NEW INDIA ASSURANCE CO LIMITED vs RAKESH KUMAR

THIS is an appeal against the order of District Consumer Disputes Redressal Forum -II, U.T., Chandigarh (for short hereinafter to be referred as District Forum) dated 14.1.2005 in Complaint Case No. 212 of 2004 and R.B.T. No. 690 of 2004, Rakesh Kumar v. The New India Assurance Co. Ltd.

BRIEFLY the case of the complainant is that he had purchased a Hero Honda Splendor motor cycle No. CH -03 -E -0304, Chasis No. 01D2OF -11393, Engine No. 01D18E29333, Model 2001 from Shri Sukhraj Singh. The previous owner i.e., Sh. Sukhraj Singh had got this motor cycle insured vide policy No. 350306310212088 and the risk period covered was from 10.3.2003 to 9.3.2004. The complainant got the motor cycle transferred in his name and the registration certificate indicating the same is at Annexure C -5 of the complaint. It is averred by the complainant that vide his letter dated 21.3.2003 sent under Certificate of Posting, he informed the OP that the vehicle has been transferred to his name and, therefore, the insurance policy too, should also be transferred to his name. Since his letter elicited no response, he again sent another letter dated 14.5.2003 requesting the OP to transfer the insurance policy to his name. This letter was also sent under Certificate of Posting. However, no action was taken even on this letter. In the meanwhile, the motor cycle was stolen from free parking place near Neelam Cinema, Sector 17, Chandigarh on 31.12.2003 at about 8.03 p.m. The Complainant lodged F.I.R with the Police Station, Sector 17, Chandigarh and he also informed the OP about the theft of the motor cycle. He requested the OP that the insurance claim be paid to him. The OP vide their letter dated 27.2.2004 directed the complainant to produce the document by which the insurance policy has been transferred to his name. The complainant vide his letter dated 12.3.2004 sent under registered cover A.D informed the OP that he had made the request for transfer of the policy vide his letter dated 21.3.2003 and 14.5.2003 but the OP had not sent any response to the same. The OP vide letter dated 25.3.2004 expressed their inability to entertain the claim stating that they had no knowledge of the letters, requesting transfer, sent by the complainant to the OP. The complainant avers that the OP has failed to transfer the insurance policy of the motor cycle in his name and repudiated his legal claim. He, therefore, served a legal notice dated 19.4.2004 on the OP but the OP vide their letter dated 13.5.2004 repudiated his claim. Stating the repudiation to be a deficiency in service, this consumer complaint has been filed by the complainant seeking the following relief from the OP: (i) Sum insured Rs. 32,640.00 (ii) Mental Harassment Rs. 5,000.00 (iii) Cost of litigation Rs. 5,500.00 Rs. 43,140.00

The OP in its written statement has stated that the complainant is not a consumer qua the OP and the insurance policy in question had been taken out by the previous owner Shri Sukhraj Singh. The OP has denied receipt of letter of the complainant dated 21.3.2003 and 14.5.2003. The OP claimed that these letters are fabricated documents. Further the OP stated that since the complainant has not paid the transfer fee of Rs. 50 to the OP, the transfer of the insurance policy could not be done in the name of the complainant. It has also been pleaded that even the previous owner had not informed the OP about the sale of the motor cycle in question to the complainant, Reiterating that the claim was rightly repudiated, the OP prayed for dismissal of the complaint.

THE learned District Forum in their analysis of the case observed that this transaction of sale of motor cycle had been effected in the year 2003 and is squarely covered under the Insurance Regulatory and Development Authority (Protection of Policyholders Interest) Regulations, 2002 published in the Government of India Gazette Notification No. F. No. IRDA/Regu/4/2002 dated 26.4.2002. It also cited the authority reported as (M.P. State Commission), Mubeen Khan v. United India Insurance Co. Ltd., wherein extensive reference was made to the General Regulations issued under Section 64UP of the Insurance Act, 1938 by the Tariff Advisory Committee and circular issued for automatic transfer of insurance policy to the new owner/purchaser of the second -hand vehicle (GR -10 of the Indian Motor Tariff). GR -10 has been reproduced in the impugned order as under: ''On transfer of a vehicle the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. If the transferee is not entitled to the benefits of the bonus or subjected to Malus already shown on the policy, the recovery of the difference between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy. However, on the expiry and/or termination of the existing policy, the transferee will be eligible for bonus or subjected to Malus as per his own entitlement. If the transferee wants to change the policy in his interest it may be done on getting acceptable evidence of sale and afresh proposal form duly filled signed. If a new certificate or insurance in the transferees name is required his old certificate of insurance must be surrendered and a fee of Rs. 15 must be collected. If the old certificate of insurance is not surrendered, a proper declaration must be taken from the transferee before a new certificate of insurance is issued.''

THE learned District Forum also observed that no authority taking a contrary view was cited by the learned Counsel for the OP and, therefore, it followed the General Regulation 10, referred to above and the ratio of Mubeen Khans case (supra) and held that the OP was not legally justified in repudiating the claim of the complainant and the OP has committed deficiency in service. The learned District Forum further observed that this case stands on a much better footing than the case of Mubeen Khan (supra) because in this case, the complainant vide his letter dated 23.3.2003 and 14.5.2003 informed the OP that he had purchased the motor cycle in question and it also informed that the registration certificate has been registered to his name and it further requested the OP to transfer the insurance policy in his name as well. The learned District Forum held that there is no prima facie evidence or reasons to doubt the genuineness of these letters referred to above and held that the OP did not acknowledge these letters and furthermore, did not even advise the complainant about the alleged mode of trnasfer about the insurance policy in his name and clarified to him whether any formalities were required to be fulfilled by him for the said purpose and, therefore, the deficiency in service on the part of OP was patent. The learned District Forum also held that the complainant as a transferee and beneficiary from the original owner under the Regulations, referred to above, was a consumer qua the OP as per definition of consumer stated at Section 2(1)(d) of the Consumer Protection Act, 1986 since he was a beneficiary of the insurance policy being the new owner of the motor cycle. The learned District Forum while quantifying compensation for the deficiency in service and the risk covered under the insurance policy, took into account that the theft had taken place nearly 9 months and 20 days after the inception of the insurance policy. It, therefore, applied a depreciation of 10% to the value of the motor cycle. This depreciation came to Rs. 3,264. Deducting this amount from the risk covered under the insurance policy of Rs. 32,640, the learned District Forum directed the OP to indemnify the Complainant to the extent of Rs. 29,376 with interest @ 6% per annum from the two months after the date when the complainant lodged his insurance claim with the OP till payment. The OP was also directed to pay Rs. 1,000 as costs of litigation.

AGGRIEVED by this order of the learned District Forum, the OP has filed this appeal. The appeal was taken on board and record of complaint case was summoned from the learned District Forum. Notice of appeal was served on the respondent. Mr. Suman Jain, Advocate appeared on behalf of the appellant whereas Mr. H.S. Thiara, Advocate represented the respondent/complainant.

THE main plank of argument of Mr. Suman Jain, Advocate was that the claim had been rightly repudiated as the automatic transfer of the insurance policy, earlier allowed vide GR -10, had been changed vide GR -17. He reiterated that automatic transfer of the policy is only applicable to third party claims and not to own damage claims. He further submitted that this change in the creation of statute is not required to be placed before the learned District Forum. Mr. H.S. Thiara, learned Counsel for the respondent submitted that the order was fair, just and legal and the respondent was on better footing than in the case of Mubeen Khan (supra) because the respondent had written two letters to the OP regarding the transfer of ownership and had requested for transfer of the insurance policy. It was also submitted that after the written statement filed by the appellant, the respondent had immediately deposited Rs. 50 with the OP for effecting the transfer of the insurance policy.

WE have heard the parties and have also gone through the record on file as well as the impugned order.

IT is settled law that being the beneficiary of the insurance policy taken by the previous owner, the respondent/complainant is a consumer qua the OP/appellant and any objection by the OP in this regard has no legal standing. It is also clear that as per GR -10, the automatic transfer of the insurance policy takes place. In this regard, reference may be made to the case of Veeresh v. Siraj Ahmed and Others, 2005 (3) RCR (Civil) 76, wherein the Honble Karnataka High Court has held, inter alia, that ''....when ownership of a motor vehicle is transferred, the certificate of insurance and policy of insurance shall be deemed to have been transferred to the transferee from the date of transfer of ownership of vehicle.'' Also in another case of United India Insurance Co. Ltd. v. Sharanjit Kaur and Others, I (2005) ACC 460=2005 (1) RCR (Civil) 481, the Honble Punjab and Haryana High Court has held that when a vehicle is transferred by the owner, the policy will also be deemed to be transferred as it is the vehicle which is insured and not the owner. It was further held that failure on the part of transferee to intimate the Insurance Company with regard to the transfer within the prescribed period of 14 days, will not exonerate the Insurance Company from its liability. From the record, it is apparent that the complainant had written two letters to the OP dated 23.3.2003 and 14.5.2003 requesting the OP to transfer the insurance policy in his name. The OP/appellant has not produced any cogent evidence to prove that these letters were fabricated documents. We are one with the view of the learned District Forum that the genuineness of these documents cannot be doubted. It is also relevant to point out that at no stage of arguments before the learned District Forum, GR -17 was produced or referred to. This has also not been referred to in the letter of repudiation. It, therefore, cannot now lie in the mouth of the appellant/OP that GR -17 overrules GR -10 and that the claim has been rightly repudiated. In fact, the appellant/OP has committed deficiency in service by not responding to the two letters of the complainant/respondent regarding request for transfer of the insurance policy. It was the duty of the Insurance Company to ensure that based on these letters, the complainant was rightly guided about the procedure to be adopted by him for the transfer of the insurance policy.

IN view of the foregoing discussion, repudiation of the claim of the complainant by the appellant/respondent is also a deficiency in service for which the respondent/complainant needs to be compensated. The learned District Forum has also rightly taken into account the time period, which elapsed between the inception of the policy and the loss of the vehicle and has applied 10% of the insured amount as depreciation. Based on the above discussion, we are of the considered view that the impugned judgment of the learned District Forum is legal, fair and just and it does not need any interference. Consequently, the appeal is dismissed being without any merit. The impugned order is upheld. Copies of this order be sent to the parties free of charge. Appeal dismissed.