S.PUSHPA DEVI JAMAD vs NEW INDIA ASSURANCE CO. LTD.

THIS is a complaint under Section 17 read with Section 12 of the Consumer Protection Act.

THE Complainant is a Financier. THE 2nd Opposite Party borrowed a sum of Rs. 1,10,000/- from the Complainant for the purchase of a second- hand Ashok Leyland Lorry bearing Registration No. TSJ 8496 and entered into a Hire Purchase Agreement on 25.7.1992. By virtue of this Hire Purchase Agreement the Complainant is the owner, the 2nd Opposite Party is the hirer. A sum of Rs. 1,57,200/- is now due to the Complainant under the Hire Purchase Agreement. THE 2nd Opposite Party has taken a comprehensive policy of insurance in respect of this lorry with the 1st Opposite Party for the period from 27.7.1990 to 26.7.1991. THE policy acknowledges the Hire Purchase Agreement. As the 2nd Opposite Party was unable to pay the installment, he surrendered the vehicle to the Complainant on 23.1.1991 which was then loaded with machinery for delivery to M/s. BEML at Patna. THE vehicle proceeded at Patna and on the way it met with an accident at Palavalasa. THE goods were transported by another vehicle. On account of the non-availability of a heavy crane, the lorry could not be lifted from the scene of accident and it was lying there till 27.3.1991, during which time the analcites had set fire to the vehicle and the vehicle was heavily damaged. THE Complainant is financier preferred a claim before the 1st Opposite Party, which rejected the same. Hence this Complaint claiming a sum of Rs. 2.25 lakhs with interest at 18% and costs. The claim is resisted by the 1st Opposite Party mainly on the ground that the Complaint filed by the financier is not maintainable. The interest of the Complainant noted in the policy contemplated only payment of any amount to the Complainant as financier, which is Otherwise payable to the insured. It is also denied that the 2nd Opposite Party surrendered the vehicle to the 1st Opposite Party. The cause of the damage as well as the extent of the damages claimed in the complaint were also denied. The amount claim is also disputed as excessive. The loss if any is only Rs. 1,18,500/- as per the survey report. It is therefore prayed for the dismissal of the complaint.

The 2nd Opposite Party has filed a separate counter raising the same objections against the maintainability of the Complaint. It is denied that he failed to pay the installment to the Complainant or that he surrendered the vehicle voluntarily to the Complainant. According to him, the Complainant''s husband with the help of others forcibly seized the vehicle from him. The cause and the extent of the damages alleged of the vehicle are also disputed. In any event, there is no insurable interest in the Complainant to maintain this complaint.

EXHIBITS A-1 to A-21 and B-1 to B-23 are marked. Proof affidavits are filed. No oral evidence has been let-in. The 2nd Opposite Party has obtained a loan from the Complainant and purchased a lorry bearing Registration No. TSJ 8496 and has entered into Hire Purchase Agreement with the Complainant on 25.7.1990. Exhibit A-1 is the said agreement. According to the Complainant, the 2nd Opposite Party did not pay the installments and consequently he surrendered the vehicle to the Complainant under Exhibit A-4. The vehicle has met with an accident at Palavalasa in Andhra Pradesh. While the consignment has been transported, the vehicle has been set fire to by analcites and has suffered heavy damage. The 2nd Opposite Party purchased the vehicle and insured the same with the 1st Opposite Party under Exhibit B-1 for the sum of Rs. 1,90,000/-. By virtue of this policy of insurance, the Complainant who is the financier has preferred a claim which has been rejected by the Insurance Company and hence this complaint.

THE contentions of the Opposite Parties is that the Complaint filed by the financier is not maintainable. THE Complainant has not insurable interest entitling her to claim compensation for the loss suffered by the vehicle. In other words, the complainant is not a consumer entitled to file this complaint. THE only point which therefore arises for consideration is whether the Complaint filed by the Financier is maintainable. The Hire Purchase Clause in the Policy of Insurance runs thus : IMT-10 Hire Purchase : "It is hereby understood and agreed that-(hereinafter referred as the owners) are the owners of the Agreement made between the owners on the one part and insured on the other part and it is further understood and agreed that the owners are interested in any monies which but for the endorsement would be pay- able to the insured under this policy in respect of loss or damage to the motor vehicle (which loss or damage is not made good by repair reinstatement or replacement) and such monies shall be paid to the owner as they are the owners of the motor vehicle and the receipt shall be a full and final discharge to the company in respect of such loss or damage."

A reading of this clause will show that the financier is considered as the owner and the purchaser of the vehicle as the hirer and the policy of insurance taken by the purchaser is for the benefit of the financier. The Complainant is therefore the beneficiary of the policy taken by the 2nd Opposite Party and is a consumer within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act. The Complaint filed by her is maintainable in law. We may also usefully refer to the following passage in MOTOR INSURANCE LAW AND PRACTICE of which Mr. M.B. Gopalan, the Learned Counsel for the 1st Opposite Party is a Co-author : "The question decided on appeal was whether the financiers could prefer claims under the Policy in their own rights directly. The Court held that the financiers could do so, due to the special endorsement in the policy recognizing the interests of the financiers. This endorsement only showed that both the insurer and hirer knew that the Policy was, to a large measure, taken to protect the interests of the financiers. In the present case, the company agreed in the Policy that they would, in the event of a claim under the Policy, pay the money directly to the financiers. By under- taking this responsibility, the insurance company became a trustee or agent of the financiers. Therefore, the financier, being the beneficiary under the trust, could enforce the contract. As such, the Insurance Company was liable to pay the claims direct to the financiers, who were entitled to institute claims against the insurer, in their own name."

It is also seen from the above observation that the financier is entitled to maintain the claim against the Insurance Company and this complaint filed by the financier is perfectly maintainable.

NEXT to the question of compensation. The Complainant has claimed a sum of Rs. 2,25,000/- as compensation for loss while the policy of insurance is only for Rs. 1,90,000/-. There is no evidence on the side of the Complainant to substantiate at her claim. On the other hand, we have the Surveyor''s report under Exhibit B-18. This report is very comprehensive and the surveyor has fixed its loss at Rs. 1,18,500/-. No serious objection is taken thereto before us. We accept the same and hold that the 1st Opposite Party is liable to pay the said sum of Rs. 1,18,500/- to the Complainant with interest at 12% per annum from the date of the claim till payment.

IN the result, we order the 1st Opposite Party to pay to the Complainant Rs. 1,18,500/- as compensation with interest at 12% from the date of the claim till payment. There will be no order as to costs. Complaint allowed.