First Appeal No. 523 of 2005

27th June, 2012

Petitioner Counsel: Mr. A.J. GONDWAL
Respondent Counsel: Ms. BHAKTI BARVE

Cases Cited:
United India Insurance Company Ltd. Vs. Sou. Kasturi J. Patil, F. A. No.1256/2010 [Para 6]

JUDGMENT

Shri NARENDRA KAWDE, Hon'ble Member :- Heard Learned Advocates for the parties.

2. This appeal takes an exception to the order dated 14/01/2005 in consumer complaint No.249/2003 (Mr.Uttam Kaul V/s. New India Assurance Co. Ltd.) passed by District Consumer Disputes Redressal Forum, Central Mumbai ('District Forum' in short). The consumer complaint was filed by the present appellant/complainant as the insurance claim payable under the policy of the vehicle on account of theft was repudiated by opponent/Insurance Company.

3. Case in brief is that the complainant/appellant subscribed to insurance policy for a sum of '1,66,000/- to provide insurance cover to the car purchased by him bearing No.MP-09/H-0762 from Shri C.A. Kuttappa, previous owner. Said car was stolen away during the validity period of the insurance policy. Police complaint was lodged. Opponent/Insurance Company was willing to settle the insurance claim to the tune of '1 Lakh as against insured sum of '1,66,000/-. The appellant/complainant declined to accept said offer. The District Forum came to the conclusion that even though said car was transferred in the R.C. Book in the record of the local R.T.O., yet the Insurance Company was not informed of the said transfer and indemnity bond not executed required to compensate against the claim from the original owner of the vehicle was not furnished by the appellant/complainant.

4. Undisputed facts are that the stolen car was insured for a sum of '1,66,000/-. It was purchased from one Shri C.A. Kattappa, previous owner. There is no dispute that the car was stolen and the amount of compensation of '1 Lakh was offered as settlement by the opponent/Insurance Company which was declined by the appellant/complainant, as it was an unilateral decision of the Insurance Company. The insurance claim was repudiated by the opponent/Insurance Company on the ground that there was no 'No Objection Certificate' from the original owner and also Indemnity Bond together with subrogation letter to compensate claim of original owner was not furnished by the complainant.

5. Learned Advocate for the appellant/complainant submitted that 'no objection certificate' was submitted from the previous owner and the transaction of purchase of car was recorded in the R.C. Book by the local R.T.O.Thus, effect of change of ownership was given by said mutation in the R.C. Book. However, due to insistence of the opponent/Insurance Company to submit Indemnity Bond and subrogation letter to compensate the original car owner, the claim was repudiated arbitrary after one year.

6. Under the provisions of India Motor Tariff GR 17, transfer of ownership in R.C. Book after Sale-Purchase transaction has a deeming effect and intimation thereafter about change of ownership under the insurance policy is mere formality as decided by this Commission in First Appeal No.1256/2010 (United India Insurance Company Ltd. V/s. Sou. Kasturi J. Patil). Provisions of India Motor Tariff as per GR 17 reads as follows :-

"On transfer of ownership, the Liability Only cover, either under a Liability Only policy or under a Package policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer.

The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy so that the insurer may make the necessary changes in his record and issue fresh Certificate of Insurance."

7. As held by this Commission, on transfer of the ownership, liability under the insurance policy simultaneously stands automatically transferred. In fact, it is deemed to have been transferred in favour the person to whom the motor vehicle is transferred with effect from the date of transfer in the R.C. Book. Intimation of change of ownership is merely a ministerial requirement and any delay will not have adverse bearing on the status or operation of insurance policy. In view of this, submission of Learned Advocate for the respondent/Insurance Company that obtaining the indemnity bond, discharge voucher, letter of subrogation, etc. to indemnify the original owner of the car is not sustainable as these are not the pre-requisite conditions to settle the insurance claim when mutation in R.C. Book recording the name of complainant had already been recorded.

8. The insurance claim has been repudiated by the respondent/Insurance Company though the appellant/complainant was constantly and consistently pursuing for settlement of claim, especially when there is no dispute about theft of the vehicle leading to settlement of insurance claim. The learned District Forum erred in dismissing the consumer complaint on the ground that the previous owner was required to be compensated and fulfillment of the requirements such as filing of Indemnity Bond by the appellant/complainant along with other documents was the requirements as pre-condition for settling the claim in favour of the appellant/complainant; even though NOC of previous owner was on record.

9. Defence of the respondent/Insurance Company to repudiate the claim on unsustainable ground resulted into inordinate delay in settling the claim payable under the policy.Therefore, appellant/complainant is required to be suitably compensated for arbitrary repudiation and inordinate delay to receive benefits under the insurance policy.

10. The District Forum has committed error in passing the impugned order by not appreciating the legal issues in favour of appellant/complainant. The appeal has substantial merit. We hold accordingly and pass the following order by allowing the appeal :-

-: ORDER :-

1. Appeal is allowed.

2. Respondent/New India Assurance Co. Ltd. is hereby directed to pay an amount of '1,66,000/- along with interest @ 12% p.a. from the date of theft till the actual payment is made to the original complainant.

3. By way of costs of this litigation, Insurance Company shall pay an amount of '15,000/- to the original complainant.

4. Amount shall be paid within a period of one month from today, if not paid, further penal interest @ 3% p.a. in addition to the interest stated above shall be paid to the original complainant.

5. Copies of the order be furnished to the parties.

Appeal allowed.