest in the vehicle after 15.6.2006.”

23.     The judgment cited by counsel for the appellant is in teeth of judgment of Apex Court rendered in case of Surendra Kumar Bhilwale vs. New India Assurance Company Ltd.  (2020(18) SCC 224 in which it has been held that the registered owner remains the owner of the vehicle, even after sale of the vehicle and has insurable interest and is entitle to claim insurance amount.  Paragraph No. 54 of which reads as:-  “ In view of the definition of ‘owner’ in section 2(30) of the Motor Vehicle Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad lliys Ansari.”

24.    There is no inter se dispute between original owner and complainant. Original owner has not filed any insurance claim for the stolen vehicle in question on the ground that he is the registered owner of the vehicle and insurance policy also stands in his name as such he is entitled for insured amount. Insurance company has either to pay insured amount to the original owner or to the purchaser and it cannot deny insurance amount to both. No prejudice will cause to Insurance Company if insured amount is paid to complainant when original owner has not made any claim.  The Apex Court in case of Balwant Singh & Sons Vs. National Insurance Company Ltd.   has directed to pay insured amount to the auction purchaser when no claim was made by the original owner. Paragraph No.25 reads as:- “ In the present case, the  Court is dealing with a situation where following the transfer of the vehicle, the Insurer was specifically informed by the Bank which held a lien on the  insurance policy, of the lifting of its lien following the termination of the agreement of hypothecation. Following this, a policy of insurance was issued by the insurer. Admittedly the payment of premium was made by the appellant. The third respondent did not set up any claim in respect of the loss of the vehicle since the vehicle had already been repossessed and sold by the bank on account of its default in the payment of dues. The insurer cannot repudiate the claim of the appellant holding that its liability is to the third respondent who has no subsisting interest in the ownership in the vehicle. The appellant has undertaken to furnish an indemnity to the insurer against any claim at the behest of the third respondent.

           The transfer of the vehicle is not in dispute.”

25.     In said view of the matter this Commission is not inclined to interfere in the order passed by the District Consumer Forum, Muzaffarpur. However,  reason for repudiation cannot be said to be unjust and baseless as such award of compensation of Rs.20,000/- is set aside and rate of interest is reduced to 6% p.a. from the date of filing of complaint case till its payment. Complainant has also to furnish indemnity bond as well as undertaking of original owner (transferor) that he has no objection if insured amount is paid to complainant (purchaser). 

26.     With aforesaid modification the appeal is disposed of.

27.    A copy of this order be supplied to both the parties free of cost as mandated by the C.P. Act 2019. Order be uploaded forthwith on the website of the State Commission.

28.      Let the file be consigned in the record room along with copy of this order.

Ram Prawesh Das                                                                                 Sanjay Kumar, J

    Member                                                                                                  President

Mukund