NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Ajit Bharihoke, Presiding Member, Suresh Chandra, Member
Oriental Ship Agency Pvt. Ltd. —Complainant
versus
The Oriental Insurance Co. Ltd.
& Anr. —Opposite Parties
Original Petition No. 112 of 2005
Decided on 16.10.2014

Headnote:(A) Consumer Protection Act, 1986—Sections 2(1)(g), 12 and 21—Fire Accident- Insurable Interest—The owner of the vehicle transferred the same in favour of third person by way of lease agreement—Registration of the Vehicle also transferred in favour of third person—The vehicle met fire accident and Surveyor appointed by the Insurance Company—Surveyor assess the loss to the extent of Rs. 60.00 Lac—The owner giving consent of acceptance of the said offer- However, the insurance company repudiated the claim on the ground that on the date of accident there was no insurable interest in the vehicle—The plea of the insurance company upheld—Complaint rejected. (Paras 3, 16, 17 & 18)

       (B) Motor Vehicles Act, 1988—Section 39, 41 (3), 50, 51—Procedure for registration and transfer- Under the Scheme of the Act ownership precedes registration of vehicle with the transport authority—Once the registration is transferred in favour of some other person, the transferor will left no insurable interest in the vehicle—The complaint having transferred the vehicle, left no insurable interest in the vehicle as per Section 51 when there is higher purchase agreement, an entry is to be made in the certificate of registration—No such entry made in the instant case—Therefore on transfer of the vehicle the owner left no insurable interest in the vehicle- The claim regarding damages rightly repudiated by the insurance company. (Paras 10 to 14, 16, 17 & 18)

       Facts of the case:

        Owner of the vehicle M/s. Orient Ship Agency Pvt. Ltd. transferred the vehicle to M/s Ornate Multi Modal Carriers Pvt. Ltd. on lease agreement for five years but even thereafter continued renewing the insurance policy. The vehicle met fire accident and insurance company appointed surveyor who assessed value of the salvage as Rs. 20.00 Lac and the damages for ‘ 60.00 Lac and sought consent of the complainant. The complainant clarified that the vehicle was transferred on lease for five years vide agreement dated 01.08.2000. On the basis of such disclosure, the claim was repudiated by the insurance company on the ground that the complainant had no insurable interest in the vehicle.

       Findings of the Court:

        Conjoint reading of Sections 39, 41, 50 and 51 of Motor Vehicles Act, 1988, makes it clear that under the scheme of the Act, ownership precedes registration of motor vehicle with the transport authority because a motor vehicle can be registered with the transport authority on the basis of an application for registration moved by or on behalf of the owner of the vehicle and the registration certificate is to be issued to the owner of the vehicle containing the requisite particulars as prescribed by the Central Government and in case of transfer of ownership of a registered vehicle, it is obligatory on the part of the transferee to intimate the factum of transfer to the authority and even the transferor is also bound to report the transfer of ownership in his favour within a period of 30 days to the concerned registering authority in whose jurisdiction he has the residence or place of business where the vehicle is normally kept. From this, it is clear that the registration of vehicle in someone’s name is the proof of ownership of vehicle as on date of registration. There was nothing on the record that after the transfer of registration in favour of M/s Ornate Multi Modal Carriers Pvt. Ltd., the subject vehicle was retransferred to the complainant. Thus, held that ownership of the subject vehicle stood transferred from the complainant to its sister concern Ms/ Ornate Multi Modal Carriers Pvt. Ltd. Thus the insurance contract obtained by the petitioner after the transfer of registration in favour of third party is not valid. Otherwise also, at the time of accident the complainant not being the owner had no insurable interest in the subject vehicle. As such, the repudiation of claim by the insurance company cannot be termed as deficiency in service.

       Result: Complaint dismissed.