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TAMIL NADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, MADRAS
Hon’ble Thiru Justice S.A. Kader, President;
Thiru R.N. Manickam, I.P.S. (Retd.), Member;
Dr. Tmt. Ramani Mathuranayagam, Member.
S. PUSHPA DEVI JAMAD—Complainant
versus
THE NEW INDIA ASSURANCE CO. LTD. & ANOTHER—Opposite Parties
O.P. No. 340 of 1992—Decided on 6.4.1993
For the Complainant :Mr. M. Mahendra Kumar, Advocate.
For the Opposite Parties :Mr. M.B. Gopalan & Mr. C. Banerji, Advocates.
A financier who is the beneficiary of an insurance policy taken by the purchaser of a vehicle under a hire purchase agreement has an insurable interest in the vehicle and can maintain a complaint against the insurance company for rejecting a claim for damages to the vehicle.
Headnote:
CONSUMER PROTECTION ACT - SECTION 2(1)(D)(II) - HIRE PURCHASE AGREEMENT - INSURABLE INTEREST - FINANCIER AS BENEFICIARY - MAINTAINABILITY OF COMPLAINT - COMPENSATION - SURVEYOR'S REPORT.
Fact of the Case:
A financier filed a complaint against an insurance company for rejecting a claim for damages to a vehicle purchased under a hire purchase agreement. The insurance company contended that the complaint was not maintainable as the financier did not have an insurable interest in the vehicle.
Finding of the Court:
The court held that the financier had an insurable interest in the vehicle by virtue of the hire purchase agreement and was therefore a consumer within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act. The court also held that the complaint was maintainable as the financier was the beneficiary of the insurance policy taken by the purchaser of the vehicle.
Issues: 1. Whether the financier had an insurable interest in the vehicle. 2. Whether the complaint was maintainable.
Ratio Decidendi: 1. The court held that the financier had an insurable interest in the vehicle by virtue of the hire purchase agreement. The court relied on the clause in the insurance policy which recognized the financier as the owner of the vehicle and provided that any monies payable under the policy for loss or damage to the vehicle would be paid to the financier. 2. The court held that the complaint was maintainable as the financier was the beneficiary of the insurance policy taken by the purchaser of the vehicle.
Final Decision: The court allowed the complaint and ordered the insurance company to pay the financier Rs. 1,18,500/- as compensation with interest at 12% from the date of the claim till payment.
Mr. Justice S.A. Kader, President—This is a complaint under Section 17 read with Section 12 of the Consumer Protection Act.
2. The Complainant is a Financier. The 2nd Opposite Party borrowed a sum of Rs. 1,10,000/- from the Complainant for the purchase of a second- hand Ashok Leyland Lorry bearing Registration No. TSJ 8496 and entered into a Hire Purchase Agreement on 25.7.1992. By virtue of this Hire Purchase Agreement the Complainant is the owner, the 2nd Opposite Party is the hirer. A sum of Rs. 1,57,200/- is now due to the Complainant under the Hire Purchase Agreement. The 2nd Opposite Party has taken a comprehensive policy of insurance in respect of this lorry with the 1st Opposite Party for the period from 27.7.1990 to 26.7.1991. The policy acknowledges the Hire Purchase Agreement. As the 2nd Opposite Party was unable to pay the installment, he surrendered the vehicle to the Complainant on 23.1.1991 which was then loaded with machinery for delivery to M/s. BEML at Patna. The vehicle proceeded at Patna and on the way it met with an accident at Palavalasa. The goods were transported by another vehicle. On account of the non-availability of a heavy crane, the lorry could not be lifted from the scene of accident and it was lying there till 27.3.1991, during which time the analcites had set fire to the vehicle and the vehicle was heavily damaged. The Complainant is financier preferred a claim before the 1st Opposite Party, which rejected the same. Hence this Complaint claiming a sum of Rs. 2.25 lakhs with interest at 18% and costs.
3. The claim is resisted by the 1st Opposite Party mainly on the ground that the Complaint filed by the financier is not maintainable. The interest of the Complainant noted in the policy contemplated only payment of any amount to the Complainant as financier, which is Otherwise payable to the insured. It is also denied that the 2nd Opposite Party surrendered the vehicle to the 1st Opposite Party. The cause of the damage as well as the extent of the damages claimed in the complaint were also denied. The amount claim is also disputed as excessive. The loss if any is only Rs. 1,18,500/- as per the survey report. It is therefore prayed for the dismissal of the complaint.
4. The 2nd Opposite Party has filed a separate counter raising the same objections against the maintainability of the Complaint. It is denied that he failed to pay the installment to the Complainant or that he surrendered the vehicle voluntarily to the Complainant. According to him, the Complainant’s husband with the help of others forcibly seized the vehicle from him. The cause and the extent of the damages alleged of the vehicle are also disputed. In any event, there is no insurable interest in the Complainant to maintain this complaint.
5. Exhibits A-1 to A-21 and B-1 to B-23 are marked. Proof affidavits are filed. No oral evidence has been let-in.
6. The 2nd Opposite Party has obtained a loan from the Complainant and purchased a lorry bearing Registration No. TSJ 8496 and has entered into Hire Purchase Agreement with the Complainant on 25.7.1990. Exhibit A-1 is the said agreement. According to the Complainant, the 2nd Opposite Party did not pay the installments and consequently he surrendered the vehicle to the Complainant under Exhibit A-4. The vehicle has met with an accident at Palavalasa in Andhra Pradesh. While the consignment has been transported, the vehicle has been set fire to by analcites and has suffered heavy damage. The 2nd Opposite Party purchased the vehicle and insured the same with the 1st Opposite Party under Exhibit B-1 for the sum of Rs. 1,90,000/-. By virtue of this policy of insurance, the Complainant who is the financier has preferred a claim which has been rejected by the Insurance Company and hence this complaint.
7. The contentions of the Opposite Parties is that the Complaint filed by the financier is not maintainable. The Complainant has not insurable interest entitling her to claim compensation for the l
