IMPORTANT POINT
Chapter XI of the MV Act deals with third party risk, not covering other risks. Other risks are governed by contract between the vehicle owner and the insurer.

JUDGMENT :

DHANANJAYA Y. CHANDRACHUD, J.

1. Leave granted.

2. This appeal arises from a judgment of the National Consumer Disputes Redressal Commission “NCDRC” dated 11 March 2014 dismissing a revision petition filed by the appellant. The NCDRC upheld the view of the District Consumer Disputes Redressal Forum, Jalandhar “District Forum” and of the State Consumer Disputes Redressal Commission, Chandigarh “SCDRC” that the insurer was not liable on a claim preferred under a policy of insurance for the loss of a vehicle occasioned by theft.

3. The third respondent entered into a Hire Purchase Agreement with ICICI Bank “Bank” the second respondent through its Branch at Jalandhar in respect of a vehicle. Pursuant to the agreement, the third respondent paid a few instalments but then committed a default upon which possession of the vehicle was taken by the Bank. The vehicle was put up for auction on 31 March 2006 and was purchased by the appellant for a consideration of Rs. 2,42,000. Besides the payment of an amount of Rs. 5,000 as earnest money, the appellant paid the balance by a cheque dated 31 March 2006 drawn on the State Bank of Bikaner & Jaipur. Possession of the vehicle was handed over to the appellant on 7 April 2006 after the cheque was encashed together with a certificate of possession of the vehicle. The Bank issued a letter dated 19 April 2006 to the first respondent, which had insured the vehicle, for the cancellation of the entry of hypothecation from the registration certificate of the vehicle. On 22 May 2006, the appellant got the vehicle insured by the first respondent in the amount of Rs. 3,28,100 against payment of a premium in the amount of Rs. 6,999. An insurance policy was issued by the first respondent. The name of the insured was reflected as the third respondent but significantly the address section in the policy document contained the name of the appellant together with its business address.

4. According to the appellant, insurance premium was collected by the insurer from it but since the registration certificate was still to be transferred, the insurance policy continued to reflect the name of the third respondent as the insured.

5. The appellant applied for and obtained a certificate of exemption from the Regional Transport Authority so as to facilitate the transfer of the registration certificate to its name. The certificate of exemption was on the ground that the vehicle was exempted from obtaining a route permit.

6. The vehicle was stolen on the intervening night between 13 and 14 June 2006. The appellant lodged a First Information Report about the incident on 14 June 2006 and the first respondent was informed on 4 July 2006.

7. On 12 October 2006, the police issued a certificate to the effect that the vehicle was untraced. On 19 October 2006, the appellant lodged a claim for the loss of the vehicle with the first respondent and enclosed the registration certificate, FIR and the certificate of the police stating that the vehicle was untraced.

8. On 16 November 2006, the first respondent rejected the claim on the ground that the ownership of the vehicle and the insurance policy stood in the name of the third respondent and on the ground that the bank had a financial interest. The first respondent stated that the vehicle must have been insured by the Bank as well. The claim was also rejected on the ground that the appellant did not have an insurable interest. The appellant addressed a letter dated 28 November 2006 to the first respondent. However, the claim was repudiated on 21 March 2007 by the insurer on the ground that the appellant had no insurable interest since the registration certificate was not transferred to it. The rejection of the claim led to the filing of a consumer complaint before the District Forum at Jalandhar. The claim was dismissed on 30 April 2008. The order of the District Forum was upheld by the State Commission on 22 March 2013 in appeal and, in revision, by the NCDRC on 11 March 2014.

9.