Insurance Policy Deemed Transferred Upon Vehicle Sale; Karnataka State Commission Dismisses Insurer's Appeal
The Karnataka State Consumer Disputes Redressal Commission, Circuit Bench-2, Belagavi, comprising Hon'ble Sri Ravi Shankar (Judicial Member) and Hon'ble Smt. Sunita C. Bagewadi (Lady Member), has dismissed an appeal filed by Shriram General Insurance Company Ltd., holding that under Section 157(2) of the Motor Vehicles Act, 1988, insurance stands transferred along with transfer of the vehicle, and repudiation of the claim was not justified.
Facts
Complainant No.2 had insured his Toyota Etios car bearing Registration No. KA-01-AC-9783 under a “PCCV 4 Wheelers Motors Commercial Vehicle Package Policy” valid from 19.11.2020 to 18.11.2021.
On 10.08.2021, the vehicle was sold to complainant No.1 and the Registration Certificate (RC) was transferred in his name on the same day. On 14.08.2021, the vehicle met with an accident on NH-4 near Vantamuri Ghats, Belagavi, and sustained damage. The purchaser had applied for transfer of the insurance policy in his name, and the process was underway at the time of the accident.
The vehicle was shifted to Shoda Toyota, Belagavi. The repair estimate was ₹2,66,379/-. The insurer appointed a surveyor, who assessed the loss at ₹1,60,000/-. The insurer repudiated the claim on 08.01.2022 stating that the policy stood in the name of complainant No.2 while the RC stood in the name of complainant No.1.
Aggrieved, the complainants approached the District Commission, which partly allowed the complaint. The District Consumer Disputes Redressal Commission, Belagavi partly allowed the complaint and directed the Opposite Parties to jointly and severally pay ₹1,60,000/- with interest at the rate of 6% per annum from the date of filing of the complaint till complete realization to Complainant No.1, within 45 days from the date of the order.
The District Commission further directed the Opposite Parties to pay ₹5,000/- towards mental agony and ₹2,000/- towards litigation expenses to Complainant No.1 within 45 days. The insurer then preferred the present appeal.
Contentions of the Insurance Company
The insurer contended that:
• The policy stood in the name of complainant No.2.
• Complainant No.1 was the registered owner on the date of accident.
• There was no insurable interest.
• Section 157 of the Motor Vehicles Act applies only to third-party claims.
• There were discrepancies regarding the driver's details and validity of driving licence.
Observations and Findings
The State Commission observed that:
• It was not in dispute that the policy was valid from 19.11.2020 to 18.11.2021.
• It was not in dispute that the vehicle was sold to complainant No.1 on 10.08.2021 and RC was transferred on the same day.
• It was not in dispute that the accident occurred on 14.08.2021.
• The insurer had appointed an IRDA surveyor who assessed the loss at ₹1,60,000/-.
Referring to Section 157(2) of the Motor Vehicles Act, 1988, the Commission observed that the provision provides for deemed transfer of the insurance policy along with transfer of the vehicle.
The Commission also relied on the Supreme Court's decision in Surendra Kumar Bhilave v. New India Assurance Co. Ltd., wherein it was held that upon transfer of the vehicle, the insurance policy automatically stands transferred in favour of the transferee and the insurer cannot deny own-damage claim on technical grounds.
The Commission held that repudiation of the claim was not justified and that the order passed by the District Consumer Commission was just and proper and required no interference.
Accordingly:
• The appeal was dismissed.
• The impugned order dated 16.11.2023 passed by the District Consumer Disputes Redressal Commission, Belagavi in CC No. 1062/2023 was confirmed.
• No order as to costs.
Case Title: The Branch Manager, M/s Shriram General Insurance Company Ltd. v. Ashok S/o Mahalingappa Doni (deceased Rep by LRs) & Anr. Case No: Appeal No. 1161/2024
Advocate For the Appellant (Insurance Company): Sri M.D. Tigadi, Advocate
Advocate For the Respondents(complainants) : Sri Rohit N. Latur, Advocate