National Consumer Disputes Redressal Commission, New Delhi

Ajit Bharihoke, Presiding Member

Vijayan M – Petitioner

Versus

Bajaj Allianz General Insurance Co. Ltd – Respondent

Revision Petition No. 4576 of 2013                                              Decided on 8th December 2015

(Against the Order dated 13.09.2013 in Appeal No. 591 of 2012 of the State Commission, Kerala)

Consumer Protection Act, 1986 – Sections 15, 17, 19 and 21 - Motor Vehicle Act, 1988 – Section 157 (1) read with GR 17 of Motor Tariff Regulations – Insurance – Damage to car in accident – State Commission dismissed claim on ground that there being no transfer of policy in name of Petitioner/Transferee, he had no insurable interest in vehicle and Respondent/Opposite Party had no liability to indemnify Complainant – Transferee of vehicle is required to apply for transfer of insurance policy in writing along with consent of previous owner of vehicle – Complainant has not done the same – In absence of any evidence to this effect, finding of State Commission cannot be faulted – Revision Petition dismissed.

Important Point

Transferee of vehicle is required to apply for transfer of insurance policy in writing along with consent of previous owner of vehicle in order to be entitled for insurance claim.

Order

1.  This revision petition is directed against the order of Kerala State Consumer Disputes Redressal Commission, Thiruvananthapuram (in short, “State Commission”) dated 13.9.2013 in first appeal No. 591/2012 arising out of the order of the District Forum, Kasargod in consumer complaint No. 163/2011.

2.  Briefly stated, facts relevant for the disposal of the revision petition are that Ford Figo car with registration No. KL-14 J 5467 was pre-owned by Gopalkrishna Rao, who got it insured with the Respondent insurance company with IDV Rs. 5,09,318. The insurance policy was valid for the period w.e.f. 25.6.2010 to 24.6.2011. The Complainant purchased the said vehicle from the previous owner on 17.5.2011. The vehicle met with an accident on 9.6.2011, resulting in total damage. Intimation of the accident and damage was given to the police as well as insurance company. The insurance claim preferred by the Complainant, however, was repudiated with following observations: -

“On scrutiny of documents submitted by your goodself, it is observed that at the time of accident, the insurance policy is in the name of Gopalkrishna Rao, whereas the registration book of the vehicle is in your name.

Please note that as per All India Motor Tariff formulated by IRDA, there should be existence of insurance interest at the time of taking policy as well as at the time of loss. In this claim, there was no contract of insurance at the time of accident. In this circumstance, we are not liable under the policy terms and conditions in respect of the above loss; hence the claim is not admissible.”

3.  Being aggrieved of repudiation of the insurance claim, the Complainant filed a consumer complaint.

4.  The Respondent/Opposite Party in the written statement admitted that the vehicle was insured in the name of the previous owner Gopalkrishna Rao and its IDV was Rs. 5,09,318. It was pleaded that despite having purchased the vehicle, the Complainant failed to either inform the Opposite Party or get the insurance transferred in his name and, therefore, the Complainant had no insurable interest in the subject vehicle and for this reason the insurance claim was repudiated.

5.  The District Forum, on consideration of the pleadings of the parties and the evidence, allowed the complaint and directed the Respondent/Opposite Party to pay to the Complainant a sum of Rs. 3,62,000 alongwith 9% interest thereon from the date of filing of complaint till realization together with litigation cost of Rs. 5,000. It was ordered that if the amount is not paid within 30 days from the date of receipt of copy of the order, the interest payable shall be 12% from the date of the complaint till realization.

6.  Being aggrieved by the order of the District Forum, the Opposite Party preferred an appeal and the State Commission after noting the judgment of the Supreme Court in the case of Complete Insulation Pvt Ltd vs New India Assurance Co. Ltd (1996) 1 SCC 221, as also the judgment in the case of G Govindan vs New India Assurance Co. Ltd (1999) 3 SCC 754 held that there being no transfer of policy in the name of the Petitioner/Transferee, he had no insurable interest in the vehicle and the Respondent/Opposite Party had no liability to indemnify the Complainant.

7.  Learned counsel for the Petitioner has contended that the order of the State Commission is not sustainable, as it has been passed in utter disregard of Section 157 of the Motor Vehicles Act (MVA), 1988. Learned counsel has tried to distinguish the judgment of the Supreme Court in the matter of Complete Insulation (supra) by contending that Section 157 of the MVA was amended, w.e.f. 14.11.1994 and, by way of the amendment the explanation was added to Section 157 (1) of MVA, 1988. It is contended that the judgment of the Supreme Court in Complete Insulation case was based upon the interpretation of unamended Section 157 and, therefore, it is not applicable to the facts of this case because of subsequent amendment in the MVA.

8.  In order to appreciate the contention of learned counsel for the Petitioner, I have compared unamended section 157 of the MVA, 1988 with the amended section, which came into effect w.e.f. 14.11.1994.  The only difference between amended and unamended section is that by way of amendment, clarificatory explanation has been added to Section 157 (1) of the MVA, which reads as under:

“157. Transfer of certificate of insurance.

.................................................................

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.”

9.  The above amendment in Section 157(1) of the MVA, 1988 does not make much difference in the legal position, as explained by the Hon’ble Supreme Court in the matter of Complete Insulation Pvt Ltd (supra), which is evident from the following observations of the Apex Court in the above said judgment:

“Section 157 appears in Chapter XI, titled as 'Insurance of Motor Vehicles against Third Party Risks' and comprises sections 145 to 164. Section 145 defines certain expressions used in the various provisions of that chapter. The expression 'Certificate of Insurance' means a certificate issued by the authorised insurer under section 147(3). 'Policy of Insurance' includes a certificate of insurance. Section 146(1) posits that 'no person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this chapter'. Of course this provision does not apply to vehicles owned by the Central or State Government and used for Government purposes not connected with any commercial enterprise. This provision corresponds to section 94 of the old Act. Section 147 provides that the policy of insurance to be issued by the authorised insurer must insure the specified person or classes of persons against any liability incurred in respect of death of or bodily injury to any person or damage to any property of a third party as well as against the death of or bodily injury caused to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. This provision is akin to section 95 of the old Act. It will be seen that the liability extends to damage to any property of a third party and not damage to the property of the owner of the vehicle, i.e. the insured.”

10.  GR 17 of the Indian Motor Tariff Regulations deals with the transfer of insurance policy in case of sale of the vehicle by the original insured owner. GR 17 reads as under:

“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 is transferred with effect from the date of transfer. 

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  in  favour  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 the Transferee’s entitlement, if any, and that shown on the policy shall be 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 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.”

11.  On conjoint reading of section 157(2) of the MVA and GR 17 of the Motor Tariff Regulations, it is clear that in the case of package insurance policy, the transfer of “Own Damage” section of the policy in favour of Transferee shall be done by the insurance company in case specific request in writing is made by the Transferee of vehicle within 14 days from the date of transfer of ownership. Undisputedly, in the instant case, accident took place before the expiry of period of 14 days for applying for transfer of insurance as provided under section 157(2) of the MVA and GR 17 of the Motor Tariff Regulations.  

Therefore, the question which needs answer is whether in such a situation dehors transfer of policy in his name, the Complainant is entitled to the benefit under the insurance contract between the insurance company and the previous owner? The answer to the above question is in-built in GR 17 of the Indian Motor Tariff Regulations. The said rule provides that the transfer of “Own Damage” section of the insurance policy shall be made in favour of the Transferee only on specific request from the Transferee alongwith consent of the transferor.  Thus, it is evident that the transfer of the insurable interest under the “Own Damage” package section of the policy can be done only with the consent of the transferer.

12.  As per rule GR 17, the Transferee of the vehicle is required to apply for transfer of insurance policy in writing and that too alongwith consent of the previous owner of the vehicle.  The Complainant has neither produced any evidence to prove that he applied for insurance in writing nor has he produced any evidence to show that the previous owner gave his consent for transfer of insurance policy in his name. In absence of any evidence to this effect, the finding of State Commission cannot be faulted.

In view of the discussion above, the Petitioner has failed to show any jurisdictional error or material irregularity in the impugned order. Revision petition is, accordingly, dismissed.

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