Date of filing: 14/07/2008
Date of Order: 12/05/2008.
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
C.C.No.105/2005
Dated this, the 12th day of May 2008.
PRESENT
SRI.K.T.SIDHIQ : PRESIDENT
SMT.P.RAMADEVI : MEMBER
SMT.P.P.SHYMALADEVI ; MEMBER
T.Vijayan, S/o.Kannan,
Puthiyaparambu House, } Complainant
Karivedakam Village, Kasaragod.Dt. (Adv.Kusuma.M.Kasaragod.) 1. The Branch Manager, The New India Assurance Company Ltd,} Opposite parties. Gokull Building, M.G.Road, Kasaragod. 2. Krishnan Peroor, S/o.Late Ambady, Ambalathara, Po.Pullur, Kasarago.Dt. (Adv.Ashokumar.A.C, Kasaragod) O R D E R SRI.K.T.SIDHIQ, PRESIDENT. The issue centres around in this complaint is whether an insurance company is liable to indemnify the loss sustained to a vehicle if the claiment is other than a policy holder or a beneficiary of the policy? The averments in the complaint is as follows:-
1. The complainant purchased a Mahindra&Mahindra jeep for Rs.3 lakhs from opposite party No.2 on 10/6/02. The vehicle was stolen from his custody on 19/7/02. The police investigated the case and referred it as undetectable. Since the R.C. and policy issued by opposite party No.1 was remained in the name of transferer ie. OP.NO.2. he filed a claim petition before OP.1 and that was repudiated stating that opposite party No.2 has already sold the vehicle. Hence the complainant approached opposite party No.1 and asked a claim form. But opposite party No.1 refused to issue a claim form. According to complainant he was the owner of the vehicle when theft took place and there was a valid insurance coverage. Hence he is entitled for a compensation for the loss sustained and the failure to award compensation is deficiency in service on the part of opposite party No.1. Hence the complainant claiming Rs.3 .50,000/- as compensation with interest @18%, Rs.10,000/- for mental agony and inconvenience along with cost of the proceedings.
2. According to opposite party No..1, opposite party No.2 was the R.C. owner of the vehicle from 20/12/01 to 19/12/02. The claim preferred by opposite party No.2 was repudiated since on the date of theft he has no custody, control of the vehicle and he has received full consideration of the vehicle and thereby lost his insurable interest. After repudiation of the claim preferred by opposite party No.2, complainant approached to issue a claim form under the policy issued to opposite party No.2. But it was refused because the complainant was a stranger and there was no privity of contract with him and so opposite party No.1 is not liable to give service or to pay compensation of theft claim to the complainant under the policy issued to opposite party No.2. Therefore, there is no deficiency in their service and the complainant is not entitled to claim compensation from opposite party No.1.
3. In the version filed by opposite party No.2 through his P.A.holder. Opposite party No.2 submits that he has transferred the possession of the jeep bearing Reg.No.KL 14B 2844 to the complainant as per agreement dt.10/6/02. The transfer was not legally effected due to hypothication clause in agreement. Hence legally he has not lost his insurable interest. The repudiation of his claim was erroneous and he is ready to execute any deed or document of OP.1 if it is found that he is entitled to receive the insured amount.
4. On the side of the complainant Exts.A1 to A4 marked. For OP.1 Ext.B1, the copy of the policy is marked. P.A. holder of OP.2 filed affidavit and he was cross-examined by counsel for OP.1.
5. In the petition filed by OP.2 on 17/4/06 to transpose him as complainant he has stated that he had no claim against insurance company adverse to the interest of the complainant. The said petition was dismissed on the ground that the petition filed in the order 23 Rule 1(a) of C.P.C has no application to the facts of the case. 6. Hence the relation of the complainant visa vis OP.1 is that of a beneficiary since the complainant claiming the benefit of the insurance policy as person claiming under OP.2. 7. Both parties heard. The counsel for OP.1 placed reliance in 1999(2)KLJ (NOC)6 and asserted that section 157 of MV. Act is applicable to 3rd party claims only and 3rd party will not include a transferee whose transferer has not followed procedure for transfer of policy. Hence they are not liable to entertain the claim of the complainant. 8. Here OP.1 admits the transfer of vehicle by OP.2 and hence it is correct to say that OP.2 has lost insurable interest, therefore they rightly repudiated the claim of OP.2.According to OP.1, the complainant and OP.2 did not comply the procedure for transfer of RC and the policy according to law and they were under dark till information received from investigation. So it is seen that the transfer of the vehicle to complainant by OP.2 is not disputed. 9. In 1994 Motor Vehicle Act has been amended and en explanation was added to Sec.157(1) of the M.V.Act. Sec.157(1) with explanation reproduced here under:Sec.157 Transfer of Certificate of insurance (1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions 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. {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.}- 10. Since Sec.157 is coming under chapter XI of M.V.Act which deals with the liability of the insurance company against 3rd party risks only, this explanation did not provide any relief to a person claiming under a policy as a transferee whose transferer has not followed the procedure for transfer of policy. 11. Again in 1994 a circular has been issued by the General Insurance Company with regard to the transfer of vehicles and transfer of insurance benefits automatically infavour of the transferee. The said regulation is a part of the Indian Motor Tariff Regulation. The said regulation reads as under:- Transfers: (i)on transfer of a vehicle, the benefits under the policy in force will automatically accrue to the new owner. The bonus/malus already applicable for the policy would continue until the expiry of the policy. On expiry or cancellation of the policy, the bonus/malus will apply as per the new owners entitlement. If the transferee wants to change the policy in his name it may be done on getting evidence of sale and a proposal form duly completed. The old certificate of insurance must be surrendered to the insurance company and a new certificate of insurance can be issued by collecting fee of Rs.15/-. If old certificate is not surrendered a declaration is to be taken from the new owner before issuing a new certificate . 12. Suppressing this regulation OP.1 contended that they are not liable to indemnify the loss to the complainant since he has no privity of contract with of OP.1. So it appears that first OP only want to appropriate the premium and to escape from the legal liabilities to indemnify the losses when genuine claims arises 13. The Honble National Commission while dealing with a case of similar nature imposed punitive cost on first opposite party insurance company against the suppression of this regulation and for taking untenable contention (IV 2007 CPJ 289(NC). 14 So it is clear that not only the policy holder but a person claiming under him as a beneficiary is also entitled to get indemnified the losses sustained to the vehicle . 15 Reliefs and cost:- The insured Estimated Value as per Ext.B1 is Rs.2,50,000/-. The period of insurance coverage was 20/12/2001 to19/12/2002. the vehicle was stolen on 19/7/2002 ie, 7months after the date of commencement of the policy. The insurance estimated value is for the whole period of insurance. Hence the complainant is entitled for the said amount. In the result complaint is allowed and we hereby direct opposite party No.1 to pay a sum of Rs.2,50,000/- with interest @9% from the date of complaint till payment. Opposite party No.1 is also directed to pay a sum of Rs.2000/- as the cost of this proceedings. Opposite party No.2 is exonerated from liabilities. Time for compliance of this order is 2 months from the date of receipt of copy of the order. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Exts. A1. Policy certificate of the vehicle Reg.No.KL 14B/2844 A2. Photo copy of FIR. Crime No.666/02. A3.26-2-05 copy of lawyer notice. A4. 21-3-05 reply sent by OP No.1. B1. Certified true copy of the policy. DW1. P.Gopalan. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Eva/ Forwarded by Order SENIOR SUPERINTENDENT
REMAND ORDER
Date of filing: 14/07/2005
Date of remand Order: 19/06/2012.
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
C.C.No.105/2005
Dated this, the 19th day of June 2012.
PRESENT
SRI.K.T.SIDHIQ : PRESIDENT
SMT.P.RAMADEVI : MEMBER
SMT.BEENA.K.G : MEMBER
T.Vijayan,
S/o.Kannan, Puthiyaparambu House, } Complainant
Karivedakam Village,
Kasaragod.Dt.
(Adv.Kusuma.M.Kasaragod.)
1. The Branch Manager,
The New India Assurance Company Ltd,} Opposite parties.
Gokull Building, M.G.Road, Kasaragod.
2. Krishnan Peroor, S/o.Late Ambady,
Ambalathara, Po.Pullur, Kasarago.Dt.
(Adv.Ashokumar.A.C, Kasaragod)
O R D E R
SRI.K.T.SIDHIQ, PRESIDENT
This complaint again came up for our consideration in view of the judgment of the Hon’ble State Commission in Appeal No.118/08 dtd 21/7/2011. By that judgment the Hon’ble State Commission remitted back the matter for fresh consideration.
2. The facts of the complaint in brief is as follows:
The complainant purchased a jeep bearing Reg.No. KL-14/B 2844 from 2nd opposite party, the R.C. owner on 10/6/2002. It was duly insured with Ist opposite party for `3,00,000/- as per policy No. 3176080272492 for the period 20/12/2001 to 19/12/2002. On 19/7/2002 it was stolen . The theft was duly informed the police. 2nd opposite party preferred a claim before the Ist opposite party for the loss. But Ist opposite party repudiated the claim stating that he has already sold the vehicle to the complainant. So the complainant approached Ist opposite party demanding a claim form. But 2nd opposite party refused to issue claim form to the complainant stating that he has no insurable interest over the vehicle. Hence the complaint.
3. The Ist opposite party has filed the version. According to them the insured is 2nd opposite party but he has sold the vehicle to the complainant and there is no privity of contract between the Ist opposite party and the complainant. Hence they are not liable to pay the amount.
4. According to 2nd opposite party, he has transferred the possession of the vehicle to the complainant as per agreement dtd. 10/6/2002. The transfer was not legally effected in RCdue to hypothecation clause in the agreement. According to 2nd opposite party he is having insurable interest in the vehicle.
5. After remanding back the case to us both sides were heard and the complainant produced agreement executed between him and 2nd opposite party with respect to the sale of vehicle bearing Reg.No.KL-14/B2844 that is marked as Ext.A5. Ext.A1 to A4 were marked during the earlier proceedings were continued to hold the same ranking in this proceedings also. On the side of 1st opposite party Ext.B1 marked . Both sides were heard at length.
6. Now the issues to be settled in this case are
1. Whether the complainant as an ostensible owner had insurable interest over the
vehicle on the day of its theft?
2. Whether GR-17 of the present IM tariff or GR-10 of the old IM tariff is applicable in
the present case?
3. What relief as to cost and compensation?
7. Issues No.1&2 are discussed together as they are interlinked .
The learned counsel for opposite party Sri.A.C.Ashok Kumar vehemently argued that complainant had no insurable interest over the vehicle on the day of theft hence he is not entitled for the relief claimed. According to him the General Regulation of IM Tariff prevailing at the time of theft has to be considered and not the General Regulation which was prevailing at the time of execution of agreement for sale.
8. In support of his contentions he relied on the following decisions of Hon’ble Supreme Court ,in the case of Govindan vs New India Assurance Co.Ltd reported in 1999(2) KLJ(NC) 6 and the decision of Hon’ble National Commission in the case of .Mehaboob Basha & Anr. Vs. The National Insurance Company Ltd reported in 2012(1)KLJ 364. In the former judgment cited supra the Hon’ble Supreme Court has held that policy of the vehicle is not transferred in the name of transferee is not a ground to deny the claim of compensation by the insurer to the claimant and the third party will not include a transferee whose transferor has not followed procedure for transfer of policy .
9. In the latter judgment the Hon’ble National Commission has held that where the accident occurred after the sale of the motor vehicle and before the transfer of insurance policy in the name of the buyer neither the buyer nor the seller can raise a claim for recovery of the insurance amount.
10. With due respect to the judgments of Ho’ble Apex Court and Hon’ble National Consumer Disputes Redressal Commission we hold that in this complaint the complainant is entitled for an order in his favor since the facts and circumstances of this case is entirely different from the above cited judgments and also in view of the amendment to sub section(1) of Sec157 of the Motor Vehicles Act which come in to force on 14/11/1994 and that has not been considered by any of our courts in its correct perspective so far.
11. Ext.A5 is the notary attested Photostat copy of the agreement of sale executed between the complainant and 2nd opposite party. Though the learned counsel for opposite party objected the marking of this document, he has no case that the proprietary of the vehicle has not been transferred from 2nd opposite party. It is because of that reason the claim preferred by 2nd opposite party has been repudiated earlier by the opposite party.
12. Ext.A5 shows that 2nd opposite party had assigned the vehicle to complainant and at the time of accident complainant was the owner of the vehicle. It cannot disputed that vehicle is a movable property. Under the sale of Goods Act 1930, the sale is complete on payment of the consideration and delivery of the vehicle regardless of transfer of registration in the name of transferee. This legal position is laid down by the Full Bench of the Andhra Pradesh High Court in the case of Madineni Kondaiah & Ors vs Yaseen Fathima reported in AIR 1986 Andhra Pradesh 62. The Hob’ble Apex Court in Complete Insulations(P) Ltd Vs New India Assurance Company has not disapproved the above legal position laid down by the Full Bench of the Andra Pradesh High Court. Further the Hon’ble Supreme Court in the case of G Govindan vs New India Assurance Co.Ltd & Others reported in 1986-1999 Consumer 3358 (NS) (1999) 3 SCC 754) has held that Registration of the vehicle in the name of transferee is not necessary to pass title on the vehicle and payment of price and delivery of vehicle makes the transaction complete and title will pass to purchaser. So on the basis of the above stated legal position laid down by the Hon’ble Supreme Court it can be safely concluded that the complainant has sgot the title over the vehicle in dispute and hence he had the locus standi to prefer claim before the opposite party as well as to file a complaint in respect to the loss sustained to his vehicle.
13. Now the next question arises is whether complainant can claim compensation for the loss caused due to the theft of the vehicle.
14. In our view he is entitled to claim compensation from the insurer in view of the amendment brought by Parliament to sub section (1) of section 157 in 1994. In this case it is evident that complainant became the ostensible owner of the vehicle from 10/6/2002 and the theft was occurred on 19/7/2002. So if section 157(1) of Motor Vehicles Act as amended in 1994 is applied them it has to be considered that the Certificate of insurance and the policy described in the certificate shall be deemed to have transferred in favour of the transferee ie the complainant w.e.f the date of transfer ie. 10/6/2002 itself. Hence there is scope for any doubt that the complainant is entitled for the relief claimed.
15. According to the learned counsel for opposite party in view of Sec.157 (2) of the Motor Vehicles Act the transferee (here the complainant) ought to have get the certificate of insurance and the policy described in the certificate there to transferred in his name within 14 days from the date of transfer of the vehicle to claim the benefits as per Sec. 157 (1) of the Act and in this case both the vehicle and insurance policy was in the name of 2nd opposite party at the time of theft.
16. On a close perusal of 157(1) and 157(2) of the M.V.Act it is vivid that now there is no requirement of applying to the insurer for transfer of the policy and it gets transferred to the transferee by operation of law. Even though Sec.157(2) of the Act gives 14 days time from the date of transfer to the transferee to make an application to the insurer for making necessary changes in regard to the effect of transfer in the certificate of insurance and the policy described in the certificate in his favor , the liability of the insurer cannot be absolved even if such transfer is not consequently effected by it since Sec.157(2) specifically says that the insurer shall make necessary changes in the certificate and in the policy of insurance with respect to the transfer of insurance when such application is made. Sub section 2 of Sec.157 of the M.V.Act provides only a procedure to intimate fact of transfer of vehicle to the insurer in order to make necessary changes in the certificate of insurance and the policy to bring it in conformity with the deemed transfer as contemplated U/s 157(1) of the Act for the purpose of indemnifying the transferee relating to the risk covered under the policy and that non compliance with this procedure does not automatically invalidate the deemed transfer that had taken place by virtue of the operation of law as contemplated U/s 157(1) of the M.V.Act.
17. Now the moot question that poses is whether the deemed transfer provision under sub section (1) sec.157 can be extended to the damages caused to the vehicle of the insured himself i.e., for own damages. The Hon’ble Supreme Court in the case of Complete Insulations (P) Ltd vs. New India Assurance Co.Ltd reported in I (1996) CPJ 1(SC) has held that the transferee is not entitled to be indemnified by the insurer without the insurance policy being transferred in his name since Sec.157 (1) of the Act is applicable in respect of third party only and if the policy of insurance covers other risks as well as damages caused to the vehicle of insured himself that would be a matter falling out side chapter XI of the Act and in the realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle.
18. But the Hon’ble Supreme Court has rendered the aforesaid judgment by applying the unamended sub section (1) of Sec.157 of Motor Vehicle Act 1988. For a better understanding of the issue, it would be profitable to extract the relevant unamended section.
Sec.157(1) Transfer of Certificate of Insurance (1) Where a person in whose favor the certificate of insurance has been issued in accordance with the provisions 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 there to the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favor of the person to whom the motor vehicle is transferred with effect from the date of its transfer.
The Motor Vehicles Act 1988 came in force w.e.f 1/7/1989 has undergone a large number of amendments in the year 1994.
19. Before proceeding further with the matter it will be in the fitness of things if a reference is made to the objects and reasons which were taken into note by the legislature when Amending Act No. 54 of 1994 was introduced and passed by it were as under :-
1) Prefatory Note: - statement of objects and Reasons to Amending Act 54 of 1994- The Motor Vehicles Act 1988(59 of 1988) consolidated and rationalized various laws regulating transport. The act came into force with effect from 1/7/1989 replacing Motor Vehicles Act 1938.
2) After coming into force of the Motor Vehicles Act 1988, Government received a number of representations and suggestions from the state Government, transport operators and members of public regarding the inconvenience faced by them because of the operations of some of the provisions of the Act 1988. (emphasis supplied ). A Review Committee was, therefore constituted by the government in March 1990 to examine and review the Act 1988.
3) The recommendations of the Review Committee were forwarded to the State Governments for comments and they generally agree with these recommendations. Government also considered a large number of representations received after finalization of the Report of the Review Committee, from the transport operators and public for making amendments in the Act. The draft of the proposals based on the recommendation of the Review Committee and representations from the public were placed before the Transport Development counsel for seeking their views in the matter. The important suggestions made by the Transport Development council relate to are on account of:-
(a) The introduction of newer type of vehicles and fast increasing number of both commercial and personal vehicles in the country.
(b) Providing adequate compensation to victims of road accidents without going into long drawn procedure,
© protecting consumers interests in transport sector:
(d) Concerns for road safety standards transport hazardous chemicals and pollution control:
(e) Delegation of greater powers to state transport authorities and rationalizing the role of police authorities in certain matters:
(f) The simplification of procedures and policy liberalization in the field of transport:
(g) Enhancing penalties for the traffic offenders:
4) Therefore the proposed legislators have been prepared in the light of the above background. The Bill, inter alia provides for:-
(a) Modification and amplification of certain definitions of new type vehicles:
(b) Simplification of procedure for the grant of driving licenses;
(c) Putting restrictions on the alteration of vehicles:
(d) Certain exemptions for vehicles running on non- polluting fuels:
(e) Ceilings on individuals or company holdings removed to curb benami holdings:
(f) State authorized to appoint one or more State Transport Appellate Tribunals.
(g) Punitive checks on the use of such components that do not conform to the prescribed standards by manufacturers and also stocking/sale by the traders:
(h) increase in the amount of compensation to the victims of hit and run cases:
(i) removal of time –limit for filing of application by road accident victims for compensation
(j) punishment in case of certain offences made stringent:
(k) a new predetermined formula for payment of compensation to road accident victims on the basis of age/income. Which is more liberal and rational?
5. The Law commission in its 119th Report had recommended that every application for a claim be made to the claims Tribunal having jurisdiction over the area in which the accident occurred or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, at the option of the claimant. The Bill also makes necessary provision to give effect the said recommendation.
6. The Bill seeks to achieve the above objectives:
20. Sec.157 (1) of the Motor Vehicles Act has also undergone an amendment, because of the inconvenience faced during its operation due to the frequent transfer of motor vehicles without transferring the insurance policies and the consequential denial of own damage insurance claims by the insurer. Therefore an explanatory note was added to Sec.157 (1) of the Act by way of amendment. The added explanation is reproduced below:
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.(emphasis supplied)
21. On a plain reading of this explanation added to sub section 1 of Sec.157 of Motor Vehicles Act as per the amendment for the removal of doubts it is apparent that after the amendment, not only the liabilities mentioned in the certificate of insurance and policy of insurance relating thereto but the ‘rights’ vested with the transferor of the vehicle as per the certificate of insurance and the policy relating there to shall also deemed to have transferred in the name of transferee.
22. If the ‘rights ‘and ‘liabilities’ described in the certificate of insurance and the policy relating there to is deemed to have transferred in the name of transferee, then what is there further remaining to be transferred ? Therefore, it is necessary to explain the matter a little further.
23. As per the instructions of Tariff Advisory Committee of the insurance sector there are two kinds of policies. They are ‘package policies’ and ‘third party policies’. In case of third party policies, the owner of a vehicle has no rights but only liabilities. That is why a third party policy is known as ‘liability only policy.’ The rights are included only in package or comprehensive policies. So by way of this amendment it is evident that transferee will get the absolute transfer of the certificate of insurance and policy relating there to in his name from the date of transfer of the ownership of the vehicle and not only the liability part or the third party risk portion of the policy alone.
24. Moreover, what is ‘liability’ is defined U/S 145(c) of the Motor Vehicles Act. But neither under Sec.145 nor any other sections of Motor Vehicles Act defines ‘rights’. Then what are the rights deemed to have transferred as per the certificate or policy of insurance by way of amending Act shall be gathered from the context of the certificate of Insurance and the policy of insurance. No doubt in package policies alone the insured enjoys rights against his insurer for getting his loses indemnified to the vehicle.
25. Further another important aspect to be noted here is that there are no other chapters or sections of Motor Vehicles Act 1988 deals with the transfer of certificate of insurance. Therefore, the legislature without considering the head note, frame work and limitations of Chapter XI has introduced the amendment to that section. It is pertinent to note that when the amendment has been brought to sub-section (1) of Sec.157 as per amending Act 1994 there were no judicial pronouncements of Hon’ble Supreme Court declaring that Chapter XI of Motor Vehicles Act is confined to third party claims alone. Moreover other amendments brought to other sections of Chapter XI of Motor Vehicles Act are also not confined to third party alone. For example Sec.147(1)(b) is amended by which the owner of the goods or his authorized representative carried in the goods vehicle is also brought within the purview of Chapter XI even though he is not a third party! Prior to amendment the owner of goods or his authorized representative was not entitled for compensation arising out of the accident caused to the vehicle since he was not considered as third party .
26. Moreover if the aforesaid amendment added by way of explanation for the removal of doubts after much discussions at various committees does not donate anything to the scope of the section or remove any doubt then it has to be regarded that the legislature has done a futile exercise by this amendment. That would never have been the intention of the legislature. Hence on analyzing the amendment to sub section 1 of Sec.157 of the Motor Vehicles Act in the back ground of its objects purposes and reasons it is clear that what is aimed by the legislature is the absolute transfer of the certificate of insurance and policy relating there to and therefore the court has to choose that interpretation which represents the true intention of the legislature.
27. The Hon’ble Supreme Court in the case of Kehar Singh v. State (Delhi Admn.) AIR 1988 (SC 1883), it has held:
"During the last several years, the ’golden rule’ has been given a go by. We now look for the ’intention’ of the legislature or the ’purpose’ of the statute. First we examine the words of the statute. If the words are precise and cover the situation on hand, we do not go further. We expound those words in the natural and ordinary sense of the words. But if the words are ambiguous, uncertain or any doubt arises as to the terms employed, we deem it as our paramount duty to put upon the language of the legislature rational meaning. We then examine every word, every section and every provision. We examine the Act as a whole. We examine the necessity which gave rise to the Act. We look at the mischief’s which the legislature intended to redress. We look at the whole situation and not just one-to-one relation. We will not consider any provision out of the framework of the statute. We will not view the provisions as abstract principles separated from the motive force behind. We will consider the provisions in the circumstances to which they owe their origin. We will consider the provisions to ensure coherence and consistency within the law as a whole and to avoid undesirable consequences".
28. Further the Hon’ble Supreme Court in the case of National Insurance Co.Ltd vs. Laxmi Narain Dhut reported in 2007 CTJ 445 (SC) has held as below.
A statute is an edict of the Legislature and in construing a statute, it is necessary to seek the intention of its maker. A statute has to be construed according to the intent of those who make it and the duty of the court is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature. This task very often raises difficulties because of various reasons, inasmuch as the words used may not be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to convey one’s thought or that the assembly of Legislatures consisting of persons of various shades of opinion purport to convey a meaning which may be obscure. It is impossible even for the most imaginative Legislature to foresee all situations exhaustively and circumstances that may emerge after enacting a statute where its application may be called for. Nonetheless, the function of the Courts is only to expound and not to legislate. Legislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the Legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive approaches. In other words the legislative intention i.e. the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed.
29. It is settled that law enacted by the Parliament cannot be changed or made useless by judicial interpretation. The question of interpretation comes only when the provisions of legislative enactment are either not clear ambiguous or cannot depict the true meaning. When the provisions of the legislative enactments, are plain, clear and unambiguous, then these cannot be negativated through judicial interpretation. Reliance can be placed upon various authorities of the Hon’ble Supreme Court on this point. The Hon’ble Supreme Court in the case of State of UP & others vs Jeet.S Bisht & Anr reported in 2007 (6) SCC 586 has specifically held that court cannot add or substitute a word in a statute. By judicial verdict the court cannot amend the law made by the Parliament or State Legislature. It has been further held by the Hon’ble Supreme Court in the said judgment that a mere direction of the Hon’ble Supreme Court without laying down any principle of law is not a precedent. It is only where the Hon’ble Supreme Court lays down a principle of law that will amount to a precedent. The courts are subordinate to law and not above the law.
30. The Hon’ble Supreme Court in the case of Bhavnagar University vs Palitana Sugar Mill Pvt. Ltd & Ors…… has held:
It is the basic principle of construction of statute that the same should be read as a whole, then chapter by chapter, sections by sections and words by words. Recourse to construction or interpretation of statute is necessary when there is ambiguity, obscurity or inconsistency there in and not otherwise. An effort must be made to give effect to all parts of statute and unless absolutely necessary, no part thereof shall be rendered surplusage or redundant.”
True meaning of a provision of law has to be determined on the basis of what provides by its clear language with due regard to the scheme of law…’
It is also will settled that a beneficent provision of legislation must be liberally construed so as to fulfill the statutory purpose and not to frustrate it.
31. It is true that Sec.157 of the Motor Vehicles Act coming under Chapter XI which bears the head note ‘ Insurance of Motor Vehicles against Third Party Risks’. But it has to be taken note that even before the interpretation of the Hon’ble Apex Court in the case of Complete Insulations(P) Ltd vs. New India Assurance Co.Ltd that Chapter XI of Motor Vehicles Act is applicable to third party claims only the amending Act 50 of 1994 was come in to force. and the Hon’ble Apex Court has rendered the said judgment without looking to that amendment. But only because of the fact that Sec.157 comes under Chapter XI of the Act which bears the head note ‘liability of insurer against third party risks’ a blanket ignorance of the application of the amended section by adhering on the words of the head note would amounts to denial of a legitimate right guaranteed by the statute. The head note shall not be allowed to control the operation of law laid down by the legislature
32. In this regard it is worth look in to the view of the Hon’ble Apex Court. Hon’ble Supreme Court in the case of K.P.Varghese vs. The Income Tax Officer reported in 1981 AIR 1922 (SC) 1982 SCR (1) 629 has held:
“It is undoubtedly true that the marginal note to a section cannot be referred to for the purpose of construing the section but it can certainly be relied upon as indicating the drift of the section or to use the words to show what the section is dealing with. It cannot control the interpretation of the words of a section particularly when the language of the section is clear and unambiguous but being part of the statute, it prima facie furnished some clue as to the meaning and purpose of the section”.
33. Therefore applying the principles enunciated in the above judgments and also looking into the objects and reasons of the amendment brought to sub section 1 of Sec 157 it is crystal clear that during transfer of ownership of the vehicle the transferee will get absolute transfer of the certificate of insurance and policy relating there to and not only the liability portion alone and therefore the transferee of a vehicle is entitled to get his own damage claim indemnified even if he has not complied the procedure laid down in sub section (2) of Sec.157.
34. The Hon’ble Apex court has rendered the judgment in the case of Complete Insulations(P) Ltd vs. New India Assurance Co.Ltd reported in 1996 CTJ 383 (SC) (1996) CPJ 1(SC) on 21/11/1995 that is more than one year after the amendment of Motor Vehicles Act in 1994 that came into force on 14/11/1994. But the Hon’ble Apex Court has applied the unamended sub section(1) of Sec.157 of Motor Vehicles Act 1988 while considering the above case since the matter related to that case has been occurred immediately after coming into force of the M.V.Act 1988 in place of M.V.Act 1939. As a result what happened is that the said amended piece of beneficial legislation was subject to a precedential tyranny even without a whisper against it in the aforementioned judgment.
35. Another important and interesting aspect is that even the General Insurance Co. has conceived the legislative intention of the amendment to sub section (1) of Sec.157. Therefore, in 1994 itself a circular has been issued by the General Insurance Co. with regard to the transfer of vehicles and the transfer of insurance benefits automatically in favor of the transferee. The same was in conformity with the amendment brought to sub section(1) of Sec157. The said regulation was a part of the Indian Motor Tariff Regulation which reads as under:
Transfers:
On transfer of a vehicle, the benefits under the policy in force will automatically accrue to the new owner. The bonus/mauls already applicable for the policy would continue until expiry of the policy. On expiry or cancellation of the policy, bonus/mauls will apply as per the new owner’s entitlement.
If the transferee wants to change the policy in his name, it may be done on getting evidence of sale and a proposal form duly completed. The old certificate of insurance must be surrendered to the insurance company and a new certificate of insurance can be issued by collecting a fee of `15/-. If the old certificate is not surrendered, a declaration is to be taken from the new owner before issuing a new certificate.
36. But the matters turned upside down when the Hon’ble Apex Court in Complete Insulation’s case without looking into the amendment held that Sec.157(1) of the Motor Vehicles Act is applicable to third party claims only and if the policy of insurance covers other risks as well like the damages caused to the vehicle of insured himself that would be a matter falling out side the chapter XI and in the realm of contract for which there must be an agreement between the insurer and transferee the former undertaking to cover the risk or damage to the vehicle. In the light of this judgment the Insurance companies also took a somersault and accordingly in the present India Motor Tariff which came into effect on 30/06/2002 the new regulation No.17 is inserted that is as follows:
GR.17 Transfers: “ …….. In case of Package policies, transfer of the Own Damage section of the policy in favor of the transferee, shall be made by the insurer only on receipt of a specific request from the transferee along with consent of the transferor. If the transferee is not entitled to the benefit of the No Claim Bonus (NCB) shown on the policy or is entitled to a lesser percentage of NCB than that existing in the policy recovery of the difference between transferee’s entitlement, if any, shown on the policy shall is made before effecting the transfer.
A fresh proposal Form duly completed is to be obtained from the transferee in respect of both Liability Only and Package Policies.
Transfer of Package Policy in the name of the transferee can be done only on getting acceptable evidence of sale and fresh proposal from duly filled and signed the old certificate of insurance for the vehicle, is required to be surrendered and a fee of ` 50/- is to be collected for issue of fresh Certificate in the name of the transferee. It for any reason the old certificate of insurance cannot be surrendered; a proper declaration to that effect is to be taken from the transferee before a new certificate of insurance is issued.”
37. But this General Regulation of the India Motor Tariff is at the most can be considered only as a subordinate legislation which has no independent existence when the statute poses a contrary view.
In this regard the Hon’ble Apex court held in the case of Kerala Samsthana Chethu Thozhilali Union vs. State of Kerala & Ors reported in 2006(2) KLT 270 (SC) as follows:-
“ A rule is not only required to be made in conformity with the provisions of the Act where under it is made, but the same must be made in conformity with the provisions of any other Act. A subordinate legislation cannot be violative of any plenary legislation made by Parliament or State Legislature.
38. Therefore, it is manifest that the dictum laid down by the Hon’ble Apex Court in the case of Complete Insulations(P) Ltd vs. New India Assurance Co.Ltd is applicable only to the cases in which the accidents were occurred in between Ist July 1989( the day on which Motor Vehicles Act 1988 is come into effect to till date of amending Act came into force. In the cases of own damage claims arising after the Motor Vehicle amending Act, Act 50 of 1994 came in effect the insurer is liable to make good the loss sustained to the vehicles also irrespective of the non transfer of insurance certificate and policy of insurance in favor of the transferee as contemplated under subsection (2) of Section 157 of the Act.
For the foregoing discussions it can be concluded that opposite parties are liable to honor the claim of complainant and the repudiation of his claim amounts to deficiency in service.
39. There is yet another reason to pass an order in favour of the complainant . The Hon’ble State Commission in its remand order has specifically directed the Forum to see as per the tariff regulation then in force whether the complainant is entitled to claim the benefits of the policy.
40. Learned counsel for the opposite party Shri.Ashok Kumar made a fervent plea that the tariff regulation prevailing on the date of theft ought to have been considered and not the tariff regulation prevailing at the time of sale. In this regard we make it clear that in the light of the discussion of para 35 itself it is apparent that subordinate legislation which is contrary to any Act has no legal sanctity . But since the Hon’ble State Commission has given a specific direction to consider the above said aspect we are further required to settle that issue. As stated supra. GR-10 of IMT Tariff says that
On transfer of a vehicle the benefits under the policy in force will automatically accrue to the new owner.
From the above itself it is manifest that it is from the date of transfer of vehicle itself the benefits of the policy will accrue to the new owner. In this case the transfer of the vehicle was on 10/6/2002 and the date of theft was 19/7/2002. So on the date of transfer of vehicle G.R 10 of the India Motor Tariff was prevailing as per that the benefits of the policy shall stand transferred automatically in favour of the complainant from the date of transfer.
41. For the forgoing discussions it can be concluded that the complainant had insurable interest on the vehicle bearing Reg. No.KL-14/B 2844 from its date of transfer ie on 10/6/2002. Therefore the Ist opposite party is liable to indemnify the loss sustained to the complainant on account of the theft of the vehicle.
42. The technicalities should not come in the way of Insurance companies in honoring their part of contract, if the principles of Indemnification of loss by the insurers are considered. Once a certificate of Insurance with the policy described there to is issued , its liability to Indemnify the loss shall never be frustrated unless there is flagrant violation of the conditions of policy. The transfer of vehicles are being an incessant process the insurance companies ought not have relied on hair splitting technicalities to honor the genuine claims solely because of transfer of vehicles . The honoring the claim shall be the rule and the repudiation shall be an exception . Otherwise the purpose of insurance itself will get frustrated.
43. Relief & Costs.
The I.E.V ( Insured’s Estimated Value) as per Ext.B1 is ` 250000/- . The period of insurance coverage was 20/12/2001 to 19/12/2002. The vehicle was stolen on 19/7/2002s ie 7 months after the date of commencement of the policy. The IEV is considered for the whole period of insurance . Hence the complaint is entitled for the said amount.
In the result complaint is allowed and opposite party No.1 is directed to pay `250,000/- with interest @ 9% from today. Ist opposite party is also directed to pay a sum of ` 3000/- towards the cost of this proceedings. OP.NO.2 is exonerated from liabilities. Time for compliance of this order is limited to 30 days from the date of receipt of copy of this order. Failing which opposite party shall further liable to pay interest @ 12% from today till payment.
Exts.
A1. Policy certificate of the vehicle Reg.No.KL 14B/2844
A2. Photo copy of FIR. Crime No.666/02.
A3.26-2-05 copy of lawyer notice.
A4. 21-3-05 reply sent by OP No.1.
A5- notary attested Photostat copy of the agreement of sale executed between
complainant and 2nd opposite party
B1. Certified true copy of the policy.
MEMBER MEMBER PRESIDENT
eva
