Failure to comply with the transfer provisions under the Motor Vehicles Act results in the transferee having no insurable interest, justifying the rejection of the claim by the insurance company.

ORDER

1. This revision petition has been filed against the order dated 26.2.2007 passed by the State Commission, U.T. Chandigarh in Appeal No. 844/2006 whereby the State Commission dismissed the appeal and affirmed the order passed by the District Forum. District Forum had allowed the complaint and directed the petitioner to pay Rs. 64,800 with interest @ 6% from the date of repudiation of the claim till realization apart from compensation of Rs. 10,000 and costs of Rs. 11,000.

2. Complainant/respondent purchased a second-hand Maruti car No. PB-O8-V-1313 with Chassis No. 1216639 and Engine No. 1661013 from Oriental Bank of Employees Union, which was OP3 before the District Forum. He applied to the RTA, Chandigarh for transfer of the vehicle in his name. RTA asked the respondent to send a letter to National Crime Records Bureau, Delhi and District Transport Office, Jalandhar for confirming the genuineness of the NOC issued by OP3. Since the insurance of the car was expiring on 9.6.2004 and the car was not transferred in the name of the respondent, the respondent got the policy renewed in the name of the previous owner i.e. OP3. On the intervening night of 20/21.8.2004, the car was stolen at Ludhiana. FIR was lodged with the police and the car was recovered on 17.9.2004 in a bad condition. Respondent lodged claim with the petitioner which sought the consent of the respondent to settle the claim at Rs. 64,800. Later on, the petitioner rejected the claim on the ground that there was no insurable interest. Being aggrieved, respondent filed complaint before the District Forum.

3. District Forum allowed the complaint, aggrieved against which the petitioner filed appeal before the State Commission, which has been dismissed by the impugned order. Insurance Company, being aggrieved by the order passed by the State Commission, has filed the present revision petition.

4. The respondent had purchased the vehicle from Sh. OP3 on 27.12.2003. The vehicle was stolen on the intervening night of 20/21.8.2004. By that time, neither the vehicle nor the insurance policy had been transferred in the name of the respondent. It is not disputed before us that the respondent neither got the vehicle registered in his name nor intimated the petitioner Insurance Company regarding the purchase of the vehicle prior to the vehicle being stolen. That, GR-17 had been enacted under which the transferee has to apply for transfer of the insurance policy in his name within 14 days of transfer of the Registration Certificate in his name. Under this GR-17, in the case of third party's interest the transfer is considered to be automatic. However, in the case of own damage, the transferee has to apply for transfer of the insurance policy in his name. GR-10 issued by the Tariff Advisory Committee applicable for the period 1.4.1990 to 30.6.2002 reads as under:

"10. Transfers

On transfer of a vehicle the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. If the transferee is not entitled to the benefit of the bonus or subjected to Malus already shown on the policy, the recovery of the differences between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy. However, on expiry and/or termination of the existing Policy the transferee will be eligible for Bonus or subjected to Malus as per his own entitlement."

5. A bare perusal of GR-10 would show that on sale of the vehicle, the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. GR-10 was replaced by GR-17 w.e.f. 1.7.2002 and the same reads as under:

"On transfer of ownership, the Liability Only cover, either under a Liability Only Policy or under a Package Policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer,

The transferee shall apply within fourteen days from the date of transfer in writi