Surendra Kumar Bhilawe v. the New India Assurance Company Limited
INDIRA BANERJEE, J.
1. 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 ‘National Commission’, allowing Revision
Petition No.4126/2014 filed by the Respondent, hereinafter referred 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 Ass essor to
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED
conduct a spot survey. The independent Surveyor and Loss Assesso r
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.4,9 3,500/- 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 t o 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 whi ch had
been purchased with finance from ICICI Bank, stood hypothecat ed 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 ha d 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 Insur er, 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 agai n 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 wi th the
complaint numbered Case No. 404 of 2012, referred to above.
47
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 b efore
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 or ders 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 re sisted 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 le tter 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 w ith
Mohammad Iliyas Ansari, he had not actually transferred ownership of
the vehicle to him. Even after the sale agreement, the Appel lant 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
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
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 nam e of the
Appellant, to Mohammad Iliyas Ansari. The permit for opera ting 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, b ut
had been paid by Mohammad Iliyas Ansari.
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 relea se 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 S ingh
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
49
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 compu ted 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 For um. 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 Ve hicle
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 t he
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) h imself
obtained insurance policy from the Appellant (Insur ance
Company).
12. The Respondent (Complainant) filed documents i.e. letter
dated 08.01.2014 sent by ICICI Bank to the Responde nt
(complainant) Surendra Kumar Bhilawe and Statement of
Account. It appears that the loan was being deposited by the
Respondent (Complainant) himself and the Appellant (O ps)
could not filed any document which shows or indicates that
the amount of loan was paid by Mohd. Iliyas Ansari, i n the
name of the Respondent (Complainant). It appears th at 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 Responden t
(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 w as
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
effective from the period from 02.06.2011 to 01.06.2012. Had
the vehicle in question was transferred by the Resp ondent
(complainant) to Mohammad Iliyas Ansari, the Respon dent
(Complainant) could have intimated the R.T.O. regar ding
transferring the vehicle in favour of Mohammad Iliyas Ansari
and Mohammad Iliyas Ansari himself could have deposi ted
the amount of loan with the ICICI Bank. In the instant case,
Mohammad Iliyas Ansari is a material evidence for t he
Appellant (Ops) to prove that he purchased vehicle in quest ion
from the Respondent (complainant) and Mohammad Iliy as
Ansari, therefore, on merely filing an agreement ex ecuted
between the Respondent (Complainant) and Mohammad Iliyas
Ansari, it cannot be said the vehicle in question w as 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 ra ised
any objection against the complaint filed by the Resp ondent
(complainant) from which it is proved that sale agreem ent is
meaningless. The Appellant (OPs) could not prove that r iver
Rajendra Singh was an employee of Mohammad Iliyas Ansari,
whereas the contention of the Respondent (complaina nt) 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 Respon dent
(complainant) only is registered owner of the vehicle. In para
13, the District Forum has observed that the conten tion of
the Respondent (complainant) is that the Surveyor, who was
appointed by the Insurance company, has taken consent lette r
dated 02.01.2012 of Respondent (complainant) after
conducting survey. The Appellant (OPs) had not file d any
evidence that they had taken statement of Mohammad Iliyas
Ansari or statement of the driver who mentioned tha t the
vehicle was of the ownership of Mohammad Iliyas Ansa ri.
15. The finding recorded by the District Forum, is j ust and
proper and does not suffer from any jurisdictional
51
erroneously, irregularity or illegality, hence does not cal l 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 s ale 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 exec uted
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 direc tly
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 prov ed 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 i n our
opinion, would be of no consequence in view of the sale havi ng
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,
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
11.4.2008, the Appellant continued to pay instalments to ICICI
Bank towards repayment of the loan for purchase of the sai d
truck.
(ii) The ICICI Bank had neither released the said truck f rom
hypothecation nor given ‘No Objection” for the sale of the s aid
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 Mohammad Iliyas Ansari.
(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 Na tional
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 trans ferred 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?
53
(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 rega rd
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 trans ferred 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, i n 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 prop erty in
movable goods passes to the buyer, is of no assistance to t he Insurer.
There can be no doubt that property in a specific mova ble property is
transferred to the buyer at such time as parties to the contr act 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
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
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 de liverable
state, but a contract to transfer, contingent upon ‘No Object ion” 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 guardi an 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 agree ment of
hypothecation, the person in possession of the vehic le 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 hypothecat ion
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. Leg islature 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 applicabl e
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:-
55
“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 t ransfer,
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 tra nsfer 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 busines s where
the vehicle is normally kept, as the case may be, a nd shall
forward the certificate of registration to that reg istering
authority together with the prescribed fee and a copy of the
report received by him from the transfer of ownership ma y be
entered in the certificate of registration.
(3) If the transferor of the transferee fails to re port to the
registering authority the fact of transfer within t he 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 ma ke an
application under sub-section (2) (hereafter in thi s section
referred to as the other person) fails to make such application
within the period the period prescribed, the regist ering
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 ma y be
taken against him under section 177 such amount not
exceeding one hundred rupees as may be prescribed u nder
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.
××× ××× ×××
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
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 whe ther
or not such vehicle is actually carrying any passen gers or
goods save in accordance with the conditions of a p ermit
granted or countersigned by a Regional or State Tran sport
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 confe r on
any person to whom a vehicle covered by the permit is
transferred any right to use that vehicle in the ma nner
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 practicab le 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-
………………..
57
(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, join tly and
severally, be liable to pay compensation in respect of such
death or disablement in accordance with the provisi ons 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 o f this
Chapter transfers to another person the ownership o f the
motor vehicle in respect of which such insurance was taken
together with the policy of insurance relating ther eto, the
certificate of insurance and the policy described i n the
certificate shall be deemed to have been transferred in fav our
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 insu rer for
making necessary changes in regard to the fact of transf er in
the certificate of insurance and the policy describe d in the
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
certificate in his favour and the insurer shall mak e 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 hav ing 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 Sch edule,
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 o f any
rule, regulation or notification made thereunder shall , if no
penalty is provided for the offence be punishable for the fir st
offence with fine which may extend to one hundered rupe es,
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 allow s a
motor vehicle to be used in contravention of the provisions of
sub-section (1) of section 66 or in contravention o f any
condition of a permit relating to the route on which or the
area in which or the purposes for which the vehicle ma y be
used, shall be punishable for the first offence wit h a fine
which may extend to five thousand rupees and for an y
subsequent offence with imprisonment which may exte nd to
one year but shall not be less than three months or with fi ne
which may extend to ten thousand rupees but shall n ot be
less than five thousand rupees or with both.
59
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 A ppellant 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 al so 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 Mot or
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 accorda nce with
the provisions of Chapter XI of the Motor Vehicles Act, t ransfers 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 descri bed in the
certificate are to be deemed to have been transferred in fa vour of the
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
person to whom the motor vehicle is transferred, with ef fect 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 v ehicle,
owned by him, without taking out a policy of Insurance in his own name,
inter alia, covering third party risks, notwithstanding the mand ate 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 Limited 1 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 t he 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, wher e the
vehicle along with the Insurance policy is transferred by the owner to
another person. This provision has taken away the Insurer’s r ight 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.
1 (1996) 1 SCC 221
2 (2001) 8 SCC 748
61
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 r egard 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 b e
liable to satisfy the third party claims.
48. In Naveen Kumar vs. Vijay Kumar and Others 4, 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, wh o,
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 appar ently a
comprehensive policy of Insurance which covered third party ri sk as
well. The Insurer could not have repudiated only one part of the contract
3 (2011) 2 SCC 240
4 (2018) 3 SCC 1
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]
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 Another 5 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 Dist rict 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 prem ium for the
Insurance Policy, issuance of Insurance Policy in the n ame of the
Appellant, permit in the name of the Appellant even after three years
and seven months, absence of ‘No Objection’ from the financier b ank
etc. and also overlooking the definition of owner in Section 2(30) of the
Motor Vehicles Act, as also other relevant provisions o f the Motor
Vehicles Act and the Rules framed thereunder, including in par ticular
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 avoide d its
5 (2017) 1 SCC 724
63
liability for the losses suffered by the owner on the ground of transfer of
ownership to Mohammad Iliyas Ansari.
55. The judgment of this Court in Oriental Insurance vs. Sony
Cheriyam 6 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 Nati onal
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 ha ve
considered and dealt with the submission of the respective p arties 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 wit h 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.
Kalpana K. Tripathy Appeal allowed.
6 (1999) 6 SCC 451
SURENDRA KUMAR BHILAWE v. THE NEW INDIA
ASSURANCE COMPANY LIMITED [INDIRA BANERJEE, J.]