Tata Aig General Insurance Co Ltd vs Bhagwant Singh Chadha

THE petitioner being aggrieved of concurrent findings of the Foras below allowing the consumer complaint of the respondent/complainant has preferred this revision petition.

BRIEFLY stated, facts relevant for the disposal of the revision petition are that the respondent M/s Tej Trade and Transport Co. Ltd. (respondent No.3) was the owner of Mercedes Benz Car bearing Registration No.TN -01 -R -4005. The car was insured in the name of the said company. According to the complainant he purchased said car from the said company in June, 2007 by paying the consideration amount. However, transaction of sale could not be completed as necessary documents for transfer of registration of car were provided by the vendor at a very late stage on 20.8.2008. In the meanwhile, the insurance policy of the car expired. Thus, the respondent/complainant got the insurance renewed for the period 10.7.2008 to 9.7.2009 by paying a premium amount of Rs.17,714/ -. Renewed policy was also taken in the name of respondent No.3. The car met with an accident on 30.8.2008. The accident was reported to the police and the intimation was given to the petitioner insurance company. The petitioner appointed M/s P.K. and Company as surveyor. The surveyor after examination concluded that it was a case of total loss and value of the salvage was Rs.50,000/ -. The surveyor, however, recommended no claim on the ground that respondent/complainant had no insurable interest in the damaged vehicle. Insurance company accordingly repudiated the claim. Being aggrieved of the repudiation of the claim, respondent No.1 filed consumer complaint in District Forum, Panchkula alleging deficiency in service on the part of the insurance company.

THE petitioner insurance company resisted the complaint on the premise that the insurance policy was renewed in the name of M/s Tej Trade and Transport Co. Ltd. concealing the fact that the said company had already sold the vehicle and it had no insurable interest in the same. It was also pleaded that the respondent/complainant had no privity of contract with the petitioner. As such respondent neither paid the premium for insurance of car nor he got the insurance policy of the said vehicle transferred in his name in accordance with GR -17. Learned District Forum on consideration of the pleadings and the pleadings of the parties and the material on record allowed the complaint and directed the petitioner insurance company as under: "For the reasons stated above, we hereby allow the present complaint with the following directions to the OP No.1: - I. To process and settle the claim (Ex. OP 1/4) submitted by the complainant with the company on 01/09/2008, keeping in view the fact that the sale of the insured vehicle by OP No.3 in favour of the complainant was completed on 20/08/2008 and the accident of the same took place on 30/08/2008. II. To pay a sum of Rs.5000/ - to the complainant on account of deficiency in service, mental agony and harassment suffered by him due to act and conduct of OP No.1. III. The OP No.1 is further directed to pay a sum of Rs.5000/ - as cost of litigation. Let the order be complied with within a period of 30 days from the date of communication of this order. A copy of this order be communicated to both the parties free of costs and file be consigned to the record room."

THE petitioner being aggrieved of the order of the District Forum preferred an appeal and the State Commission, Haryana dismissed the appeal in limine.

LEARNED counsel for the petitioner has contended that the impugned orders of the Foras below are based upon incorrect appreciation of facts and law. Expanding of the argument, learned counsel submitted that admittedly the insured vehicle was sold by M/s Tej Trade and Transport Co. Ltd. to the respondent/complainant on 7.6.2007. Despite that complainant did not get the registration transferred in his name and instead by concealing the fact of transfer of vehicle, the insurance policy was got renewed in the name of M/s Tej Trade and Transport Co. Ltd. on 10.7.2008. Therefore, the insurance contract in itself is void. Learned counsel further contended that the complaint itself is not maintainable because there is no privity of contract between the petitioner and the respondent/complainant.

LEARNED counsel for the respondent/complainant on the contrary has argued in support of the impugned orders. He contended that the Foras below have rightly appreciated the facts to concluded that the sale transaction was completed on 20.8.2008.

WE have heard learned counsel for the parties and perused the record. The main plea of the petitioner is that the insurance contract itself is not valid because on the date of renewal of insurance policy M/s Tej Trade and Transport Co. Ltd. had no insurable interest in the car as it was already sold to the respondent/complainant in June, 2007. On perusal of para -5 of the complaint it transpires that the complainant has categorically alleged that he had purchased the subject car from the said company in June, 2007 after making the payment of consideration amount. This fact also finds corroboration from the delivery report dated 7.6.2007 which records that complainant B.S. Chadha had taken delivery of the said car No. TN -01 -R -4005 against full and final payment at 3.00 pm. Delivery receipt is fully duly signed by the complainant. From this it is obvious that the car in question was sold by the previous owner M/s Tej Trade and Transport Co. Ltd. to the respondent/complainant after obtaining full and final payment on 7.6.2007. Despite of the sale of the vehicle to the complainant, admittedly the insurance cover was obtained in the name of M/s Tej Trade and Transport Co. Ltd. w.e.f. 10.7.2008 to 9.7.2009. The said insurance policy in our considered view is not a valid contract because it has been obtained by concealing the material fact of transfer of ownership of the vehicle in favour of the complainant. Moreover, on the date of taking the insurance cover M/s Tej Trade and Transport Co. Ltd. had no insurable interest in the vehicle. As such the petitioner insurance company was justified in repudiating the claim of the complainant particularly when there was no privity of contract with him.

LEARNED counsel for the respondent has tried to justify the orders of the Foras below by contending that the payment of consideration amount or delivery of the possession of car does not complete transaction of sale and the transaction of sale gets completed only when the vendor delivers sale letter and other necessary documents for the purpose of transfer of registration of the vehicle. We find no merit in the above contention. Complainant in para -5 of the consumer complaint has categorically stated that he had purchased the subject car from M/s Tej Trade and Transport Co. Ltd. on 7.6.2007 after making payment. On perusal of the copy of the delivery receipt placed on record we find that vide this receipt the complainant B.S. Chadha has confirmed having received delivery of the car against full and final payment on 7.6.2007 at 3.00 pm. The said delivery receipt further records as under: "I find that the vehicle is in perfect running condition and its documents are correct as I have seen and thoroughly checked. I further state that I will be legally fully responsible for its maintenance, accidents, road taxes, police challans, offences its misuse of any kind after taking the delivery. I am finally satisfied about the deal and also the balance payment through me."

ON reading of the above, there is no doubt left in our mind that the sale transaction of the vehicle in question was complete when the car was delivered to the complainant after obtaining full and final payment and this is the reason the complainant vide the deliver receipt has taken full responsibility for maintenance, accidents, road taxes, police challans, offences or misuse of vehicle of any kind after the delivery. That being the case M/s Tej Trade and Transport Co. Ltd. had left with no insurable interest in the subject car and as such it can be safely concluded that the said company or the complainant obtained the aforesaid insurance policy valid w.e.f. 10.7.2008 to 9.7.2009 by concealing the material fact regarding the transfer of vehicle in the name of the complainant. As such the insurance contract itself is invalid as it was obtained by concealment of identity of the actual owner of the vehicle. Otherwise also, as per record, the insurance policy is not in the name of the complainant and as such the complainant has no locus standi to file insurance claim or to file the complaint.

THE foras below have failed to appreciate the above aspect of the matter. Therefore, their orders cannot be sustained.

IN view of the discussion above, revision petition is accepted, impugned orders of the Foras below are set aside and complaint is dismissed.