RAMESH KUMAR vs Reliance General Insurance Company Ltd. And Ors.

THIS revision is directed against the order of the Haryana State Consumer Disputes Redressal Commission, Panchkula (in short, "the State Commission") dated 16.8.2012 in first appeal No. 490/2012 whereby the State Commission allowed the appeal of the respondent/insurance company against the order of the District Forum, Rohtak and dismissed the complaint.

BRIEFLY stated, facts relevant for the disposal of the revision petition are that the petitioner Ramesh Kumar filed a consumer complaint in District Forum, Rohtak alleging that he being the registered owner of Truck No. HR -63 G -3892 got it insured with the respondent/insurance company for a sum of Rs. 10,70,000/ -. The insurance policy was valid for the period w.e.f. 19.11.2009 to 18.11.2010. On 2nd September, 2010 the driver of the petitioner parked the insured truck at Nanda Associate Petrol Pump, Ismaila and went to his house after properly locking the vehicle. On 3 September, 2010 when the driver returned to fetch the truck, it was not there. It is alleged that when the truck could not be found Sombir, Caretaker of the truck lodged an FIR at police station Sampla. Intimation of theft of the truck was also given to the respondent/insurance company. The respondent/insurance company, however, repudiated the insurance claim of the petitioner on the ground that on the date of theft of the truck the petitioner had no insurable interest in the truck as he had already sold the truck to Sombir.

THE respondent/opposite party in its written statement justified the repudiation on the ground that on the relevant date the petitioner had no insurable interest in the truck, as he had already sold the truck to Sombir on 12.3.2008. Learned District forum on consideration of the pleadings and the appraisal of evidence held the respondent guilty of deficiency in service and allowed the complaint preferred by the petitioner with following directions -

"It is observed that respondents shall pay a sum of Rs. 1070000/ - (Rupees ten lac seventy thousand only) alongwith interest @ 6% p.a. from the date of accident i.e. 2.9.2010 till its actual realization. Complainant is also entitled for a sum of Rs. 2000/ - (Rupees two thousand only) as litigation expenses which the complainant has to bear for the present unwanted and unwarranted litigation only due to deficiency in service on the part of the respondent. Complaint is disposed of accordingly."

BEING aggrieved of the order of the District Forum, respondent/insurance company preferred an appeal and the State Commission, Haryana vide impugned order allowed the appeal, set aside the order of the District Forum and dismissed the complaint.

LEARNED counsel for the petitioner has contended that the impugned order has been passed in utter disregard of the evidence on record. Expanding on the argument, learned counsel for the petitioner contended that the State Commission has totally ignored the affidavit evidence of the complainant and Sombir wherein they had denied the transfer of ownership of truck in favour of Sombir. It is contended that from the said two affidavits it is clear that Sombir was only a Caretaker of the truck. As such the repudiation of insurance claim on the ground of the complainant not having insurable interest is not justified.

WE do not find any merit in the above contention. No doubt the complainant Ramesh Kumar and Sombir in their affidavits filed in the District Forum, Rohtak have denied the transfer of ownership of truck in favour of Sombir, their affidavit evidence however is not reliable because it is contrary to the documentary evidence i.e. the agreement of sale executed between the complainant and Sombir as also the receipt dated 10.4.2008 purportedly to have been executed by the complainant in token of having received consideration amount of Rs. 5,61,000/ - from Sombir regarding the sale of truck. On perusal of copy of the agreement to sale available on the record of the District Forum it is clear that on 12.3.2008 the complainant Ramesh Kumar had sold the subject truck which was got financed by him for which he was paid Rs. 5,61,000/ - and Sombir had agreed to pay the balance installments to the financer against the loan taken by Ramesh Kumar. From the aforesaid documentary evidence it is established that ownership of the subject truck was transferred by the complainant in favour of Sombir in March, 2008. Thus, it is clear that in September, 2010 when the truck was stolen complainant Ramesh Kumar had no insurable interest in the subject truck.

SECTION 157 of the Motor Vehicles Act, 1988 deals with the transfer of certificate of insurance which is reproduced as under: - - "(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer. 1[Explanation. -For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.]

(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance."

ON reading of the above it is clear that Clause 2 of Section 157 casts an obligation on transferee of the motor vehicle to apply for necessary change with regard to the fact of transfer of certificate of insurance within 14 days. Admittedly, no such intimation was given to the insurance company. Thus, in absence of any intimation regarding the transfer of the ownership of the vehicle the respondent/insurance company was fully justified in repudiating the claim of Ramesh Kumar on the premise that he has no insurable interest left in the subject truck.

SIMILAR issue came up before the Supreme Court in the case of Complete Insulation Pvt. Ltd. v. New India Assurance Co. Ltd. : (1996) 1 SCC 221 wherein it was held: "Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157 of the New Act must be limited thereto. The certificate of insurance to be issued in the prescribed form (See Form 51 prescribed under Rule 141 of the Central Motor Vehicles Rules, 1989) must, therefore, relate to third party risks. Since the provisions under the New Act and the Old Act in this behalf are substantially the same in relation to liability in regard to third parties, the National Consumer Disputes Redressal Commission was right in the view it took based on the decision in Kondaih''s case because the transferee -insured could not be said to be a third party qua the vehicle in question. It is only in respect of third party risks that Section 157 of the New Act provides that the certificate of insurance together with the policy of insurance described therein "shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred". If the policy of insurance covers other risks as well, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI of the New Act and in the realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle. In the present case since there was no such agreement and since the insurer had not transferred the policy of insurance in relation thereto to the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken by the National Commission is therefore correct."

FROM the above decision of the Supreme Court, it is clear that the insurance company is not under obligation to indemnify the subsequent purchaser for the damage caused to the vehicle unless the subsequent purchaser has got the insurance policy transferred in his name. In the instant case as the insurance policy was not transferred in the name of the respondent complainant, the petitioner was justified in repudiating the claim.

IT is also contended by learned counsel for the petitioner that the State Commission has failed to appreciate that petitioner is still shown as owner of the subject truck in the registration certificate. Therefore, the insurance company was not justified in repudiating the claim. The above contention is misconceived. There is a difference between the ownership of vehicle and being described as an owner in the registration certificate. Chapter IV of the Motor Vehicles Act, 1988 deals with the registration of motor vehicles. Section 39 of Motor Vehicle Act provides for necessity for registration of motor vehicles. Sections 40 and 41 of the Motor Vehicle Act, 1988 deal with the registration, where to be made and how to be made. Section 40 provides that every owner of motor vehicle shall cause the vehicle to be registered by a registering authority which clearly means that the ownership of vehicle precedes the registration of the vehicle. Thus, non -transfer of the name of the registered owner in the registration certificate of the subject vehicle because of failure on the part of the transferee of the truck to apply for change in registration, by no means shall confer right of ownership on the complainant.

IN view of the discussion above, we are of the opinion that the State Commission, Haryana has rightly allowed the appeal, dismissed the complaint and the impugned order cannot be faulted either on the issue of jurisdiction or material irregularity. We find no reason to interfere with the impugned order in exercise of revisional jurisdiction.

REVISION petition is accordingly dismissed.