ORIENTAL INSURANCE CO LTD vs TANURAM MAHANTA

-AGGRIEVED by the order of the State Commission dismissing its appeal No. 106/06, Oriental Insurance Company has filed this revision petition before us.

THE facts of the case in brief are that the complainant Tanuram had purchased an Ambassador Car from Wasif Khan and it was insured in the name of Wasif Khan for the period from 8. 7. 2004 to 7. 7. 2005. After purchasing the vehicle, the complainant had got his name registered in the Registration Certificate on 7. 8. 2004. The accident took place on 1. 1. 2005. The insurance policy was changed in favour of the complainant on 4. 1. 2005. The Insurance Company repudiated a claim of the insurer on the plea that at the time of the accident, the complainant did not have the insurable interest in the vehicle. Accordingly, the complainant had filed a complaint before the District Forum. The District Forum after going through the records of the case and hearing the parties, based on the bills and cash memos on Singa Bahini Auto Workshop, Bhubaneswar for Rs. 86,350 in proof of the expenses incurred by the complainant for the repairs, admitted the claim of the complainant and directed the Insurance Company to pay the same. Dissatisfied with the order of the District Forum, the Insurance Company had filed an appeal contesting that the vehicle was insured in the name of the respondent No. 2 at the time of the accident on 1. 1. 2005, respondent No. 2 was the insured and not the respondent No. 1/complainant and, therefore, latter cannot claim for indemnification for the loss caused to the car.

The State Commission held that as the policy has been transferred in the favour of complainant, he cannot be denied the right for indemnification. As the correctness and genuineness of the bills/cash memos was not challenged, the State Commission did not find any merit in the appeal and dismissed the same.

THIS case is squarely covered by the ratio of the following case viz. Shri Narayan Singh v. New India Assurance Company Ltd. , IV (2007) CPJ 289 (NC)=2007 (CT2) GJX 0042 NCDRC decided by this Commission. The Commission in the cited case (supra) in its opening observation stated as follows: "it is highly deplorable on the part of the Insurance Company to take undue advantage of the ignorance of the consumers. In 1994, a circular has been issued by the General Insurance Company with regard to the transfer of the vehicles and the transfer of insurance benefits automatically in favour of the transferee. The said regulation is part of the India Motor Tariff Regulations. The said regulation reads as under: if the transferee wants to change the policy in his name, it may be done on getting evidence of sale and a proposal form duly completed. The old certificate of insurance must be surrendered to the Insurance Company and a new certificate of insurance can be issued by collecting a fee of Rs. 15. If the old certificate is now surrendered, a declaration is to be taken from the new owner before issuing a new certificate. It appears that in a number of cases Insurance Companies are suppressing this regulation and take undue advantage and contend with all force that as the insurance policy was not transferred in favour of the new purchaser, Insurance Companies are not liable to reimburse the insurers or the transferees of the vehicle because the transferees were not having any insurable interest. " the concluding remarks of this decision reads as follows: "because such stand is taken by the Insurance Company in number of cases, Insurance Company is directed to pay punitive costs of Rs. 1 lakh under Section 14 (1) (d) for taking unjustified stand in not disclosing the India Motor Tariff Regulation which was applicable in the present case. The said amount shall be deposited with the Registrar of this Commission who, in turn, shall transfer the same in the Consumer Legal Air Account. It is further directed that Insurance Companies would be careful in not taking such stand which is contrary to the regulations framed by the India Motor Tariff and Insurance Regulatory Development Authority. It is high time for the Insurance Companies to give information with regard to the India Motor Tariff to the insurers and not to take undue advantage of their ignorance as the regulations framed under the India Motor Tariff are binding to the Insurance Companies. The Registrar is directed to send a copy of this order to Shri C. S. Rao, Chairman, Insurance Regulatory Development Authority (I. R. D. A) for taking appropriate action. "

IN view of the above decision, we hold that the Insurance Company should not hesitate to pay the complainant the amount ordered by the Fora below. Accordingly, revision petition is dismissed. The petitioner shall also pay a sum of Rs. 10,000 as cost. The Insurance Company is directed to pay the awarded amount within a period of six weeks from the date of this order. We, however, desist from awarding any punitive cost in this case. Revision Petition dismissed.