1.Indira Banerjee, J. Leave granted.
2.This appeal is against a judgment and order dated 23.2.2015 passed by the National Consumers Disputes Redressal Commission, New Delhi, hereinafter referred to as MAHABIR SINGH to as ‘the Insurer’, setting aside an order dated 09.1.2014 passed by the District Consumer Disputes Redressal Forum, Raipur, hereinafter referred to as ‘the District Forum’ allowing the Complaint Case No.404 of 2012; and an order dated 22.7.2014 passed by the Chhattisgarh State Consumer Disputes Redressal Commission Pandri, Raipur (C.G), hereinafter referred to as the State Commission, dismissing an appeal being Appeal No.FA/14/85 of the Insurer against the said order of the District Forum; and dismissing the said complaint filed by the Appellant.
3.The Appellant was the owner of Ashok Leyland 2214 Truck bearing Registration Number C.G.04/JA 3835, which was covered by a Policy of Insurance issued by the Insurer being Policy Number was 45030031110100001693, effective for the period from 2.6.2011 to 1.6.2012.
4.On 11.11.2011, the said lorry, which was loaded with Ammonia Nitrate at Raipur, commenced its journey for Dhanbad, where the Ammonia Nitrate was to be unloaded. The lorry was driven by Driver, Rajendra Singh.
5.On 13.11.2011, at about 1.45 p.m., while the said truck was on its journey from Raipur to Dhanbad, it met with an accident near Bhakuwa Toil Police Station, Gumla in Jharkhand. It is stated that while negotiating the said truck, near a culvert, to save a cow, which had come on its way, the Driver lost control, as a result of which the said truck turned turtle and fell into a river by the side of the road and was extensively damaged. The Ammonia Nitrate, carried in the truck was also washed away.
6.The accident was reported to the Gumla Police Station, District Gumla, Jharkhand on 16.11.2011 and on 25.11.2011 the Appellant lodged a claim with the Insurer, through one Mohammad Iliyas Ansari.
7.On receipt of information regarding the accident, and the claim, the Insurer appointed an independent Surveyor and Loss Assessor to conduct a spot survey. The independent Surveyor and Loss Assessor appointed by the Insurer, namely, Shri Birendra Kumar Gupta, conducted a spot survey and submitted his report on 29.11.2011.
8.The Insurer, thereafter, appointed one Shri Gyan Chandra, Valuer, Surveyor, Loss Assessor and Investigator to conduct the final survey. The said Shri Gyan Chandra submitted a report dated 25.1.2012 assessing the loss recoverable from the insurer at Rs.4,93,500/- after deduction of salvage value.
9.However, instead of reimbursing the loss, the Insurer issued a show cause Letter dated 22.3.2012 to the Appellant requiring the Appellant to show cause why the claim of the Appellant should not be repudiated, on the allegation that, he had already sold the said truck to the said Mohammad Iliyas Ansari on 11.4.2008. It is, however, not in dispute that the Appellant continued to be the registered owner of the said truck, on the date of the accident.
10.It is the case of the Appellant, that the said truck which had been purchased with finance from ICICI Bank, stood hypothecated to ICICI Bank, and the same could not be transferred without the consent of ICICI Bank. ICICI Bank had not issued ‘No Objection’ to the Appellant for transfer of the said truck, as the dues of ICICI Bank had not been repaid in full till the date of the accident. Admittedly, however, the Appellant had entered into a sale agreement with the said Mohammed Iliyas Ansari.
11.The Appellant claims that he duly replied to the show cause letter and that he also sent a legal notice on 2.6.2012 to the Insurer, to which there was no reply. The Insurer was disputing the claim, as it had been submitted by Mohammad Iliyas Ansari, and also on the ground of delay in filing the police complaint and in reporting the accident to the Insurer.
12.The Appellant himself submitted a motor claim again on 22.8.2012, but the Insurer refused to accept the same. Under cover of a letter dated 22.8.2012, the Appellant sent the claim form, along with the requisite documents, to the Insurer by Registered Post.
13.Aggrieved by the action of the Insurer company in not releasing the claim of the Appellant, towards reimbursement of losses on account of the accident, the Appellant approached the District Forum with the complaint numbered Case No. 404 of 2012, referred to above.
14.By a judgment and order dated 9.1.2014, the District Forum allowed the complaint filed by the Appellant and directed the Insurer to pay Rs.4,93,500/- to the Appellant within a month along with interest @ 6% per annum from the date of filing of the complaint, that is, 6.10.2012 till the date of payment and further directed the Insurer to pay the Appellant a sum of Rs.5,000/- towards compensation for mental agony and Rs.2,000/- towards cost of litigation.
15.The Insurer appealed to the State Commission. The said appeal, being Appeal No.FA/14/85, was dismissed by the State Commission by an order dated 22.7.2014, which was challenged by the Insurer before the National Commission by filing the Revision Petition No. 4126 of 2014.
16.By the Judgment and order impugned before us, the National Commission has allowed the Revision Petition, set aside the orders of the District Forum and the State Commission respectively, and dismissed the complaint of the Appellant.
17.From the judgment and order dated 9.1.2014 of the District Forum, it is patently clear that the complaint had been resisted by the Insurer on the purported ground that the Appellant had sold the said truck to Mohammad Iliyas Ansari for a consideration of Rs.1,40,000/- and also on the ground of delay in filing a police complaint and in lodging the claim for reimbursement of losses.
18.Before the district Forum, the Insurer contended that the claim of the Appellant had been rejected by the Insurer by a letter dated 22.3.2012, which had duly been received by the Appellant on 22.3.2012. There was no reply to the said letter. On the other hand, the Appellant contended that even though he had entered into a sale agreement with Mohammad Iliyas Ansari, he had not actually transferred ownership of the vehicle to him. Even after the sale agreement, the Appellant had himself been paying instalments, to ICICI Bank, towards repayment of the loan obtained by him for purchase of the said truck.
19.The Appellant contended that he had not been paid the full consideration for the said truck, even as late as on 13.11.2011, when the accident occurred. That is why the Appellant had himself paid insurance premium and taken out the Policy No. 45030031110100001693. The Appellant strenously contended that the Insurer had not produced a scrap of document before the District Forum to show that the premium for the said Insurance Policy No. 45030031110100001693 had been paid by Mohammad Iliyas Ansari. No proceedings had also been initiated for change of registration of the vehicle, which was in the name of the Appellant, to Mohammad Iliyas Ansari. The permit for operating the said truck also stood in the name of the Appellant.
20.The District Forum accepted the contention of the Appellant that the ownership of the said truck did not stand transferred to Mohammad Iliyas Ansari, and allowed the complaint, by its order dated 9.1.2014, for the reasons summarized briefly hereinbelow:-1. Even though the sale agreement with Mohammad Iliyas Ansari was dated 11.4.2008, the Appellant continued to pay instalments towards repayment of the loan obtained from ICICI Bank, for purchase of the said truck, long thereafter. 2. The Appellant had produced documents to show that he had paid the premium for the insurance policy after 11.4.2008, and even as late as on 31.05.2011. 3. The Insurer had not produced any materials to show said that the insurance premium had not been paid by the Appellant, but had been paid by 4. The said truck was registered in the name of the Appellant and the permit for operating the said truck for carriage of goods also stood in his name. 5. Mohammad Iliyas Ansari had not objected to release of compensation to the Appellant for damage caused to the vehicle, by reason of the accident. 6. The Insurer had not established that Driver, Rajendra Singh was an employee of Mohammad Iliyas Ansari.
21.It had also been argued on behalf of the Appellant, before the District Forum, that the Surveyor appointed by the Insurer had taken a consent letter from the Appellant after the Survey, but had not taken any statement from Mohammad Iliyas Ansari or from the Driver which could show that Mohammad Iliyas Ansari was the owner of the said truck, or the Driver was the employee of Mohammad Iliyas Ansari.
22.The District Forum, thus allowed the claim, holding in effect, that the Appellant continued to be the owner of the vehicle. On the basis of the report of the Surveryor, the gross liability was calculated at Rs.8,48,500/- from which salvage value of Rs. 3,55,000/- was deducted and the net loss recoverable from the Insurer computed at Rs.4,93,500/-.
23.The District Forum directed the Insurer to pay to the Appellant the said sum of Rs.4,93,500/-, with simple interest at 6% per annum from the date of the institution of the complaint, that is, 6.10.2012, a sum of Rs.5,000/- for mental harassment and a sum of Rs.2,000/- towards litigation expenses.
24.In appeal the State Commission found:-“11. We have perused the record of the District Forum. In Certificate of Registration of the vehicle in question, the name of the Respondent (complainant) Surendra Kumar Bhilawe is recorded as registered owner. In the license of Good Vehicle also vehicle bearing No.C.G.04-JA-3835 is registered in the name of the Respondent (Complainant) Surendra Kumar Bhilawe and the Insurance Policy was issued in the name of Respondent (Complainant) Surendra Kumar Bhilawe for the period from 02.06.2011 to 01.06.2012. Looking to the above documents, it appears that the vehicle in question was still recorded in the name of Respondent (Complainant) himself obtained insurance policy from the Appellant (Insurance Company). 12. The Respondent (Complainant) filed documents i.e. letter dated 08.01.2014 sent by ICICI Bank to the Respondent (complainant) Surendra Kumar Bhilawe and Statement of Account. It appears that the loan was being deposited by the Respondent (Complainant) himself and the Appellant (Ops) could not filed any document which shows or indicates that the amount of loan was paid by Mohd. Iliyas Ansari, in the name of the Respondent (Complainant). It appears that the Respondent (complainant) himself had deposited loan amount with the ICICI Bank from where he had obtained loan. 13. An agreement was executed between the Respondent (complainant) Surendra Kumar Bhilawe and Mohammad Iliyas Ansari on 11.04.2008 and the Insurance Policy was obtained by the Respondent (Complainant) on 02.06.2011, which was effective from the period from 02.06.2011 to 01.06.2012. Had the vehicle in question was transferred by the Respondent (complainant) to Mohammad Iliyas Ansari, the Respondent (Complainant) could have intimated the R.T.O. regarding transferring the vehicle in favour of Mohammad Iliyas Ansari and Mohammad Iliyas Ansari himself could have deposited the amount of loan with the ICICI Bank. In the instant case, Mohammad Iliyas Ansari is a material evidence for the Appellant (Ops) to prove that he purchased vehicle in question from the Respondent (complainant) and Mohammad Iliyas Ansari, therefore, on merely filing an agreement executed between the Respondent (Complainant) and Mohammad Iliyas Ansari, it cannot be said the vehicle in question was duly transferred by the Respondent (Complainant) to Mohammad Iliyas Ansari and Mohammed Iliyas Ansari is owner of the vehicle in question. 14. Ld. District Forum, in para 12 of the Impugned Order has observed that Mohammad Iliyas Ansari has not raised any objection against the complaint filed by the Respondent (complainant) from which it is proved that sale agreement is meaningless. The Appellant (OPs) could not prove that river Rajendra Singh was an employee of Mohammad Iliyas Ansari, whereas the contention of the Respondent (complainant) is that vide letter dated 08.08.2012 which was received by the Appellant (OPs) (Insurance Company) wherein it was mentioned by him that by the above sale agreement, the purchaser has not received any right and the Respondent (complainant) only is registered owner of the vehicle. In para 13, the District Forum has observed that the contention of the Respondent (complainant) is that the Surveyor, who was appointed by the Insurance company, has taken consent letter dated 02.01.2012 of Respondent (complainant) after conducting survey. The Appellant (OPs) had not filed any evidence that they had taken statement of Mohammad Iliyas Ansari or statement of the driver who mentioned that the vehicle was of the ownership of Mohammad Iliyas Ansari. 15. The finding recorded by the District Forum, is just and proper and does not suffer from any jurisdictional erroneously, irregularity or illegality, hence does not call for any interference by this Commission.”
25.The National Commission set aside the orders of the District Forum and the State Commission, thereby rejecting the concurrent factual finding of both the fora, and dismissed the complaint on the ground that the Appellant had sold his vehicle to Mohammad Iliyas Ansari.
26.The National Commission observed that when an owner of a vehicle sells his vehicle and executes a sale letter without in any manner postponing passing of the title to the property in the vehicle, the ownership in the vehicle passes to the purchaser on execution of the sale letter. The delivery of the vehicle, to the purchaser, reinforces the title which the purchaser gets to the vehicle, on execution of the sale letter in his favour. The National Commission also drew adverse inference against the Appellant, since the FIR was lodged with the Police on 16.11.2008, that is, three days after the accident and intimation of the claim was given to the Appellant 12 days after the accident, that is, on 25.11.2011.
27.The National Commission Held:-
“A perusal of the sale agreement dated 11.4.2008
executed by the complainant with Shri Mohd. Iliyas
Ansari would show that the complainant handed
over the possession of the aforesaid vehicle to Shri
Ansari on payment of Rs.1,40,000/- Since the
vehicle had been got financed from ICICI Bank the
remaining payment was to be made by the
purchaser directly to the said bank. The aforesaid
document also shows that a sum of Rs.1,40,000/-
was received by the complainant from Shri Ansari
on 11.4.2008. Thus, it stands duly proved that not
only had the complainant received the sale
consideration agreed with Shri Ansari he had also
delivered the possession of the vehicle to him on
11.4.2008.
7.Though the vehicle was not got registered in the
name of Shri Ansari by the time it met with an
accident, that in our opinion, would be of no
consequence in view of the sale having been
already completed on 11.4.2008.”
28. The National Commission completely ignored the
following concurrent factual findings of the District Forum
and State Commission:-
(I) Even after the date of the purported sale
agreement, that is, 11.4.2008, the Appellant
continued to pay instalments to ICICI Bank towards
repayment of the loan for purchase of the said
truck.
(ii) The ICICI Bank had neither released the said
truck from hypothecation nor given ‘No Objection”
for the sale of the said truck.
(iii) The Appellant paid the premium and took
out the policy of insurance on or about 31.5.2011
covering the period from 2.6.2011 to 1.6.2012 in his
own name. This was over three years after the date
of the purported sale agreement.
(iv) No steps were taken by the Appellant or by
Mohammad Iliyas Ansari to have the registration of
the said truck transferred in the name of
(v) The permit for operating the said truck was
still in the name of the Appellant over three years
after the purported sale agreement.
29. There was no material evidence at all before the
National Commission, on the basis of which the National
Commission could have reversed the concurrent factual
findings of the District Forum and the State Commission
which unerringly led to the conclusion that ownership of the
said truck never stood transferred to Mohammad Iliyas
Ansari.
30. In fact, the National Commission did not address the
following questions:-
(i) Who actually paid instalments to ICICI Bank after
11.4.2008 – the Appellant or Mohammad Iliyas Ansari? The
concurrent finding of the District Forum and the State
Commission that the Appellant paid instalments to ICICI Bank
even after 11.4.2008, therefore, remained unshaken.
(ii) If the ownership of the said truck stood transferred on
11.4.2008, why would the Appellant continue to pay the
instalments to ICICI Bank towards repayment of the loan for
purchase of the said truck?
(iii) Was any ‘No Objection’ obtained from ICICI Bank for
transfer of the said truck?
(iv) Could the Appellant have transferred the said truck
without ‘No Objection’ from ICICI Bank?
(v) Who actually paid the Insurance Premium on 31.5.2011
for the said Policy No.45030031110100001693 effective
from 2.6.2011 to 1.6.2012?
(vi) If the ownership of the said truck were transferred, why
would the Appellant have taken out an Insurance Policy
covering the said truck in his own name even on 31.5.2011,
after over three years?
(vii) Was the Driver Rajendra Singh employee of the
Appellant or of Mohammad Iliyas Ansari? Was any statement
in this regard taken either from Driver Rajendra Singh or
Mohammad Iliyas Ansari?
(viii) Were any steps ever taken for transfer of registration of
the said truck in the name of Mohammad Iliyas Ansari?
(ix) If the ownership of the said truck stood transferred to
Mohammad Iliyas Ansari, why did he not take steps to have
the registration of the said truck transferred in his own name
even after three years?
(x) In whose name did the permit to operate the said truck
stand?
(xi) Why would Mohammad Iliyas Ansari run the said truck
with a permit in the name of the Appellant, if he was its
owner, thereby exposing himself to penal consequences
under the Motor Vehicle Act and the Rules framed
thereunder?
(xii) Could ownership of the said truck be transferred
without transfer of registration in the name of the transferee,
in view of the Motor Vehicle Act, 1988 and the Rules framed
thereunder?
31. In our considered opinion, Sections 19 and 20 of the
Sale of Goods Act, 1930, which deal with the stage at which
the property in movable goods passes to the buyer, is of no
assistance to the Insurer. There can be no doubt that
property in a specific movable property is transferred to the
buyer at such time as parties to the contract intend it to be
transferred, provided such immovable property is free to be
transferred, and/or in other words capable of being
transferred.
32. If there is an impediment to the transfer, as in the
instant case, where ‘No Objection’ of the financier bank was
imperative for transfer of the said truck, there could be no
question of transfer of title until the impediment were
removed, for otherwise the contract for transfer would be
injurious to the financier bank, immoral, unlawful and void
under Section 10 read with Sections 23 and 24 of the
Contract Act, 1872.
33. It was thus, an implicit condition of the agreement for
transfer of the said truck, that the transfer would be
complete only upon issuance of ‘No Objection” by the
financier bank and upon compliance with the statutory
requirements for transfer of a motor vehicle.
34. The contract in this case, could not possibly have been
an unconditional contract of transfer of movable property in
deliverable state, but a contract to transfer, contingent upon
‘No Objection” from ICICI Bank, and compliance with the
statutory provisions of the Motor Vehicles Act, 1988 and the
Rules framed thereunder. Sections 19 and 20 of the Sale of
Goods Act are not attracted.
35. The National Commission overlooked the definition of
‘owner’ in Section 2(30) of the Motor Vehicle Act, 1988. In
Section 2(30) ‘owner’ has been defined to mean “a person in
whose name a motor vehicle stands registered and, where such
person is a minor, the guardian of such minor, and in relation to
a motor vehicle which is the subject of a hire purchase
agreement, or an agreement of lease or an agreement of
hypothecation, the person in possession of the vehicle under
that agreement”. Even assuming that Mohammad Iliyas Ansari
was in possession of the said truck at the time of the accident,
such possession was not under any agreement of lease, hire
purchase or hypothecation with ICIC Bank.
36. It would also be pertinent to note the difference between
the definition of owner in Section 2(30) of the Motor Vehicles Act,
1988 and the definition of owner in Section 2(19) of the Motor
Vehicles Act, 1939 which has been repealed and replaced by the
Motor Vehicles Act, 1988. Under the old Act ‘owner’ meant the
person in possession of a motor vehicle. The definition has
undergone a change. Legislature has consciously changed the
definition of ‘owner’ to mean the person in whose name the
motor vehicle stands.
37. The National Commission also overlooked other applicable
provisions of the Motor Vehicle Act 1988, particularly Sections 39
to 41, 50, 51, 66, 69, 82, 84(g), 86(c), 146, 157, 177 and 192A.
38. Some of the relevant provisions of the Motor Vehicles Act
are set out hereinbelow:-
“50. Transfer of ownership-
1) Where the ownership of any motor vehicle registered
under this Chapter is transferred-
(a) the transferor shall,-
(i) in the case of a vehicle registered within the same
State, within fourteen days of the transfer, report the fact
of transfer, in such form with such documents and in such
manner, as may be prescribed by the Central Government
to the registering authority within whose jurisdiction the
transfer is to be effected and shall simultaneously send a
copy of the said report to the transferee; and
(ii) ……
(b) the transferee shall, within thirty days of the
transfer, report the transfer to the registering authority
within whose jurisdiction he has the residence or place of
business where the vehicle is normally kept, as the case
may be, and shall forward the certificate of registration to
that registering authority together with the prescribed fee and a copy of the report received by him from the transfer of ownership may be entered in the certificate of registration.
(3) If the transferor of the transferee fails to report to the registering authority the fact of transfer within the period specified in clause (a) or clause (b) of sub-section (1), as the case may be, or if the person who is required to make an application under sub-section (2) (hereafter in this section referred to as the other person) fails to make such application within the period the period prescribed, the registering authority may, having regard to the circumstances of the case, required the transferor or the transferee, or the other person, as the case may be, to pay, in lieu of any action that may be taken against him under section 177 such amount not exceeding one hundred rupees as may be prescribed under sub-section (5).
Provided that action under section 177 shall be taken against the transferor or the transferee or the other person, as the case may be, where he fails to pay the said amount.
66. Necessity for permits-
(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used.
82.Transfer of permit-
(1)Save as provided in sub-section (2), a permit shall not be transferable from one person to another except with the permission of the transport authority which granted the permit and shall not, without such permission, operate to confer on any person to whom a vehicle covered by the permit is transferred any right to use that vehicle in the manner authorised by the permit.
84. General conditions attaching to all permit
The following shall be conditions of every permit-
(g) that the name and address of the operator shall be painted or otherwise firmly affixed to every vehicle to which the permit relates on the exterior of the body of that vehicle on both sides thereof in a colour or colours vividly contrasting to the colour of the vehicle centered as high as practicable below the window line in bold letters.
86. Cancellation and suspension of permits.-
(1)The Transport Authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit-
(c) if the holder of the permit ceases to own the vehicle covered by the permit,
140. Liability to pay compensation in certain cases on the principle of no fault-
(1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
146. Necessity for insurance against third party risk-
(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that person, as the case may be, a policy of insurance complying with the requirement of this Chapter.
157. Transfer of certificate of Insurance--
(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom
the motor vehicle is transferred with effect from the
date of its transfer.
(2) The 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 the 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 regards to the transfer of
insurance.
163A. Special provisions as to payment of
compensation on structured formula basis-
(1) Notwithstanding anything contained in this Act or in
any other law for time being in force or instrument
having the force of law, the owner of the motor
vehicle or the authorised insurer shall be liable to
pay in the case of death or permanent disablement due
to accident arising out of the use of motor vehicle,
compensation, as indicated in the Second Schedule, to
the legal heirs or the victim, as the case may be.
177. General provision for punishment of offences-
Whoever contravenes any provisions of this Act or of any rule, regulation or notification made thereunder shall, if no penalty is provided for the offence be punishable for the first offence with fine which may extend to one hundered rupees, and for any second or subsequent offence with fine which may extend to three hundred rupees.
192A. Using vehicle without permit-
(1) Whoever drives a motor vehicle or causes or
allows a motor vehicle to be used in contravention of the
provisions of sub-section (1) of section 66 or in
contravention of any condition of a permit relating to the
route on which or the area in which or the purposes for
which the vehicle may be used, shall be punishable for
the first offence with a fine which may extend to five
thousand rupees and for any subsequent offence with
imprisonment which may extend to one year but shall
not be less than three months or with fine which may
extend to ten thousand rupees but shall not be less than
five thousand rupees or with both.
Provided that the Court may for reasons to be recorded,
impose a lesser punishment.
39. It appears that the National Commission patently erred in
holding that the Appellant had been paid the consideration
without even examining if Mohammad Iliyas Ansari had paid any
instalments to ICICI Bank.
40. The finding of the National Commission that the fact of
registration of the said truck in the name of the Appellant was
inconsequential is also not sustainable in law. Section 2(30) of
the Motor Vehicles Act, 1988 defines ‘owner’ to mean the person
in whose name the motor vehicle stands registered. The
definition of ‘owner’ has been overlooked and ignored by the
National Commission. Had ownership of the said truck intended
to be transferred forthwith, the registration would have been
transferred in the name of the transferee, as also the permit to
operate the said truck for carriage of goods.
41. It is difficult to accept that a person who has transferred
the ownership of a goods carriage vehicle on receipt of
consideration, would not report the transfer or apply for transfer
of registration, and thereby continue to incur the risks and
liabilities of ownership of the vehicle under the provisions of law
including in particular, under the Motor Vehicles Act, 1988 and
other criminal/penal laws. It does not also stand to reason why a
person who has transferred the ownership of the vehicle should,
for over three years, benevolently go on repaying the loan for
purchase of the vehicle, take out insurance policies to cover the
vehicle or otherwise discharge obligations of ownership.
42. It is equally incredible that an owner of a vehicle who has
paid consideration to acquire the vehicle would not insist on
transfer of the permit and thereby expose himself to the penal
consequence of operating a goods vehicle without a valid permit.
43. The National Commission also failed to appreciate that
Section 157 of the Motor Vehicles Act provides that where a
person, in whose favour the certificate of insurance has been
issued in accordance with the provisions of Chapter XI of the
Motor Vehicles Act, transfers to another person the ownership of
the motor vehicle in respect of which such insurance was taken
together with the policy of insurance relating thereto, the
certificate of insurance and the policy described in the certificate
are to be deemed to have been transferred in favour of the
person to whom the motor vehicle is transferred, with effect from
the date of its transfer.
44. The explanation to Section 157 clarifies, for the removal of
all doubts, that such deemed transfer would include transfer of
rights and liabilities of the said certificate of insurance and policy
of insurance. The transferee might, within 14 days from the date
of transfer, apply to the Insurer in the prescribed form, for
making requisite changes in the certificate of insurance and the
policy of insurance with regard to the factum of transfer of
insurance. There could be no reason for a transferee of an
insured motor vehicle, to refrain from applying for endorsement
of the transfer in the Insurance Policy Certificate when
insurance covering third party risk is mandatory for using a
vehicle.
45. In any case, there could be no reason for the Appellant to
take out an insurance cover in his own name as late as on
31.5.2011, covering the period from 2.6.2011 till 1.6.2012, if the
Appellant had transferred ownership of the vehicle in April 2008.
It is incredible that the transferee, Mohammad Iliyas Ansari
would take the risk of operating a vehicle, owned by him, without
taking out a policy of Insurance in his own name, inter alia,
covering third party risks, notwithstanding the mandate of
Section 146 of the Motor Vehicles Act, 1988 prohibiting the use
of a motor vehicle without third party insurance
46. The judgment of this Court in Complete Insulations
Private Limited vs. New Indian Assurance Company
Limited1 was rendered in the context of Motor Vehicle Act, 1939
which has been repealed and replaced by the Motor Vehicles
Act, 1988. As observed in the said judgment itself, under
Section 103-A of the old Act, the Insurer had the right to refuse
to transfer the certificate of insurance and/or the Insurance
policy. However, Section 157 of the Motor Vehicles Act, 1988
introduces a deeming provision whereby the transfer of the
certificate of Insurance and the policy of Insurance are deemed
to have been made, where the vehicle along with the Insurance
policy is transferred by the owner to another person. This
provision has taken away the Insurer’s right of refusal to transfer
the Policy Certificate of Insurance. which was there under the
old Act. The judgment of this Court in Dr. T.V. Jose vs. Chacko
P.P. @ Thankachan and Ors.2 was also rendered in the
context of the Motor Vehicles Act of 1939.
47. In Pushpa @ Leela And Others vs. Shakuntala and
Others3, the question before this Court was, whether liability to
pay compensation to third parties as determined by the Motor
Vehicles Accidents Claims Tribunal in case of an accident, was
that of the purchaser of the vehicle alone, or whether the liability
of the recorded owner of the vehicle was coextensive, and from
the recorded owner it would pass on to the Insurer of the vehicle.
This Court found that the person whose name continued in the
records of the registering authority as the owner of the truck was
equally liable for payment of the compensation, having regard to
the provisions of Section 2(30) read with Section 50 of the Motor
Vehicles Act, 1988 and since an insurance policy had been
taken out in the name of the recorded owner, he was indemnified
and the Insurer would be liable to satisfy the third party claims.
48. In Naveen Kumar vs. Vijay Kumar and Others4, a three-
Judge Bench of this Court held that in view of the definition of
the expression ‘owner’ in Section 2(30) of the Motor Vehicles
Act, 1988, it is the person in whose name the motor vehicle
stands registered, who, for the purposes of the said Act, would
be treated as the owner of the vehicle. Where the registered
owner purports to transfer the vehicle, but continues to be
reflected in the records of the Registering Authority as the owner
of the vehicle, he would not stand absolved of his liability as
owner.
49. The Judgment of this Court in Pushpa @ Leela & Ors. vs.
Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar
(supra) were rendered in the context of liability to satisfy third
party claims and as such distinguishable factually. However, the
dictum of this Court that the registered owner continues to
remain owner and when the vehicle is Insured in the name of the
registered owner, the Insurer would remain liable
notwithstanding any transfer, would apply equally in the case of
claims made by the insured himself in case of an accident. If
the insured continues to remain the owner in law in view of the
statutory provisions of the Motor Vehicles Act, 1988 and in
particular Section 2(30) thereof, the Insurer cannot evade its
liability in case of an accident.
50. The policy of insurance in this case, was apparently a
comprehensive policy of Insurance which covered third party risk
as well. The Insurer could not have repudiated only one part of
the contract of insurance to reimburse the owner for losses,
when it could not have evaded its liability to third parties under
the same contract of Insurance in case of death, injury, loss or
damage by reason of an accident.
51. The FIR was lodged within three days of the accident. In
the case of a major accident of the kind as in this case,
where the said truck had turned turtle and fallen into a river,
slight delay if any, on the part of the traumatized driver to
lodge an FIR, cannot defeat the legitimate claim of the
Insured. Of course in our view, there was no delay at all in
lodging the FIR. In case of a serious accident in course of
inter-state transportation of goods, delay of 20 days in
lodging a claim is also no delay at all. It is nobody’s case
that the claim application filed by the Appellant was time
barred. Moreover, the Insurer had, in any case, duly sent its
Surveyors/ Assessors to assess the loss. The claim of the
Appellant could not have, in this case, been resisted, either
on the ground of delay in lodging the FIR, or on the ground of
delay in lodging an Accident Information Report, or on the
ground of delay in making a claim.
52. In any case, as held by this Court in Om Prakash vs.
Reliance General Insurance and Another5 delay in
intimation of accident, or submission of documents due to
unavoidable circumstances, should not bar settlement of
genuine claims.
53. In our considered opinion, the National Commission
erred in law in reversing the concurrent factual findings of
the District Forum and the National Commission ignoring
vital admitted facts as stated above, including registration of
the said truck being in the name of the Appellant, even as on
the date of the accident, over three years after the alleged
transfer, payment by the Appellant of the premium for the
Insurance Policy, issuance of Insurance Policy in the name of
the Appellant, permit in the name of the Appellant even after
three years and seven months, absence of ‘No Objection’
from the financier bank etc. and also overlooking the
definition of owner in Section 2(30) of the Motor Vehicles Act,
as also other relevant provisions of the Motor Vehicles Act
and the Rules framed thereunder, including in particular the
transferability of a policy of insurance under Section 157.
54. In view of the definition of ‘owner’ in Section 2(30) of
the Motor Vehicles Act, the Appellant remained the owner of
the said truck on the date of the accident and the Insurer
could not have avoided its liability for the losses suffered by
the owner on the ground of transfer of ownership to
55. The judgment of this Court in Oriental Insurance vs.
Sony Cheriyam6 was rendered in the context of liability of
an Insurer in terms of the insurance policy and is not
attracted in this case, where the claim of the insured has not
been rejected on the ground of the same not being covered
by the policy of insurance, but on the ground of purported
transfer to a third party by entering into a sale agreement.
56. We have not dealt with the judgments of the National
Commission and/or other Fora under the Consumer
Protection Act, 1986, relied upon by the parties, as they are
factually distinguishable and are in any case, not precedents
binding on this Court. In any case, we have considered and
dealt with the submission of the respective parties at length.
57. The judgment and order of the National Commission is
unsustainable. The appeal is, therefore, allowed. The
impugned order of the National Commission under appeal is
set aside and the order of the District Forum is restored.
The Insurer shall pay to the Appellant a sum of Rs.4,93,500/-
as directed by the District Forum with interest as enhanced
by this Court to 9% per annum from the date of claim till the
date of payment. The sum of Rs.5,000/- awarded by the
District Forum towards compensation for mental agony and
Rs.2,000/- awarded towards the cost of litigation, is in our
view grossly inadequate. The Insurer shall pay a composite
sum of Rs.1,00,000/- to the Appellant towards costs and
compensation for the agony caused to the Appellant by
withholding his legitimate dues. The amounts as directed
above shall be paid to the Appellant within six weeks from
date of the judgment and order.
[ R. Banumathi ]
[ Indira Banerjee]