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2008 DIGILAW 261 (MP)

United India Insurance Co. Ltd. v. Umesh Aangale

2008-02-18

N.K.JAIN, NEERJA SINGH

body2008
JUDGMENT : Asper N.K. Jain, J. (President):- Thisappeal arises from the order dated 25-1-2006 passed in C.C. No. 111/2005 by theDistrict Consumer Disputes Redressal Forum, East Nimar , Khandwa directing theappellant-Insurance Company to pay Rs . 21,050/- ascompensation, besides cost Rs . 500/-. 2.It is a case where a motor car Tata Sumo insured withthe appellant met with an accident and damaged during existence of theinsurance cover. However, admittedly the vehicle in question was initiallyregistered and insured in the name of one Nitin More,who had sold the vehicle to respondent-complainant Umesh Aangale before the date of the accident. Although thevehicle was registered in the name of respondent-transferee, but no intimationof transfer of vehicle was ever given to the appellant-insurer and no actionwas taken to get the certificate of insurance transferred in the name ofrespondent-purchaser. The Forum below has directed the appellant-InsuranceCompany to pay compensation Rs . 21,050/- to respondent-complainant for the damage caused to the subject insured. 3.The question thus arises for determination is whether in absence of transfer ofcertificate of insurance in the name of respondent-transferee, theappellant-Insurance Company can be held liable to make good ,the damage to the vehicle. The answer to the question we say with respect isfound in a Supreme Court decision in the case of M/s. Complete Insulations (P)Ltd., AIR 1996 SC 586 , wherein it is held :- "Therequirements of Chapter XI are in relation to third party risks only and hencethe fiction of Section 157 of the New Act must be limited thereto. Thecertificate of insurance to be issued in the prescribed form (Form 51Prescribed under 141 of the Central Motor Vehicles Rules, 1989) must,therefore, relate to third party risks. Since the provisions under the New Actand the Old Act in this behalf are substantially the same in relation toliability in regard to third parties. The transferee of the vehicle could notbe said to be a third party qua the vehicle in question. It is only in respectof third party risks that Section 157 of the New Act provides that thecertificate of insurance together with the policy of insurance describedtherein "shall be deemed to have been transferred in favour of the person to whom the motor istransferred". It is only in respectof third party risks that Section 157 of the New Act provides that thecertificate of insurance together with the policy of insurance describedtherein "shall be deemed to have been transferred in favour of the person to whom the motor istransferred". If the policy of insurance covers other risks as well, e.g.,damage caused to the vehicle of the insured himself, that would be a matterfalling outside Chapter XI of the New Act and in the realm of contract forwhich there must be an agreement between the insurer and the transferee, theformer undertaking to cover the risk or damage to the vehicle. In the instantcase, the vehicle was purchased in the name of 'A' for which the Insurance Company, had issued a comprehensive insurance policy. Thepremium for the insurance was paid by the transferee company in whose favour the car was transferred. The registration of the carwas transferred to the transferee, the transfereeintimated the transfer of registration and asked for transfer of the insurancepolicy. The Insurance Company did not reply to the two letters sent bytransferee. In the meanwhile the vehicle met with a serious accident. Thetransferee asked for the assessment of the damage as the vehicle was a totalloss. There was no agreement between insurer and the transferee, the formerundertaking to cover the risk or damage to the vehicle. And since the insurerhad not transferred the policy of insurance in relation thereto to thetransferee, the insurer was not liable to make good the damage to thevehicle". 4.Following the ratio of the decision in the case of Mis .Complete Insulations (supra), the National in it's recent decision in the case of Harinder Kaur , III (2007) CPJ 411 (NC), held that in absence ofsteps being taken for transferring the policy as required by Section 157 of theMotor Vehicle Act, the transferee is not entitled to get benefit of theinsurance policy. 5.We may however, refer here to an another decision of the National Commission inthe case of Banowarilal Agrawalla Vs. National Insurance Co. Ltd. and another, 2006 NCJ 72 (NC), wherein theNational Commission after referring to the Supreme Court decision in the caseof Mis . Complete Insulations (supra), has tried tofind out a via media and it was held that in order to overcome thistechnicality the new owner of the vehicle may get the claim submitted by theprevious owner having insurance in his favour . Complete Insulations (supra), has tried tofind out a via media and it was held that in order to overcome thistechnicality the new owner of the vehicle may get the claim submitted by theprevious owner having insurance in his favour . Somedecisions were also - rendered by this Commission on the basis of the decisionin the case of Banowarilal Agrawalla (supra). However, in view of the Supreme Court decision in the case of Mis . Complete Insulations (supra), followed by the NationalCommission in the case of Harinder Kaur (supra), the correct legal position thus emerges is thatunless the policy is transferred in the name of the purchaser, the lattercannot claim any compensation from the Insurance Company. The order passed bythe District Forum, therefore, deserves to be set aside. 6.We accordingly allow the appeal and set-aside the impugned order and dismissthe complaint of respondent. We make no order as to costs which the parties areleft to bear their own as incurred of both the for a. 7.Copy of this order be circulated to all the DistrictFor a for guidance.