ORIENTAL INSURANCE CO. LTD. Vs. ASHOK KUMAR

JUDGEMENT

(1.) TATA Indica car bearing registration No. PB -05 -B -8652 was owned by one Sh. Rajiv Kumar S/o Sh. Mukakh Raj. The aforesaid car was insured with the petitioner company for the period from 29.09.2002 till 28.09.2003. Sh. Rajiv Kumar sold the car to one Darshan Lal who got the vehicle transferred in his name in the record of the concerned Transport Authority. He however, did not apply to the insurance company for transfer of the insurance in his name. Sh. Darshan Lal then sold the aforesaid car to the complainant Ashok Kumar on 25.02.2003. Since the vehicle was financed by Punjab National Bank, a letter dated 26.02.2003 was sent by Punjab National Bank to the petitioner company informing that they had financed the aforesaid vehicle and requesting to change the name of the insured Rajiv Kumar S/o Sh. Mulakh Raj to Sh. Ashok Kumar S/o Sh. Ram Saroop and include bank clause. A letter was sent on the letter head of the bank. No action on the aforesaid letter was taken by the insurance company till it met with an accident on 07.03.2003. Since the vehicle was extensively damaged in the said accident, the complainant lodged a claim of Rs. 1,77,359/ - with the insurance company. The claim having been repudiated, the complainant approached the concerned District Forum by way of a complaint.

(2.) THE complaint was resisted by the insurance company primarily on the ground that though the letter sent by the bank sought substitution of the name of Ashok Kumar by the name of Sh. Rajiv Kumar, the vehicle was purchased by the complainant from Sh. Darshan Lal and not from Rajiv Kumar. It was also pointed out in the reply that Sh. Darshan Lal had never applied to the insurance company for transferring the insurance in his name. On merits, it was stated that the surveyor appointed by the insurance company had assessed the loss at Rs. 99894.50p.

(3.) SECTION 157(2) of the Motor Vehicles Act requires the transferee of a motor vehicle to 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 on such a request being made the insurer is required to make necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance. Section 157(1) of the act which provides for deemed transfer of the insurance policy alongwith transfer of the ownership of the vehicle, applies only to third party risks, as held by the Hon'ble Supreme Court in Complete Insulations Pvt. Ltd. (Supra). As held by the Hon'ble apex court, if the insurance policy covers other risks as well, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI of the New Act and in the realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle.