IMPORTANT POINT
Petitioner Insurance Company is justified in repudiating insurance claim where Respondent had no insurable interest in vehicle on date of theft.

Prem Narain, Presiding Member—Aggrieved by the order dated 28.09.2006 of the State Consumer Disputes Redressal Commission, Madhya Pradesh, (in short ‘the State Commission, the United India Insurance Co. Ltd. has filed this revision.

2. The facts of the case are that Mahindra Commander Jeep which was made available by respondent No.2 Mahindra & Mahindra Financial Services Ltd. to respondent No.3 S.L.Markam on hire-purchase basis. The insurance was also obtained in the name of respondent No.3. It appears that on account of default on the part of the respondent No.3, the vehicle was repossessed by the respondent No.2 Company and made available to the respondent no.1 under a fresh agreement of hire-purchase. However, the insurance continued in the name of respondent No.3 S. L. Markam. The vehicle was stolen when the insurance cover was in force. Appellant/ insurer repudiated the claim of respondent no.1 on the ground that on the date of theft, the respondent no.1 had no insurable interest in the vehicle in as much as the insurance was not transferred in his name. The respondent no.1 filed the consumer complaint before the District Forum and the District Forum rejected the case of the complainant vide its order dated 27.10.2004, whereas the State Commission allowed the insurance claim of Rs.2,00,000/- in the appeal filed by the complainant vide its order dated 28.09.2006.

3. Heard learned counsel for the parties and perused the records.

4. Learned counsel for the petitioner stated that the main controversy in this case is that the insurance of vehicle continued in the name of previous owner whereas, the vehicle was sold to new owner and the vehicle met with an accident. The District Forum has rightly rejected the case of the complainant whereas the State Commission has wrongly allowed the insurance claim of Rs. 2,00,000/-. The State Commission has relied on the order in the case of Banwarilal Agrawal Vs. National Insurance Company Ltd., 2006 NCJ 72 (NC), wherein National Consumer Disputes Redressal Commission has observed that :-

“The national Commission in a similar fact situation while observing that this technicality should not come in way of insurance company in honouring its part of the contract.”

5. Learned counsel pointed out that Banwarilal Agrawal (supra) has been superseded by the order passed in Madan Singh Vs. United India Insurance Co. Ltd. & Anr., I (2009) CPJ 158 (NC), wherein following has been held:-

“Consumer Protection Act, 1986- Section 21(b)- Motor Vehicles Act, 1988- Section 157(2)- Insurance- Motor Accident Claim-vehicle purchased transferred in name of purchaser- Insurance continued in name of previous owner-Claim denied by insurer- Forum held, policy not transferred in favour of petitioner, petitioner had no insurable interest in vehicle on date of accident, dismissed complaint- Order upheld in appeal- Hence revision- Petitioner suppressed material fact of transfer of vehicle in his name, insured vehicle in name of previous owner- Not entitled to relief.”

6. Learned counsel also placed before me the judgment of Hon’ble Supreme Court in case of Complete Insulations (P) Ltd. Vs. New India Assurance Co. Ltd., (1996) 1 SCC 221, wherein following has been held:-

“Motor Vehicles Act, 1988- Ss. 157 and 146, 147 and 156- Motor Vehicles Act, 1939- Ss. 103-A and 94, 95 – Second-hand purchase of vehicles – Transfer of certificate of insurance and policy- Deemed transfer- Provisions of the new Act compared with those of the old Act-Extent of liability of insurer in case of damage to the vehicle insured in accident-Held, insured not entitled to compensation from insurer for damage to the vehicle transferred to him in absence of a specific contract with insurer covering risk or damage to the vehicle- Insurer’s liability under the Act extends only to risk or damage to property of third party since the deeming provision provides for transfer of third party risks only.”

7. Learned counsel for the respondent no.1 mentioned