New India Assurance Co. Ltd. vs Arvindbhai Mansukhlal Gohel

Binoy Kumar, Presiding Member

Aggrieved by the concurrent findings and Orders passed by the District Consumer Disputes Redressal Forum, Bhavnagar (for short, the District Forum) and the State Consumer Disputes Redressal Commission, Gujarat, Ahmedabad (for short, the State Commission), the Petitioner / Opposite Party – New India Assurance Co. Ltd. (Insurance Company) filed this present Revision Petition No. 2871 of 2014 under Section 21(b) of the Consumer Protection Act, 1986 (for short, the Act). The Complaint filed by the Complainant (Respondent herein) in District Forum was allowed with the direction that the Opposite Party should pay Rs. 1,37,164/-  against insurance cover amount with 9% interest alongwith compensation of Rs. 3,000/-.

Aggrieved by this Order dated 30.06.2011 of the District Forum, the Opposite Party filed an Appeal before the State Commission, which, vide its Order dated 10.04.2014, dismissed the same, upholding the Order of the District Forum.

As the District Forum and the State Commission have comprehensively addressed the facts of the case, which led to filing of the Complaint and passing of the Orders, I do not find it relevant to reiterate the same, when the findings of both the fora are concurrent on facts.

I have heard the learned Counsel for the Petitioner, considered his submissions and perused the record. Nobody appeared for the Respondent despite repeated directions.

The learned Counsel for the Petitioner submitted that the vehicle which was insured with the Petitioner had met with an accident on 19.04.2010, but the said vehicle had already been sold to a third party as evident in the FIR that was filed after the FIR. The registration of the vehicle was formally transferred after two days of the accident, which  is 21.04.2010. He further submitted that NOC transfer was issued by the RTO on 01.04.2009 i.e. 18 days before accident. He submitted that the Insurance Company has rightly repudiated the claim as the “purchaser of the insured vehicle has not made request in writing within 14 days for transfer of the packaged policy in his favour” and there is no privity of contract with the Insurance Company.

I have gone through the submissions and record.

The key issue in this Revision Petition is whether the Respondent Complainant had an insurable interest at the time of the accident. As observed by the State Consumer Disputes Redressal Commission, Gujarat in its Order dated 10.04.2014, the Registration Certificate at the time of the accident was with the Respondent / Complainant and was transferred only two days later. The State Commission has dismissed the Appeal filed by the Insurance Company on this very ground.

Going by the evidence produced in the FIR filed, after the accident, by Sh. Amitbhai, it is clearly stated that the vehicle was purchased by his brother-in-law Bharatbhai about 15 days back from the Complainant. Further, the NOC was granted in favour of Sh. Bharatbhai by the RTO Bhavnagar on 01.04.2009. Clearly there is a transfer of ownership of vehicle about 15 days back. As per the Order of the Hon’ble Supreme Court in Civil Appeal No. 2632/2020, Surendra Kumar Bhilawe vs. The New India Assurance Co. Ltd., dated 18.06.2020, the owner of the vehicle according to Section 2(30) of The Motor Vehicles Act, 1988 shall be “a person in whose name a motor vehicle stands registered and, where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of the hire purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement”. This vehicle was not hypothecated, so the owner of the vehicle in my opinion is the subsequent purchaser.

The NOC for transfer was obtained from the RTO on 01.04.2009. As per the India Motor Tariff GR.17 provision, the transferee shall apply within 14 days of the date of transfer in writing under the recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of the transfer of the vehicle, the previous owner of the vehicle and the number and date of insurance policy, so that the insurer may make the necessary changes in his record and issue fresh Certificate of Insurance. This has not been done. In this case, it is not the purchaser who has filed the Complaint, but it is the original owner. It would have been another matter if the purchaser would have filed the Complaint and sought relaxation of a few days for intimating the Insurance Company about the transfer. Not being so, the original owner who is the Insured clearly does not have an insurable interest when once an NOC has been issued by the Transport Authority in favour of the Insurer. Both the State Commission and the District Forum have erred in law in holding that the Complainant has an insurable interest.

In this regard, I would like to rely on the Order of this Commission in Oriental Insurance Co. Ltd. vs. M/s Kamal Tours & Travels, R.P. No. 2012 of 2007, dated 07.03.2007, wherein it has been held that if a vehicle is sold by the insuree to another person without intimation to the Insurance Company, then in case of any claim covered under the Insurance Policy, the insuree ceases to have an insurable interest.

Further making a very indirect inference from the Order of the Hon’ble Supreme Court in Surendra Kumar Bhilawe (supra), as per Sections 19 and 20 of the Sale of Goods Act, 1930, which deals with the stage at which the property in moveable goods passes to the buyer, will be of assistance to the insurer. In this case, there is no impediment to the transfer as the vehicle did not have any hypothecation at the time of accident.

In view of the aforesaid discussion, the Revision Petition is allowed and the Orders of the State Commission and the District Forum are set aside.