C B RAMACHANDRA REDDY vs Kamala Devi

COMPLAINANT No. 1, Subhash Chand Kataria, was the owner of the tempo, which was insured with the petitioner w. e. f. 11. 1. 2001 to 10. 1. 2002. On 8. 1. 2001, the vehicle met with an accident. As the vehicle was damaged, the complainant claimed that he spent Rs. 1,50,000 on its repairs. On receipt of information, the revision petitioner-Insurance Company deputed a Surveyor who assessed the loss at Rs. 58,669. The Insurance Company repudiated the claim inter alia on the ground that there was no contract between complainant 2 and the petitioner and there was clear violation of the policy condition as two unauthorised persons were travelling in the vehicle though the vehicle was a goods carrier.

THE District Forum allowed the complaint and awarded a sum of Rs. 58,669 in favour of the complainant No. 1 along with interest @ 9 per cent p. a. from 12. 6. 2003 with Rs. 2,000 as costs. Dissatisfied by the order of the District Forum, the Insurance Company filed an appeal before the State Commission which enhanced the cost from Rs. 2,000 to Rs. 20,000 while dismissing the appeal. Aggrieved by the dismissal of the order the petitioner has filed this revision petition. Learned Counsel for the petitioner-Insurance Company submits that passengers are not allowed to travel in a goods vehicle and the insurance policy has also to be transferred to the buyer within 14 days of the date of purchase as per the India Motor Tariff Regulations. In this case, there is no request for transfer of the insurance policy to the name of the buyer. As such, Mohinder Singh did not have any insurable interest.

In this case it is clear from the records that the vehicle was insured by complainant No. 1 and accident took place during the currency of the insurance policy. Secondly, two passengers were travelling in the tempo which was a goods vehicle. The first issue raised by the learned Counsel for the petitioner is that as the vehicle had been sold by complainant No. 1 to complainant No. 2, complainant No. 2 has no insurable interest. Complainant No. 1 cannot claim any benefit as he has sold the vehicle to complainant No. 2. If this argument has to be accepted, during the transition period neither the seller nor the buyer can claim insurance amount and the Insurance Company can be enriched.

AS the circular issued in the year 1994 by the General Insurance Company is relevant to the case, the extract is reproduced below: "transfers: on transfer of a vehicle, the benefits under the policy in force will automatically accrue to the new owner. The bonus/malus already applicable for the policy would continue until expiry of the policy. On expiry or cancellation of the policy, bonus/malus will apply as per the new owner's entitlement. If the transferee wants to change the policy in his name, it may be done on getting evidence of sale and a proposal form duly completed. The old certificate of insurance must be surrendered to the Insurance Company and a new certificate of insurance can be issued by collecting a fee of Rs. 15. If the old certificate is not surrendered, a declaration is to be taken from the new owner before issuing a new certificate. " In this connection, the National Commission has observed in Revision Petition No. 566 of 2002, Shri Narayan Singh v. New India Assurance Company Ltd. in its judgment and order of 22. 5. 2007, as under: "it appears that in a number of cases Insurance Companies are suppressing this regulation and take undue advantage and contend with all force that as the Insurance Policy was not transferred in favour of the new purchaser, Insurance Companies are not liable to reimburse the insurers or the transferees of the vehicle because the transferees were not having any insurable interest. "

IN fact, in the aforesaid case, the National Commission imposed Rs. 1 lakh as punitive costs under Section 14 (1) (d) of the Consumer Protection Act, 1986 on the Insurance Company for taking an unjustified stand in not disclosing the India Motor Tariff Regulations which were applicable and the amount was ordered to be credited to the Consumer Legal Aid Account. The second issue is whether on account of two additional persons travelling in the tempo at the time of accident, the Insurance Company can repudiate the claim of the insured. The Hon'ble Apex Court in B. V. Nagaraju v. Oriental Insurance Company Ltd. , II (1996) CPJ 28 (SC)=i (1997) ACC 123 (SC)=1996 (4) Supreme Court Cases 647, has held: "it is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. In the present case the driver of the vehicle was not responsible for the accident. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the owner, cannot be said to be such a fundamental breach that the owner should, in all event, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to the causing of the accident. The exclusion term of the insurance policy must be read down so as to serve the main purpose of the policy that is to indemnify the damage caused to the vehicle. "

It is not the case of the Insurance Company that the two persons travelling by this tempo had any nexus with the cause of the accident. Accordingly, we do not find any merit in this revision petition.

FURTHER, this appeal has also been filed by the Insurance Company with delay of 63 days. We have gone through the application for condonation of delay. On receipt of the impugned order on 24. 8. 2007, the case was processed for necessary action at various levels of the regional office and with the opinion of the Advocate it was recommended to the head office at Calcutta on 6. 10. 2007 to file a revision petition. The head office concurred with the regional office in the month of December 2007 (no specific date is given) and the revision petition was filed on 24. 1. 2008. Datewise details regarding the processing of the case is not given to ascertain whether the delay was reasonable. The reasons given for condonation of delay are not convincing.

HENCE, on both grounds the revision petition is dismissed. The petitioner --Insurance Company shall pay Rs. 10,000 as cost to the respondent. Revision Petition dismissed.