No Valid Insurance Claim For 3rd Party In Absence Of Direct Relationship With The Insurer, Chandigarh Commission Dismisses Complaint

Brief Facts:

Anil Dhamey (“the Complainant”) purchased a Polo car in August 2021, initially insured by the previous owner until September 2021. After the purchase, the Complainant had the car transferred into their name. In December 2020, while driving the car, it was involved in an accident caused by a stray dog. The Complainant reported the incident to the police, resulting in a filed report. However, when the Complainant contacted the New India Assurance Company (“the Insurance Company”) to claim damages, the insurance company denied the claim, citing that the insurance policy was not in the Complainant's name at the time of the accident and that the car was not insured by them.

The Complainant attempted to resolve the issue by filing a complaint with the Insurance Ombudsman, but the claim was also denied due to the absence of the insurance policy in the Complainant's name. Despite the Complainant's efforts, including sending a legal notice to the insurance company, the claim was not admitted. Alleging deficiency in service and unfair trade practices on the part of the insurance company, the Complainant filed a consumer complaint before the District Consumer Disputes Redressal Commission-I, Chandigarh (“the District Commission”).

The insurance company argued that the complaint is not maintainable, citing issues such as the concealment of important facts and the absence of a direct contractual relationship between the Complainant and the insurance company. Furthermore, they contended that they rejected the Complainant's claim because the Complainant did not transfer the insurance policy into their name after obtaining the car's registration certificate.

Observations by the Commission:

The District Commission recognized the key issue in the case which was whether the insurance company was justified in denying the Complainant's claim on the grounds that the insurance policy was not in the Complainant's name at the time of the accident and that there was no contractual relationship between the Complainant and the insurance company regarding the policy. The District Commission examined the evidence, including an application allegedly submitted by the Complainant to transfer the insurance policy into their name. However, the authenticity of this application was questioned, as it was not initially mentioned in the complaint and lacked confirmation of receipt by the insurance company.

The District Commission cited Section 157 of the Motor Vehicles Act and various legal precedents, concluding that since there was no contract of insurance between the Complainant and the insurance company at the time of the accident due to the policy not being transferred, the insurance company could not be held liable for the damage to the vehicle, especially when the policy did not cover own damage, and there was no claim for third-party damage.

As a result, the District Commission found that the Complainant failed to establish any deficiency in service on the part of the insurance company, and therefore, the consumer complaint was dismissed.

Case Title: Anil Dhamey vs The New India Assurance Company and anr.

Case No.: Consumer Complaint No. CC/549/2022

Advocate for the Complainant: Sh. Suresh Pal

Advocate for the Respondent: Sh. J.P. Nahar

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