The respondent as complainant filed a complaint before the District Forum against the appellant/opposite party praying for the direction to the opposite party to pay a total sum of Rs.1 lakh as damage or compensation on all aspects with 18% interest and to pay the cost. The District Forum allowed the complaint, against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.30.08.2007 in C.C.241/2005.
This appeal coming before us for hearing finally on 10.01.2011, upon hearing the arguments of the either counsels and perused the documents, as well as the order of the District Forum, this commission made the following order:
M. THANIKACHALAM J, PRESIDENT
1. The District Consumer Disputes Redressal Forum, Coimbatore, had caused grievance to the opposite party, in OP.241/2005 by its order dated 30.08.2007, issuing certain directions, resulting this appeal, to eclipse the same.
2. Facts:- The lorry bearing Registration No.TN-37-K-3130, originally belonged to one P.Ganesan, had taken insurance policy with the opposite party, covering the period from 29.04.2002 to 29.04.2003. The complainant had purchased the vehicle and pursuant to the sale, vehicle was transferred in the name of the complainant, changing the name in the RC Book also on 27.3.2003. Thereafter, the complainant had taken separate policy for the vehicle, commencing from 10.04.2003 to 09.04.2004. After purchase, before the complainant had taken the policy, while the previous policy, was in currency, the vehicle met with an accident on 06.04.2003, causing damage, resulting an expenses of Rs.85,000/-, which was claimed by the complainant, repudiated by the opposite party, on flimsy and false ground, resulting mental agony and the deficiency so committed, was not rectified, despite legal notice also. Hence, the claim for Rs.1 lakh, including the repair expenses and for mental agony.
3. The opposite party admitting the policy for the vehicle, its validity also, resisted the application, inter alia, contending that the complainant has not transfer the policy or informed the purchase of the vehicle within 14 days, as contemplated under Section 157 of the Motor Vehicle Act, 1988, and before the transaction of the policy or before taking the new policy, the vehicle met with an accident on 6.4.2003, on which date, there was no privity of contract between the complainant and the opposite party and on that basis, when a claim was made, it was repudiated legally, justifiably, cannot be quoted as covered by the negligent act or deficiency in service, thereby praying for the dismissal of the complaint.
4. The District Forum, based upon certain decisions, as well as the fact, during currency of the previous policy, accident had taken place, came to the conclusion that the non-payment of the expenses incurred by the complainant, should be construed as deficiency in service and in this view, as said above, direction came to be issued, to pay a total sum of Rs.91,000/- including costs, which is under challenge.
5. The facts not in controversy are, that the vehicle in question originally belonged to one Ganesan, who had insured the vehicle with the opposite party, covering the period 29.04.2002 to 29.04.2003, that the complainant having purchased the same, transferred the vehicle in his name on 27.3.2003, that during the currency of the said policy, on 6.4.2003, the vehicle met with an accident, causing damage to the insured vehicle. It is also an admitted fact, after the said accident, the complainant had taken policy, for the same vehicle with the opposite party, for the period from 10.4.2003 to 09.04.2004. Therefore, this policy will not cover the accident and it is also not the case of the complainant.
6. Based upon the original policy, a claim was made, repudiated, resulting consumer complaint, which favoured the consumer, which is sought to be set aside, mostly relying upon Section 157 of Motor Vehicle Act. It is also an admitted fact, that on the date of the accident namely 6.4.2003, there was no contract of insurance between the complainant and the opposite party though the vehicle had coverage on that date. In this context, we have to see, Section 157 of Motor Vehicle Act, 1988, which comes under the Chapter-XI âInsurance of Motor Vehicle against the third party risksâ. Section 157 (1) makes it obligatory that if ownership of the motor vehicle is transferred, the policy also automatically transferred with effect from the date of its transfer, for the purpose of the Chapter-XI, which covers third party risk. Therefore, that cannot be taken, as if, it is applicable to the own damage also. In our case, the claim is for own damage, namely for the damage sustained by the vehicle owned by the insured or the transferee of the vehicle. Therefore, on the basis of the automatic transfer or deemed transfer, the complainant is not entitled to claim, that there is a contractual obligation, on the part of the opposite party. By reading this Section, especially Section 157 (2), it is seen the intention as well as the purport, we are of the considered opinion. If the insurance policy is not transferred within the time frame, if any damage caused to the insured vehicle, during that permissible period, the benefits available to the insured, under the old policy should be made available to the transferee also, otherwise there is no meaning, in prescribing the time. In other words, if the transfer of the policy was not intimated, or transferred in the name of the subsequent owner, within 14 days, and thereafter if anything had taken place, in that situation alone, the insurer can claim immunity, as if, they are not liable since within 14 days, policy was not transferred or the insurer was not informed, since period expired.
7. Section 157 (2) reads âThe transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insuranceâ. The above readings, make it abundantly clear that the purpose is to make the insurer aware of the transfer, thereby enabling the insurer, to change in its record, the name of the subsequent transferee, so as to answer if any claim is made thereafter. Therefore, we are of the view, it is only a procedural one, not affecting the right available under the policy within the prescribed period. If, after the prescribed period, if anything had happened, then the insurer can use Section 157, not only as sword, but also as a shield, not otherwise. In this context, we have to once again see the facts of the case.
8. The vehicle was transferred on 27.3.2003, accident had taken place on 6.4.2003, that is within 10 days or we can say within 14 days, that is within the permissible time under the Act. When the subsequent purchaser, had the right to transfer or informto the insurer within 14 days, before that, the accident had taken place and therefore, it should be construed that the benefits available under the original policy should accrue, to the purchaser also, otherwise prescribing the period may not have any sense at all, as indicated by us supra. Under the above said circumstances, irrespective of the disputed facts, in this case, on admitted facts, when the vehicle was covered, by a valid policy, the insurance company is liable to answer, for the damage caused to the insured vehicle, and in our considered opinion, the repudiation is not proper and justifiable. Therefore, the submission of the learned counsel for the appellant, that automatic transfer is not applicable in case of own damage claim and the claim of insurance is untenable in the absence of changing the policy, in the name of the transferee are unacceptable to us, and the policy should be binding and it should have the validity even in respect of the transferee also, upto the period of 14 days from the date of actual transfer of the vehicle, which alone had happened and therefore the claim should have been honoured, by the Insurance Company. Regarding the quantum of damage, no dispute had been raised. The District Forum, based upon the documents, awarded a sum of Rs.85,000/- towards damage and nominal compensation of Rs.5,000/-, which cannot be termed as excessive or against law, since the quantum was not disputed before us. For all these reasons, we conclude, the appeal is devoid of merits, liable to be dismissed.
9. In the result, the appeal is dismissed, confirming the order passed by the District Consumer Disputes Redressal Forum, Coimbatore, in C.C.241/2005, dated 30.08.2007. Under the facts and circumstances of the case, there will be no order as to cost in this appeal.