National Insurance Company And Another vs Daleep Bamba

Rajnesh Oswal, J

The present petition has been filed for setting aside the judgment passed by the Divisional Consumer Forum, Jammu tilted, “Daleep Bamba vs National Insurance Company and another” dated 22.05.2006 (hereinafter to be referred as the Forum) as also for setting aside the judgment passed by Jammu and Kashmir State Consumer Disputes Redressal Commission, Jammu in appeal, titled, “National Insurance Company and another vs Daleep Bamba” dated 31.03.2009 (hereinafter to be referred as the Commission).

The petitioners have assailed both the orders on the ground inter alia that there was no privity of contract under which the respondent herein can seek indemnification. Further, the fiction of section 157 of Motor Vehicles Act dealing with deemed transfer of policy of insurance, is available only in third-party cases to the owner of the vehicle and the provision does not apply when the owner seeks the indemnification under own damage claim.

As per GR 17, the transferee is not only required to make a request for transfer of policy in his name within the stipulated period but also has to pay the requisite fee but in the instant case the respondent did not bring on record the receipt of Rs. 50/- and also no material was placed before the Forum and Commission which would reflect that the respondent herein had applied for transfer of the certificate of insurance and deposited the required fee of Rs. 50/-.

The respondent has filed objections to the present petition thereby stating that the previous owner Sh. Ashok Kumar Puri had approached both RTO as well as the petitioner-Insurance Company for transfer of policy and necessary form was also filled up by the said Ashok Kumar Puri but since the said form was lying in the office of the petitioner-company and no receipt of the same was issued, therefore the petitioner company has chosen to hide these facts in the present writ petition.

Mr. Sunil Malhotra, learned counsel for the petitioners argued that neither the respondent nor the previous owner approached the petitioners for transfer of certificate of insurance and this is substantiated by the fact that nothing was placed on record by the respondent to demonstrate that any such request was made to the petitioners, as such both the Forum and Commission have fallen in grave error of law by allowing the complaint of the respondent and dismissing the appeal of the petitioners respectively.

Per contra, Mr. R. S. Jamwal, learned counsel for the respondent argued that the petitioner-Insurance Company was duly informed about the purchase of the vehicle and transfer of insurance policy, as is evident from the statement of the witness of the respondent namely Lekh Raj. He further submitted that once the vehicle was transferred in the name of respondent on 23.10.2002, then how the petitioners can justify the issuance of insurance policy in favour of erstwhile owner w.e.f. 23.10.2002 to 22.10.2003.

Heard and perused the record.

The brief facts necessary for disposal of present writ petition are that the respondent in his complaint before the Forum stated that the vehicle bearing No. JK02D-8971 was originally owned by one Ashok Kumar Puri and respondent had purchased the same from him on 23.10.2002. The said vehicle met with an accident near Udhampur on 12.12.2002 resulting into the loss of life and injuries to few persons and also the vehicle was damaged. FIR No. 339 of 2002 for commission of offences under sections 279, 337 and 304-A RPC was registered. The respondent lodged the claim with the petitioner-insurance company for the damage suffered by the vehicle. The petitioner-company also deputed surveyor for assessment of loss, who assessed the loss as Rs. 54,550/-. The petitioner-company, however, repudiated the claim stating that the respondent had no insurable interest with the vehicle vide communication dated 23.09.2003. The respondent as such, filed the complaint before the Forum on the ground that he had purchased the vehicle in question from one Ashok Kumar Puri and immediately after the sale, the Road Transport Office (RTO) and the petitioner-company was informed about the sale and original owner also applied for transfer of the policy by filling the necessary form which was provided by the petitioners. Thereafter, the respondent was told that the policy stood transferred in his name. The respondent also stated that the RTO transferred the vehicle on 23.10.2002 but the petitioners rejected the claim of the respondent on flimsy grounds without checking their records.

The respondent placed on record the copy of the Registration Certificate as also the certificate of the Insurance Policy issued by the petitioner-company along with copy of the FIR.

The petitioner-company filed the reply and the plea was taken that there is no privity of contract between the parties and it was stated that the vehicle was insured with the petitioners w.e.f. 23.10.2002 at 02:11 PM to midnight of 22.10.2003 in the name of Ashok Kumar Puri. It was also stated that the petitioner-insurance company was never informed about the sale of the vehicle which otherwise the transferee is under legal obligation to inform the insurer within a period of 14 days from the date of transfer with the details of the registration of the vehicle, the date of transfer of the vehicle so that the insurer may make the necessary changes in its record and issue fresh certificate of insurance. The loss assessed by the surveyor has been admitted by the petitioners. It was also stated that the respondent neither furnished the transfer certificate issued by the registering authority nor the fee was deposited by the transferee as such, at no point of time, the company was informed regarding the transfer.

The respondent submitted his affidavit as his own witness and affidavit of one Lekh Raj. The petitioners submitted affidavit of Mr. K. C. Sharma, Bank Manager, NIC. The learned Forum vide order dated 22.05.2006 allowed the complaint of the respondent and directed the petitioners to make payment of Rs. 54,550/- @ 6% per annum from three months after the date of accident. Rs. 2000/- were awarded as litigation expenses. Further it was also ordered that if the amount is not deposited within the period of two months, then interest @9% per annum shall be payable.

Aggrieved of the order dated 22.05.2006 passed by the Forum, the petitioners preferred an appeal before the Commission and the Commission vide order dated 31.03.2009 dismissed the said appeal. While dismissing the appeal, the Commission did not agree with the reasons furnished by the Forum while passing the order dated 22.05.2006. However, the Commission dismissed the appeal thereby holding that there was substantial compliance of section 157 of the Motor Vehicles Act by placing reliance upon the statement of witness of the respondent namely, Lekh Raj.

The contention of the petitioners is that there was no privity of contract between the petitioners and the respondent and further that neither the respondent nor erstwhile owner informed the petitioners about the sale of the vehicle. We have carefully gone through the records of the complaint and have also perused the certificate of insurance issued in the name of erstwhile owner i.e. Mr. Ashok Kumar Puri. The petitioners have rejected the claim of the respondent on the ground that the respondent had no insurable interest and there was no privity of contract between the petitioners and the respondent. We find that the certificate of insurance was issued in the name of Mr. Ashok Kumar Puri with regard to the vehicle in question and the period of insurance was from 14:11 hrs 23.10.2002 to 22.10.2003 as is evident from the certificate of insurance. It is admitted fact that registration certificate of the vehicle in question was transferred in the name of respondent on 23.10.2002. From the schedule of premium, it also transpires that sum of Rs. 10,155/- was charged as premium for OD and TP. The policy has been issued on 08.11.2002 at Jammu as is evident from the endorsement and the same is reproduced as under: “in witness where of this policy has been signed at Jammu on this 8th of November, 2002. Warranted that in case of dishonour of the premium cheque this document stands automatically cancelled “AB-INITIO”.

The petitioner-Insurance Company has not produced any record before the Forum regarding the issuance of the policy more particularly when on 23.10.2002, the vehicle stood transferred in the name of the respondent. Though in the policy, the receipt number and date as 23.10.2002, have been mentioned but issuance of policy on 08.11.2002 in the name of erstwhile owner, who was not the owner at the time of issuance of policy remains a mystery. It assumes significance particularly in view of the fact, that no cover note number has been mentioned in the policy. Thus, from the record it is evident that when the policy was issued on 08.11.2002, the vehicle was owned by the respondent and it appears that the petitioner company issued the policy of insurance on 08.11.2002 without examining the registration certificate of the vehicle. The respondent has been in litigation for a sum of Rs. 54,550/- for a period of nearly 20 years. The petitioner company should have produced the record before the Forum or the Commission, more particularly when it was so serious in contesting the claim but the same was never produced. Even before this Court, no record was produced by petitioners. In the policy, Mr. Sudhir Gupta has been mentioned as an agent and Mr. L. S. Sambyal has been mentioned as Development Officer and they also have not been examined as witnesses by the petitioners. At least the official who had issued the policy was required to be examined as witness to demonstrate the circumstances where in the policy was issued in favour of the erstwhile owner on 08.11.2002 when he was not the registered owner as per the registration certificate. In fact, there was no insurable interest in erstwhile owner when the policy was issued. Though it is necessary for the transferee to intimate the insurer regarding the change of ownership for transfer of the vehicle purchased by him within the period of 14 days from the date of transfer but in the instant case the policy was issued in the name of person who was not the owner at the relevant point of time as per the registration certificate issued by the Motor Vehicles Department and the petitioners have not been able to justify the same. The petitioners were under obligation to satisfy the “Own Damage” claim of the respondent.

In view of what has been said and discussed above, this Court is of the considered view that the petitioners have no case on merits and the writ petition filed by the petitioners deserves to be dismissed.

Dismissed without costs.