Case: SURENDRA KUMAR BHILAWE Vs. THE NEW INDIA ASSURANCE COMPANY LTD

3. The Appellant was the owner of Ashok Leyland 2214 Truck bearing Registration Number C.G.04/JA 3835, which was covered by a Policy of Insurance issued by the Insurer being Policy Number was 45030031110100001693, effective for the period from 2.6.2011 to 1.6.2012.  4. On 11.11.2011, the said lorry, which was loaded with Ammonia Nitrate at Raipur, commenced its journey for Dhanbad, where the Ammonia Nitrate was to be unloaded. The lorry was driven by Driver, Rajendra Singh.  5. On 13.11.2011, at about 1.45 p.m., while the said truck was on its journey from Raipur to Dhanbad, it met with an accident near Bhakuwa T oil Police Station, Gumla in Jharkhand. It is stated that while negotiating the said truck, near a culvert, to save a cow, which had come on its way, the Driver lost control, as a result of which the said truck turned turtle and fell into a river by the side of the road and was extensively damaged. The Ammonia Nitrate, carried in the truck was also washed away.  6. The accident was reported to the Gumla Police Station, District Gumla, Jharkhand on 16.11.2011 and on 25.11.2011 the Appellant lodged a claim with the Insurer, through one Mohammad Iliyas Ansari.  7. On receipt of information regarding the accident, and the claim, the Insurer appointed an independent Surveyor and Loss Assessor to conduct a spot survey. The independent Surveyor and Loss Assessor appointed by the Insurer, namely, Shri Birendra Kumar Gupta, conducted a spot survey and submitted his report on 29.11.2011.  8. The Insurer, thereafter, appointed one Shri Gyan Chandra, Valuer, Surveyor, Loss Assessor and Investigator to conduct the final survey. The said Shri Gyan Chandra submitted a report dated 25.1.2012 assessing the loss recoverable from the insurer at Rs.4,93,500/- after deduction of salvage value.  9. However, instead of reimbursing the loss, the Insurer issued a show cause Letter dated 22.3.2012 to the Appellant requiring the Appellant to show cause why the claim of the Appellant should not be repudiated, on the allegation that, he had already sold the said truck to the said Mohammad Iliyas Ansari on 11.4.2008. It is, however, not in dispute that the Appellant continued to be the registered owner of the said truck, on the date of the accident.  10. It is the case of the Appellant, that the said truck which had been purchased with finance from ICICI Bank, stood hypothecated to ICICI Bank, and the same could not be transferred without the consent of ICICI Bank. ICICI Bank had not issued No Objection to the Appellant for transfer of the said truck, as the dues of ICICI Bank had not been repaid in full till the date of the accident. Admittedly, however, the Appellant had entered into a sale agreement with the said Mohammed Iliyas Ansari.  11. The Appellant claims that he duly replied to the show cause letter and that he also sent a legal notice on 2.6.2012 to the Insurer, to which there was no reply. The Insurer was disputing the claim, as it had been submitted by Mohammad Iliyas Ansari, and also on the ground of delay in filing the police complaint and in reporting the accident to the Insurer.  12. The Appellant himself submitted a motor claim again on 22.8.2012, but the Insurer refused to accept the same. Under cover of a letter dated 22.8.2012, the Appellant sent the claim form, along with the requisite documents, to the Insurer by Registered Post.  13. Aggrieved by the action of the Insurer company in not releasing the claim of the Appellant, towards reimbursement of losses on account of the accident, the Appellant approached the District Forum with the complaint numbered Case No. 404 of 2012, referred to above.  14. By a judgment and order dated 9.1.2014, the District Forum allowed the complaint filed by the Appellant and directed the Insurer to pay Rs.4,93,500/- to the Appellant within a month along with interest @ 6% per annum from the date of filing of the complaint, that is, 6.10.2012 till the date of payment and further directed the Insurer to pay the Appellant a sum of Rs.5,000/- towards compensation for mental agony and Rs.2,000/- towards cost of litigation.  15. The Insurer appealed to the State Commission. The said appeal, being Appeal No.FA/14/85, was dismissed by the State Commission by an order dated 22.7.2014, which was challenged by the Insurer before the National Commission by filing the Revision Petition No. 4126 of 2014.  16. By the Judgment and order impugned before us, the National Commission has allowed the Revision Petition, set aside the orders of the District Forum and the State Commission respectively, and dismissed the complaint of the Appellant.  17. From the judgment and order dated 9.1.2014 of the District Forum, it is patently clear that the complaint had been resisted by the Insurer on the purported ground that the Appellant had sold the said truck to Mohammad Iliyas Ansari for a consideration of Rs.1,40,000/- and also on the ground of delay in filing a police complaint and in lodging the claim for reimbursement of losses.  18. Before the district Forum, the Insurer contended that the claim of the Appellant had been rejected by the Insurer by a letter dated 22.3.2012, which had duly been received by the Appellant on 22.3.2012. There was no reply to the said letter. On the other hand, the Appellant contended that even though he had entered into a sale agreement with Mohammad Iliyas Ansari, he had not actually transferred ownership of the vehicle to him. Even after the sale agreement, the Appellant had himself been paying instalments, to ICICI Bank, towards repayment of the loan obtained by him for purchase of the said truck.  19. The Appellant contended that he had not been paid the full consideration for the said truck, even as late as on 13.11.2011, when the accident occurred. That is why the Appellant had himself paid insurance premium and taken out the Policy No. 45030031110100001693. The Appellant strenously contended that the Insurer had not produced a scrap of document before the District Forum to show that the premium for the said Insurance Policy No. 45030031110100001693 had been paid by Mohammad Iliyas Ansari. No proceedings had also been initiated for change of registration of the vehicle, which was in the name of the Appellant, to Mohammad Iliyas Ansari. The permit for operating the said truck also stood in the name of the Appellant.  20. The District Forum accepted the contention of the Appellant that the ownership of the said truck did not stand transferred to Mohammad Iliyas Ansari, and allowed the complaint, by its order dated 9.1.2014, for the reasons summarized briefly hereinbelow:-  1. Even though the sale agreement with Mohammad Iliyas Ansari was dated 11.4.2008, the Appellant continued to pay instalments towards repayment of the loan obtained from ICICI Bank, for purchase of the said truck, long thereafter.  2. The Appellant had produced documents to show that he had paid the premium for the insurance policy after 11.4.2008, and even as late as on 31.05.2011.  3. The Insurer had not produced any materials to show said that the insurance premium had not been paid by the Appellant, but had been paid by Mohammad Iliyas Ansari.  4. The said truck was registered in the name of the Appellant and the permit for operating the said truck for carriage of goods also stood in his name.  5. Mohammad Iliyas Ansari had not objected to release of compensation to the Appellant for damage caused to the vehicle, by reason of the accident.  6. The Insurer had not established that Driver, Rajendra Singh was an employee of Mohammad Iliyas Ansari.  21. It had also been argued on behalf of the Appellant, before the District Forum, that the Surveyor appointed by the Insurer had taken a consent letter from the Appellant after the Survey, but had not taken any statement from Mohammad Iliyas Ansari or from the Driver which could show that Mohammad Iliyas Ansari was the owner of the said truck, or the Driver was the employee of Mohammad Iliyas Ansari.  22. The District Forum, thus allowed the claim, holding in effect, that the Appellant continued to be the owner of the vehicle. On the basis of the report of the Surveryor, the gross liability was calculated at Rs.8,48,500/- from which salvage value of Rs. 3,55,000/- was deducted and the net loss recoverable from the Insurer computed at Rs.4,93,500/-.  23. The District Forum directed the Insurer to pay to the Appellant the said sum of Rs.4,93,500/-, with simple interest at 6% per annum from the date of the institution of the complaint, that is, 6.10.2012, a sum of Rs.5,000/- for mental harassment and a sum of Rs.2,000/- towards litigation expenses.  24. In appeal the State Commission found:-  11. We have perused the record of the District Forum. In Certificate of Registration of the vehicle in question, the name of the Respondent (complainant) Surendra Kumar Bhilawe is recorded as registered owner. In the license of Good Vehicle also vehicle bearing No.C.G.04-JA-3835 is registered in the name of the Respondent (Complainant) Surendra Kumar Bhilawe and the Insurance Policy was issued in the name of Respondent (Complainant) Surendra Kumar Bhilawe for the period from 02.06.2011 to 01.06.2012. Looking to the above documents, it appears that the vehicle in question was still recorded in the name of Respondent (Complainant) himself obtained insurance policy from the Appellant (Insurance Company).  12. The Respondent (Complainant) filed documents i.e. letter dated 08.01.2014 sent by ICICI Bank to the Respondent (complainant) Surendra Kumar Bhilawe and Statement of Account. It appears that the loan was being deposited by the Respondent (Complainant) himself and the Appellant (Ops) could not filed any document which shows or indicates that the amount of loan was paid by Mohd. Iliyas Ansari, in the name of the Respondent (Complainant). It appears that the Respondent (complainant) himself had deposited loan amount with the ICICI Bank from where he had obtained loan.  13. An agreement was executed between the Respondent (complainant) Surendra Kumar Bhilawe and Mohammad Iliyas Ansari on 11.04.2008 and the Insurance Policy was obtained by the Respondent (Complainant) on 02.06.2011, which was effective from the period from 02.06.2011 to 01.06.2012. Had the vehicle in question was transferred by the Respondent (complainant) to Mohammad Iliyas Ansari, the Respondent (Complainant) could have intimated the R.T.O. regarding transferring the vehicle in favour of Mohammad Iliyas Ansari and Mohammad Iliyas Ansari himself could have deposited the amount of loan with the ICICI Bank. In the instant case, Mohammad Iliyas Ansari is a material evidence for the Appellant (Ops) to prove that he purchased vehicle in question from the Respondent (complainant) and Mohammad Iliyas Ansari, therefore, on merely filing an agreement executed between the Respondent (Complainant) and Mohammad Iliyas Ansari, it cannot be said the vehicle in question was duly transferred by the Respondent (Complainant) to Mohammad Iliyas Ansari and Mohammed Iliyas Ansari is owner of the vehicle in question.  14. Ld. District Forum, in para 12 of the Impugned Order has observed that Mohammad Iliyas Ansari has not raised any objection against the complaint filed by the Respondent (complainant) from which it is proved that sale agreement is meaningless. The Appellant (OPs) could not prove that river Rajendra Singh was an employee of Mohammad Iliyas Ansari, whereas the contention of the Respondent (complainant) is that vide letter dated 08.08.2012 which was received by the Appellant (OPs) (Insurance Company) wherein it was mentioned by him that by the above sale agreement, the purchaser has not received any right and the Respondent (complainant) only is registered owner of the vehicle. In para 13, the District Forum has observed that the contention of the Respondent (complainant) is that the Surveyor, who was appointed by the Insurance company, has taken consent letter dated 02.01.2012 of Respondent (complainant) after conducting survey. The Appellant (OPs) had not filed any evidence that they had taken statement of Mohammad Iliyas Ansari or statement of the driver who mentioned that the vehicle was of the ownership of Mohammad Iliyas Ansari.  15. The finding recorded by the District Forum, is just and proper and does not suffer from any jurisdictional erroneously, irregularity or illegality, hence does not call for any interference by this Commission.. The National Commission set aside the orders of the District Forum and the State Commission, thereby rejecting the concurrent factual finding of both the fora, and dismissed the complaint on the ground that the Appellant had sold his vehicle to Mohammad Iliyas Ansari.  26. The National Commission observed that when an owner of a vehicle sells his vehicle and executes a sale letter without in any manner postponing passing of the title to the property in the vehicle, the ownership in the vehicle passes to the purchaser on execution of the sale letter. The delivery of the vehicle, to the purchaser, reinforces the title which the purchaser gets to the vehicle, on execution of the sale letter in his favour. The National Commission also drew adverse inference against the Appellant, since the FIR was lodged with the Police on 16.11.2008, that is, three days after the accident and intimation of the claim was given to the Appellant 12 days after the accident, that is, on 25.11.2011.  27. The National Commission Held:-  A perusal of the sale agreement dated 11.4.2008 executed by the complainant with Shri Mohd. Iliyas Ansari would show that the complainant handed over the possession of the aforesaid vehicle to Shri Ansari on payment of Rs.1,40,000/- Since the vehicle had been got financed from ICICI Bank the remaining payment was to be made by the purchaser directly to the said bank. The aforesaid document also shows that a sum of Rs.1,40,000/- was received by the complainant from Shri Ansari on 11.4.2008. Thus, it stands duly proved that not only had the complainant received the sale consideration agreed with Shri Ansari he had also delivered the possession of the vehicle to him on 11.4.2008.  7.Though the vehicle was not got registered in the name of Shri Ansari by the time it met with an accident, that in our opinion, would be of no consequence in view of the sale having been already completed on 11.4.2008.

Court's reasoning:
28. The National Commission completely ignored the following concurrent factual findings of the District Forum and State Commission:-(i) Even after the date of the purported sale agreement, that is, 11.4.2008, the Appellant continued to pay instalments to ICICI Bank towards repayment of the loan for purchase of the said truck.(ii) The ICICI Bank had neither released the said truck from hypothecation nor given No Objection for the sale of the said truck.(iii) The Appellant paid the premium and took out the policy of insurance on or about 31.5.2011 covering the period from 2.6.2011 to 1.6.2012 in his own name. This was over three years after the date of the purported sale agreement.(iv) No steps were taken by the Appellant or by Mohammad Iliyas Ansari to have the registration of the said truck transferred in the name of Mohammad Iliyas Ansari.(v) The permit for operating the said truck was still in the name of the Appellant over three years after the purported sale agreement.29. There was no material evidence at all before the National Commission, on the basis of which the National Commission could have reversed the concurrent factual findings of the District Forum and the State Commission which unerringly led to the conclusion that ownership of the said truck never stood transferred to Mohammad Iliyas Ansari30. In fact, the National Commission did not address the following questions:-(i) Who actually paid instalments to ICICI Bank after 11.4.2008 – the Appellant or Mohammad Iliyas Ansari? The concurrent finding of the District Forum and the State Commission that the Appellant paid instalments to ICICI Bank even after 11.4.2008, therefore, remained unshaken.(ii) If the ownership of the said truck stood transferred on 11.4.2008, why would the Appellant continue to pay the instalments to ICICI Bank towards repayment of the loan for purchase of the said truck?(iii) Was any No Objection obtained from ICICI Bank for transfer of the said truck?(iv) Could the Appellant have transferred the said truck without No Objection from ICICI Bank?(v) Who actually paid the Insurance Premium on 31.5.2011 for the said Policy No.45030031110100001693 effective from 2.6.2011 to 1.6.2012?(vi) If the ownership of the said truck were transferred, why would the Appellant have taken out an Insurance Policy covering the said truck in his own name even on 31.5.2011, after over three years?(vii) Was the Driver Rajendra Singh employee of the Appellant or of Mohammad Iliyas Ansari? Was any statement in this regard taken either from Driver Rajendra Singh or Mohammad Iliyas Ansari?(viii) Were any steps ever taken for transfer of registration of the said truck in the name of Mohammad Iliyas Ansari?(ix) If the ownership of the said truck stood transferred to Mohammad Iliyas Ansari, why did he not take steps to have the registration of the said truck transferred in his own name even after three years?(x) In whose name did the permit to operate the said truck stand?(xi) Why would Mohammad Iliyas Ansari run the said truck with a permit in the name of the Appellant, if he was its owner, thereby exposing himself to penal consequences under the Motor Vehicle Act and the Rules framed thereunder?(xii) Could ownership of the said truck be transferred without transfer of registration in the name of the transferee, in view of the Motor Vehicle Act, 1988 and the Rules framed thereunder?31. In our considered opinion, Sections 19 and 20 of the Sale of Goods Act, 1930, which deal with the stage at which the property in movable goods passes to the buyer, is of no assistance to the Insurer. There can be no doubt that property in a specific movable property is transferred to the buyer at such time as parties to the contract intend it to be transferred, provided such immovable property is free to be transferred, and/or in other words capable of being transferred32. If there is an impediment to the transfer, as in the instant case, where No Objection of the financier bank was imperative for transfer of the said truck, there could be no question of transfer of title until the impediment were removed, for otherwise the contract for transfer would be injurious to the financier bank, immoral, unlawful and void under Section 10 read with Sections 23 and 24 of the Contract Act, 187233. It was thus, an implicit condition of the agreement for transfer of the said truck, that the transfer would be complete only upon issuance of No Objection by the financier bank and upon compliance with the statutory requirements for transfer of a motor vehicle34. The contract in this case, could not possibly have been an unconditional contract of transfer of movable property in deliverable state, but a contract to transfer, contingent upon No Objection from ICICI Bank, and compliance with the statutory provisions of the Motor Vehicles Act, 1988 and the Rules framed thereunder. Sections 19 and 20 of the Sale of Goods Act are not attracted35. The National Commission overlooked the definition of owner in Section 2(30) of the Motor Vehicle Act, 1988. In Section 2(30) owner has been defined to mean a person in whose name a motor vehicle stands registered and, where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement. Even assuming that Mohammad Iliyas Ansari was in possession of the said truck at the time of the accident, such possession was not under any agreement of lease, hire purchase or hypothecation with ICIC Bank.37. The National Commission also overlooked other applicable provisions of the Motor Vehicle Act 1988, particularly Sections 39 to 41, 50, 51, 66, 69, 82, 84(g), 86(c), 146, 157, 177 and 192A.39. It appears that the National Commission patently erred in holding that the Appellant had been paid the consideration without even examining if Mohammad Iliyas Ansari had paid any instalments to ICICI Bank40. The finding of the National Commission that the fact of registration of the said truck in the name of the Appellant was inconsequential is also not sustainable in law. Section 2(30) of the Motor Vehicles Act, 1988 defines owner to mean the person in whose name the motor vehicle stands registered. The definition of owner has been overlooked and ignored by the National Commission. Had ownership of the said truck intended to be transferred forthwith, the registration would have been transferred in the name of the transferee, as also the permit to operate the said truck for carriage of goods41. It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws. It does not also stand to reason why a person who has transferred the ownership of the vehicle should, for over three years, benevolently go on repaying the loan for purchase of the vehicle, take out insurance policies to cover the vehicle or otherwise discharge obligations of ownership42. It is equally incredible that an owner of a vehicle who has paid consideration to acquire the vehicle would not insist on transfer of the permit and thereby expose himself to the penal consequence of operating a goods vehicle without a valid permit43. The National Commission also failed to appreciate that Section 157 of the Motor Vehicles Act provides that where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate are to be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred, with effect from the date of its transfer44. The explanation to Section 157 clarifies, for the removal of all doubts, that such deemed transfer would include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. The transferee might, within 14 days from the date of transfer, apply to the Insurer in the prescribed form, for making requisite changes in the certificate of insurance and the policy of insurance with regard to the factum of transfer of insurance. There could be no reason for a transferee of an insured motor vehicle, to refrain from applying for endorsement of the transfer in the Insurance Policy Certificate when insurance covering third party risk is mandatory for using a vehicle45. In any case, there could be no reason for the Appellant to take out an insurance cover in his own name as late as on 31.5.2011, covering the period from 2.6.2011 till 1.6.2012, if the Appellant had transferred ownership of the vehicle in April 2008. It is incredible that the transferee, Mohammad Iliyas Ansari would take the risk of operating a vehicle, owned by him, without taking out a policy of Insurance in his own name, inter alia, covering third party risks, notwithstanding the mandate of Section 146 of the Motor Vehicles Act, 1988 prohibiting the use of a motor vehicle without third party insurance49. The Judgment of this Court in Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident50. The policy of insurance in this case, was apparently a comprehensive policy of Insurance which covered third party risk as well. The Insurer could not have repudiated only one part of the contract of insurance to reimburse the owner for losses, when it could not have evaded its liability to third parties under the same contract of Insurance in case of death, injury, loss or damage by reason of an accident51. The FIR was lodged within three days of the accident. In the case of a major accident of the kind as in this case, where the said truck had turned turtle and fallen into a river, slight delay if any, on the part of the traumatized driver to lodge an FIR, cannot defeat the legitimate claim of the Insured. Of course in our view, there was no delay at all in lodging the FIR. In case of a serious accident in course of inter-state transportation of goods, delay of 20 days in lodging a claim is also no delay at all. It is nobodys case that the claim application filed by the Appellant was time barred. Moreover, the Insurer had, in any case, duly sent its Surveyors/ Assessors to assess the loss. The claim of the Appellant could not have, in this case, been resisted, either on the ground of delay in lodging the FIR, or on the ground of delay in lodging an Accident Information Report, or on the ground of delay in making a claim52. In any case, as held by this Court in Om Prakash vs. Reliance General Insurance and Another (2017) 1 SCC 724 delay in intimation of accident, or submission of documents due to unavoidable circumstances, should not bar settlement of genuine claims53. In our considered opinion, the National Commission erred in law in reversing the concurrent factual findings of the District Forum and the National Commission ignoring vital admitted facts as stated above, including registration of the said truck being in the name of the Appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the Appellant of the premium for the Insurance Policy, issuance of Insurance Policy in the name of the Appellant, permit in the name of the Appellant even after three years and seven months, absence of No Objection from the financier bank etc. and also overlooking the definition of owner in Section 2(30) of the Motor Vehicles Act, as also other relevant provisions of the Motor Vehicles Act and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 15754. In view of the definition of owner in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari.55. The judgment of this Court in Oriental Insurance vs. Sony Cheriyam (1999) 6 SCC 451 was rendered in the context of liability of an Insurer in terms of the insurance policy and is not attracted in this case, where the claim of the insured has not been rejected on the ground of the same not being covered by the policy of insurance, but on the ground of purported transfer to a third party by entering into a sale agreement56. We have not dealt with the judgments of the National Commission and/or other Fora under the Consumer Protection Act, 1986, relied upon by the parties, as they are factually distinguishable and are in any case, not precedents binding on this Court. In any case, we have considered and dealt with the submission of the respective parties at length.