Order by:
Sh.Amrinder Singh Sidhu, President
1. The complainants have filed the instant complaint under section 35 of the Consumer Protection Act, 2019 on the allegations that Complainant No.2 Gurlal Singh was owner of vehicle PB-03AL-5086 of I20 and said vehicle was sold by Complainant No.2 to complainant No.1 on 20.05.2019 alongwith all its rights as ownership and in this regard, affidavit was also attested in favour of Complainant No.2 alongwith all other documents and forms which are required for transfer of ownership of the vehicle. The complainant No.1 submitted all the documents to the Registration Authority for the transfer of the ownership of the vehicle. Since the vehicle was not transferred, but to avoid any difficulty, the complainant No.1 got insurance of the said vehicle at his own vide policy No. 2012003120P 102065294 valid for the period w.e.f 05.06.2020 to 04.06.2021. Unfortunately, the vehicle in question met with an accident and thereafter, the complainant No.1 lodged the claim with the Opposite Party for the reimbursement of the repair charges, but the Opposite Party repudiated the claim of the complainant on the false and frivolous grounds. In this way, said conduct of the Opposite Party clearly amounts to deficiency in service and as such, the Complainant is left with no other alternative but to file the present complaint. Vide instant complaint, the complainant has sought the following reliefs.
- The Opposite Party may be directed to make the claim amount of Rs.4,50,000/- of the insured vehicle and also to pay Rs.1 lakhs besides Rs.35,000/- as costs of litigation and any other relief to which this Hon’ble Consumer Commission, Moga may deem fit be granted in the interest of justice and equity.
2. Opposite Party appeared through counsel and contested the complaint by filing the written version on the ground inter alia that the complaint is not maintainable; that there is no deficiency in service on the part of the Opposite Parties and that the complaint is absolutely false and frivolous. In fact, as alleged by the complainants, the Complainant No.2 has sold the car on 20.05.2019 to Complainant No.1 who got the insurance in the name of Complainant No.2 on 05.06.2019 by enjoying 20% NCB and again got the insurance in the name on 05.06.2020 and enjoyed 25% NCB without disclosing the material fact of transfer of car. The accident happened on 26.07.2020 and in this way, the complainant has violated the Regulation of IRDA and illegally enjoyed the benefit of NCB (No Claim Bonus). Insurance policy is a contract between a policy holder and an issurer. In the absence of the new vehicle owner’s name on the motor insurance policy, there exists no valid contract between him and an insurance company and hence is not competent to make complaint s a consumer against the Opposite Party. Complainant No.2 is not a consumer under the provisions of the Act as he has sold the car on 20.05.2019 to Complainant No.1 and hence he has no insurable interest in the insurance policy. Insurable interest is the basis on which the whole contract of insurance stands and is an essential and material fact in the contract of insurance. On merits, the Opposite Party took up almost the same and similar pleas as taken up by them in the preliminary objections. Remaining facts mentioned in the complaint are also denied and a prayer for dismissal of the complaint was made.
3. In order to prove his case, the complainant has tendered into evidence affidavit of Gurlal Singh Ex.A alongwith copies of documents Ex.A2 to Ex.A28 and closed his evidence.
4. On the other hand, to rebut the evidence of the complainant, Opposite Party tendered into evidence affidavit of Sh.Raghunanan Bansal Ex.OP1 alongwith copies of documents Ex.Ops2 to Ex.Ops4 and closed the evidence on behalf of the Opposite Parties.
5. We have heard the ld.counsel for the parties and gone through the documents placed on record.
6. During the course of arguments, ld.counsel for the Complainant as well as Opposite Parties have mainly reiterated the facts as narrated in the complaint as well as in the written statements respectively. We have perused the rival contentions of the parties and also gone through the record on file. The main contention of the ld.counsel for the complainant is that during the policy period w.e.f 05.06.2020 to 04.06.2021, the insured vehicle met with an accident and thereafter, the complainant No.1 lodged the claim with the Opposite Party for the reimbursement of the repair charges, but the Opposite Party repudiated the claim of the complainant on the false and frivolous grounds. On the other hand, ld.counsel for the Opposite Party has repelled the aforesaid contention of the ld.counsel for the complainant on the ground that in fact, the Complainant No.2 has sold the car on 20.05.2019 to Complainant No.1 who got the insurance in the name of Complainant No.2 on 05.06.2019 by enjoying 20% NCB and again got the insurance in the name on 05.06.2020 and enjoyed 25% NCB without disclosing the material fact of transfer of car. The accident happened on 26.07.2020 and in this way, the complainant has violated the Regulation of IRDA and illegally enjoyed the benefit of NCB (No Claim Bonus). Insurance policy is a contract between a policy holder and an issurer. In the absence of the new vehicle owner’s name on the motor insurance policy, there exists no valid contract between him and an insurance company and hence is not competent to make complaint against the Opposite Party. Complainant No.2 is not a consumer under the provisions of the Act as he has sold the car on 20.05.2019 to Complainant No.1 and hence he has no insurable interest in the insurance policy. Insurable interest is the basis on which the whole contract of insurance stands and is an essential and material fact in the contract of insurance. It is not the denial of the case that the vehicle in question was originally the ownership of Complainant No.2, however, Complainant No.2 has sold the same to Opposite Party No.1, but at the time of accident it was not transferred in the name of Complainant No.1. However, the Complainant No.1 was continuously, getting the insurance cover of the vehicle in question of the said purchased vehicle which was duly insured at the time of accident. In this respect, we may refer to the cases "New India Assurance Company Limited v. Shri Divya Prashad, I (2011) CPJ 22 (NC)" and "Oriental Insurance Company v. Kamal Tours & Travels III (2011) CPJ 39 (NC)" in which cases it was held by the Hon'ble National Commission that if the complainant No.1 has no insurable interest in the vehicle at the time of the accident, there was no privity of contract between the insurance company and the complainant No. 2, but the vehicle in question was duly insured by Complainant No.1 at the time of accident and the insurable interest is between Complainant No.2 and insurance company in whose name the vehicle was registered at the time of accident. However, there is breach of terms and conditions of the policy on the part of Complainant No.1 because he did not get transferred the vehicle in his name, however, he was continuously getting the insurance cover of the vehicle in question and as such, there is breach of terms of the policy. However, we are of the view that even if the complainant No.2 has breached the terms and conditions of the policy in question by not transferring the vehicle in the name of Complainant No.1 and breached the terms and conditions of the policy, even then the Insurance Company ought to have settled the claim of the complainant on “non standard basis” even if some of the conditions of the insurance policy are not adhered by the insured. In this regard, we are supported with judgment in case titled National Insurance Company Limited versus Kamal Singhal IV (2010)CPJ297 (NC) wherein the Hon'ble National Consumer Disputes Redressal Commission, New Delhi relying upon various decisions of the National Consumer Disputes Redressal Commission in the matter of (1) National Insurance Company Ltd. v. J. P. Leasing & Finance Pvt. Ltd. (RP No. 643/2005), (2) Punjab Chemical Agency v. National Insurance Company Ltd. (RP No. 2097/2009), (3) New India Assurance Co. Ltd. v. Bahrati Rajiv Bankar, (RP) No. 3294/2009) and (4) National Insurance Company Ltd. v. Jeetmal, (RP No.3366/2009) and also judgment of the Hon'ble Apex Court in the matter of National Insurance Company Versus Nitin Khandewal IV (2008) CPJ 1(SC), held the breach of condition of the policy was not germane and also held further that : “the appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy to the loss caused to the insurer”. The Hon'ble Supreme Court has further held that; “even assuming that there was a breach of policy, the appellant Insurance Company ought to have settled the claim on “non-standard basis.” Hon'ble Apex Court in back drop of these features, in these cases, allowed 70% of the claim of the claimant on the “non-standard basis”. This view was again reiterated by the Hon'ble Apex Court in the matter of Amalendu Sahoo versus Oriental Insurance Company Limited. II(2010) CPJ 9(SC)=II (2010)SLT 672. Hon'ble National Commission in the case National Insurance Company Limited versus Kamal Singhal referred to above relying upon the law laid down by the Hon'ble Supreme Court has held that;
“there being a long line of decisions on this score, we have no option but to uphold the finding of Fora below with modification that the claim be settled on 'non-standard' basis”, in terms of the guidelines issued by the Insurance Company. In case petitioner company fails to carry out the direction contained therein, the amount payable on 'non-standard' basis, shall carry interest @ 6% p.a from the date of expiry of six weeks till the date of actual payment”.
11. In such a situation the repudiation made by Opposite Parties regarding genuine claim of the complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pesters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation. This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-
“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.
12. Now come to the quantum of compensation. Undisputedly, the IDV of the insured vehicle was Rs.4,50,000/- copy of the insurance policy is placed on record as Ex.A4. Hence, having regard to the position of the law, as has been laid down, by the Hon'ble Apex Court in the various decisions referred to here-in-above and also the view expressed by the Hon'ble National Commission, we are of the considered view that in the present case the complainant, if not entitled for the entire amount of IDV, the Insurance Company definitely ought to have settled the complainant's claim on 'non-standard basis”, which in the facts and circumstances taking the assistance of the view expressed by the Hon'ble Apex Court and also by the Hon'ble National Commission, we allow 70% of the assessed amount on 'non-standard' basis” of the IDV.
13. In view of the aforesaid facts and circumstances of the case, we allow the complaint of the Complainant partly and direct the Opposite Party to make the payment of Rs.3,15,000/- (Rupees three lakh fifteen thousands only) i.e. 70% of the IDV of the insured vehicle of Rs.4,50,000/- to Complainant No.2 Gurlal Singh, alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 09.04.2021 till its actual realization. The compliance of this order be made by the Opposite Party within 45 days from the date of receipt of this order, failing which the complainant No.2 shall be at liberty to get the order enforced through the indulgence of this District Commission. Copies of the order be furnished to the parties free of cost. File be consigned to record room after compliance.
Announced in Open Commission.
Dated:15.06.2021.
