National Insurance Co. Ltd vs Manish Ashokrao Kadu

This revision petition has been filed by the petitioner National Insurance Co. Ltd. against the order dated 20.04.2016 of the State Consumer Disputes Redressal Commission, Maharashtra, (in short 'the State Commission') passed in FA No.A/05/557.

Brief facts of the case are that on 05.03.2003, Ms. Smt. Uma Devi Dhira Thakur allegedly sold the vehicle Tata Sumo bearing No.MH-32/A-234 to Mr. Manish Ashokrao Kadu i.e. the respondent. On 07.03.2003, the respondent took a private car policy No.27050/31/02/6105360 for the period from 06.03.2003 to 05.03.2004 for the vehicle. On 08.06.2003, an accident took place near Pride Hotel, at Sonegaon, where the said TATA Sumo motor vehicle was dashed by one TATA Indica Car, having registration No.MH-31/AB-5928 from the front. On 22.09.2003, the vehicle was registered in the name of the respondent. Thereafter a claim was made with the petitioner On 15.10.2003, the respondent sent a legal notice to the petitioner for expenses incurred by him in repair of the damaged vehicle. The petitioner had rejected/repudiated the claim of the respondent as he did not have insurable interest in the vehicle at the time of accident.

In the year 2004, the respondent filed a consumer complaint under the Consumer Protection Act, 1986 against the petitioner before the District Forum. On 02.02.2005, the District Forum dismissed the Complaint of the respondent and held that at the time of accident i.e. 08.03.2003 the respondent was not the registered owner of the vehicle and hence does not have the insurable interest in the vehicle. Further, held that the opposite party i.e. the petitioner herein was absolutely justified in repudiating the claim of the complainant and as such there was no deficiency in service on the part of the opposite party. Respondent then filed an appeal against the order of the District Forum. The State Commission allowed the appeal filed by the respondent and set aside the order dated 02.02.2005 passed by the District Forum. The State Commission further held that the policy was given to the appellant/respondent by the Insurance Company and giving the policy without registration of the vehicle in the name of the appellant itself was a deficiency in service.

Heard the learned counsel for the petitioner as well as respondent in person. It was argued by the learned counsel for the petitioner that at the time of accident, the respondent did not have any insurable interest as his name was not recorded in the registration certificate. The State Commission has wrongly accepted the Insurance claim of the respondent and has directed the petitioner Insurance Company to pay the same. Learned counsel further stated that the total amount spent by the respondent in repairs i.e. Rs.90,360/- has been allowed by the State Commission without verifying the veracity of the bills of such repairs. The State Commission has accepted that the respondent does not have any insurable interest, even then the expenditure of repairs has been allowed as compensation to the respondent. Learned counsel further mentioned that the insurance is based on mutual trust and in this case the insured was not the registered owner and he misrepresented the facts while obtaining the policy. Thus, no claim of repairs under the present policy can be allowed.

On the other hand, the respondent in person stated that the Insurance Company had issued the policy in the name of the respondent as the respondent had already purchased the vehicle from the third party. It was for the Insurance Company to see and verify all the records relevant for the insurance of the vehicle. If the Insurance Company has failed in its duty to check the registration certificate at that time and issued the policy to the respondent, it means that they had waived off condition of registration certificate. Therefore, at a later stage, Insurance Company cannot repudiate the claim on that basis. The respondent had submitted all the bills of repairs before the State Commission. The State Commission has rightly allowed the payment of repair charges as compensation to the respondent.

I have given a thoughtful consideration to the arguments of both the sides and have examined the material on record. There is no denying the fact that the policy was issued in the name of respondent/complainant without verifying whether the respondent/complainant was registered owner of the vehicle or not. Clearly in this regard, the Insurance Company was at fault while issuing the policy. The policy was not a valid contract right from the very beginning, but the Insurance Company itself is responsible for the same along with respondent/complainant who should have also seen that his name is entered into registration certificate if he purchases vehicle from a third party.

The State Commission has clearly observed that issuing the policy without verifying registration certificate was a deficiency on the part of the Insurance Company and therefore, the compensation equal to the repair charges have been allowed. As the policy has been issued by the Insurance Company in the name of the insured, even though wrongly, the Insurance Company cannot back out from indemnifying the claim of the respondent/complainant. However, it is obvious that the terms and conditions of the policy have clearly been violated by the respondent/complainant as well, as he misrepresented to get the policy in his name without insuring that the vehicle was registered in his name. Hon'ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd., II (2010) CPJ 9 (SC) had laid down that if there is any violation of terms and conditions of a Motor Insurance Policy, the claim may be settled on non-standard basis.

Relying on the judgment of Hon'ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd. (supra), I deem it appropriate to allow the claim only on non-standard basis. Accordingly, the Insurance Company would be liable to pay Rs.67,770/- (rupees sixty seven thousand seven hundred seventy only) [75% of Rs.90,360] to the respondent/complainant instead of Rs.90,360/- as ordered by the State Commission. The amount of Rs.67,770/- be paid to the respondent/complainant within a period of 45 days from the date of this order, failing which, the Insurance Company shall pay an interest @ 7% p.a. from the date of this order till actual payment. The revision petition No.2620 of 2016 is accordingly disposed of. Parties to bear their own costs.