1. THE complainant M/s. Orient Ships Agency Pvt. Ltd. is engaged in the business of shipping, transportation and handling mobile cranes. The complainant company owned various mobile cranes/container handler including the P.P.M. Stacker 1995 having registration no. MH -01 R 1652 (herein after referred to as subject vehicle).
2. THE subject vehicle was insured with the Oriental Insurance Company Limited on 19.09.1995 for sum assured of Rs. 1,56,00,000/ - for the period w.e.f. 19.09.1995 to 18.09.1996. Thereafter, the complainant renewed the policy from year to year. The registration of the subject vehicle was transferred in the name of M/s. Ornate Multi Modal Carrier Pvt. Ltd. in R.T.O. record w.e.f. 21.08.2000. Even after the transfer of registration, the complainant kept on renewing the insurance policy on year to year basis in its own name and the last policy was for Rs. 80.00 lakhs for the period w.e.f. 19.09.2003 to 18.09.2004.
That on 08.11.2003 the subject vehicle met with fire accident resulting in damage to the subject vehicle. The information was given to the fire brigade as well as the opposite party insurance company. M/s. Rehman & Company was appointed by the opposite party to conduct survey and assess the loss. The surveyor assessed the salvage value of subject vehicle at Rs. 20.00 lakhs and proposed the settlement of loss of subject vehicle on total loss basis for Rs. 60 lakhs. The surveyor vide his letter dated 28.07.2004 called upon the complainant to send his acceptance letter so that it could be submitted to the insurer for settlement of claim alongwith surveyor report. It is alleged by the complainant that he was advised to give consent letter failing which he was threatened with the rejection of his claim. Since the complainant was hard pressed for finances, he had no alternative but to accept the proposal of surveyor and accordingly complainant conveyed his acceptance to the proposal of the surveyor vide letter dated 05.08.2004. The surveyor, thereafter, sought certain clarifications from the complainant particularly in respect of registration of subject vehicle having been transferred in the name of M/s. Ornate Multi Modal Carrier Pvt. Ltd. The complainant allegedly clarified aforesaid aspect to the surveyor and informed that ownership of the subject vehicle was given to M/s. Ornate Multi Modal Carrier Pvt. Ltd. on lease for a period of five years vide lease agreement dated 01.08.2000. According to the complainant M/s. Ornate Multi Modal Carrier Pvt. Ltd. is its sister concern and the registration of the vehicle was transferred in its name with a view to enable said company to fulfill the eligibility requirement for the tender floated by Jawahar Lal Nehru Port Trust/Central Ware Housing Corporation/Punjab State Container Ware Housing Corporation. Despite of the clarification given, the insurance claim of the complainant was repudiated by the opposite party insurance company vide letter dated 23.12.2004 on the ground that at the time of accident and the loss caused to the subject vehicle, the complainant had no insurable interest in the vehicle.
3. BEING aggrieved of the repudiation of his claim, the complainant filed the present complaint with following prayer:
"a. Rs. 80,00,000/ - being the insured value of Mobile Crane which was admittedly a total loss.
b. Rs. 30,53,589/ - being the interest @ 18% p.a. from 08.11.2003 till 21.12.2005.
c. Pendente lite and future interest @ 18% p.a. till the date of payment.
d. Damages amounting to Rs. 50,00,000/ - @ Rs. 2,00,000/ - per month which the complainant has been suffering from 08.11.2003 till 21.12.2005 and further damages during the pendency of the present complaint @ Rs. 2,00,000/ - per month till the actual payment.
e. Cost of these proceedings may also be awarded in favour of the complainant.
f. Any other relief which this Hon''ble Commission may deem fit and proper under the facts and circumstances of the case be also awarded in favour of the complainant and against the respondent."
4. THE insurer opposite parties in their written statement alleged that the assessment of loss done by the surveyor is subject to the validity of the insurance contract. It is pleaded by the opposite party that the relevant insurance policy is not a valid contract because it was obtained by the complainant by suppressing the material fact regarding transfer of ownership of crane in favour of M/s. Ornate Multi Modal Carriers Pvt. Ltd. on 21.08.2000. It is also alleged by the opposite party that as the ownership of the crane was transferred in August 2000, as such the complainant at the time of accident dated 08.11.2003 had no insurable interest in the subject crane and as such the repudiation of insurance claim is justified and there is no deficiency in service.
Mr. Rajeev Tyagi, Advocate for the complainant has contended that the repudiation of insurance claim on the ground of lack of insurable interest is not justified. Expanding on the argument, learned counsel for the complainant submitted that term insurable interest has not been defined in the Insurance Act. However, the term is defined in Section 7 of the Marine Insurance Act which is a cognate statute. As such analogy of the aforesaid provision should be drawn to construe insurable interest in respect of the motor vehicle insurance. Learned counsel for the complainant has referred to the lease agreement dated 01.08.2000 executed between the complainant and M/s. Ornate Multi Modal Carriers Pvt. Ltd. and submitted that from this document, it is obvious that the title of the subject crane always remained with the complainant and the crane was given to M/s. Ornate Multi Modal Carriers Pvt. Ltd. for user on lease hold basis. Thus, it cannot be said that the complainant had parted with the insurable interest in the mobile crane though registered at the time of loss stood in the name of the lessee. Learned counsel for the complainant has contended that the transfer of registration of owner in the name of other party cannot be taken as the transfer of ownership. In support of his contention, learned counsel for the complainant has relied upon the judgment of Supreme Court in the matter of New India Assurance Co. Ltd. Vs. G.N. Sainani : (1997) 6 SCC 383, Uttar Pradesh State Road Transport Corporation Vs. Kulsum & Ors. : (2011) 8 SCC 142 and judgment of Delhi High Court in the matter of New India Assurance Co. Ltd. Vs. M/s. T.T. Finance Ltd. & Ors. : AIR 2011 Delhi 121.
5. LEARNED Ms. Savita Singh, Advocate for the opposite party on the contrary has contended that admittedly ownership of the subject crane was transferred in the name of M/s. Ornate Multi Modal Carriers Pvt. Ltd. in the year 2000 but this information was concealed by the complainant and he kept on getting the insurance policy renewed for three years by suppressing the material fact regarding transfer of ownership. Therefore, insurance policy obtained after the transfer of subject crane is null and void. It is further contended by the opposite parties that as the ownership of the crane stood transferred in the name of M/s. Ornate Multi Modal Carriers Pvt. Ltd., the complainant on the date of accident had no insurable interest in the subject crane. As such, repudiation of the insurance claim is justified and opposite party has not committed any deficiency in service.
6. WE have considered the rival contentions and perused the record. The question which needs consideration is whether on the date of fire accident, the complainant had insurable interest in the subject vehicle?. The answer to this question would depend upon the fact whether the entry in the RTO record pertaining to transfer of registration of vehicle in the name of someone other than the original registered owner can be treated as the proof of transfer of ownership of vehicle?
In order to find answer to the above question, it would be useful to have a look on Chapter IV of the Motor Vehicles Act, 1988 (herein after referred to as the Act), which deals with Registration of the Motor Vehicle.
7. SECTION 39 of the Act provides that no person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or any other place unless the vehicle is registered in accordance with other provisions of Chapter IV.
8. SECTION 41 of the Act deals with procedure for registration of vehicle. Section 41(1) of the Act provides that in order to get the motor vehicle registered with the concerned transport authority, an application by or on behalf of the owner of the motor vehicle for registration shall be filed in prescribed form and it shall be accompanied by the documents, particulars and information as may be prescribed by the central government. The Section further provides that whether the motor vehicle is jointly owned by more persons than one, then the application shall be made by one of them on behalf of all the owners and the applicant shall be deemed to be the owner of the motor vehicle for the purpose of the Act.
Clause 3 of Section 41 provides that registering authority shall issue to the owner of the motor vehicle registered by it a certificate of registration in such form and containing such particulars and information as may be prescribed by the Central Government.
9. SECTION 50 of the Act deals with transfer of ownership and it reads as under:
50. Transfer of ownership: (1) Where the ownership of any motorcycle registered under this Chapter is transferred -
(a) the transferor shall -
(i) in the case of a vehicle registered within the same State, within fourteen days of the transfer, report the fact of transfer, in such form with such documents and in such manner, as may be prescribed by the Central Government to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; and to "prescribed by the Central Government to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; and"
(ii) in the case of a vehicle registered outside the State, within forty -five days of the transfer, forward to the registering authority referred to in sub -clause (i) - -
(a) the no objection certificate obtained section 48; or
(b) in a case where no such certificate has been obtained -
(I) the receipt obtained under sub -section (2) of Section 48; or
(II) the postal acknowledgment received by the transferee if he has sent an application in this behalf by registered post acknowledgment due to the registering authority referred to in section 48, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted;
(b) the transferee shall within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept as the case may be and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration."
10. CONJOINT reading of the above provision 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 is 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, we are of the view that ownership of the subject vehicle stood transferred from the complainant to its sister concern M/s. Ornate Multi Modal Carriers Pvt. Ltd.
Learned counsel for the complainant has drawn our attention to the copy of lease agreement dated 01.08.2000 purported to have been entered into between the complainant and M/s. Ornate Multi Modal Carriers Pvt. Ltd. It is contended that it is clear from the lease agreement that the complainant has given the subject vehicle on lease to its sister concern M/s. Ornate Multi Modal Carriers Pvt. Ltd. in order to enable said concern to fulfill the eligibility requirement of the tender floated by JNPT/CWC/Government bodies. It is contended that Clause IV of lease deed clearly indicate that the complainant had allowed lessee company to get the subject vehicle insured in their names with the RTO to fulfill the eligibility criteria of the tender notes and from this it is clear that the ownership of the vehicle was never transferred.
11. WE do not find merit in this contention, firstly because the lease agreement cannot be taken into consideration because it is unregistered document despite of the fact that agreement of lease is for a period of more than one year. The document have a stamp impression "6 March 2000" despite of the fact that lease is purported to have been executed on 01.08.2000. This casts a doubt on the genuineness of this document and possibility cannot be ruled out that this document has been created subsequently with a view to create a case against the decision of repudiation of claim. Thirdly, Section 51(1) of the Motor Vehicle Act deals with the special provisions regarding motor vehicle subject to hire -purchase agreement/ lease agreement. The relevant section is reproduced as under:
"Special provisions regarding motor vehicle subject to hire -purchase agreement, etc. (1) Where an application for registration of a motor vehicle which is held under a hire -purchase, lease or hypothecation agreement (hereafter in this section referred to as the said agreement) is made, the registering authority shall make an entry in the certificate of registration regarding the existence of the said agreement."
12. ON reading of the above, it is clear that when an application for registration of motor vehicle under hire purchase, lease or hypothecation is made, the registering authority is required to make an entry in the certificate of registration regarding existence of said agreement. Admittedly, in the instant case, there is no entry about existence of lease agreement between the complainant and M/s. Ornate Multi Modal Carriers Pvt. Ltd. in the registration certificate regarding transfer of ownership. This imply that at the time of application for transfer of ownership, the complainant or the transferee company did not mention about any lease agreement between the parties. As the complainant by his own act had allowed the transfer of ownership of vehicle in the record of RTO on 21.08.2000, now it is estopped from taking a contradictory plea. Thus, the plea of the complainant that the subject vehicle was given on lease to the sister concern and ownership was not transferred, is devoid of any merit.
Undisputedly, the complainant got the subject vehicle insured with the opposite party for the first time on 19.09.1995 and thereafter he had been renewing the insurance policy on year to year basis. It is also not disputed that registration of the subject vehicle was transferred in favour of M/s. Ornate Multi Modal Carriers Pvt. Ltd. on 21.08.2000. There is no evidence on record to show that the complainant or the transferee company ever intimated the insurance company about the transfer of registration in the RTO record. Thus, it is clear that the complainant had been getting the insurance policy renewed in his favour even after the transfer of ownership/registration by concealing the said material information from the insurer. Thus, in our considered view, 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. As the complainant has actually transferred ownership of the subject vehicle in favour of M/s. Ornate Multi Modal Carriers Pvt. Ltd., the judgments relied upon by the complainant are of no avail to the complainant.
13. IN view of the discussion above, we find no merit in the complaint. It is accordingly dismissed.
