New India Assurance Co. Ltd. vs S.G. RAJENDRAN

THE complainant is the owner of a Matador van bearing No. PY-01-1011 which was insured with the 1st opposite party on 21.9.1993. THE complainant has paid a sum of Rs. 3,422/- towards premium on the said insurance. On 14.7.1994 one Chellappan of Perundurai, with the intention of buying the vehicle, made an advance of Rs. 5,000/-, took the vehicle and drove the same to Perundurai where on the way it met with an accident. THE accident was reported to the opposite parties and a claim was made. THE Surveyor wrote a letter on 26.11.1994 to Guru Auto Garage, Erode, to inform him after dismantling the damaged part for assessing the liability. THE complainant was also required to produce necessary documents. THE complainant was unable to send the documents immediately. THE complainant has informed by letter dated 1.9.1995 to the 1st opposite party of the delay and told them that he sold the vehicle to one Chellappan. In the meanwhile, Chellappan who intended to purchase the vehicle, refused to purchase the vehicle and returned back the advance paid. No transfer of vehicle had taken place. While so, the 1st opposite party informed the complainant that the claim has been closed as no claim as per letter dated 27.3.1995 and the complainant has no interest in the vehicle at the time of accident. Thus, there is deficiency in service on the part of the opposite parties. THE claimant is a proper insurance holder who is entitled to make claim and recover the claim amount. Hence, the complaint.

THE 2nd opposite party filed a version pleading as follows: THEre is no deficiency in service at all. THE complainant has not mentioned the date of accident anywhere in the claim. It is stated by the complainant that on 14.7.1994 one Chellappan took the vehicle after paying an advance of Rs. 5,000/- and the vehicle met with an accident. It is the duty of the complainant to send a claim form to the Insurance Company. After sale, the transaction comes to an end regarding movables once the vehicle is handed over. THE change in the registry is only a subsequent act. THErefore, there is no duty cast upon the opposite parties to indemnify the complainant. THE complainant sent a claim form on 18.11.1994 to the company informing about the accident. THE date of accident was stated as 14.7.1994. It was not immediately reported to the Insurance Company. It is also not stated when the complainant came to know of the accident. THEre is considerable delay on the part of the complainant and the complainant and Chellappan have conspired together to get benefit from the policy. Both the complainant and the purchaser of the vehicle Chellappan took time and made it look such a way that the said Chellappan did not want to purchase the vehicle. It is only an after-thought to get the money from the opposite party Insurance Company. On receiving the claim form dated 18.11.1994, the Company deputed a Surveyor to inspect the vehicle. THEy also requested the complainant to send all the documents. But, they were not sent. It is only on 1.9.1995 by his letter, the complainant informed the 1st opposite party that he sold the vehicle to Chellappan. He has in that letter requested the purchaser Chellappan to informed the Erode Branch. THE allegation that the advance amount was returned to the complainant is false. THE vehicle was with the transferee namely Chellappan sufficiently for a long time. In such circumstances, no body would return the advance or accept the return of the advance. THE Motor Vehicle Inspector, Karaikkal had issued no objection certificate for transfer of the ownership with effect from 22.10.1994. It is only at the instance of the complainant, Chellappan had agreed to repair the van. Chellappan has also signed the sale deed and form of transferee of insurance. One Murthi of Thirumurugan Auto Finance has financed for the repair of the vehicle on receipt of the original R.C. of the vehicle. THErefore, all these facts will go to show that the real reason behind the delay in reporting the matter to the opposite parties. THE repudiation of the claim was, therefore, proper. THE claimant had no interest of the vehicle at the time of accident. THE claim is speculative. THErefore, the opposite parties pray that the complaint be dismissed with costs. The District Forum accepted the claim in part and directed the opposite parties to pay a sum of Rs. 55,450/- with interest @ 12% p.a. from 18.1.1995 till date of payment together with cost of Rs. 1,000/-. Hence, this appeal by the Insurance Company.

A perusal of the pleadings and the documents would go to show that this is but a clever attempt on the part of the complainant to make unlawful gain. In the complaint, it is not stated specifically that the complainant sold the vehicle to Chellappan. On the other hand, it is adroitly adverted to in the complaint in paragraph 5 that on 14.7.1994 one Chellappan of Perundurai with the intention of buying the aforesaid vehicle paid an advance of Rs. 5,000/- and drove the same to Perundurai and unfortunately the said vehicle on its way met with an accident on the same day at Kolipalayam near Perundurai. It is really strange that the complainant should part with his vehicle and allow a third party to drive away his vehicle just on payment of Rs. 5,000/- as advance. Such a thing is unknown and is opposed to all canons of normal conduct and practice. No one in his right senses would allow another person to drive his vehicle costing more than a lakh of rupees just on receiving Rs. 5,000/- as advance. The sale of motor vehicle being a sale of a movable property, the sale is complete as soon as delivery is effected and normally only after receiving the entire consideration the delivery would be effected and rightly it has been effected in this case only after payment of the entire consideration. Therefore, the vague allegations made in para 5 cannot at all be considered as allegations containing even a fleck of truth. There is one other aspect to be noted. Assuming that Chellappan was the intending purchaser and had not purchased the vehicle but has made only an advance of Rs. 5,000/- admittedly, it is he who took the possession of the vehicle from the complainant and drove it to Perundurai and on the way it met with the accident. If it is so, whether a owner of the vehicle would simply accept to return the advance after an intending purchase takes the vehicle and involves it in an accident. Unless, he is a fool, no owner would accept to refund the advance and accept to bear the charges for the repair of the vehicle. The intending purchaser cannot refuse the purchase of the vehicle because it is he who has caused the accident and to say that the intending seller in spite of it accepted to refund the advance is but a blatant lie. Assuming that the accident had taken place on 14.7.1994 and assuming that the intending purchaser took back the advance why it is that neither the intending purchaser nor the intending seller has not reported to the opposite parties immediately but could make a claim only belatedly.

THE opposite parties has sent a letter on 15.3.1995 requesting the complainant to submit certain documents. THEy had again written to say on 27.3.1995 that despite their letters dated 20.2.1995 and 15.3.1995 certain requirements have not been complied with. To these letters, it is only in September, 1995, the complainant makes a response. In this, he has stated that the Matador van was involved in an accident on 14.7.1994 and that because of the inevitable circumstances in family, he cannot arrange in connection with the repair work of the van. Further, he has clearly stated there that he has sold the vehicle to Chellappan residing at Perundurai and had requested the opposite party to take necessary steps to get claim at an earliest date. Here, in this letter, he had not stated anything about the payment of Rs. 5,000/- on 14.7.1994 by Chellappan or the vehicle being involved in accident while Chellappan took it to Perundurai on that day namely on the date of payment of advance and that Chellappan insisted upon the return of the advance and that he repaid the same. On the other hand, he has categorically stated that he has sold the vehicle to Chellappan. Only in his letter dated 22.2.1996 he has stated for the first time that Chellappan paid an advance of Rs. 5,000/- and when he took the vehicle on 14.7.1994, it met with an accident and that he has said that he would take the vehicle only if it is repaired. Such a case has not been set out in the early letter dated 1.9.1995 where nothing is mentioned about all these. But, on the other hand, it has been emphatically stated that the vehicle was sold to Chellappan. To think of an owner of a vehicle allowing the other to drive away his vehicle merely on payment of Rs. 5,000/- as advance is itself unnatural. For that person who got the vehicle involved in the accident to say that he will take back the vehicle only if repairs are done by the intending seller is but an insult to the owner. Further, in this letter he has also stated that though the accident took place when Chellappan took the vehicle, Chellappan handed over the vehicle to him for the purpose of effecting repairs at his request. Thus, impossible stories are woven. THE opposite parties have informed the complainant by their letter dated 25.4.1996 that the claim has been closed as no claim vide their letter dated 27.3.1995 due to non-submission of required claim papers. Further, they have stated that the complainant had no insurable interest of the vehicle at the time of the accident. THE complainant says that he is an illiterate man. But, he sends letters to the opposite parties both in English and Tamil. THE signature does not look as though it is that of an illiterate person. THE opposite parties have definitely stated that the complainant had no insurable interest on the date of the complaint. THEre is a letter addressed by the complainant on 14.2.1996 to the opposite parties where he has stated that one Chellappan of Perundurai was interested in purchasing the vehicle and that an agreement was made but unfortunately before carrying out the deal, the vehicle was met with an accident and as a result, and that Chellappan was not interested to take the vehicle and the agreement was cancelled. Here, there is no mention is made of payment of Rs. 5,000/- as advance by Chellappan. It is not stated that while Chellappan took the vehicle, the accident took place nor there is any mention about Chellappan insisting upon the refund of advance or about his agreeing to bear the expenses of the repair. It is also mentioned that an agreement was made. But the agreement is not produced. In his earliest letter he has stated that it is Chellappan who out of friendship accepted to carry out the repairs. But, curiously enough we find that the bills do not stand in the name of Chellappan but in the name of the complainant. THE complainant has also signed the transfer of ownership and the necessary forms also. THErefore, in such circumstances, it is impossible to accept the contention that on the date of the accident, the complainant had any insurable interest in the property. Here, in this case, the claim was closed because there was no claim. THE documents sought for by the opposite parties, were not produced in spite of sufficient opportunities. From the records, it is clear that the complainant has sold the vehicle and also executed the necessary forms for effecting transfer. If transfer had not taken place in the books maintained by the Transport Department, it is the fault of the Insurance Company. It being only a clerical work, the non effecting of the transfer of names will not in any manner clothe the complainant with any right. Thus, there is a complete termination of insurable interest in this case. THE insured had lost possession, has received the amount and has signed the necessary forms. THErefore, as held by the National Commission, in 1996 CCJ 191, the repudiation of the claim by the Insurance Company is quite in order as there has been total termination of interest of the complainant in the vehicle and the complainant ceased to have any interest in the property either on the date of accident or before accident or immediately thereafter. Therefore, the order passed by the District Forum suffers from factual as well as legal errors. When there is a termination of insurable interest in the vehicle, merely because the insurance policy has not been transferred to Chellappan and no application was given to the Insurance Company by Chellappan for transfer of policy, it cannot be held that the policy still subsist and will have force. In fact, the complainant himself has written to the Insurance Company stating that in his letter dated 1.9.1995 stating that he has sold the vehicle to Chellappan and has requested the opposite parties to intimate the same to the Erode Branch. Further, the policy cannot be transferred here. It is the contract entered between the complainant and the Insurance Company and the moment the subject matter of the contract is involved in accident, the contract so entered into between the parties would, therefore, come to an end. If at all the buyer wants the insurance cover for the vehicle transferred to him, it is for him to apply for the insurance fresh cover thereafter and the question of tranferring of the policy will not arise. There is no such provision for transferring the policy and in these circumstances it is not a contract which can be assigned. Therefore, the logic behind the order passed by the lower Forum cannot be comprehended. The complainant has signed the letter on 1.9.1995 and delivery receipt and the forms under Rules 29 and 30 of Motor Vehicle Rules signalling the sale and transfer of the vehicle to Chellappan. Therefore, in spite of it to say that the complainant still continues to hold some insurable interest will be doing violence to the very object and purpose of insurance. Hence, the reasons given by the lower Forum cannot be appreciated at all. It overlooks the fundamental provisions of law especially relating to insurance and the factual position prevailing in this case. Therefore, the complaint deserves to be dismissed. Hence, we hold that the order of the lower Forum cannot be sustained and deserves to be set aside.

IN the result, the appeal is allowed with cost of Rs. 250/-. The order of the District Forum will stand set aside. The complaint is dismissed with cost of Rs. 250/-. Time for compliance : Two months. Appeal allowed.