Person Can’t Claim Insurance Amount If Policy Is Not Transferred In His/her Name, Andhra Pradesh Commission Allows National Insurance Co’s Appeal

Brief Facts:

The complainant's husband purchased a Honda City car and insured it with National Insurance Company Limited ("Insurance Company"). Subsequently, the car was transferred to the complainant, his wife. Following an accident, the complainant incurred repair expenses amounting to Rs. 1,88,070. Seeking reimbursement, the complainant submitted a claim to the Insurance Company. However, the Insurance Company repudiated the claim, asserting that the complainant lacked insurable interest since the policy was initially obtained and submitted in her husband's name.

Feeling aggrieved by this decision, the complainant lodged a consumer complaint with the District Consumer Disputes Redressal Commission in Machilipatnam, Andhra Pradesh ("District Commission"). The District Commission ruled in favour of the complainant, directing the Insurance Company to disburse the insurance amount. Additionally, the Insurance Company was ordered to pay Rs. 10,000/- as compensation for mental agony and Rs. 5,000/- for litigation costs.

Unsatisfied with the District Commission's decision, the Insurance Company appealed to the State Consumer Disputes Redressal Commission in Andhra Pradesh ("State Commission"). The Insurance Company argued that, although the car was transferred to the complainant's name, the insurance policy was not similarly transferred. Citing the Motor Vehicles Act and the All-India Tariff Guidelines, which stipulate that the transferee must approach the Insurance Company within 14 days of ownership transfer, submit a proposal with the new owner's details, and remit the prescribed fee for ownership transfer, the Insurance Company claimed that the complainant overlooked this requirement. The complainant herself acknowledged this oversight, admitting that she failed to transfer the insurance policy to her name.

Observations by the Commission:

The State Commission concurred with the arguments presented by the Insurance Company and determined that, given the non-transfer of the insurance policy into the complainant's name, the Insurance Company rightfully repudiated the claim in accordance with the terms and conditions of the relevant policy. The State Commission also noted that the District Commission overlooked the absence of insurable interest between the complainant and the Insurance Company at the time of the accident.

Relying on the precedent set in the case of M/s Complete Insolations (P) Ltd. vs New India Insurance Company Limited (AIR 1996 Supreme Court 586), the State Commission emphasized that an individual is not entitled to claim damages for the accident of the vehicle when the insurance policy has not been transferred into their name.

Consequently, the appeal was allowed, and the District Commission's order was set aside.

Case Title: National Insurance Company Limited and Anr. vs Smt. Buragadda Sridevi

Case No.: F.A. No. 138 of 2018

Advocate for the Appellants: M/s N.V.R Krishna Kumar

Advocate for the Respondent: M/s K. Venkateswarlu

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