The insurable interest continues to be in the name of the registered owner unless all requisite documents for transfer are executed. The contract of insurance should be interpreted in a manner that favors the consumer.

ORDER

J.D. Kapoor, President (Oral)- Admittedly, the respondent obtained insurance policy from the appellant in respect of a vehicle covering risk of theft of damage and due to accident. The car was taken away by a person who intended to purchase the same and wanted test drive. Consequently he lodged a complaint with the police and claim with the appellant. The claim was repudiated on the ground that the insurable interest stood transferred as the car had already been sold to the person, who had taken it for test drive. Consequently the respondent filed the instant complaint before District Forum seeking indemnification of loss and compensation..

2. Vide impugned order dated 4.6.2007, the District Forum allowed the complaint with the following directions to the appellant:

(i) OP will pay Rs. 3,80,000 to the complainant as insurance amount and the complainant will issue a letter of subrogation in favour of the OP and will inform RTO concerned to change the ownership in the name of OP.

(ii) The OP repudiated a genuine claim and caused mental agony and harassment and deficiency in service, the OP will pay a sum of Rs. 20,000 to the complainant.

(iii) OP will also pay Rs. 2,000 as cost of litigation to the complainant.

3. Case of the respondent before District Forum leading to the impugned order was that the respondent is an authorised dealer of car. A person who represented himself as a resaler desired to purchase a car and selected a Fiat Palio EL(PS) diesel colour royal gold which was parked in front of the showroom. Respondent wanted to test drive the car and Abhishek Jain escorted him. After half kilometre the car started giving some unusual noise from the front side and the person escorting him got off the car to see but Mr. Amrik Singh suddenly sped off with the car. The respondent verified at the address given by Mr. Amrik Singh but no such person was found there on 19.10.2004. FIR under Section 379, IPC was registered at Vasant Kunj Police Station. Intimation for the theft was given to the appellant on 19.10.2004. The claim of the respondent was not honoured.

4. While justifying the repudiation of the claim, the appellant took the objection that the respondent did not lodge complaint on the same date so that the culprits could be arrested. Moreover, Mr. Amrik Singh obtained the insurance cover of the car on 20.10.2004 and issued a cheque for a sum of Rs. 17,187 in favour of the appellant drawn on Syndicate Bank for payment of insurance premium. The appellant took the plea that the entire transaction had already been completed with Amrik Singh and therefore the respondent has no insurable interest.

5. In our view the appellant has taken a very strange plea as to the transfer of insurable interest. The appellant-Insurance Company did not verify at all the papers of the ownership of the vehicle. Merely because some prospective purchaser had intended to purchase the car and took it for test drive and that too along with the representative of the respondent sitting besides him and in the process committed theft, does not mean that the insurable interests stood transferred in the name of the prospective purchaser. The report was lodged with the police and the police could not trace the car and therefore filed untraced report. District Forum has rightly come to the conclusion that the formalities relating to the purchase were still to be completed when the car was taken for the test drive and moreover Amrik Singh who wanted a test drive did not take the vehicle all alone, he was accompanied by one Abhishek Jain a relative of friend of the respondent and when the car started giving problem it was natural for Abhishek Jain to get down from the car but such circumstances were created by Amrik Singh that gave him an opportunity to take away the car and to succeed in his plan to commit theft of the car.

6. It is not understandable and beyond our comprehension as to how respondent was blamed for theft of the car or transferring insurable