KERALA  STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION

                    VAZHUTHACADU    THIRUVANANTHAPURAM

   APPEAL  NO. 125/2009

                                 JUDGMENT DATED:22..02..2010.

PRESENT

SRI. M.V. VISWANATHAN                                    : JUDICIAL MEMBER

SMT.VALSALA SARANGADHARAN                 :  MEMBER

SHRI.S. CHANDRAMOHAN NAIR                      :  MEMBER

The Manager,

M/s National Insurance Company Ltd.,

Korambayil Arcade, Pandikkad Road,             : APPELLANT

Manjeri Post, Malappuram District.

(By Adv: Sri.Prasannakumar Nair)

            Vs.

1.Unni Alavi, S/o Moideenkutty,

  House No:1/67, Puthiyara House,

  Nambooripooti Post, Edakkara,

  Malappuram District.

                                                                                    : RESPONDENTS

2.M/s Sakthi Finance Ltd.,

  5/2248-D, Indira Gandhi Road,

  Kozhikkode-673 004.

                                                JUDGMENT                                        

SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER

Appellant was the 1^st opposite party and respondents 1 and 2 were the complainant and the 2^nd opposite party respectively in the complaint in OP:89/05 on the file of CDRF, Malappuram.  The complaint therein was filed alleging deficiency of service on the part of the 1^st opposite party/National Insurance Company Ltd in repudiating the insurance claim put forward by the complainant.  The 1^st opposite party entered appearance and filed written version denying the alleged deficiency of service.  The 1^st opposite party/Insurance Company contended that the complainant is not having any privity of contract with the opposite party/Insurance company and so the 1^st opposite party is not bound to indemnify the complainant.  It was also contended that the complainant never approached the 1^st opposite party/Insurance Company to get the policy of insurance transferred in the name of the complainant.  The 2^nd opposite party entered appearance and filed separate written version and submitted that the 2^nd opposite party being the financier of the insured vehicle informed the 1^st opposite party/Insurance company by letter dated:25/8/2003 about the sale of the vehicle to the complainant and with a further request to transfer the policy infavour of the complainant with necessary hire purchase endorsement.

2. Before the Forum below Exts.A1 to A3 documents were marked on the side of the complainant and B1 copy of the certificate cum insurance policy schedule was marked on the side of the 1^st opposite party.  No evidence was adduced from the side of the 2^nd opposite party.  On an appreciation of the evidence on record, the Forum below passed the impugned order directing the 1^st opposite party/National Insurance Company Ltd to pay Rs.1,99,944/- to the complainant with interest at 18% from the date of the complaint till payment and cost of Rs.1000/-.   Hence the present appeal.

3. When this appeal was taken up for final hearing there was no representation for the 2^nd respondent/2^nd opposite party.  We heard the counsel for the appellant/1^st opposite party and 1^st respondent/complainant.  The learned counsel for the appellant/1^st opposite party/Insurance company submitted his arguments based on the grounds urged in the Memorandum of the present appeal.  He also filed argument notes in support of his oral submission.  He much relied on the provisions of GR 17 of the India Motor Tariff which came into force on 30^th June 2002 and submitted that under a package policy/comprehensive policy the liability to indemnify would bind the insurance company only on transfer of the policy in the name of the transferee of the insured vehicle and that there will be no automatic transfer of the policy into the name of the transferee of the vehicle.  It is also submitted that the Act only policy will be having deeming provision and the Act only policy will be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer.  He also argued for the position that the Forum below has gone wrong in relying on GR 10 of Old India Motor Tariff which was in existence up to 30 th  June 2002.  Thus, the appellant/1^st opposite party prayed for setting aside the impugned order dated:15/9/2008 passed by CDRF, Malappuram in OP:89/05.  On the other hand, the learned counsel for the 1^st respondent/complainant supported the impugned order passed by the Forum below.  He much relied on the decision rendered by the Hon’ble Commission in Sri.Narayan Singh Vs. New India Assurance Company Ltd IV (2007) CPJ 289 (NC) and submitted that the benefits under the policy would automatically accrue to the new owner on transfer of the insured vehicle and that the Insurance Company is liable to indemnify the new owner/transferee of the vehicle.  Thus, the 1^st respondent prayed for dismissal of the present appeal.

4. The points that arise for consideration are:-

1.                            Whether there was any deficiency of service on the part of the appellant/1^st opposite party in repudiating the insurance claim put forward by the 1^st respondent/complainant?

2.                            Whether the appellant/1^st opposite party/Insurance Company was liable to indemnify the 1^st respondent/complainant with respect to the theft of the insured vehicle bearing registration No:KL-10R/1095?

3.                            Whether the package or comprehensive policy of insurance would automatically be transferred in the name of the transferee of the insured vehicle with effect from the date of transfer of the insured vehicle?

4.                            Is there any legally sustainable ground to interfere with the impugned order dated:15/9/2008 passed by CDRF, Malappuram in OP:89/05?

5. Point Nos:1 to 4:-

These points can be discussed and answered jointly  as these points are inter related and inter connected.  For the sake of convenience, the parties to this appeal will be referred to according to their rank and status before the Forum below in OP:89/05.

6. There is no dispute regarding the facts of this case.  The complainant Unni Alavi purchased the Maruthi Car bearing registration No:KL-10R/1095 from the registered owner Unni Hydru.  The aforesaid vehicle was purchased by the said Unni Hydru with the financial assistance of the 2^nd opposite party M/s Sakthi Finance Limited.  The aforesaid vehicle was insured with the 1^st opposite party/National Insurance Company.  The vehicle was having a policy coverage for the period from 23/7/2003 to 22/7/2004.  The registered owner Unni Hydru was the insured of the said vehicle KL-10R/1095.  The said policy was a comprehensive policy known as package policy.  Complainant has not produced copy of the policy; but the 1^st opposite party/insurance company produced P1 copy of the policy.  Admittedly the insured vehicle KL-10R/1095 was transferred into the name of the complainant Unni Alavi with effect from 15/8/2003.  Necessary endorsement regarding transfer of the vehicle was also effected in the certificate of registration of the insured vehicle.  Copy of the certificate of registration produced from the side of the complainant/1^st respondent would reveal this fact.  Thus, from 15/8/2003 onwards the complainant Unni Alavi became the registered owner of the insured vehicle KL-10R/1095.  But the policy of insurance was not transferred in the name of the complainant.  In other words, the comprehensive policy of insurance issued by the 1^st opposite party/insurance company continued in the name of the former owner Unni Hydru.  It is to be noted that the former owner Unni Hydru is none other than the father in law of the complainant Unni Alavi.

7. There is no dispute that the insured vehicle was fully burnt in an accident which occurred on 29/4/2004 at 05.00 hours.  There is also no dispute regarding the fire accident and the extensive damage caused to the insured vehicle. The complainant preferred a claim on total loss basis.  But the 1^st opposite party/insurance company repudiated the insurance claim by its letter dated:8/9/2004 stating that the insurance policy was not transferred into the name of the complainant and so the 1^st opposite party/insurance company is not liable to indemnify the complainant, the transferee of the vehicle.  Hence the complaint in OP:89/05 on the file of the CDRF, Malappuram.

8. The complainant has got a case that the 2^nd opposite party M/S Sakthi Finance Ltd. requested the 1^st opposite party/Insurance Company to transfer the policy in the name of the complainant with necessary hire purchase endorsement.  It is the definite case of the complainant that the 2^nd opposite party/Sakthi Finance by the letter dated:25/8/2003 informed the Divisional Manager/National Insurance Company Limited, Calicut about the transfer of the vehicle into the name of the complainant Unni Alavi and to have  hypothecation endorsement infavour of the 2^nd opposite party.  But the 1^st opposite party/Insurance company has not admitted acceptance of such a letter dated:25/8/2003 from the 2^nd opposite party.

9. Ext.A2 is copy of the aforesaid letter dated:25/8/2003 addressed to Divisional Manager, National Insurance Company Ltd., Calicut with copy to National Insurance Company Ltd., New Delhi.  It is to be noted that A2 letter is said to have been issued by the 2^nd opposite party, Sakthi Finance Ltd. to the 1^st opposite party/National Insurance Company Ltd.  But acceptance of such a letter has not been admitted by the 1^st opposite party.  On the other hand, the 1^st opposite party in its written version has categorically contended that the 1^st opposite party was not approached by the complainant for getting the policy transferred to his name and there was no omission on the part of the 1^st opposite party in making an endorsement regarding transfer of the policy.  Then, it is for the complainant or the 2^nd opposite party to substantiate their case that A2 letter was issued to the 1^st opposite party/National Insurance Company Ltd. It is to be noted that 2^nd opposite party, Sakthi Finance Ltd is having regular office and the 2^nd opposite party will be having necessary dispatch register evidencing issuance of such a letter on 25/8/2003.  It is also not stated as to how A2 letter was forwarded to the 1^st opposite aprty/National Insurance Company Ltd.  The mode of forwarding oof A2 letter has not been stated by the 2^nd opposite party/Sakthi Finance Ltd. or the complainant.  It is to be noted that it is very convenient for the 2^nd opposite party or the complainant to have copy of such a letter. The genuineness and correctness of A2 letter is disputed by the 1^st opposite party.  The burden is heavily upon the 2^nd opposite party and the complainant to prove issuance of A2 letter to the 1^st opposite party. So, the Forum below cannot be justified in relying on A2, the copy of the letter said to have been issued by the 2^nd opposite party to the 1^st opposite party on 25/8/2003.  No evidence is forthcoming from the side of the 2^nd opposite party or the complainant to prove issuance of the original of A2 letter dated:25/8/2003.  So, no reliance can be placed on A2 letter.

10. There can be no doubt that the 2^nd opposite party, Sakthi Finance Ltd. is having experience in the field of purchase of vehicles.  They were also having vast experience regarding transfer of vehicles and transfer of policy of insurance.  There is no case for the 2^nd opposite party or the complainant that necessary fee has been remitted or paid by any of them to get the policy of insurance transferred into the name of the complainant, Unni Alavi.  There is nothing on record to show that the original owner/insured of the vehicle signed the necessary application form for transfer of the vehicle into the name of the new owner (transferee).  So, the case of the complainant, that the 2^nd opposite party submitted necessary proposal form duly signed by the complainant, P.Unni Alavi for getting the policy of insurance transferred, cannot be believed or accepted.  It can very safely be concluded that the comprehensive policy of insurance (package policy) with respect to the insured vehicle KL-10R/1095 was not transferred into the name of the new owner, P.Unni Alavi and that no steps were taken to get the policy transferred into the name of the new owner.  But the policy with respect to the insured vehicle stood in the name of the original owner Unni Hydru.

11. Admittedly Sri.Unni Hydru/the insured had transferred his interest and right over the insured vehicle KL—10 R/1095 by transferring the vehicle into the name of the complainant Unni Alavi with effect from 15/8/2003.  So, on the date of peril ie on 29/4/2004, the insured Unni Hydru had no insurable interest over the vehicle KL-10 R/1095.  So Sri.Unni Hydru is not entitled to get any insurance claim with respect to the insured vehicle KL—10 R/1095 and that the 1^st opposite party/National Insurance Company was not liable to indemnify Sri.Unni Hydru with respect to the insured vehicle KL-10R/1095.

12. On the date of peril (29/4/2004) the insured vehicle KL-10R/1095 was insured with the 1^st opposite party/National Insurance Company Ltd; but the registered owner of the said vehicle was the complainant, Unni Alavi.  He had no insurance contract with the 1^st opposite party/National Insurance Company Ltd.  He had no privity of contract with the 1^st opposite party/National Insurance Company Ltd.  In such a situation, the 1^st opposite party had no liability to indemnify the complainant Unni Alavi, the registered owner of the vehicle with respect to the loss or damage caused to the insured vehicle KL-10R/1095.  The 1^st opposite party/National Insurance Company Ltd can very well repudiate the insurance claim which was putforward by the complainant, as there was no contract of insurance between the complainant and the 1^st opposite party/National Insurance Company Ltd.

13. The case of the complainant is that the policy of insurance would get automatically transferred in the name of the new owner as and when the ownership of the vehicle is transferred.  In other words, the case of the complainant is that the policy would run with the vehicle.  The Forum below accepted the aforesaid case of the complainant.  The Forum below much relied on GR 10 of the General Regulations of India Motor Tariff.  Admittedly the aforesaid India Motor Tariff was in existence up to 30^th June 2002.  It is to be noted that thereafter general regulations of India Motor Tariff was amended and in the place of the old GR 10 the new general regulation GR 17 has been introduced.  The old GR 10 reads as follows:-

Transfers:-

On transfer of a vehicle the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner.  If the transferee is not entitled to the benefit of the bonus or subjected to malus already shown on the policy, the recovery of the differences between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy.  However, on expiry and/or termination of the existing policy the transferee will be eligible for Bonus or subject to Malus as per his own entitlement.

14. If the transferee wants to change the policy in his name it may be done on getting acceptable evidence of sale and a fresh proposal Form duly filled and signed.  If a new Certificate of Insurance in the transferee’s name is required, his old Certificate of Insurance must be surrendered and fee of Rs.15/- must be collected.

15. If the old certificate of insurance is not surrendered, a proper declaration must be taken from the transferee before a new certificate of insurance is issued.

Endorsement No:9 must be used.

16. So, by virtue of GR 10 there must be an automatic transfer of the policy with effect from the date of transfer of the ownership of the vehicle.  In other words the new owner/transferee will got the benefits under the policy both under Act only Policy and comprehensive Package policy.  But the aforesaid GR 10 was in force up to 30^th June 2002.  Thereafter, new general regulations came into force with effect from July 2003.  The old GR 10 was replaced by GR 17 of the revised India Motor Tariff.  GR 17 of the revised India Motor Tariff is as follows:-

GR 17 Transfers:-

On transfer of ownership, the Liability Only cover, either under a Liability Only Policy or under a package policy, is deemed to have been transferred in favour of the person to whom the motor vehicle transferred with effect from the date of transfer.

17. The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy.  So that the insurer may make the necessary changes in his record and issue Fresh Certificate of insurance.  In case of Package Policies, transfer of the “Own Damage” section of the policy infavour of the policy, shall be made by the insurer only on receipt of the 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 the transferee’s entitlement, if any, and that shown on the policy shall be made before effecting the transfer.

18. A fresh Proposal Form duly completed is to be obtained from the transferee in respect of both Liability Only and Package Policies.

19. Transfer of Package Policy in the name of the transferee can be done only on getting acceptable evidence of sale and a fresh proposal form duly filled and signed.  The old Certificate of Insurance for the vehicle, is required to be surrendered and a fee of Rs.50/- is to be collected for issue of fresh Certificate in the name of the transferee.  If 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. 

20. Endorsement IMP-3 is to be used.

A reading of GR 17 of the revised India Motor Tariff would make it abundantly clear that there will be an automatic transfer of the Act only policy with effect from the date of transfer of ownership of the vehicle.  But as far as the comprehensive policy or package policy is concerned, the liability on the insurance company to indemnify the insured would come into operation from the date of transfer of the policy.  It would also make it clear that the transferee must apply within 14 days from the date of transfer in writing to get the policy transferred into the name of the new owner (transferee).  It is also made more clear in case of package policies, transfer of the “Own Damage” section of the policy infavour of the transferee shall be made by the insurer only on receipt of a specific request from the transferee along with consent of the transferer.  Thus, provisions of GR 17 of the revised India Motor Tariff would make it clear that the package policy or comprehensive policy shall not run with the insured vehicle but only with the insured person.  It is for the owner of the vehicle to get the policy transferred in his name.  Otherwise, the owner of the vehicle is not entitled to get the insurance benefits from the insurance company.

21. The peril in this case occurred on 29/4/2004.  On that date the provisions of GR 17 of the revised India Motor Tariff was in force.  In other words, on the date of the peril the old GR 10 had no application.  The Forum below cannot be justified in relying on the provisions of the GR 10 of the old India motor Tariff which was in existence only up to 30^th June 2002.  The aforesaid provision had no application in the present case on hand.  On the other hand, GR 17 of the revised India Motor Tariff is applicable in the case of the insured vehicle KL 10 R/1095.  So, the impugned order passed without considering the relevant provisions of GR 17 of revised India Motor Tariff is legally unsustainable and the same is liable to be quashed.

22. The Forum below much relied on the decisions rendered by the Hon’ble National Commission in Sri.Narayan Singh Vs. New India  Assurance Company Ltd reported in IV (2007) 289 (NC).  It is to be noted that the aforesaid decision was rendered by the Hon’ble National Commission based on the GR 10 of the old India Motor Tariff which was in existence only up to 30^th June 2002.  It is to be borne in mind that the insured vehicle in the reported case was having Package Policy for the period from 3^rd August 1994 to 2^nd August 1995 and the insured vehicle met with an accident on 4/6/1995 and the insured vehicle was totally damaged.  The insurance claim therein was repudiated by the insurance company on the ground that the insurance policy was not transferred in the name of the owner of the vehicle.  It is to be noted that as far as the insured vehicle therein was concerned, the provisions of GR 10 of the India Motor Tariff was applicable and so the Hon’ble National Commission by relying on the said provisions of GR 10 of the India Motor Tariff directed the insurance company to indemnify the loss suffered by the transferee/owner of the vehicle.  But as far as the present case on hand is concerned, the provisions of GR 10 of the old India Motor Tariff has no application; but the provisions of GR 17 of the revised India Motor Tariff is only applicable.  So, the impugned order passed by the Forum below is to be set aside.  Hence we do so.

23. The foregoing discussions and the findings thereon would make it clear that there was no deficiency of service on the part of the 1^st opposite party/National Insurance Company Ltd in repudiating the insurance claim put forward by the complainant.  The complaint in OP:89/05 ought to have been dismissed by the Forum below.  But the Forum below was misled by the provisions of GR 10 of the old India Motor Tariff.  The Forum failed to consider relevancy of the provisions of GR 17 of the revised India Motor Tariff.  So, this Commission is pleased to set aside the impugned order passed by the Forum below.  These points answered accordingly.

In the result the appeal is allowed.  The impugned order dated:15/9/2008 passed by the CDRF, Malappuram in OP:89/05 is set aside.  The complaint in the said OP:89/05 is also dismissed.  The parties are directed to suffer their respective costs throughout. 

M.V. VISWANATHAN  : JUDICIAL MEMBER

VALSALA SARANGADHARAN   :  MEMBER

S. CHANDRAMOHAN NAIR:  MEMBER

VL.