Future Generali India Insurance Vs. Sombir [NCDRC, 16-08-2016]

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI

BEFORE: HON’BLE DR. B.C. GUPTA, PRESIDING MEMBER HON’BLE MR. PREM NARAIN, MEMBER

Dated : 16 Aug 2016

REVISION PETITION NO. 3216 OF 2015

(Against the Order dated 07/10/2015 in Appeal No. 381/2015 of the State Commission Haryana)

1. FUTURE GENERALI INDIA INSURANCE CO. LTD. 001 DELTA PLAZA, 414, VEER SAVARKAR MARG, PRABHADEVI, MUMBAI MAHARASHTRA ………..Petitioner(s)

Versus

1. SOMBIR S/O SHRI MAHENDER SINGH,R/O VILLAGE MAKRANA TEHSIL CHARKHI DADRI, DISTRICT BHIWANI HARYANA-127306 ………..Respondent(s)

For the Petitioner : MR. KAPIL CHAWLA For the Respondent : MR. ANIL KUMAR SAINI

ORDER

The complainant/respondent Sombir s/o Mahender Singh, purchased a tractor Farmtrac 60, registration No. HR-14F-3235 from Balwan s/o Amar Singh for a consideration of ₹4,40,000/-, which was already insured with the petitioner insurance company for the period 20.01.2012 to 19.01.2013, in the name of the previous owner Balwan. It has been stated in the consumer complaint that the complainant parked the vehicle on 15.08.2012 at about 8:30 PM in front of his house, but he discovered the next morning that the said tractor had been stolen. An FIR No. 270 dated 16.08.2012 under

Section 379 of theIndian Penal Code

was registered with the Police Station Dadri Sadar. After the Police filed an untraced report, the complainant applied for the insurance claim for the vehicle with the Insurance Company and submitted the relevant documents with the surveyor. However, the Insurance Company did not entertain the claim of the complainant on the ground that the insurance policy had not been transferred in the name of the complainant. It is the case of the complainant that he made an application with the registering authority for the transfer of ownership of vehicle in his name and the registration certificate was issued in his favour on 28.08.2012. He could not get the insurance policy transferred in his name because such transfer could have been made after the transfer of registration only. The complainant filed the consumer complaint in question, seeking directions to the insurance company to pay him the insured value of the vehicle, i.e., ₹4 lakh alongwith 18% interest p.a. from the date of theft of the vehicle till realisation. In addition, the complainant also asked for compensation for mental harassment, cost of litigation etc. and claimed a total sum of ₹4,73,528/- alongwith interest @18% p.a. from the Insurance Company.

2. The claim was resisted by the Petitioner/OP Insurance Company by filing a written statement before the District Forum in which they stated that the petitioner/OP had no privity of contract with the complainant and hence, the complaint against them was not maintainable. The complainant had neither informed the insurance company about the purchase of the vehicle, nor got the policy transferred in his name and hence, there was no insurable interest of the complainant for making payment of any claim under the Policy.

3. The OP Insurance Company mentioned about the General Regulations GR-17 of the India Motor Tariff, relating to the transfer of the vehicles, saying that the complainant was required to make an application within 14 days from the date of transfer to the insurer. On his failure to do so, there was no deficiency in service on the part of the insurance company towards him.

4. The District Forum vide order dated 18.03.2005, after taking into account the averments made by the parties, directed payment of the insured amount to the complainant alongwith interest @12% p.a. from the date of repudiation till realisation and also to pay ₹2,200/- as litigation charges. Being aggrieved against the said order of the District Forum, the petitioner Insurance Company challenged the same by way of an appeal before the State Commission and the said appeal having been dismissed by the State Commission, the petitioner is before this Commission by way of the present revision petition.

5. During arguments before us, the Ld. Counsel for the petitioner reiterated that there was no privity of contract between the complainant and the insurance company and hence, the complaint was not maintainable against them. The Ld. Counsel has drawn attention to an order passed by the Hon’ble Supreme Court in

M/s Complete Insulations Private Limited vs. New India Insurance Company Ltd., I (1996) CPJ 1

saying that in the case of failure of the complainant to have the vehicle transferred, the insurer was not liable to make payment of any claim. The Ld. Counsel for the petitioner has also drawn attention to an order passed by the Andhra Pradesh High Court in

Madineni Kondaiah and Ors. vs. Yaseen Fatima & Ors., I (1986) ACC 501

in which a similar view had been taken.

6. In reply, the Ld. Counsel for the complainant/respondent stated that in the affidavit filed by the complainant before the District Forum and the documents for the transfer of vehicle from Balwan s/o Mahender Singh to the complainant, it had been stated that the transfer of the vehicle was made on 24.07.2012. The said documents were submitted before the registering authority at Charakhi Dadri on 08.08.2012. The possession of the vehicle was transferred to the complainant on 15.08.2012 and on the same day, the vehicle was stolen. An FIR was lodged on the very next day, i.e., 16.08.2012 and an intimation was also sent to the insurer on that day. The change of name in the insurance policy could have been done only after the change of registration in his name. It was incumbent upon the insurance company, therefore, to make payment of the claim under the policy to the complainant.

7. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

8. The main point for consideration in the matter is whether the insurance company is liable to pay the claim for theft of the vehicle to the complainant, although, the insurance policy in the name of previous owner of the vehicle had not been transferred in the name of the new owner/complainant. The matter has been examined earlier in a catena of judgments given by the Hon’ble Apex Court and this Commission. The effect of section 157 of the Motor Vehicles Act and the India Motor Tariff Regulations, General Regulation (GR) 17 have been gone into in detail in many of these judgments.

Section 157 of the Motor Vehicles Act, 1988

reads as follows:-

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 transfer to another person the ownership of the another 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.] (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 fact 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.”

9. The issue was examined by the Hon’ble Apex Court in the case

Complete Insulation Pvt. Ltd. vs. New India Assurance Co. Ltd., (1996) 1 SCC 221

wherein it was held:

“Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157 of 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 Kondaih’s 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 well, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI 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.”

10. It is clear from above that section 157 (1) of the Motor Vehicles Act, 1988 provides for deemed transfer of certificate of insurance in the event of transfer of ownership of the Motor Vehicle. Under section 157(2), a period of 14 days has been provided for making necessary changes in the certificate of insurance, but the policy is deemed to be transferred on the date of transfer of vehicle. However, it is clear that section 157 of the Motor Vehicles Act, 1988 which is a part of chapter XI of the said Act, is applicable in the case of third party risks only. In the instant case, therefore, which relates to own damage / theft of the vehicle, the said section shall not have any application.

11. Now we come to GR-17 of the India Motor Tariff Regulations, which deals with the transfer of insurance policy in case of sale of the vehicle by the original 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.”

12. A perusal of the GR-17 of the India Motor Tariff Regulation shows that the Liability Only Cover is deemed to have been transferred from the date of such transfer to a transferee, whereas for transfer of Own Damage Section of an insurance policy, a specific request has to be made by the transferee alongwith consent of transfer and a fresh proposal form has to be submitted with evidence of sale. It is evident that there is no deemed transfer in such cases but a duty has been cast upon the transferee to make appropriate application for the transfer of policy in his name. The natural implication of this provision is that a transferee has to apply to the insurance company within a period of 14 days of the transfer having been completed, failing which, he shall not be liable for payment of claim in the eventuality of such claim arising on account of any untoward incident.

13. The main issue for examination in the present case is whether the application to be made to the insurer for the transfer of the policy should have been made by the complainant within 14 days of purchase of the vehicle, OR he could have waited for the transfer of registration in his name by the transport authority and then make application for the change of the insurance policy in his name, within 14 days of the transfer of such registration in his name.

14. To adjudicate upon the main issue as stated above, it shall be worthwhile to examine as to when the transfer of the vehicle took place. It is the admitted case of the complainant that the said tractor was purchased by him on 24.07.2012 and he has stated so in the legal notice sent by him to the insurance company. Further, Form 29 and Form 30 relating to the transfer of ownership of a motor vehicle as prescribed in the relevant Central Motor Vehicles Rules 1989 have been produced on record. In Form 29, (prescribed under Rule 55(1) of the said Rules) duly signed by the transferor Balwan Singh, it has been stated that he “sold and delivered”, the vehicle HR 14 F 3235 on 24.07.2012 to Sombir. In part I of Form 30 (prescribed under Rule 55(2) and (3) of the said Rules), Balwan Singh stated that he had sold the vehicle to Sombir on 24.07.2012 and also handed over the certificate of registration and certificate of insurance to him. In part II of the Form 30, the complainant Sombir has declared to the registered authority that he had purchased the vehicle on 24.07.2012. It is clear, therefore, that the sale of the vehicle, including the delivery of the possession was made on 24.07.2012. The assertion made by the complainant that he obtained delivery of the vehicle from Balwan Singh on 15.08.2012, is, therefore, belied from the documents referred to above.

15. Further,

Section 19 & 20 of the Sale of Goods Act, 1930

reads as follows:-

19. Property passes when intended to pass

(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.

(3) Unless a different intention appears, the rules contained in Section 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.

20. Specific goods in a deliverable state

Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed.”

16. The declarations contained in Form 29 and Form 30 by the transferor as well as the transferee, leave no room for doubt that the property in question was in a ‘deliverable state’ when the contract was made and the intention of both the parties is also clear that the vehicle was transferred on 24.07.2012 itself. The transfer was, therefore, complete on 24.07.2012.

17. In this regard, reliance may be placed on the order passed by the Hon’ble Andhra Pradesh High Court in case,

Madineni Kondaiah and Ors. etc. vs. Yaseen Fatima and Ors., I (1986) ACC 501

in which it has been stated as follows:-

“The transfer of vehicle is governed by the provisions of Sale of Goods Act. In the absence of any agreement to the contrary payment of price, and delivery of vehicle make the sale complete, and the title passes to the purchaser. The obligation to register the vehicle is for the purpose of controlling and regulating the movement of vehicles by the authorities under the Act and they do not stand in the way of passing title to the purchaser.”

18. From the above view taken by the Hon’ble Andhra Pradesh High Court, it is very clear that the sale had been completed and the title of the vehicle passed to the purchaser on 24.07.12 itself. The contention raised by the transferee, therefore that he could not make application to the insurer for the transfer of the insurance policy before the change of registration in his name, is not justified. Under the provisions of GR-17, it was his duty to make such application to the insurer within 14 days of 24.07.2012, failing which, he cannot be held eligible to get the claim for the theft of the vehicle.

19. Based on the discussion above, it is amply made clear that under the provisions of GR-17 of the India Motor Tariff Regulations, the relevant date for making application to the insurer for the transfer of insurance policy is the date of actual transfer of the vehicle and not the date on which the change of name in the registration book was recorded by the concerned Transport Authority. As stated by the Hon’ble Andhra Pradesh “Madineni Kondaiah and Ors. vs. Yaseen Fatima & Ors.” [supra], the application to register a vehicle is only for the purpose of controlling and regulating the movement of vehicles by the authorities under the Motor Vehicles Act and it does not stand in the way of passing title to the purchaser.

20. From the facts and circumstances of the case, it is made out, therefore, that the repudiation of claim by the Insurance Company was in order, because there was no privity of contract between the complainant and the insurance company. Although the vehicle had been purchased and delivered to the complainant on 24.07.2012, the complainant failed to make application for transfer of insurance policy to the insurance company within time and hence, the claim made by him for compensation on the theft of the vehicle is not payable by the said insurance company. The revision petition is, therefore, allowed and the orders passed by the State Commission as well as the District Forum are set aside. The consumer complaint stands dismissed. There shall be no order as to costs.

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