This appeal has been filed against the Judgment and Order dated 10.8.2022 whereby hereunder the District Commission in Complaint Case No 15/2014 has directed to make payment of Rs 2,00,000 (Rupees two lakhs) for deficiency in service, Rs 20,000 (Rupees twenty thousand) as cost of litigation, Rs 3,05,936 (Rupees three lakhs five thousand nine hundred and thirty six) as expense for repairing and damage of vehicle, Total comes to Rs 5,25,936/- along with 12 % interest from the date of repudiation of the claim dated 5.10.2012.. The said amount is to be paid within 45 days failing which interest would run at the rate of 18% per annum shall accrue till the payment is made.

          The fact in dispute is precisely inter alia is as follows:

          The Oriental Insurance Company Limited (hereinafter mentioned as the Appellant) issued an Insurance Policy vide Policy No 322406/31/2012/2908 dated 30.11.2011 in respect of TATA Indigo Marina LX, bearing Registration No ML-05-1461 issued in the name of Dr D.S.Sethi as he had purchased the vehicle. The cover note of insurance policy covers the period from 30.11.2011 to 29.11.2012. Later the said vehicle was sold by Dr Sethi in favour of Complainant respondent on 08.05.2012.On the same day Complainant applied for a transfer of vehicle in his name. The ownership of the vehicle was transferred on 09.05.2012 in the name of the Complainant Respondent, Shri Shiv Kumar Biswal.The said certificate was printed and signed by District Transport Officer on 17/05/2012 but in the meantime unfortunately the said vehicle met with an accident on 16.05.2012 which caused heavy damage to the vehicle. On the same day an intimation was given to the Insurance Company (Appellant) alongwith the request by Complainant to depute the surveyor for inspection and assessment of loss in as much as the Complainant Respondent, on  18.05.2012 duly made claim to Insurance Company (Appellant)  alongwith letter of Dr Sethi mentioning therein that the said insured  vehicle was sold to the Complainant Respondent with a request to the Appellant Insurance Company to re issue the Insurance Policy in favour of the Complainant Respondent. In turn, the Appellant- Insurance Company deputed the Surveyor for assessing the quantum of loss or damage of the vehicle suffered. Accordingly, assessment was made by the Surveyor who furnished report to the Appellant Company. The Complainant- Respondent had approached the Modrida Auto Enterprise, Shillong to get estimate of cost of repair of the damaged vehicle who in turn estimated the repair cost of Rs. 3,05,936/- (Rupees three lakhs five thousand nine hundred and thirty six). After about five months the Complainant- Respondent received the pre repudiation letter dated 05.10.2012 addressed to Dr D.S.Sethi previous owner of the vehicle copy to the Complainant-Respondent mentioning that the claim made by the Complainant is not sustainable because the Registration Certificate has been in the name of the Complainant and Insurance Policy is in the name of Dr D.S.Sethi. The said pre repudiation letter ought to have been addressed to the Complainant- Respondent but surprisingly Appellant addressed the said letter to Dr D.S.Sethi even though Dr D.S.Sethi informed to re-issue the Insurance Policy in the name of the Complainant Respondent. The sequence of facts is that the vehicle was purchased on 08.05.2012 the same was transferred on 09.05.2012. The Registration Certificate was issued on 17.05.2012 but one day before, the vehicle met with an accident which caused heavy loss to the vehicle. After receipt of the said repudiation letter dated 05.10.2012 the Complainant Respondent vide letter dated 05.11.2012 requested for revisit and reconsider the claim of the Complainant/ Respondent but by letter dated 13.12.2012 refused to reconsider on the ground earlier mentioned in the repudiation letter. The Complainant filed complaint case vide 15/2014 before the District Commission. Notice issued to the Appellant Insurance Company, they filed show cause, the ground has been taken that the vehicle was registered in the name of the Complainant /Respondent whereas the Insurance Policy was standing in the name of DrD.S.Sethi, and further said that the Section 157 of the Motor Vehicles Act, 1988 has no application as it falls in chapter dealing with third party risk. It is further stated that the Surveyor visited Modrina Auto Enterprise, Shillong and found the vehicle suffered heavy loss due to impact of accident.

          Further, it has been mentioned that the proposal for repairing of vehicle would be nothing but only reassembling of vehicle by purchasing of more new parts/units which would cost more than new vehicle. Under that circumstances, the Surveyor has found justified to settle the claim on the total loss basis for an amount of Rs 2,24,500/ (Rupees two lakhs twenty four thousand and five hundred only).

          In the present case, admitted documents have been filed by the Complainant as

Annexure 1 – is the Insurance Policy standing in the name of DrD.S.Sethi for the period from 30.11.2011 to midnight of 29.11.2012

Annexure 2 – is the transfer of ownership certificate in the name of Shri Shiv Kumar Biswal dated 17/05/2012 but the date of transfer has been shown as 09.05.2012.

Annexure 3 - is the accident report issued from the District Transport Office, East Khasi Hills Shillong dated 17.12.2012 giving the description of the damage.

Annexure 4 is the letter written by Complainant/Respondent dated 18.05.2012 to the Manager of Insurance Company informing of the accident of the said vehicle requesting for inspection by Surveyor to assess the loss.

Annexure 5 – is the letter dated 18.05.2012 of Dr D.S.Sethi informing the Insurance Company with respect to sale of vehicle in favour of Shri Shiv Kumar Biswal and requested to change the name of DrD.S.Sethi to Shri Siv Kumar Biswal at the earliest.

Annexure 6 – is the estimate prepared by the Modrina Auto Enterprise.

Annexure 7 – is the pre repudiation letter dated 05.10.2012 issued by Insurance Company to Dr D.S.Sethi and copy was given to Shri Shiv Kumar Biswal.

Annexure 8 – is the letter of Shri Shiv Kumar Biswal Dated 05.11.2012 addressed to the insurance Company to re consider the claim of the Complainant with respect to covering the loss suffered by him due to damage of vehicle.

Annexure 9 – is the letter of Insurance Company addressed to Dr. D.S.Sethi dated 13.12.2012 thereby refused to reconsider the claim but giving one more opportunity to substantiate the claim in view of the grounds of repudiation mentioned before a final decision was taken, and to clarify the stand within two (2) weeks was granted.

Annexure 10- legal notice by Complainant to Appellant Company.

Annexure 11 – is the reply given by Insurance to the lawyer.

          From the side of the Opposite party, Surveyor report has been filed attached with the show cause. From the side of the Complainant, no witness has been examined whereas from the side of the Appellant- Insurance Company, Surveyor Shri A.Sarma has been examined as No OP1. In the examination-in-chief as well as in the cross-examination, he has stated that he surveyed the vehicle and found the period of insurance from 30.11.2011 to 29.11.2012.He stated in his evidence that at the time of accident, registered owner of vehicle was Shri Shiv Kumar Biswal. The Surveyor’s report has made final assessment on the principle of total loss basis and recommended the settlement of claim on payment of Rs. 2,24,500/-. This fact has been stated in cross-examination by the Surveyor. In the cross-examination, Surveyor has mentioned that the ownership of vehicle was transferred on 09.05.2012 from Dr D.S.Sethi to Shiv Kumar Biswal.After considering all facts and circumstances, the District Commission has allowed the claim as mentioned earlier.

          Counsel for the Appellant has submitted that the Appellant has rightly refused to grant relief of insurance by issuing impugned letter of repudiation as on the date of accident. In the insurance office, the name of Dr D.S.Sethi was standing, so there was no insurable contract with Shri Shiv Kumar Biswal. Though the vehicle was transferred by Dr D.S.Sethi in favour of Shiv Kumar Biswal Complainant/Respondent it will be of no value as privy of contract was with Dr D.S.Sethi so the relief of insurance cannot be extended to Shiv Kumar Biswal, the Complainant. He further submitted that Section 157 of the Motor Vehicles Act, 1988 falls in the chapter of third party claim and, as such, Section 157 of Motor Vehicles Act, 1988 cannot be pressed in service to support the claim of Complainant.

      He further submitted that the Surveyor has assessed and recommended an amount of Rs 2,24,500/- whereas, the District Commission though accepted the Surveyor's Report, but granted the relief of Rs 3,05,936/- without any basis only on the ground of estimation given by the Modrina Auto Enterprise. Further, he has submitted that the cost of Rs 2,00,000/- under the heading ‘deficiency of service’  is very exorbitant hitting the conscience of any normal person,  so it requires interference in as much as the litigation cost of Rs 20,000/- is required to be reduced. He further submitted that 12 % interest is also at a higher side.

          Even after the service of notice, Opposite party has neither responded either by personal appearance or through any lawyer. So this Commission has decided to adjudicate the case on merit in his absence.

          Section 157 which in nature makes it very clear that Insurance is attached to the vehicle not to the person. It will be proper to quote Section 157 of the insurance Act.

“Transfer of certificate of insurance – (1) Where a person in whose favour the certificate of Insurance has been issued in accordance with the provision of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of  insurance and the policy described in the certificate shall be deemed to have been transferred in favour of  the person to whom the motor vehicle is transferred with effect from the date of its transfer. I[Explanation – For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance]”

     On perusal of Section 157, it is very clear that the Insurance Policy will be deemed to have been transferred   in favour of a person to whom the vehicle is transferred. It will not be justified to argue that the Section 157 lying in the chapter of third party will not be applicable to others. The golden rule to interpretation of statute provides that the court while interpreting the statute will give ordinary meaning of the words used in the statutory provision unless it gives absurd result. The words of statute will be read in the manner which has been mentioned in the statutory provision unless there is ambiguity and would give absurd result and, in those circumstances, it is the duty of the court to find out the intention of the legislature while framed the statutory provision. In Section 157, the words used are completely lucid and clear having no ambiguity and would not lead to absurdity; it  shows that the insurance policy will be deemed to have been transferred in favour of person to whom the motor vehicle is transferred. So merely because the name of Shiv Kumar Biswal was not changed in place of Dr D.S.Sethi in the insurance policy the Respondent will not be deprived of the benefit of insurance policy covering the vehicle at the time of  accident which had taken place during the subsistence of policy period. This view is fortified from the judgment rendered in National Insurance Company Ltd  vs K. Yadammma, reported in 2003(3) ALT 589 para-19, “ To put it in a different way, even after, the transfer of the vehicle, the liability of the Insurance Company would not cease inasmuch as  the vehicle is under the coverage of the policy. Merely because the vehicle had been transferred in favour of another person the said liability of the Insurance Company under the policy would not get obliterated or superseded. The transferee owner alone would and should be fastened with the liability and consequently, subject to the subsistence of the insurance policy: the same would get extended to the Insurance Company also.

          In our view, the District Commission has rightly allowed the benefit of Insurance to Shiv Kumar Biswal and it does not require any interference. The amount awarded is required to be revisited in the sense that the Surveyor has surveyed the vehicle and make an assessment of total loss basis of vehicle at Rs 2,24,500. The District Commission has approved the report, but wrongly mentioned Rs 3,05,936/- as assessed by the surveyor, an amount of Rs. 2,24,500/-  has been approved as compensation amount. Under the category of deficiency in service, the amount awarded, in our view, is at a higher side. Accordingly, in place of Rs 2,00,000/-, the Insurance Company would make payment of Rs 50,000/- under that category. We do not find any error in awarding the litigation cost of Rs 20,000/- and also the rate of interest of 12 % from the date of repudiation till the payment to the Complainant is made. The said amount shall be paid within a period of 30 days from the date of receipt/production of a copy of this Order, failing which 18% compoound interest shall accrue till the payment is made.

          Accordingly the Order of the District Commission is modified to aforesaid extent. The Appeal is dismissed with the aforesaid direction.