Registration as 'owner' is key

In the judgment of the case- Surendra Kumar Bhilawe v The New India Assurance Company Ltd. , delivered on June 18, 2020, Justice R.Banumathi and Justice Indira Banerjee, at the Supreme Court have placed it beyond any doubt that in view of the definition of 'owner' in section2(30) of the Motor Vehicles Act, the appellant - Bhilawe 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.

Through a judgment and order on January 9, 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 6 pc per annum interest from the date of filing of the complaint , that is, October 6, 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.

The Insurer's appeal was dismissed by the State Commission on July 22, 2014. And this dismissal was challenged by the Insurer by filing Revision Petition before the National Commission. By the impugned judgment, 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.

From the District Forum's order 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 re-imbursement of losses.

Before the District Forum the contention by the Insurer has been that the claim of the appellant had been rejected by the Insurer by a letter on March 22, 201which was received by him, the same day. There was no reply to the said letter. On the other hand, the appellant had contended t5hateven 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 himself was paying instalments to ICICI Bank towards repayment of the loan obtained by loan for purchasing the said truck.

It was contended by the appellant that he had not been paid the full consideration for the said truck. Even as late as on November 13, 2011, when the accident occurred .That is why the person, in whose favour the certificate of insurance has been issued, in accordance with provisions of the 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 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 transfer.

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 vehicle.

However, dictum of the Supreme 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 claimed 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 accident.

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 accident.

The FIR was lodged within 3 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 lodge FIR , cannot defeat the legitimate claim of the insured. 'of Course in the Court's view' there was no delay in lodging the FIR or delay at all '

The Court has pointed out that in its view there was no delay at all in lodging the FIR. In case of a serious accident, relating to Inter-State Transportation of goods delay of 20 days in lodging claim was considered no delay at all. The claim of the appellant in this case could not have been resisted either on the ground of delayin lodging the FIR, 0ron the ground of delay in lodging a Accident Information report.

The Supreme Court has allowed the appeal setting aside impugned judgment delivered by the National commission for Consumers and holding that legally unsustainable.

The Supreme Court has restored the District Forum's judgment with modification of enhancing interest from 9 pc per annum and compensation for mental agony and legal expenses from grossly inadequate Rs 7,000/- To Rs one Lakh.