SHRI SWAPAN KUMAR MAHANTY, PRESIDENT

This is an application u/s.12 of the C.P. Act, 1986.

            The factual scenario of the case is that complainant-1 Ruby Infralogistics Ltd. had purchased a commercial Goods Carrying Vehicle bearing No. NL 01K/2329 and the said vehicle was insured with OP-1 by way of a policy which was valid for the period from 05.01.2015 to 04.01.2016. The complainant -1 sold the said vehicle  to complainant-2 National Trailer Transport Company in the month of February, 2015. Immediately, complainant-2 informed about the transfer to OP-2 through e-mail dated 13.02.2015 along with all documents including Form 29 & 30. Complainant-2 transferred their name in all documents related with the said vehicle. In spite of knowing the facts of transfer the OPs did not change the name of the owner of the vehicle in the insurance policy.

            Further case of the complainants is that on 17.05.2015 the said vehicle met an accident. The complainant-2 informed about the accident to the OP-2 via e-mail on the date of accident. The OP-2 asked some documents through e-mail and the complainant-2 sent all the required documents to the OP-2 through e-mail. The complainant-1 lodged claim to the OP-1 in respect of the insured vehicle. The OPs estimated the loss and damage of the insured vehicle through their surveyor. Ultimately, the OP-1 vide letter dated 20.12.2015 repudiated the legitimate  claim  of the complainants on the ground on the ground that on the date of accident the complainant-1 had no insurable interest in respect of the vehicle. There is deficiency in services and unfair trade practice on the part of the OPs. Hence, the consumer complaint.

            The OP-1 has contested the case by filing W.V. contending inter alia that the  complaint is not maintainable in its present form and the complainants are not “consumer” within the meaning of Consumer Protection Act, 1986. The  specific case of the  answering OP is that vehicle bearing registration No. NL-01/K-2329 (Tata LPs Truck) was insured with the answering OP which was valid for the period from 05.01.2015 to 04.01.2016. The insured vehicle met an accident on 18.07.2015 and after receiving such information the answering OP immediately appointed IRDA licenced surveyor to assess the loss of damaged vehicle. The answering OP has also appointed one professional investigator for collection of information regarding the alleged accident.

            Further case of the answering OP is that on perusal of the reports of the surveyor and investigator it is noticed that the insurance policy stands in the name of complainant-1 but the R.C. Book of the vehicle stands in the name of complainant-2. As such, on the date of accident there was no insurable interest of the complainant-1 in respect of subject vehicle. Transfer of Package  Policy in the name of the transferee can be done only on getting acceptable evidence of sale and on submitting fresh proposal form duly filled in and signed. The old certificate of insurance for the vehicle, is required to be surrendered and a fee of Rs. 50/- should be deposited for fresh insurance certificate in the name of the transferee. Neither the complainant-2 deposited Rs. 50/- for fresh insurance policy nor submitted fresh proposal form within 14 days of transfer. Thus, the answering OP repudiated the claim. There is no deficiency in service or unfair trade practice on the part of the answering OP. Accordingly, the answering OP has prayed for dismissal of the complaint with cost.

            In spite of service of notice OP-2 did not turn up to contest the case. As such, the case has proceeded ex parte against the OP-2.

Decision with Reasons

            Both parties have tendered evidence through affidavit. They have also filed Brief Notes of Argument. We have travelled on the pleadings of the parties coupled with evidence and documents on record. We have also given a thoughtful consideration to the argument advanced by the Ld. Advocates for the complainants and OP-1.

            There is no dispute on the facts that complainant-1 had purchased a commercial Goods Carrying Vehicle bearing registration No. NL 01K/ 2329 and the said vehicle was insured with OP-1 by way of a policy being No. 0000000002412072  which was valid for the period from 05.01.2015 to 04.01.2016. It is also not in dispute that the complainant-1 sold the said vehicle to the complainant-2.

            The complainants alleged that by e-mail dated 13.02.2015 complainant-2 informed about the transfer to the OP-2 Suvidha Insurance Broking Pvt. Ltd. along with all related documents including Form 29 & 30 but the OPs did not change the name of the owner of the vehicle in the insurance policy. On the contrary, the OP-1 denied allegations of the complainants. According to the OP-1 transfer of package Policy in the name of the transferee can be done only on getting acceptable evidence of sale and on submitting fresh proposal form duly filled in and signed. The old certificate of insurance is required to be surrendered and a fees of Rs. 50/- should be deposited for fresh certificate of insurance. On perusal of annexure-II of the complaint petition, we find that on 13.02.2015 complainant-2 informed the OP-1 through e-mail regarding transfer of ownership of the vehicle and against reply dated 14.02.2015 complainant-2 furnished all the required documents including R.C. Book, Form 29 & 30 to the OP-1. On perusal of Form 29 & 30 we do not find the actual date of Sale of the Vehicle bearing registration No. NL 01K/2329. Moreover, there is no date, month and year of submission of Form-29 & 30. The complainant-2 failed to submit name transfer letter and Sale Purchases Agreement to the OP-1 against e-mail dated 13.02.2015. The insurance policy of the vehicle was in the name of previous owner i.e. complainan-1 on the date of accident though he was not the owner of the vehicle. Thus, on the date the vehicle met with an accident, there was no insurance cover in respect of the vehicle in the name of the complainant-2 though there was an insurance cover issued in the name of previous owner of the vehicle.

There is no dispute on the facts involved in this case. It is an admitted case that the vehicle in question has been purchased by the complainant-2 and got transferred in his name on 09-05-2015. It is also not in dispute that the complainant-2 did not submit fresh proposal form duly filled in and signed. The old certificate of insurance was not surrendered and fee of Rs.50/- was not deposited for fresh insurance certificate in the name of transferee at any time prior to 17-05-2015 for transfer of the insurance policy, which the previous owner of the vehicle had obtained, in his name. Thus, on the date the vehicle met with an accident, there was no insurance cover in respect of the vehicle in the name of the complainant-2 though there was an insurance cover issued in the name of the previous owner of the vehicle.

Section 157 of the Motor Vehicle Act which provides for deemed transfer of the certificate of insurance reads as under:

“Transfer of Certificate of Insurance – (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 with effect from the date of its transfer.”

The above referred Section came up for consideration before the Hon’ble Apex Court in Complete Insulations Pvt. Ltd. Vs. New India Assurance Co. Ltd., (1996) 1 SCC 221 and the following view was taken;

“There can be no doubt that the said chapter provides for compulsory insurance of vehicles to cover third party risks. Section 146 forbids the use of a vehicle in a public place unless there is in force in relation to the use of that vehicle a policy of insurance complying with the requirements of that chapter. Any breach of this provision may attract penal action. In the case of property, the coverage extends to property of a third party i.e. a person other than the insured. This is clear from Section 147 (1)(b)(i) which clearly refers to “damage to any property of a third party” and not damage to the property of the ‘insured’ himself. And the limit of liability fixed for damage to property of a third party is Rupees Six Thousand only as pointed out earlier. That is why even the Claims Tribunal constituted under Section 165 is invested with jurisdiction to adjudicate upon claims for compensation in respect of accidents involving death of or bodily injury to persons arising out of the use of motor vehicles or damage to any property of a third property so arising, or both. Here also it is restricted to damage to third party property and not the property of the insured. Thus, the entire Chapter XI of the new Act concerns third party risks only. It is, therefore, obvious that insurance is compulsory only in respect of third party risks since Section 146 prohibits the use of a motor vehicle in a public place unless there is in relation thereto a policy of insurance complying with the requirements of Chapter XI, 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 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 Kondaiah 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.”

Analyzing the provisions of the Section 157 of the Motor Vehicle Act in the light of the above referred decision the Hon’ble NCDRC in Revision Petition No.3001 of 2008, United India Insurance Co. Ltd. & Ors. Vs. Deepak Mathur & Anr., decided on 22-07-2014 inter alia held as under:

“It would, thus, be seen that as far as the provisions of Section 157 of the Motor Vehicles Act are concerned, the same would apply only in relation to the liability of the insurance in relation to a third party. As far as liability of the insurance company to the insured is concerned the same would continue to be covered by the contract of policy between the insurer and the insured. This legal position was made quite clear by the Apex Court when it said that “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 our opinion, since the insurance policy is nothing but a contract between the insurer and the insured, the insurance company, in a case of theft or damage to the vehicle, which does not involve a third party right, would be liable to pay only to the insured and not to the transferee of the vehicle in a case where the transferor did have an insurable interest in the vehicle at the time the insurance policy was taken as well as at the time the loss took place. If, however, the insured did not have such an interest in the vehicle at the time the policy was taken as well as at the time the loss occurred, he would not be entitled to any payment from the insurance company. In that case, the transferee would have a right qua the insurance company provided he had got the insurance transferred in his name or had at least applied for such transfer or he has executed an independent contract of insurance with the insurance company. If the transferor chooses to obtain insurance, despite having no insurance interest in the vehicle subject matter of the policy, he has to blame only himself since he cannot be a proxy for the owner of the vehicle in the matter of obtaining an insurance policy. The transferee, when he becomes the owner of the vehicle must necessarily apply to the insurance company to transfer the insurance policy in his name. In the alternative, he can take his own independent insurance policy form the same or some other insurance company. But, if the insured had an insurable interest in the vehicle, at the time the policy is taken as well as at the time the vehicle gets stolen or damaged, he would be entitled to have a claim against the insurance company.”

This issue also came to be considered by another Bench of the Hon’ble National Commission in Revision Petition No.3597 of 2008, The New India Assurance Co. Ltd. & Anr. Vs. Akbar, decided on 16-01-2014. In the aforesaid case, the vehicle in question was purchased by the complainant on 16-01-2006. He requested the insurance company to change the policy in his name for the period of one year from 18-06-2005 to 17-06-2006. The vehicle, however, was stolen in the night intervening 5/6-02-2006. The claim having been declined by the insurance company, the matter was taken to the concerned forum and ultimately reached before the Hon’ble National Commission by way of the above referred revision petition. Relying upon the decision of the Hon’ble Supreme Court in Complete Insulation (P) Ltd. (supra) it was held that the insurance company was not liable to pay to the complainant. During course of the hearing the learned Advocate for the complainant referred to an earlier decision of the Hon’ble National Commission in Narain Singh’s case reported in 2008 (1) CLT 46 (NC) holding therein that in view of the India Motor Tariff Regulations the benefits under the policy automatically accrues to the new owner on transfer of the vehicle. It was noticed by the Hon’ble National on’ble National Commission Commission that the aforesaid regulations were applicable only upto  30-06-2002, new Regulations had come into force from 01-07-2002 and under the new Regulations the complainant was not entitled to indemnification from the insurance company. Reliance in this regard was placed upon another decision of the Hon’ble National Commission in Madan Singh Vs. United India Insurance Co. Ltd., (2009) CPJ 158 (NC). A similar view was taken by the Hon’ble Commission in Revision Petition No.2355 of 2012, Sandeep Gupta Vs. United India Insurance Co. Ltd. & Anr., decided on 14-02-2014.

In the case before us, though in view of the mandate of Section 157 (2) of the Motor Vehicle Act, the complainant-2 is required to apply to the insurance company within 14 days of purchase of the vehicle, for transfer of the certificate of insurance in his name, on submitting fresh filled in signed proposal form and depositing Rs.50/- for fresh insurance certificate. Admittedly, no fresh application was submitted within the aforesaid period. Even the old insurance certificate was not surrendered. Consequently, there was no policy of insurance in respect of the aforesaid vehicle in the name of the complainant-2, on the date the vehicle met an accident.

A policy of insurance is nothing but a contract between the insurer and the insured whereby the insurer, in consideration of the premium received from the insured, undertakes to indemnify the insured in case of loss of or damage to the vehicle subject matter of the insurance policy. In the absence of such a contract, the insurance company cannot be held liable to indemnify the owner of the vehicle which is lost or gets damaged. Considering that under Sub-Section (2) of Section 157 the transferee can apply for change of the insurance policy in his name within 14 days of the purchase of the vehicle, the insurance company in our view would be entitled to indemnify the transferee of the vehicle, in a case where the loss/damage takes place within 14 days of the purchase of the vehicle by him. This view is premised on the statutory provision which gives 14 days’ time to the transferee to seek transfer of the insurance in his name, considering that it may not be possible for him to seek such a transfer immediately on purchase of the vehicle. However, in the case before us since the complainant-2 did not submit fresh proposal form for transfer of the insurance policy in his name at any point of time within 14 days from the date of purchase of the vehicle and did not deposit the fee of Rs.50/- for fresh insurance certificate, no benefit from the aforesaid interpretation accrues to them. As such, the repudiation is justified.

Regard being had to the entire facts and circumstances of the case coupled with evidence and documents on record, we are of the opinion that complainants are not entitled to get any relief as prayed for.

In the result, the case fails.

Hence,

ORDERED

That the complaint case  be and the same is dismissed on contest against the O.Ps.

            No cost is imposed upon any of the parties.