ORIENTAL INSURANCE COMPANY LTD vs CAPT AJAY SINGH YADAV

APPEAL No. 236 of 2005 has been directed by the Oriental Insurance Company against order dated 31.10.2005 passed by Consumer Disputes Redressal Forum -I, U.T. Chandigarh (hereinafter to be referred as District Consumer Forum), whereby the complaint filed by Capt. Ajay Singh Yadav and Smt. Vasu Devi was accepted and the Oriental Insurance Company was directed to pay Rs. 1,23,888.32p on account of parts, as assessed by the Surveyor and Rs. 55,000 on account of labour charges, total amounting to Rs. 1,78,888 along with interest @ 8% p.a. with effect from 2.5.2005 (after giving margin of three months from the date of survey report dated 2.2.2005). Respondents Capt. Ajay Singh Yadav etc. were also awarded costs which were quantified at Rs. 2,200.

BRIEFLY stated the facts are that Capt. Ajay Singh Yadav was the registered owner of Toyota Qualis, having registration No.HR -29 -N -0018. He sold it to his maternal aunt Smt. Vasu Devi, resident of House No. 578, Sector -11, Panchkula and the registration certificate was transferred in the name of Smt. Vasu Devi on 12.10.2004. The photocopy of registration certificate is Annexure C -1. The said vehicle was insured with the Oriental Insurance Company and the insurance policy was in the name of Capt. Ajay Singh Yadav. It was next averred that on 19.10.2004, the Oriental Insurance Company was intimated by Capt. Ajay Singh Yadav about the sale of vehicle and to transfer the insurance policy in the name of Smt. Vasu Devi. The copy of the letter of intimation is Annexure C -2 and the same was acknowledged in the office of Sh. Thapa, Branch Manager, SCO No. 45, Ist floor, Sector -20 -C, Chandigarh, vide acknowledgement, whose copy is Annexure C -3.

IT was further averred that the said vehicle met with accident on 2.12.2004 at light point of Sector -27/28, Chandigarh and was damaged. FIR No. 296 dated 2.12.2004 about the accident was lodged at Police Station, Sector -26, Chandigarh. The incident was also reported to Mr. Grover, Divisional Manager as well as Mr. Thapa, Branch Manager, who in response to the intimation, appointed Er. G.S. Riar, Surveyor -Loss Assessor & Chartered Engineer. He conducted survey and intimated the same to Capt. Ajay Singh Yadav vide letter dated 3.1.2005 and submitted his report to Mr. Thapa, Branch Manager.

IT was next averred that the vehicle was repaired at Anil Corporation (workshop), 816, Industrial Area, Phase -II, Chandigarh and an amount of Rs. 2,42,215 was incurred. The photocopies of various cash receipts are annexed with the complaint as Annexure C -8(collectively). However, the amount of compensation was not released. It was also averred that Mr. Thapa wrote letter dated 15.4.2005 and intimated that letter dated 19.10.2004 for transfer of insurance policy along with documents appeared to have not been received in their office and in response to this communication, Capt. Ajay Singh Yadav sent photocopy of the letter dated 19.10.2004 along with copy of the registration certificate in the name of Smt. Vasu Devi and photocopy of the insurance policy of the vehicle through courier on 2.5.2005, which was duly received. However, again the payment was not made and ultimately the claim was repudiated on the plea that Capt. Ajay Singh Yadav had no insurable interest as ownership of the vehicle had already transferred in the name of Smt. Vasu Devi.

ALLEGING deficiency in service, Capt. Ajay Singh Yadav and Smt. Vasu Devi filed complaint and sought compensation of Rs. 2,41,215 and further claimed Rs. 15,000 as compensation on account harassment, besides Rs. 5,000 as costs of litigation.

THE appellant and other persons who are officials of the appellant, contested the complaint. They stated that the insurer was never informed regarding transfer and GR 17 regarding transfer enjoined upon the transferee to give in writing within 14 days from the date of transfer, the details of registration, the date of transfer, the previous owner, number and date of insurance policy to enable the Insurance Company to make necessary changes in its record and thereafter, issue fresh certificate of insurance. It was also pleaded that none of their employees had put signatures inside the seal Annexure C -3 as shown in the acknowledge -ment receipt and there was no provision with the Oriental Insurance Company to issue receipts on scrap papers. It was also pleaded that evaluation and billing had been inflated and certain parts which were repairable had been shown to be replaced and the Insurance Company was obliged to pay as per norms of the company and certain parts i.e. glass and rubber parts attracted 50% of the liability. It was pleaded that since, claim was not tenable, so, there was no question of making payment of any amount and it was prayed that the complaint should be dismissed. Parties adduced their evidence by way of affidavits.

AFTER hearing Counsel for the parties, the complaint was accepted with costs as stated in the earlier part of the judgment.

AGGRIEVED by the said order, respondent No. 2 -Oriental Insurance Company has filed Appeal No. 236 of 2005. Another appeal bearing No. 252 of 2005 was filed by Capt. Ajay Singh Yadav and another and claimed that they were entitled to the enhanced compensation of Rs. 2,41,215 plus Rs. 15,000 as harassment charges and Rs. 5,000 as litigation costs with interest @ 18% p.a..

BOTH the appeals are decided by common judgment, since they have arisen from the same order. We have heard Mr. T.S. Gujral, Counsel for appellant -Oriental Insurance Company, Mr. J.S. Yadav, Counsel for respondents Capt. Ajay Singh Yadav and others and carefully gone through the file.

IT is an admitted fact that Capt. Ajay Singh Yadav was the registered owner of Toyota Qualis, bearing registration No. HR -29 -N -0018 and he sold this vehicle to his maternal aunt Smt. Vasu Devi, resident of House No. 578, Sector -11, Panchkula and the registration certificate was transferred in her name on 12.10.2004. There is also no dispute about it that the said vehicle met with an accident on 2.12.2004 and FIR was lodged in the Police Station, Sector -26, Chandigarh, on 2.12.2004 about the accident and the photocopy of FIR is Annexure C -5. The registration certificate in lieu of sale was transferred in favour of Smt. Vasu Devi, H. No. 578, Sector -11, Panchkula and the copy of registration certificate which was issued on 12.10.2004 is Annexure C -1. The case of Capt. Ajay Singh Yadav and Smt. Vasu Devi is that they had intimated to the manager of Oriental Insurance Company, SCO No. 45, Sector20 -C, Chandigarh about the sale of the vehicle Toyota Qualis bearing Registration No.HR -29 -N -0018 to Smt. Vasu Devi and the Oriental Insurance Company was required to transfer the insurance policy issued in the name of Capt. Ajay Singh Yadav, in favour of Smt. Vasu Devi. The copy of registration certificate and copy of the insurance policy were also sent along with the application. Annexure C -3 is the photocopy of the receipt vide which office of the Oriental Insurance Company had received the request for transfer of insurance cover, copy of the RC and copy of the insurance policy. It is duly sealed and signed. The Oriental Insurance Company has denied the receipt of the request for transfer of insurance policy along with the documents i.e. copy of RC and insurance policy on 19.10.2004. No affidavit has been filed by the concerned clerk or receipt clerk who used to receive documents in the office that he had not received the aforesaid documents. On the other hand, the affidavit of Sh. Sandeep Thapa, Branch Manager dated 1.7.2005 has been filed. He stated that he had been working as Branch Manager since 28.2.2002 and he had called a meeting and enquired from each employee regarding signatures purported to have been put on the seal and every one had denied knowledge about the same and he could vouch safe that none of his employees had put signatures on the receipt Annexure C -3. He had further stated in his affidavit that if the documents were received in the office then the seal and signatures were affixed on the duplicate copy and not on scrap paper. His affidavit is of no value because he had derived knowledge from others. In fact the affidavit of the receipt clerk should have been placed on file. If there is no receipt clerk, then affidavit of the clerks working in the office should have been placed on the file to prove categorically that none of them had signed on the seal which is affixed on the original of Annexure C -3,vide which they had received the request for transfer of insurance policy and other documents. Moreover, he did not state in the affidavit that these employees had denied their signatures on the seal of the original of Annexure C -3 but stated that they had denied knowledge about the same. Knowledge is something else and denying the signatures is another thing. Moreover, he did not state that he is conversant with the signatures of his employees and Annexure C -3 is not signed by any of his employees. Therefore, in the absence of evidence of the concerned person, the affidavit of Sh. Sandeep Thapa cannot be taken into consideration and the only conclusion is that the request on behalf of Capt. Ajay Singh Yadav along with documents was received in the office on 19.10.2004 and acknowledgement was duly issued. The transfer of the vehicle had taken place on 12.10.2004, therefore, intimation was sent within 14 days as required under GR17 which reads as under: ''On transfer of ownership, the liability only cover, either under a liability only policy or under a package policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer. The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy, so that the insurer may make the necessary changes in his record and issue fresh certificate of insurance. In case of Package Policies, transfer of the ''Own damage'' section of the policy in favour of the transferee, shall be made by the insurer only on receipt of a specific request from the transferee along with consent of the transferor. If the transferee is not entitled to benefit of the No Claim Bonus (NCS) shown on the policy, or is entitled to a lesser percentage of NCB than that existing in the policy, recovery of the difference between the transferees entitlement, if any, that shown on the policy shall be made before effecting the transfer. A fresh proposal form duly completed is to be obtained from the transferee in respect of both liability only and package policies. Transfer of package policy in the name of the transferee can be done only on getting acceptable evidence of sale and a fresh proposal form dully filled and signed. The old certificate of insurance for the vehicle, is required to be surrendered and a fee of Rs. 50 is to be collected for issue of fresh certificate in the name of the transferee. If for any reason, the old certificate of insurance cannot be surrendered, a proper declaration to that effect is to be taken from the transferee before a new certificate of insurance is issued.''

IF the request for transfer of the insurance policy was not on proper form and fee of Rs. 50 had not been sent and also did not contain signatures of the transferee, then Insurance Company should have written back and should have asked the transferor to submit the request on proper form along with Rs. 50. The very fact that the Insurance Company kept mum shows that the transferor or transferee had done whatever was to be done by them and it was fault of the Insurance Company if the certificate of insurance was not transferred and in such circumstances, the transferor and transferee are not to be blamed and it cannot be said that no request was ever made for transfer of the certificate of insurance.

IT is true that the judgment of Honble Supreme Court titled M/s. Complete Insulations (P) Ltd. v. New India Assurance Co. Ltd., II (1996) ACC 536 (SC)=1996 ACJ 65, deals with Section 157 of Motor Vehicles Act and is limited to third party risk. The Division Bench of Honble High Court in United India Insurance Co. Ltd. v. Sharanjit Kaur and Others, I (2005) ACC 460 (DB)=2005 (1) RCR (Civil), has held that when a vehicle is transferred by the owner, then the vehicle would also be deemed to be transferred and failure on the part of transferee to intimate the Insurance Company with regard to transfer within the prescribed period of 14 days will not exonerate the Insurance Company from its liability. Although, this judgment is relating to compensation to third party, yet nothing has been said in the judgment and the principle has been applied generally. However, in the present case, even intimation was sent as required under GR 17 and transferor /transferee had done whatever was in their power. The authority in the case titled New India Assurance Co. Ltd. v. Manjit Pal Singh and Others, I (2006) CPJ 441, rendered by the State Commission in Appeal No. 132 of 2005 on 22.11.2005 is distinguishable because in the above mentioned authority, no intimation was sent to the Insurance Company within 14 days of the transfer of vehicle but here requisite information was sent and there was no deficiency on the part of transferor or transferee but it was Insurance Company which had not replied. In such circumstances, it shall be presumed that the insurance policy stood transferred in the name of Smt. Vasu Devi and the Insurance Company is liable to pay the claim.

IT has been observed by the Honble Supreme Court in New India Assurance Company Ltd. v. Sheela Rani, II (1998) ACC 408 (SC)=1998 (4) RCR (Civil) 224, that on transfer of the vehicle about which intimation was given though not strictly under Section 103 -A of the Act and in the absence of refusal from the insurer, the policy already given by the Insurance Company to the transferor will not lapse. In the present case Capt. Ajay Singh Yadav had intimated to the appellant Insurance Company about the transfer of the vehicle in favour of his maternal aunt Smt. Vasu Devi, though not in the prescribed form and sought transfer of the vehicle. No reply was given by the appellant and in the absence of such reply, the certificate shall be deemed to have transferred in the name of transferee Smt. Vasu Devi as per Section 103 -A of the M.V. Act.

THE District Consumer Forum had allowed compensation of Rs. 1,23,888.32 on account of parts as assessed by the Surveyor and Rs. 55,000 on account of labour charges, aggregating to Rs. 1,78,888 along with interest @ 8% p.a. with effect from 2.5.2005 (after giving margin of three months from the date of survey report dated 2.2.05) besides awarding of costs of Rs. 2,200. The copy of survey report conducted by the Surveyor of the Oriental Insurance Company Er. G.S. Riar has been placed on the appeal file. Its copy is also on the complaint file. It shows that the original estimate was of Rs. 4,23,370.23 and labour charges were assessed at Rs. 55,000 and net payable was Rs. 4,78,370.17p. However, labour charges had been assessed at Rs. 33,500, Rs. 1,000 had been deducted as excess. The total cost of the parts had been assessed at Rs. 1,40,931.84p against Rs. 4,23,370.17. Out of the said amount, Rs. 17,043.52p had been deducted as depreciation and net payable is said to be Rs. 1,56,388.32p. Thus, after depreciation, value had been assessed at Rs. 1,23,888.32. This is certainly a wrong practice. The Surveyor had not given any reasons as to why Rs. 1,40,931.84p were assessed as cost of the parts against original estimate of Rs. 4,23,370.17. It is not the case that Capt. Ajay Singh Yadav etc., had got the car repaired from the workshop of their choice, but the same was got repaired from the workshop which was approved by the Insurance Company i.e. Anil Corporation, Phase -II, Chandigarh. The Surveyor has simply stated that he had given the rates as prevalent in the local market. No schedule of the rates of market has been placed on record. Thus, the assessment of rates made by the Surveyor is arbitrary. Still, further it is strange to note that the Surveyor has deducted depreciation from the loss assessed while in fact, depreciation is always deducted from the original parts of the vehicle and no depreciation can further be allowed from the actual loss assessed at the time of accident. Therefore, deduction of Rs. 17,043.52p is not justified by any stretch of imagination. Hence, we hold that the appellant is liable to pay Rs. 17,043.52p.

COUNSEL for appellants Capt. Ajay Singh Yadav etc. contended in the cross -appeal that they are also entitled to the payment of damages and repairs for the engine which was to the tune of Rs. 23,980 as shown in Annexure 8 (collectively). This amount cannot be allowed as it was not mentioned in the complaint, nor it was pointed out to the Surveyor. The learned Counsel further contended that they were also entitled to Rs. 15,000 as harassment charges. Since, interest has already been allowed after three months of the survey report, so, they cannot be made to benefit twice, as interest awarded shall also take care of compensation for harassment etc.

HENCE , in view of the discussion above, the Appeal No. 236 of 2005 filed by Oriental Insurance Co. Ltd. is dismissed with costs of Rs.1,000. While Appeal No. 252 of 2005 filed by Capt. Ajay Singh Yadav etc. is partly allowed and they are further allowed a sum of Rs. 17,043.52p which were wrongly deducted by the Surveyor as depreciation, besides the amount allowed by the District Consumer Forum. They will also have costs of Rs. 1,000. The said amount shall carry interest @ 8% p.a. with effect from 2.5.2005 till the date of payment Copies of the order be communicated to the parties, free of charge.