NEW INDIA ASSURANCE CO. LTD & ANR.
24/57,BIRHANA ROAD KANPUR
KANPUR
UTTAR PRADESH                                               ...........Petitioner(s)
                                                 Versus    
M/S. M.G. TECHNICALS & ORS
113/22,SWAROOP NAGAR
KANPUR
UTTAR PRADESH                                              ...........Respondent(s)

BEFORE:    
     HON'BLE DR. B.C. GUPTA, PRESIDING MEMBER

Dated : 29 Jun 2016


        This revision petition has been filed  against the impugned order dated 7.2.2008,  passed by the U.P. State Consumer Disputes Redressal Commission, Lucknow (hereinafter referred to ‘State Commission’) in Appeal No.2700/SC/07 and Appeal No.2735/SC/07, vide which Appeal No.2700/SC/07 preferred by M.G. Technicals was accepted, while in Appeal No.2735/SC/07 preferred by the New India Assurance Company Ltd.,  it was ordered that a sum of Rs.1 lakh be paid to the complainant , M.G. Technicals as damage claim  with interest @ 9% per annum from the date of  rejection of the claim.

2.      The insurance claim in respect of the theft of a vehicle was filed before the petitioner insurance company by the previous owner Aggarwal Agencies as well as the purchaser M.G. Technicals. However, both these claims were rejected by the insurance company. Thereafter, the previous owner as well as the purchaser filed two separate consumer complaints before the District Consumer Disputes Redressal Forum, Kanpur City. The said Forum vide their order dated 14.11.2007, allowed the complaint of  the previous owner Aggarwal Agencies and directed the insurance company to pay a sum of Rs.1 lakh with 10% simple interest to them. Vide separate order dated 15.11.2007, the District Forum dismissed the complaint filed by the purchaser M.G. Technicals. Being aggrieved against the two orders passed by the District Forum, two different appeals were filed before the State Commission, one by the purchaser M.G. Technicals,  seeking payment of compensation in their favour, while the other appeal was filed by the New India Assurance Company Ltd. seeking rejection of the consumer complaint filed by the Aggarwal Agencies. Both these appeals were decided by the State Commission, vide impugned order dated 7.2.2008, according to which,  the appeal of the M.G. Technicals was accepted and a sum of Rs.1 lakh was ordered to be paid, along with 9% interest per annum to the complainant M.G. Technicals. The appeal filed by the New India Assurance Company Ltd. was also allowed and the award in favour of the previous owner Aggarwal Agencies was set aside. Being aggrieved against the order of the State Commission, the petitioner insurance company is before this Commission by way of the present revision petition.

3.      During hearing before me, the learned counsel for the insurance company vehemently argued that since the insurance policy had not been got transferred  in the name of the purchaser M.G. Technicals, they were not eligible for the grant of claim at all.  Learned counsel has drawn attention to General Regulations No.17 (GR-17) laid down by the Tariff Advisory Committee (TAC) in accordance with the   provisions  of the Insurance Act, 1938, according to which,  the transferee of a vehicle was required to apply within 14 days from the date of transfer in writing to the insurer with all relevant details for making necessary changes in the record of the insurance company and to issue a fresh certificate of insurance. In this regard, the learned counsel stated that it was mandatory for the purchaser to have applied for the transfer of the vehicle and on his failure to do so, they were not liable to get the claim. The learned counsel stated that the complainant M.G. Technicals had relied upon a letter dated 27.3.2004, alleged to have been sent by them to the petitioner, seeking transfer of the insurance policy. However, the said letter was never received by the insurance company. Learned counsel has drawn attention to an order passed by this Commission in New India Assurance Company Ltd. vs. Ashok Kumar II (2013) CPJ 162 (NC) in which a view has  been taken that claim was not admissible on failure of a party to act in accordance with the provisions of GR-17. Further, the National Commission had taken a similar view in Buddhi Prakash Jain vs. Bajaj Allianz General Insurance Company Ltd. IV(2015) CPJ 337 (NC), saying that it was obligatory on the part of the complainant to apply for the transfer of insurance policy, along with relevant documents, otherwise,  there was no privity of contract between the complainants  and the insurance company. The learned counsel has also referred to the order of the Hon’ble Supreme Court in Complete Insulations (P) Ltd. vs. New India Assurance Company Ltd. (1996) 1 SCC 221, in which it had been held that Section 157 of the Act was applicable in case of third party claims only, whereas for own damage cases, the transfer of the insurance policy should have been made,  if the claim was to be allowed. The learned counsel also referred to an order of this Commission in Vijayan M. Aingoth vs. Bajaj Allianz General Insurance Company Ltd., I (2016) CPJ 446 (NC), in which a similar view has been taken.

4.      Per contra, learned counsel for the respondent stated that this was the case of theft of vehicle and even if there had been any breach of terms and conditions, the claim should be allowed on a non-standard basis. Learned counsel referred to a decision made by  the Hon’ble Supreme Court in National Insurance Company vs. Nitin Khandelwal, reported in 2008(7) SCALE 351.

5.      I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me. The facts of the case that the vehicle was earlier owned by Aggarwal Agencies and that it was sold on 19.3.2004 to M.G. Technicals have not been controverted by the any of the parties.  It is also not disputed that the registration of the vehicle was transferred in favour of M.G. Technicals on 25.3.2004, but the insurance policy had not been transferred in their name.  It is made out,  therefore,  that in accordance with the view taken by this Commission in a number of cases decided,  as already referred by the petitioner, the provisions of GR-17 were applicable in the present case as well,  and the purchaser of the vehicle was required to make application  in accordance with GR-17 to the insurer for the transfer of policy in his name. The stand taken by the purchaser that he sent an application dated 27.3.2004 under postal cover (UPC) to the insurance company,  has not been proved on record and the insurance company has denied the receipt of any such letter from the purchaser.  It has been stated very clearly by this Commission in the cases referred above, that for cases involving ‘own damage’, the application for transfer of the vehicle had to be submitted within 14  days to the insurance company and there was no automatic  transfer of the insurance policy in favour of the purchaser. It has also been made clear that Section 157(1) of the Motors Vehicle Act, 1989 was applicable in the case of third party claims only.

6.      Further, the contention raised by the learned counsel for the respondent regarding payment of claim on non-standard basis is also not applicable in the present case. In the case of National Insurance Company vs. Nitin Khandelwal  (supra),  it was held that in the case of theft of vehicle, the breach of terms and conditions of the policy is not germane. However,  the claim made in  such cases shall be  payable, if the purchaser of the vehicle had a valid policy against its name.  In the present case, since the insurance policy stands in the name of the previous owner, there is obviously no insurable interest of the purchaser for the said vehicle. The complainant is therefore, not entitled to get the claim even on non-standard basis.

7.      The learned counsel for the respondent has drawn attention to an order passed by this Commission in Shri Narayan Singh Vs. New India Assurance Company Ltd. IV (2007) CPJ 289 (NC),  saying that a view was taken in that  case that the benefits in the policy automatically get transferred to the owner on transfer of the vehicle. However, in the said case, the period of 14 days prescribed for making application for transfer of the insurance policy was not over,  as the vehicle met with an accident within 5 days of its purchase.

8.      Based on the discussion above, it is held that the orders passed by the State Commission is contrary to the settled legal position that an insurance claim in such cases cannot be paid, unless the application for transfer is duly made to the insurance company within the prescribed period of 14 days and the said policy is transferred in favour of the purchaser. This revision petition is, therefore, accepted and the impugned order passed by the State Commission is set aside. The consumer complaint, in question, stands dismissed with no order as to costs.