RAJ KUMAR vs United India Insurance Co.Ltd.

RAJ Kumar has filed this complaint against United India Insurance Company Limited claiming Rs. 4,35,000/- with 18% interest w.e.f. December 4, 1996 till payment alongwith Rs. 2,000/- cost of litigation and Rs. 50,000/- compensation for mental tension and delay in settlement of the claim.

RAJ Kumar had purchased Maruti Esteemed Car No. DL-4 CD 3590 on February 5, 1995 from Daya Singh, resident of Village Basrampur, District Jalandhar on payment of Rs. 4,40,000/-. He obtained an agreement as well as affidavit from Daya Singh in this respect alongwith the car and Registration Book. On October 30, 1996, he obtained Insurance Policy for the aforesaid car from the opposite party United India Insurance Company for a period of one year from October 30, 1996 on payment of Rs. 13,836/- premium in cash through Mr. Wadial, Development Officer of the Insurance Company and obtained Cover Note No. 600267. The value of the car for which the Insurance Policy was taken was stated to Rs. 4,25,000/- + Rs. 10,000/- for the Sterio, in all Rs. 4,35,000/-. The Cover Note was issued in the name of Daya Singh because in the Registration Book, change of ownership had not taken place. On December 4, 1996, the aforesaid Car was stolen. The Insurance Company was informed. Report with Police Station was also lodged. The car was not traceable, hence claim was lodged with the Insurance Company. Annexure B is the copy of the F.I.R. and Annexure C is the intimation given to the Insurance Company. Sh. R.S. Ahluwalia, Investigator was appointed by the Insurance Company who submitted his report. The claim was repudiated by the Insurance Company vide letter dated May 26, 1998 addressed to Daya Singh that after transfer of the car, he was left with no insurable interest. Thus, RAJ Kumar has come up claiming the amount from the Insurance Company. The claim was contested by the Insurance Company by submitting a written version. Preliminary objections were taken that the complaint was not maintainable. The complainant had no locus standi to file the complaint. The car was still in the name of Daya Singh and Insurance Cover was also in his name although car stood sold and RAJ Kumar had no insurable interest. There was no deficiency in rendering service on the part of the Insurance Company. On merits, for want of knowledge, it was denied that the car had been purchased by the complainant. Issuance of the Insurance Policy in the name of Daya Singh was admitted who was stated to be the registered owner. The claim intimation was given by Daya Singh to the Insurance Company vide Annexure R3. R.S. Ahluwalia''s report was admitted to be of June 12, 1997, copy Annexure R-4. The repudiation was bona fide and correct as per facts. There was no privity of contract between the Insurance Company and the complainant. Both the parties produced their evidence on affidavits and documents. The complainant produced the Cover Note as issued by the Insurance Company Annexure A and copy of F.I.R. Annexure B with its English translation, intimation to the Insurance Company (Annexure C) as signed by RAJ Kumar for Daya Singh. Copy of the affidavit of Daya Singh (Annexure D) with regard to sale of the car in favour of RAJ Kumar after receipt of full payment. Annexure E is the letter from the Insurance Company repudiating the claim that Daya Singh had no insurable interest. Annexure F is the report of the Investigator Mr. R.S. Ahluwalia. On the other hand, the Insurance Company produced Annexure R-1, the repudiation letter already referred to above. Annexure R-2 is the another copy of the same dated May 26, 1998. Annexure R-3 is the letter of RAJ Kumar giving intimation of theft though signed for Daya Singh. Ex. R-4 is the report of Sh. R.S. Ahluwalia. The following questions require consideration in the present case : 1. Whether the complainant is a consumer, as defined, entitled to file the complaint having locus standi to do so ? 2. Whether repudiation of the claim by the Insurance Company is arbitrary ?

To how much compensation, if any, the complainant is entitled to from the opposite party ?

Relief. Question No. 1 3. The car at the time of the theft belonged to Raj Kumar is now beyond dispute as is otherwise proved on the record. Copy of the affidavit of Daya Singh (Annexure D) produced by the complainant indicates the sale of the car on receipt of its full price by Daya Singh in favour of Raj Kumar. R.S. Ahluwalia also in his report, as relied by both the parties (Annexure F), after going through the material produced observed that the car had been sold by Daya Singh to Raj Kumar. In the complaint, it was stated by Raj Kumar that he has paid premium for taking the Cover Note to that effect. There was simple denial in the written statement filed by the Insurance Company and not specific. Further more, in view of the finding as above that car had been sold to Raj Kumar by Daya Singh and possession had been delivered, it was Raj Kumar who was to take the policy for the insurance of the car as under the law, no car can be plied without the Insurance Cover. There is no reason to disbelieve the complainant Raj Kumar that he had paid the premium for insurance of the Car. Though the Insurance Cover was staken in the name of Daya Singh as in the Registration Book, change of ownership entry had not so far been recorded. Thus, it is the complainant who had taken the Insurance Policy from the Insurance Company and it is he who had hired the services of the Insurance Company covering risk of the car which he had purchased. It is he who has suffered the loss on account of theft of the Car. He is, therefore, held to be a consumer having hired services of the Insurance Company for consideration. Even otherwise in the set of facts as stated above, he would be a beneficiary of the contract of insurance which purports to be between the Insurance Company and Daya Singh, the previous owner. The Insurance Cover for all intents and purposes is for the benefit of the complainant. Being a beneficiary, he is also consumer, as defined, entitled to file the complaint. Question is answered accordingly. Question No. 2.

Repudiation of the claim on the ground that Daya Singh had no insurable interest in the facts of the present case is arbitrary. When it has been found by R.S. Ahluwalia, Investigator in his report referred to above that much prior to taking Insurance Cover, Daya Singh had sold the Car to Raj Kumar on February 5, 1995. Although the Car still stands recorded in the official record in the name of Daya Singh, he may not have any interest as is stated in the repudiation letter but it was the case of the Raj Kumar which was to be considered by the Insurance Company as to whether he was entitled to claim on account of loss of theft. Such a matter was earlier considered by the Insurance Company and in view of the decision of the Supreme Court, instructions were issued by the Insurance Companies known as GR-10 on November 28, 1991 and reiterated in 1997 that where the vehicle has not been transferred in the official records, the transferees'' cases for full payment of the insured amount be considered. One of such cases came up before this Commission in Appeal No. 137 of 1998, Capt. Harbhajan Singh v. Branch Manager, National Insurance Company, decided on 1.9.1999. Relying upon such instructions, a direction was given to the Insurance Company to re-consider the case of the complainant. Reference be also made to the decision of Haryana State Commission in United India Insurance Co. Ltd. v. Rajesh Chhabra & Anr., III (1998) CPJ 448, where car had been sold under Special Power of Attorney. Although the insurance was in the name of the original owner, the transferee was held entitled to the benefit of the Insurance Policy. Sh. Pardeep Bedi, Advocate for the Insurance Company relied upon the instructions as already referred to above and prayed that time be allowed to the Insurance Company to settle the claim as per instructions referred to above. We find merit in this contention. The question is answered accordingly. Question No. 3 Since the matter is to be referred to the Insurance Company for settlement of the claim, it is taken that while considering the case of the complainant and while granting compensation, the element of delay in settlement of claim will be taken into consideration and on the insured amount, if decided to be paid, interest thereon @ 12% p.a. is also to be paid as held by the Supreme Court in United India Insurance Co. Ltd. v. M.K.J. Corporation, III (1996) CPJ 8 (SC). Question No. 4. For the reasons stated above, this complaint is allowed with costs of Rs. 1,000/- with the direction to the Insurance Company to re-consider the case of the complainant and pass appropriate orders as directed above for settlement of the claim within three months from receipt of copy of this order. It is made clear that in case the Insurance Company still declines to make payment of the settled amount, the complainant would be at liberty to approach the Fora again.

Complaint allowed.