United India Insurance Company Limited vs NITIN KUMAR

ONLY question urged at the time of hearing of this appeal by Mr. Behal is that his client is not liable to indemnify respondent No. 1 as there was no privity of contract to indemnify the said respondent by his client. At the same time while buttressing this submission and after referring to Section 157 of the Motor Vehicles Act, 1988, Mr. Behal further submitted that while transferring the vehicle which was admittedly insures under a valid policy of insurance on the date of its accident, respondent No. 2 had not intimated the appellant in this behalf so as to enable respondent No. 1 to claim benefit of the continuance of the policy that was there in favour of respondent No. 2 issued by the Insurance Company-appellant in this case. In support of his this submission Mr. Behal relied on the decision of the Supreme Court 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. Thus he prayed for allowing the appeal and setting aside the impugned order.

ON the other hand, Mr. Verma learned Counsel for the respondent submitted that mere non-information being sent to the appellant regarding transfer of vehicle by respondent No. 2 in favour of transferee cannot be allowed to be used as a defence to reject the claim as is urged on behalf of the appellant in the present case. The determination of this question need not detain us any further in the light of the decision of the Andhra Pradesh High Court in the case of Oriental Insurance Company Ltd. v. S. Babaiah and Ors. , I (1998) ACC 720=1999 ACJ 1126 (AP ). In this case scope of Section 157 of the Motor Vehicles Act, 1988, was examined and discussed. Thereafter, the Court came to the conclusion that the insurance policy would be deemed to have been transferred under the deeming provision of Section 157 (1) of the Act of 1988 supra. This view was reiterated again by the said Court in the case of National Insurance Co. Ltd. v. K. Yadamma and Ors. , 2007 ACJ 1343.

In addition to above, before the National Commission in the case of Shri Narayan Singh v. New India Assurance Company Ltd. , IV (2007) CPJ 289 (NC), identical question as involved in the present appeal, directly came up for consideration. In this case, vehicle was purchased from the original owner who had taken the insurance policy. After taking note of the provisions of India Motor Tariff Regulation issued vide circular of 1994 by the General Insurance Company Ltd. with regard to the transfer of vehicles and transfer of insurance benefits automatically in favour of the transferee, Insurance Company like appellant before us was held liable to pay insurance amount along with interest. Punitive costs were imposed for taking unjustified stand in not disclosing the provisions of India Motor Tariff Regulation. National Commission while passing this judgment, had also noticed decision of the Chhattisgarh State Commission in the case of Ajimuddin v. New India Insurance Co. Ltd. , III (2006) CPJ 273. Its paragraph 7, which is relevant and has material bearing on the decision of this case, is extracted herein below: "learned Counsel for the appellant submitted that GIC has issued special insructions regarding settlement of claim in case of transfer of policy. It was submitted that as per the said instructions the transfer of policy in favour of the purchaser the complainant/appellant should be treated as automatic. It appears that the Tariff Advisory Committee issued a circular regarding automatic transfer of the policy to the new owner/purchaser of the vehicle. In the said circular the decision of Supreme Court in Complete Insulations (P) Ltd. v. New India Assurance Co. Ltd. , was referred to. In the said circular it was stated that for policies issued as per revised Motor Tariff, own damage claim which fall within the purview of GR 10 provisions may be settled in full subject to the other terms and conditions of the policy. "

THE above extracted paragraph further shows that in the circular in question reference was made to the decision relied upon by Mr. Behal. While framing Regulations, it can safely be held that taking note of the decision of the Hon''ble Supreme Court relied upon by Mr. Behal, those were framed. No decision has been brought to our notice by Mr. Behal to the contrary for upholding his submission. No other point was urged. In view of the aforesaid discussion, there is no merit in this appeal which is accordingly dismissed and the order of the District Forum, Mandi, in Complaint No. 4/2007 dated 8. 6. 2007 is upheld, leaving the parties to bear their own costs. All interim orders passed from time-to-time in this appeal shall stand vacated forthwith. Learned Counsel for the parties have undertaken to collect copy of this order from the Reader of this Court. Appeal dismissed.