NEW INDIA INSURANCE CO. LTD. vs BIMLESH

THE respondent/complainant purchased a car No.HR -06 -J -3124 make Santro on 02 -04 -2004 and obtained an insurance policy in respect of the above referred vehicle from the petitioner -company for the period from 08 -04 -2005 to 07 -04 -2006. On 02 -11 -2005, the said vehicle caught fire and got totally damaged along with its original papers. A report was lodged with the police in this regard on the same date. On being informed, a surveyor was also appointed by the petitioner -company for assessment of the damage to the vehicle, but the claim was later repudiated by the insurance company, on the ground that the vehicle had not been registered in the name of the complainant.

BEING aggrieved from the rejection of her claim the complainant approached the Central Consumer Disputes Redressal Forum, Delhi (for short, the District Forum), seeking the following reliefs: (a) the respondent be directed to pay the insured amount of Rs.2,26,100/ - to the complainant along with interest @24% per annum,

(b) the respondent be further directed to pay Rs.1,00,000/ - towards the damages/compensation for mental agony and harassment caused to the complainant and

(c) award cost of proceedings to the complainant.

THE complaint was resisted by the petitioner -company, on the sole ground that the vehicle was not registered in the name of the complainant at the time it got damaged. The District Forum vide its order dated 24 -07 -2007, gave the following directions: (i) the opposite party will pay the whole of the insurance amount of Rs.2,26,100/ - to the complainant,

(ii) the opposite party had wrongfully denied the claim of the complainant for which the opposite party will pay Rs.40,000/ - to the complainant as mental agony, harassment and deficiency in service and

(iii) the opposite party will pay a sum of Rs.2,000/ - to the complainant as cost of litigation.

BEING aggrieved from the order passed by the District Forum the insurance company approached the Delhi State Consumer Disputes Redressal Commission (for short, the State Commission) by way of an appeal. The said appeal having been dismissed vide impugned order dated 08 -01 -2008 the petitioner is before us by way of this revision petition.

IT is not in dispute that the complainant had not got the vehicle in question registered in her name, by the time the vehicle got damaged. However, it is also an undisputed fact that the complainant had obtained the insurance policy from the petitioner -company, for insurance of the above referred vehicle for the period from 08 -04 -2005 to 07 -04 -2006. It is also not in dispute that the vehicle got damaged during the period of the aforesaid insurance policy.

WE asked the learned counsel for the petitioner as to on what basis the insurance policy was issued in favour of the complainant, when the vehicle had not been transferred in her name by the time the said policy was issued. We also asked him as to whether the documents such as forms Nos.29 and 30 prescribed under the Motor Vehicle Rules was submitted to the petitioner -company or not. This became necessary in view of the claim of the complainant, she had submitted the documents such as forms Nos.29 and 30 at the time the policy was taken.

THE learned counsel for the petitioner has filed an affidavit dated 30 -08 -2014, sworn by Mr. S.K. Kundra, Manager stating therein that as per the claim file/official record no documents were submitted at the time of proposal of the insurance by the respondent. It is further stated in the said affidavit that only the copy of the previous RC, copy of the sale letter, insurance copy, FIR copy and estimated bill copy were submitted by the complainant in connection with her claim and the said documents were received on 24 -02 -2006. Thus, the stand taken by the petitioner -company is that it had issued the insurance policy in respect of the vehicle in question to the complainant without taking any document at all. It would mean that the insurance policy was issued without even a written request to this effect from the complainant. We are shocked to learn that a public sector insurance company issued an insurance policy without taking any document or even an application from the insured in this regard. The learned counsel for the petitioner submits that the insurance company acts on faith and declaration made by the insured while issuing such a policy. Even if that be so, the insurance company should at least have taken a written application coupled with a written declaration from the insured to the effect that he had purchased the vehicle in respect of which insurance was being sought and he had accordingly become the owner of the said vehicle. The contention of the learned counsel for the petitioner is that no such written declaration was taken and only an oral request and an oral declaration was obtained.

IN our opinion, the insurance company, before issuing an insurance policy or transferring such a policy, on account of change of the ownership of the vehicle should have at least obtained a written declaration from the persons seeking insurance along with documents such as sale letter and delivery letter of the vehicle in respect of which the insurance is sought. If insurance companies start issuing insurance policies on the basis of the oral request by a stranger without taking even a written request from such a person, that can result in a situation where a person having absolutely no title to a vehicle may obtain insurance in respect of the vehicle belonging to some other person. Such a policy can then be misused by an unscrupulous person obtaining it from the insurance company, for some ulterior motives.

BE that as it may, considering the fact that the petitioner -company had already issued an insurance policy much before the vehicle in question came to be damaged, it would be liable to reimburse the insured provided he has been able to show that he had an insurable interest in the vehicle which was subject matter of the insurance policy.

THE next question which arises for our consideration is as to whether the complainant had an insurable interest in the vehicle at the time it got damaged. Though the vehicle had not been transferred in the name of the complainant in the record of the concerned RTO, it is not in dispute that it had been purchased by her by way of sale letter dated 02 -04 -2004. The learned counsel for the petitioner confirms that the sale letter, a copy of which was received from the complainant at the time of submitting the claim, purports to have been executed on 02 -04 -2004. Thus, the complainant has been able to show that the vehicle in question was purchased by her on 02 -04 -2004.

SECTION 19 of the Sale of Goods Act, 1930, which deals with the stage when the property (title) in movable property passes to the buyer, reads as under: ''''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 sections 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. ''''

It would thus be seen that the title in a movable property is transferred to the purchaser only at the time the parties to the transaction intend it to be so transferred. The intention of the parties would be gathered primarily from the terms of the contract coupled with the conduct of the parties and the circumstances of each case.

SECTION 20 of the Act, which deals with passing of property in the good which are in a deliverable state reads as under: ''''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. ''''

Thus, the property i.e. ownership of vehicle in question passed from the previous owner to the complainant, on execution of the sale agreement dated 02 -04 -2004, since, there is nothing on record to indicate that the parties intended to postpone the passing of the property in vehicle in question to the complainant, till the time it was got registered in her name in the record of the RTO.

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.

THE learned counsel for the petitioner draws our attention to Section 50(1) of the Motor Vehicle Act which 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 607 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 acknowledgement received by the transferred if he has sent an application in this behalf by registered post acknowledgement 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. ''''

A careful analysis of the above referred provision would show that the obligation cast upon the transferor and the transferee to report the factum of transfer to the said authority 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 our view, only reinforces the view which we have taken i.e. the ownership of a vehicle is transferred on execution of the sale letter and the requirement of informing the transfer to the registering authority is only a post transfer statutory requirement.

Since the complainant had acquired ownership of vehicle in question, on account of the transfer of the said vehicle in her name by way of execution of a sale letter from the previous owner on 02 -04 -2004 she became its owner with effect from that date and consequently had an insurable interest in it, at the time it got damaged.

FOR the reasons stated hereinabove we find no merit in the revision petition and the same is hereby dismissed. A copy of this order be sent to the CMD of the petitioner -company for making inquiry into the circumstances in which the policy in question came to be issued in the name of the complainant, without taking any document or even a written request from her in this regard.