Hdfc Egro General Insurance Co. Ltd. vs BALRAJ SINGH

THIS revision is directed against the order of the State Commission Uttrakhand dated 13.03.2014 whereby the State Commission partly allowed the appeal preferred by the petitioner insurance company and modified the order of the District Forum.

BRIEFLY stated, the facts relevant for the disposal of the revision petition are that the respondent Balraj Singh preferred a consumer complaint in the District Forum claiming himself to be registered owner of truck No. RJ -13GA -0096. According to the complainant, he got the said truck insured with the petitioner insurance company for a sum of Rs. 514700/ - for the period w.e.f. 16.11.2009 to 15.11.2010. According to the complainant, the truck was stolen from Bhiwadi District, Alwar on 16.11.2009 at 7.30 p.m.. The theft was reported to the police and intimation was given to the insurance company. The insurance company, however, repudiated the claim of the respondent on the ground that respondent had no insurable interest in the truck as he had already sold the said truck to one Ajay Kumar on 16.06.2007. The District forum on consideration of the pleadings and evidence allowed the complaint and directed the petitioner opposite party as under: "This complaint under Section 12 of the Consumer Protection Act against the respondents is allowed. The respondents are directed to pay a sum of Rs. 5,14,700 to the complainant with one month days from this order and also pay a sum of Rs. 25000/ - as compensation for the mental agony and Rs. 1000/ - compensation of cost of complaint. This is clarified that if the respondents fail to pay the above said amount within a period of 30 days, then the complainant will be entitled to get interest at the rate of 9% per annum from the date of filing of the complaint till the date of realisation."

BEING aggrieved of the order of the District Forum, the respondent insurance company preferred an appeal. The State Commission while concurring with the finding of the District Forum that the respondent insurance company has committed deficiency in service by repudiating the claim partly accepted the appeal so far as quantum of relief is concerned and modified the order of the District Forum by directing the petitioner insurance company as under: "The appellant is directed to pay sum of Rs. 5,14,700/ - to the respondent together with interest @ 7% p.a. from the date of filing of the consumer complaint till payment and Rs. 5000/ - towards litigation expenses."

MS . Suman Bagga, Advocate for the petitioner insurance company has contended that the impugned orders of the foras below are not sustainable because both the foras below have ignored the evidence that respondent complainant Balraj had sold the subject truck to Ajay Kumar s/o Amar Nath Khosla and delivered his possession way back on 16.06.2007. In support of this contention, learned counsel for the petitioner has drawn our attention to copy of special power of attorney executed by the complainant in favour of the Ajay Kumar as also copy of the affidavit of the complainant confirming sale of truck to Ajay Kumar. Learned counsel has contended that both the foras below have committed a grave error by ignoring the aforesaid clinching evidence which clearly establish that the complainant has no insurable interest in the subject truck since 16.06.2007 and he obtained the insurance policy by misrepresenting and claiming himself to be the owner of the truck. Ms. Monica Kapoor, Advocate for the respondent on the contrary has argued in support of the impugned order. She has contended that it cannot be disputed that at the time of taking insurance policy as also on the date of theft, the registration of the truck was in the name of complainant and as such, the State Commission has rightly concluded that the complainant is a deemed owner of the vehicle and he had insurable interest in the subject vehicle.

WE have considered the rival contentions and perused the material on record. On perusal of the impugned order, we find that the State Commission had decided the appeal in favour of the complainant on the premise that it is settled legal position that the registered owner of the vehicle shall be deemed to be actual owner of the vehicle. The aforesaid view taken by the State Commission is erroneous.

IN order to prove sale of the subject vehicle by the respondent to one Ajay Kumar, counsel for the petitioner has drawn our attention to Special Power of Attorney as also affidavit both dated 16.06.2007 executed by the respondent complainant Balraj Singh. Special Power of Attorney reads as under: "I, Balraj Singh son of Sh. Hardial Singh resident of Vill. Kot Siwaiya P.O. Bagiyara, Tehsil and Distt. Tarn Taran now at present Transport Nagar, Jahajgarh, Amritsar. Whereas I am the registered owner of vehicle truck bearing Regn. No. RJ13 -GA -0096 Make Tata -1613 Engine No. 697 TC 45 CUZ 109779 Chasis No. 373341 CUZ 111293 Model 2005 financed with M/s. Tata Motors Ltd. having balanced financed amount of Rs. 3,82,000/ -. Now, I am unable to look after and arrange the work of this vehicle. So I hereby appoint Mr. Ajay Kumar son of Sh. Amar Nath Khosla resident of 22, Bangali Mandir Road, Rishi Kesh, Distt. Dehradun (Uttranchal) Special Attorney to take any action regarding the vehicle to transfer the vehicle on his or any other name to sell the vehicle to pay taxes, to face challan, to take permit, to give application. Affidavit in each department regarding the vehicle to present in the court regarding vehicle, to give application to take insurance claim to take the benefit of insurance claim, to authorize sub -attorney to look after and other formalities regarding vehicle. Each and every action taken by my Special Attorney will be accepted by me. I am executing this deed of Special Power of Attorney with my fill and free consent and I will not cancel this Attorney. So, this Special Power of Attorney has been executed for record on dt. 16.6.2007."

Affidavit reads as under:

"I, Balraj Singh son of Sh. Hardial Singh resident of Vill. Kot. Siwaiya P.O. Bagiyara, Tehsil and Distt. Tarn Taran now at present Transport Nagar, Jahajgarh, Amritsar do hereby solemnly affirm and declare as under:

That I have sold a vehicle truck bearing registration No. RJ13 -GA -0096 Make Tata 1613, Engine No. 697 TC 45 CUZ 109779 Chasis No. 373341 CUZ 111293 Model 2005 alongwith hypothecation with M/s. Tata Motors Ltd. to Sh. Ajay Kumar s/o Sh. Amar Nath Khosla r/o 22, Bangali Mandir Road, Rishi Kesh, Distt. Dehradun (Uttranchal)

that the possession of vehicle is delivered on 16 June 2007 and from this date purchaser will be fully responsible for all challans, taxes, finance, case bank loan, accident case and any type of legal or illegal police case, theft case etc. Before this I am liable for same.

That Ajay Kumar will be responsible for the balanced amount of finance case. If any action will be taken by the finance Co. due to non payment of instalments, then he will be liable for it."

On reading of the above documents, there is no doubt left in our mind that on 16.06.2007 respondent complainant Balraj Singh had sold the subject truck to Ajay Kumar who as per the transaction between the parties was made liable for all challans, taxes, accident, liability and bank loan etc. Thus, it is established on record that since 16.06.2007, the respondent had no proprietary interest in the subject truck. As such, he has no insurable interest in the same.

COUNSEL for the petitioner has contended that registration certificate of the vehicle is the proof of ownership. Till date the name of the respondent is shown as owner of the registration certificate. Therefore, it cannot be said that respondent had no insurable interest on the subject truck on the date of accident. There is no merit in this contention. In our considered view, entry of ownership in the registration certificate is only a matter of record but not the proof of ownership. Our view gets confirmation from Section 50 of the Motor Vehicle Act, 1988 (in short, the Act) which deals with Transfer of Ownership of motor vehicle registered under Chapter IV of the Act. Section 50 of the Act reads as under: "50. Transfer of ownership. - -

(1) Where the ownership of any motor vehicle registered under this Chapter is transferred, - -

(a) the transferor shall, - -

(i) in the case of a vehicle registered within the same State, within fourteen days of the transfer, report the fact of transfer, in such form with such documents and in such manner, as may be prescribed by the Central Government to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; and

(ii) in the case of a vehicle registered outside the State, within forty -five days of the transfer, forward to the registering authority referred to in sub -clause (i) - -

(A) the no objection certificate obtained under section 48; or

(B) in a case where no such certificate has been obtained, - -

(I) the receipt obtained under sub -section (2) of section 48; or

(II) the postal acknowledgment received by the transferee if he has sent an application in this behalf by registered post acknowledgment due to the registering authority referred to in section 48, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted;

(b) the transferee shall, within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration.

(2) Where - -

(a) the person in whose name a motor vehicle stands registered dies, or

(b) a motor vehicle has been purchased or acquired at a public auction conducted by, or on behalf of, Government, the person succeeding to the possession of the vehicle or, as the case may be, who has purchased or acquired the motor vehicle, shall make an application for the purpose of transferring the ownership of the vehicle in his name, to the registering authority in whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, in such manner, accompanied with such fee, and within such period as may be prescribed by the Central Government.

(3) If the transferor or the transferee fails to report to the registering authority the fact of transfer within the period specified in clause (a) or clause (b) of sub -section (1), as the case may be, or if the person who is required to make an application under sub -section (2) (hereafter in this section referred to as the other person) fails to make such application within the period prescribed, the registering authority may, having regard to the circumstances of the case, require the transferor or the transferee, or the other person, as the case may be, to pay, in lieu of any action that may be taken against him under section 177 such amount not exceeding one hundred rupees as may be prescribed under sub -section (5): Provided that action under section 177 shall be taken against the transferor or the transferee or the other person, as the case may be, where he fails to pay the said amount.

(4) Where a person has paid the amount under sub -section (3), no action shall be taken against him under section 177.

(5) For the purposes of sub -section (3), a State Government may prescribe different amounts having regard to the period of delay on the part of the transferor or the transferee in reporting the fact of transfer of ownership of the motor vehicle or of the other person in making the application under sub -section (2).

(6) On receipt of a report under sub -section (1), or an application under sub -section (2), the registering authority may cause the transfer of ownership to be entered in the certificate of registration.

(7) A registering authority making any such entry shall communicate the transfer of ownership to the transferor and to the original registering authority, if it is not the original registering authority."

ON reading of the above, it is clear that ownership of a vehicle precedes the registration which is only a matter of record. This is a reason that Section 50 casts an obligation on the transferor and transferee of the vehicle to report the transfer to the registration authority within the stipulated period so that entry regarding transfer of ownership is recorded in the registration certificate and record maintained at the concerned authority. From the discussion above, it is clear that ownership of subject truck stood transferred in favour of Ajay Kumar in June 2007. Admittedly the complainant had taken insurance policy for the period w.e.f 16.11.2009 to 15.11.2010 when he was not the owner and did not have insurable interest in the truck. Therefore, in our considered view, the petitioner insurance company was justified in repudiating the insurance claim. The State Commission has committed a grave error in failing to appreciate that entry in the registration certificate is not conclusive proof of the ownership and transfer of ownership stands established from the Power of Attorney and the affidavit executed by the complainant. Thus, the impugned order cannot be sustained.

IN view of the discussion above, we allow the revision petition, set aside the order of foras below and dismiss the complaint.