National Insurance Co. Ltd. vs Lal Singh

THIS appeal is by the National Insurance Company challenging the order of District Consumer Forum, Kapurthala directing the appellant to pay a sum of Rs. 1,08,000/- after allowing 10% depreciation with 12% interest from the date of institution of the complaint till payment. A sum of Rs.2,000/- compensation for harassment and a sum of Rs. 500/- as costs were also awarded.

LAL Singh, complainant claimed amount from the Insurance Company as his car, which was insured was stolen, on 7.12.1991. The Insurance Company repudiated the claim on May 18, 1995 which led the complainant to file the complaint. The Insurance Company inter alia took up several pleas in the form of prelminary objections. It was asserted that LAL Singh complainant was not real LAL Singh but some fictitious persons were put up namely Bhupinder Singh or Harbhajan Singh to defraud the Insurance Company. Jurisdiction of the District Forum was also disputed asserting that the car was stolen in Srinagar LAL Singh was alleged to be not a registered owner at the time the car was stolen. Bhupinder Singh s/o Chanan Singh resident of 21, Beant Nagar, near PAP Jalandhar was stated to be the registered owner. LAL Singh concealed material facts as aforesaid in getting the insurance policy. A replication was filed by the complainant controverting the allegations of the Insurance Company. Both the parties produced evidence on affidavits and documents. On consideration of the evidence produced, the impugned order was passed. Learned Counsel for the Insurance Company, the appellant, has argued that since Lal Singh was not a registered owner he had no insurable interest in the vehicle and could not get insurance policy from the Insurance Company. Thus the complaint was liable to be dismissed. He is supported by the decision of State Commission, Haryana in this respect in National Insurance Co. Ltd. v. U.C. Dhiman, I (1995) CPJ 14. The State Commission, Haryana held that a presumption can be raised with respect to ownership of a vehicle, whose name is entered in the Registration Certificate. That person can take insurance policy. The other persons having interest in the vehicle such as Financier could also take the insurance policy. That was a case where insurance policy was not taken by a person whose name did not find mention in the registration book. Reliance was placed on the decision of Haryana State Commission in Shri Rain Mnrti of Hissar v. The Oriental Insurance Company, Hissar, 1993 CPC 478. The following passage from Ram Murti''s case was quoted : "To conclude on the legal aspect, the answer to the question posed at the very outset is rendered in the affirmative. It is held that Clause 30 of Section 2 of the Act lays down an inflexible presumption that a person in whose name a motor vehicle stands registered is its owner for the purpose of the insurance of the said vehicle against third party risks or comprehensively".

In paras 8 and 9 of the judgment it was observed as under : "8. It would be somewhat menifest from the above that within mis jurisdiction there is an inflexible, if not an irrebuttable presumption that the person in whose name the motor vehicle is registered is the real owner thereof for the purpose of insurance. Any other person consequently cannot validly lay claim to the legal title thereof as long as the registration continues to stand in the said person''s name. Consequently, unless some other insurable interest is established no person other than the registered owner can claim to have an insurable interest in the vehicle as its owner. 9. Now once it is so, it necessarily follows that the insurers in the context of an insurance claim with regard to a vehicle can validly insist that either the insured was the registered owner of the vehicle or in the alternative had disclosed and established an insurable interest therein. They would be well within their right, to repudiate the liability, if the insured at the time of taking out the insurance or at the time of the loss is neither the registered owner of the vehicle nor can be established any other ancillary insurable interest therein."

We have given due consideration to the opinion expressed by Haryana State Commission. With great respect to Hon''ble the President and Hon''ble Members of the Haryana State Commission, we beg to differ with the decision in that case however, the opinion on the question of law helps us in deciding the case in hand. No doubt a presumption can be raised in favour of the person, whose name is entered in the Registration Certificate as issued under the Motor Vehicles Act, but motor vehicle can be sold and possession delivered before the actual entry in the Registration Certificate is made, either initially when the new motor vehicle is purchased from the dealer or when an old vehicle is subsequently purchased, the position would remain the same, meaning thereby, the factum of purchase of a vehicle is to be followed by the act of the authorities under the Motor Vehicles Act to register the name in the Certificate of Registration in the records maintained by the authorities under the Motor Vehicles Act. A person, who has purchased the motor vehicle and paid entire money or even if partly paid and partly promised to be paid, on the delivery of the vehicle, would be owner of the vehicle and liable for the action in the matter of any claim lodged with regard to use of that vehicle. If the insurance policy is in the name of the original owner and Insurance Company has not been informed about the transfer, it may validly repudiate the claim or defend the claim in Court of Law on the ground that the vehicle had, before the incident, been transferred although entry in the Registration Certificate had not been made. If that is so, a person who had actually purchased the vehicle cannot be deprived of his right to make a claim if he had purchased an insurance policy with respect to that vehicle from the Insurance Company. Reading of para Nos. 8 and 9 of the decision of Haryana State Commission in U.C. Dhiman''s case, as reproduced above, enlarges the scope of the insurance policy obtained by a person but benefit of which can be taken by the persons having interest in the motor vehicle i.e. the financiers. But that is a question to be established, by evidence. If a financier who has partly financed the vehicle can take benefit of the insurance policy, there is no reason that the private person who had paid the entire price to the person, registered owner, and taken delivery of the vehicle is to be deprived of the benefit of insurance policy taken by him. Reliance placed on Clause 30 of the Section 2 of the Motor Vehicles Act in Ram Murti''s case is only to die extent of drawing a presumption that the person in whose name the motor vehicle stands registered is its owner for the purposes of insurance of the said vehicle against third party risks or comprehensively. With regard to raising of presumption, there is no dispute. As above stated, if on evidence it is established that the complainant is in fact the actual owner of the vehicle, would have insurable interest and could have taken the policy and if had taken the insurance policy, he would be entitled to benefit therein.

THE definition of ''owner'' as given in the Motor Vehicles Act will not be helpful in deciding the present case. That may be for the purposes of Motor Vehicles Act. But as far as Consumer Protection Act is concerned, if Lal Singh is held to be the actual owner of the vehicle and had taken the policy, on proof of deficiency in rendering service on the part of the Insurance Company, he would be entitled to compensation. In para No. 3 of the complaint, Lal Singh alleged that he was the owner of the car No. PB 08 C-3338. The original owner of the car was Balwinder Singh son of Chanan Singh of Jalandhar from whom he purchased it in October, 1991. This portion of the plea was not specifically denied by the opposite party the Insurance Company in corresponding para No. 3 of the written statement. What was stated therein was that it was correct that the said car was insured in the name of Lal Singh whose whereabouts were not known and instead of Lal Singh - Bhupinder Singh / Harbhajan Singh who claimed himself to be Lal Singh was pursuing the complaint and Lal Singh was not the registered owner. From it, it cannot be inferred that the plea of Lal Singh being owner was denied as referred to above. Rather, it will be deemed to have been admitted as not specifically denied. It is well settled that plea, which is admitted or not specifically denied, need not be proved. Thus it is to be taken in the present case that Lal Singh had actually purchased the motor vehicle referred to above from the original owner - Balwinder Singh. Incidently, it may be observed that Balwinder Singh and Lal Singh are brothers being sons of Chanan Singh. The affidavit of Chanan Singh, Exh. A/I, Naranjan Singh, Sarpanch Ex. A/2, Sohan Singh, Namberdar, Ex. A/3 are consistent that Lal Singh aforesaid is the owner of the aforesaid car. No evidence to the contrary was produced by the Insurance Company on this point. Thus a finding is recorded that Lal Singh, aforesaid is owner of car No. PB08-C-3388. Lal Singh being the owner of the vehicle could legitimately purchased insurance policy with respect to the aforesaid car from the Insurance Company which was done. The repudiation by the Insurance Company on the ground that Lal Singh was not the registered owner is illegal. Though this ground was not mentioned specifically in the repudiation letter, dated May 18, 1995 which is at page 59 of the District Forum record, since repudiation has been held to be illegal obviously there was deficiency in rendering service on the part of the Insurance Company for which Lal Singh complainant was entitled to be compensated. With regard to the amount ordered to be paid to Lal Singh, no argument has been addressed. This appeal is therefore, dismissed with no order as to costs. Appeal dismissed. ____________