DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB : PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Sri. V. BALAKRISHNAN, M Tech, MBA, LL.B, FIE: MEMBER
Friday the 27th day of October 2023
C.C.109/2009
Complainant
Alex Kuriakkose,
S/o Kuriakkose,
Puthuppulliyil (HO)
Kuliramutti, Koodaranhi,
Kozhikode
(By Adv. Sri. K.P. Raju)
Opposite Parties
The Branch Manager,
The Oriental Insurance Company Ltd,
P.B.No. 3, By Pass Road Junction,
Jaseela Complex, Nilambut Road,
Manjeri - 673121
Malappuram District
(By Adv. Sri. Mohammad Zahir)
ORDER
By Sri. P.C. PAULACHEN – PRESIDENT
This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.
2. The case of the complainant, in brief, is as follows;
The complainant is the owner in possession of the Mahindra Jeep bearing registration No. KL -11- J- 2826. The vehicle was duly insured with the opposite party. The period of validity of the insurance coverage was from 21/06/2006 to 20/06/2007. Originally the policy was issued to the RC owner Sri. Ahammed.P.K. Subsequently, the complainant had purchased the vehicle from Sri. Ahammed.P.K paying full sale consideration.
3. The vehicle met with an accident on 09/01/2007causing extensive damage to the vehicle. The accident was reported to the opposite party without any delay and there after surveyor had inspected the vehicle and assessed the damages as Rs. 1,23,000/-.
4. After the repairs of the vehicle, the complainant preferred claim before the opposite party with necessary documents for an amount of Rs.1,23,000/- as own damage claim. But the claim was repudiated by the opposite party stating that though the ownership of the vehicle was transferred in the name of the complainant, the insurance was not transferred to his name within 14 days and that there is no privity of contract between the complainant and opposite party. To the lawyer notice sent by the complainant, a reply was sent by the opposite party with untenable contentions. There is no valid reason for repudiating the claim and act of the opposite party amounts to deficiency in service and unfair trade practice. Hence the complaint to direct the opposite party to pay an amount of Rs. 1,23,000/- with interest to the complainant as own damage claim and pay Rs. 10,000/- as compensation.
5.The opposite party has resisted the complaint by filing written version wherein all the allegations and claims made in the complaint are denied. It is contended that the complainant has no locus - standi to file the present complaint and there is no privity of contract between the complainant and the opposite party. It is admitted that the vehicle had met with an accident on 09/01/2007 and that damages were caused to the vehicle. The submission of claim form by the complainant on 17/01/2007 is admitted. The claim was repudiated on valid and legal grounds.
6. Upon receipt of intimation of the accident, the opposite party had deputed a surveyor and loss assessor who, after inspecting the vehicle, assessed the damages as Rs. 24,198.50. While processing the claim, it was noticed that though the complainant was the registered owner of the vehicle at the time of the accident, he was not the insured to whom the policy was issued. In fact the vehicle was insured for the period from 21/06/2006 to 20/06/2007 by the then owner Sri. Ahammed.P.K. There after the insured owner sold the vehicle to the complainant and the ownership was transferred in the name of the complainant in the registration certificate with effect from 21/12/2006. Neither the insured nor the transferee had intimated the transfer of ownership of the vehicle to the opposite party within 14 days from the date of transfer as mandated under section 157(2) of the Motor Vehicles Act. The complainant with whom the opposite party is not having any contract of insurance cannot legally sustain a claim of indemnity for the loss suffered by him. The claim was rightly repudiated by the opposite party. There was no unfair trade practice or deficiency of service on the part of the opposite party. With above contentions, the opposite party prays for dismissal of the complaint.
7. The points that arise for determination in this complaint are;
(1) Whether there was any unfair trade practice or deficiency of service on the part of the opposite party, as alleged?
(2) Reliefs and costs.
8. The complainant filed affidavit. The complainant was not cross examined by the opposite party. Exts.A1 to A5 were marked on the side of the complainant. The insurance surveyor and loss assessor was examined as RW1 on the side of the opposite party. Exts.X1 series and X2 were also marked.
9. The evidence in this case was recorded by our learned predecessors – in - office. Both sides did not advance any arguments before us despite giving ample opportunity.
10. Point No. 1: The complainant has approached this Commission with a grievance that the claim put in by him in connection with the damage caused to his vehicle in an accident was repudiated by the opposite party without valid reason and thereby there was unfair trade practice and deficiency of service on the part of the opposite party.
11.The complainant is the registered owner of KL-11-J-2826 Mahindra Jeep. Ext. A1 is the copy of the registration certificate. He purchased the same from one Sri. Ahammed.P.K. The ownership of the vehicle was transferred in his name in the registration certificate with effect from 21/12/2006. The vehicle was insured with the opposite party for the period from 21/06/2006 to 20/06/2007 by the previous owner Sri. Ahammed. P.K. Ext. A 2 is the copy of the certificate – cum - policy schedule in the name of Sri. Ahammed. P.K. Neither the insured nor the complainant had intimated the fact of transfer of ownership of the vehicle to the insurance company within 14 days from the date of transfer as mandated under section 157(2) of the Motor Vehicles Act. The vehicle met with an accident on 09/01/2007and damages were caused to the vehicle. Against the estimate of Rs. 1,23,000/- submitted by the complainant, the surveyor assessed only an amount of Rs.24,198.50 as can be seen from Ext.X2 survey report and the testimony of RW1, the surveyor. The complainant preferred claim before the opposite party on 17/01/2007. Ext.X1 series are the claim form and the connected documents including photographs of the vehicle. The claim was rejected by the opposite party as per Ext.A3 letter dated 23/04/2007.Ext.A4 is the copy of the lawyer notice dated 15/03/2008 issued by the complainant and Ext A5 is the copy of the reply notice sent by the insurance company.
12. Ext.A3 shows that the claim was repudiated for the reason that the insurance was not transferred to the name of the complainant within14 days from the transfer of ownership of the vehicle and as such there was no privity of contract between the complainant and the opposite party. Admittedly, the complainant, who is the subsequent purchaser of the vehicle, did not get the insurance policy transferred in his name within the prescribed time.
13. The crucial point to be considered in this case is as to whether the insurance company was justified in repudiating the claim on the above ground. In this context, it is worthwhile to have a glance at section 157 of the Motor Vehicles Act, 1988 which reads as follows;
“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 right and liabilities of the said certificate of insurance and policy of insurance.
(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the act of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance”.
14. Going by section 157 of the Motor Vehicles Act, we are of the view that the insurance company is not under obligation to indemnify the subsequent purchaser for the damage caused to the vehicle unless the subsequent purchaser has got the insurance policy transferred in his name. The above position is supported by the decision of the Honourable Apex Court in Complete Insulation Private Ltd. Vs. New India Assurance Company Ltd. reported in (1996) (1) SCC 221 wherein it has been held;
“Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157of the New Act must be limited thereto. The certificate of insurance to be issued in the prescribed form (See Form 51 prescribed under Rule 141 of the Central Motor Vehicles Rules, 1989) must, therefore, relate to third party risks. Since the provisions under the New Act and the Old Act in this behalf are substantially the same in relation to liability in regard to third parties, the National Consumer Disputes Redressal Commission was right in the view it took based on the decision in Kondaihs case because the transferee – insured could not be said to be a third party qua the vehicle in question. It is only in respect of third party risks that Section 157 of the New Act provides that the certificate of insurance together with the policy of insurance described therein “shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred”. If the policy of insurance covers other risks as will, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter X1 of the New 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. In the present case since there was no such agreement and since the insurer had not transferred the policy of insurance in relation thereto to the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken by the National Commission is therefore correct.”
15. Similar view was taken by the Honourable Supreme Court in Rikhi Ram & Anr. Vs. Sukhrania & Ors. (2003) 3 SCC 97 wherein it was observed:
“On an analysis of Section 94 and 95, we further find that there are two third parties when a vehicle is transferred by the owner to a purchaser. The purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer.”
- In the instant case, the complainant / transferee did not intimate the transfer of ownership of the vehicle in his name and get the insurance policy transferred in his name. That being so, there is no privity of contract between the complainant and the opposite party in respect of ‘own damage’ section of the policy. In the light of the dictum of the Honorable Supreme Court referred to above, the insurance company is not under any oblogation to indemnity the purchaser for the damage caused to the vehicle since the complainant has not transferred the insurance policy in his name. Therefore, the insurance company was justified in repudiation the claim for the reasons stated in Ext. A3. The repudiation of the claim was on justifiable, valid and legal grounds and hence it would not amount to deficiency in service or unfair trade practice and consequently the complaint must fail.
17. Point No.2: In view of the finding on the above point, the complainant is not entitled to claim and get any relief.
In the result, the complaint is dismissed. However, no order as to costs.
Pronounced in open Commission on this, the 27th day of October, 2023.
Date of Filing: 07/03/2009
Sd/- Sd/- Sd/-
PRESIDENT MEMBER MEMBER
APPENDIX
Exhibits for the Complainant :
Ext.A1 – Copy of the registration certificate.
Ext.A2 – Copy of the certificate – cum - policy schedule in the name of Sri. Ahammed. P.K.
Ext.A3 – Letter dated 23/04/2007.
Ext.A4 – Copy of the lawyer notice dated 15/03/2008 issued by the complainant.
Ext.A5 – Copy of the reply notice sent by the insurance company.
Exhibits for the Opposite Party
Nil.
Witnesses for the Complainant
Nil.
Witnesses for the opposite party
RW1 – Vamanan.P.S.
Third party Exhibits
Ext X1 series – Claim form and the connected documents including photographs
of the vehicle.
Ext X2 - Survey report
Sd/- Sd/- Sd/-
PRESIDENT MEMBER MEMBER
True Copy,
Sd/-
Assistant Registrar.
