UNITED INDIA INSURANCE CO LTD vs UMESH AANGALE

-THIS appeal arises from the order dated 25. 1. 2006 passed in C. C. No. 111/2005 by the District Consumer Disputes Redressal Forum, East Nimar, Khandwa directing the appellant-Insurance Company to pay Rs. 21,050 as compensation, besides cost Rs. 500.

IT is a case where a motor car Tata Sumo insured with the appellant met with an accident and damaged during existence of the insurance cover. However, admittedly the vehicle in question was initially registered and insured in the name of one Nitin More, who had sold the vehicle to respondent-complainant Umesh Aangale before the date of the accident. Although the vehicle was registered in the name of respondent-trasferee, but no intimation of transfer of vehicle was ever given to the appellant-insurer and no action was taken to get the certificate of insurance transferred in the name of respondent-purchaser. The Forum below has directed the appellant-Insurance Company to pay compensation, Rs. 21,050 to respondent-complainant for the damage caused to the subject insured. The question thus arises for determination is whether in absence of transfer of certificate of insurance in the name of respondent-transferee, the appellant-Insurance Company can be held liable to make good, the damage to the vehicle. The answer to the question, we say with respect, is found in a Supreme Court decision in the case of Complete Insulations (P) Ltd. v. New India Assurance Company Ltd. , I (1996) CPJ 1 (SC)=i (1996) CLT 22 (SC)=ii (1996) ACC 536 (SC)=air 1996 SC 586 wherein it is held: "the requirements of Chapter XI 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 (Form 51 prescribed under 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 transferee of the vehicle 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 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 instant case the vehicle was purchased in the name of ''a'' for which the Insurance Company, had issued a comprehensive insurance policy. The premium for the insurance was paid by the transferee company in whose favour the car was transferred. The registration of the car was transferred to the transferee, the transferee intimated the transfer of registration and asked for transfer of the insurance policy. The Insurance Company did not reply to the two letters sent by transferee. In the meanwhile the vehicle met with a serious accident. The transferee asked for the assessment of the damage as the vehicle was a total loss. There was no agreement between insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle. 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. "

Following the ratio of the decision in the case of M/s. Complete Insulations (supra), the National Commission in its recent decision in the case of United India Insurance Company Ltd. and Anr. v. Harinder Kaur, III (2007) CPJ 411 (NC), held that in absence of steps being taken for transferring the policy as required by Section 157 of the Motor Vehicle Act, the transferee is not entitled to get benefit of the insurance policy.

WE may however, refer here to an another decision of the National Commission in the case of Banowarilal Agrawalla v. National Insurance Co. Ltd. and Anr. , IV (2005) CPJ 110 (NC)=2006 NCJ 72 (NC), wherein the National Commission after referring to the Supreme Court decision in the case of M/s. Complete Insulations (supra), has tried to find out a via media and it was held that in order to over come this technicality the new owner of the vehicle may get the claim submitted by the previous owner having insurance in his favour. Some decisions were also rendered by this Commission on the basis of the decision in the case of Banowarilal Agrawalla (supra ). However, in view of the Supreme Court decision in the case of M/s. Complete Insulations (supra), followed by the National Commission in the case of Harinder Kaur (supra) the correct legal position thus emerges is that unless the policy is transferred in the name of the purchaser, the latter cannot claim any compensation from the Insurance Company. The order passed by the District Forum, therefore, deserves to be set aside. We accordingly allow the appeal and set aside the impugned order and dismiss the complaint of respondent. We make no order as to costs which the parties are left to bear their own as incurred of both the Fora.

COPY of this order be circulated to all the District Fora for guidance. Appeal allowed.