New India Assurance Co. Ltd. vs Jagdev Singh

THIS is an appeal at the behest of the New India Assurance Company Ltd against the order of the District Consumer Disputes Redressal Forum, Ludhiana dated 8.9.2005 by which the complaint of the complainant was allowed in the following terms : "In view of our above discussion, the complaint is accepted and the respondent insurance company is directed to make the payment of the claim in accordance with the report Ex. R.5 of Sh. Yogesh Kochar to the complainant in accordance with the rules and regulations and terms and conditions of the policy. Compliance of the order to be made within one month of the receipt of copy of order. Copy of order be supplied to the parties. File be completed and consigned to the record room."

THE facts giving rise to this appeal, which are not in dispute, may be noticed : M/s. Ravi Cycle Industries was the owner of Maruti-800 car bearing registration No.PB10-AS-2243. THE same was allegedly sold to Jagdev Singh, complainant (respondent herein) on 1.8.2003. THE insurance policy was taken on 5.8.2003 and was valid upto 4.8.2004. THE said policy was placed on record. THE insured''s name and address in the policy is mentioned as M/s. Ravi Cycle Industries C/o Shri Jagdev Singh, 266/100, J-Block, PHB, BRS Nagar, Ludhiana. THE vehicle was in fact transferred in the record of the Registering Authority on 18.8.2003. In other words, the name of Jagdev Singh was entered in the Registration Certificate as a transferee on 18.8.2003. Admittedly, no intimation to the Insurance Company was sent either by the seller M/s. Ravi Cycle Industries or by Jagdev Singh of having purchased the vehicle and having got it transferred in the registration certificate on 18.8.2003. THE fact remains that the insurance policy for the period 5.8.2003 to 4.8.2004 stood in the name of M/s. Ravi Cycle Industries C/o Shri Jagdev Singh. Unfortunately, the car met with an accident on 6.4.2004 resulting in damage to the car. THE claim lodged by Jagdev Singh, complainant-respondent with the appellant insurance company for reimbursing the damage to the car was repudiated on the ground that Jagdev Singh was not the insured person and the insurance of the vehicle had been got done by M/s. Ravi Cycle Industries and since it was a case of "own damage" there was no automatic transfer of the insurance policy in the name of the subsequent transferee, i.e., Jagdev Singh. This led Jagdev Singh to file a complaint before the District Forum, which allowed the complaint as aforesaid. Hence the present appeal by the Insurance Company. Learned Counsel for the appellant argued that there was no privity of contract between the Insurance Company and Jagdev Singh and the policy, which was issued on 5.8.2003, was in the name of M/s. Ravi Cycle Industries. So far as the "own damage" case is concerned, the intimation about the transfer of the vehicle had to be sent under G.R. 17 of the Indian Motor Tariff to the Insurance Company for transferring the insurance in the name of the subsequent owner, i.e. Jagdev Singh, and after getting such request, the insurance would have been transferred in the name of Jagdev Singh after completion of certain formalities. It is not disputed that if it was a case of claim of a third party, the insurance would have automatically stood transferred in the name of subsequent owner as per the provisions of Section 157 of the Motor Vehicles Act, 1988. Reliance has been placed by the Counsel for the appellant on a judgment of the National Consumer Disputes Redressal Commission in Banowarilal Agrawalla v. National Insurance Co. Ltd. and Anr., IV (2005) CPJ 110 (N.C.)

On the other hand, learned Counsel for the respondent Jagdev Singh argued that the premium regarding the insurance had been paid by Jagdev Singh. Even the address of M/s Ravi Cycle Industries is C/o Jagdev Singh and, therefore, for all intents and purposes, the insured was Jagdev Singh and not M/s. Ravi Cycle Industries.

ALTER hearing learned Counsel for the parties, we are of the view, that there is sufficient force in the arguments of the learned Counsel for the appellant. On the day the insurance was done, i.e. 5.8.2003, the vehicle stood in the records of the Motor Vehicles authorities in the name of M/s. Ravi Cycle Industries. Admittedly, the transfer of ownership of the vehicle in the records of Motor Vehicle Authorities was done on 18.8. 2003. Further, there is no dispute that no intimation/request was sent either by the transferee or by the transferor to the insurance company as per GR-17. The above said discussion leads to one conclusion that on the date of the accident the insurance of the vehicle stood in the name of M/s Ravi Cycle Industries and there was no privity of contract of the appellant with Jagdev Singh. As held by the National Commission in the authority cited by the Counsel for the appellant, since the insurance policy was not transferred in name of the subsequent owner (in the present case, Jagdev Singh), the question to be seen would be : Did Jagdev Singh had any privity of contract with the appellant Insurance Company? The answer to this question, according to us, would be in the negative. That being so, Jagdev Singh could not have filed a complaint before the District Forum basing his claim the insurance policy which was issued in the name of the previous owner of the vehicle, i.e. M/s. Ravi Cycle Industries assuming for the sake of argument, though not conceding, that it was Jagdev Singh who had paid the premium that will be of little help to Jagdev Singh inasmuch as merely payment of premium by a particular person does not mean that the insurance is being done in his name. In the present case, even the policy on which the reliance has been placed by Jagdev Singh is in the name of M/s. Ravi Cycle Industries. The fact that it has been mentioned. "C/o Jagdev Singh" is hardly of any consequence as that is the address given for the purpose of correspondence etc. by M/s. Ravi Cycle Industries. The insurance cannot be taken to be in the name of Jagdev Singh. For the foregoing reasons, we are of the view that the approach of the District Forum was not correct to hold that Jagdev Singh had privity of contract with the appellant Insurance Company.

CONSEQUENTLY, the appeal is allowed and the order of the District Forum is set aside. No order as to costs. The amount deposited by the appellant while filing the appeal be refunded to the appellant by way of crossed cheque/bank draft after 45 days. The orders were reserved on 21.2.2006. Be communicated to the parties. Appeal allowed