FAZLE MUBEEN Vs ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED

The petitioner/complainant who owned a dumper bearing no. MP-43G-1719 had got the same insured with the respondent company for the period from 14.04.2009 to 13.04.2010. The said dumper while in possession of one Jitender Singh Rathore, was stolen in the night of 01.04.2010. A claim for reimbursement in terms of the insurance policy taken by him was lodged by the complainant/petitioner with the respondent company. The claim however, was rejected on the ground that the petitioner/complainant having sold the dumper to Jitender Singh Rathore before it got stolen, had no insurable interest in the vehicle. Being aggrieved, the petitioner/complainant approached the concerned District Forum by way of a consumer complaint.

The complaint was resisted by the insurer primarily on the same ground on which the claim had been rejected.

The District Forum vide its order dated 09.05.2011, dismissed the complaint. Being aggrieved, the petitioner/complainant approached the concerned State Commission by way of an appeal. Vide impugned order dated 31.10.2015, the State Commission dismissed the appeal filed by the petitioner/complainant. Being still dissatisfied, the petitioner/complainant is before this Commission by way of this revision petition.

It is not in dispute that the dumper in question was in possession of Sh. Jitender Singh Rathore and was in his use when it got stolen. The FIR was also lodged by Sh. Jitender Singh Rathore. In his statement to the police, Shri Jitender Singh inter-alia stated that the aforesaid dumper was purchased by him from Fazle Mubeen Khan in January 2009 for a total consideration of Rs. 12 lacs out of which Rs. 3 lacs were paid in cash and the remaining Rs. 9 lacs were agreed to be paid to the financer M/s India Bulls Finance Company. He further stated that the monthly installment of Rs. 21,000/- was being paid by him to the financer. The dumper was being driven by his driver namely Merulal when it got stolen on the night intervening 31.03.2010/01.04.2010

A perusal of the agreement between the petitioner/complainant and Sh. Jitender Singh shows that the dumper was sold to Sh. Jitender Singh for a consideration of Rs. 12 lacs out of which Rs. 3 lacs were paid to the petitioner/complainant on 18.03.2009 in the presence of two witnesses and the balance amount of Rs. 9 lacs was agreed to be paid by Sh. Jitender Singh to the financer. It was further agreed between the petitioner/complainant and Sh. Jitender Singh that in case of default in payment of installments to the financer, it is the purchaser Mr. Jitender Singh who will be wholly responsible for the consequences and the petitioner/complainant will not be liable in this regard. It was recorded in the agreement that the insurance policy as well as the documents of the dumper had been delivered to Sh. Jitender Singh. It was recorded that the possession of the dumper had already been delivered to him on 22.01.2009 and in case of any accident or theft of the dumper, Sh. Jitender Singh alone would be responsible. The responsibility of insurance was also taken by Sh. Jitender Singh upon himself. The aforesaid averments were reiterated in the Power of Attorney executed by the petitioner/complainant in favour of Sh. Jitender Singh.

Section 19 of the Sale of Goods Act to the extent it is relevant provides that 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. 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. Unless a different intention appears, the rules contained in section 20 to 24 are the 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. Section 20 of the Act provides that 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. Section 157(2) of the Motor Vehicle Act, requires transferee of the vehicle to apply within 14 days from the date of the transfer to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described therein, in his favour.

Dealing with this issue, this Commission in Revision Petition No.1347 of 2008, New India Assurance Co. Ltd. Vs. Smt. Bimlesh decided on 03-09-2014 inter alia held as under:

"13. In our view, when the owner of a vehicle sells the said vehicle to another person, and executes a sale letter, without in any manner postponing the passing of title/property in the vehicle, the ownership in the vehicle passes to the purchaser on execution of the sale letter itself. The delivery of the vehicle only reinforces the title which the purchaser gets to the vehicle on execution of the sale letter in his favour. As far as transfer of the vehicle in the name of the purchaser in the record of the RTO is concerned, that is a requirement for the purpose of the Motor Vehicle Act but that does not postpone the transfer of the ownership in the vehicle to the purchaser till the time the vehicle is transferred in his name in the purchaser in the record of the concerned RTO." Section 50 of The Motor Vehicles Act casts an obligation upon the transferor and the transferee to report the factum of transfer to the Registering Authority. But this obligation arises only after the transfer of the vehicle has already taken place. The aforesaid provision does not envisage any kind of reporting to or permission of the registering authority even before the ownership of the vehicle is transferred from one person to other. Thus, the above referred provision in my view, only reinforces the view that the ownership of a vehicle is transferred on the sale and delivery of the vehicle and the requirement of informing the transfer to the registering authority is only a post transfer statutory requirement.

Once it is proved that the ownership of the vehicle had transferred from the insured to another person before the theft or accident of the vehicle, as the case may be, the transferee of the vehicle, having no insurable interest in the vehicle at the time of the theft / accident, will not be entitled to any reimbursement from the insurer. He having already sold the ownership of the vehicle, if the insurer is made to pay to him, it will not be a reimbursement but will become a bounty for the person who has already sold the vehicle. The insurance policy entitles the insured only to reimburse for the loss suffered by him. If no loss has been suffered by him, there can be no question of any reimbursement from the insurer.

Since the complainant Shri Fazle Mubeen Khan did not own the vehicle on the date it met with an accident, he did not have insurable interest in the subject matter of the insurance and consequently is not entitled to any reimbursement. As far as Shri Jitender Singh Rathore is concerned, since there was no privity of contract between him and the insurance company, he having neither got the insurance transferred in his name nor having applied for such transfer, despite purchasing the vehicle from Shri Fazle Mubeen Khan, and the statutory period of 14 days from the date of transfer for applying to the insurer for transferring the certificate of insurance in his favour having already expired before the theft, he also is not entitled to any reimbursement from the insurance company.

For the reasons stated hereinabove, I find no merit in the revision petition and the same is accordingly dismissed with no order as to cost.