New Delhi: The National Consumer Disputes Redressal Commission (NCDRC), under the leadership of Mr. Subhash Chandra, has dismissed a complaint against Oriental Insurance, ruling that proper procedures must be adhered to for policy transfers. In this case, the commission found that the policy transfer was not conducted correctly, and the complainant did not possess an insurable interest at the time of the accident.
Case Overview
The original owner of a Skoda Superb, purchased for ₹20.08 lakhs, sold the vehicle to the complainant for ₹11,26,475. The original owner informed the Registration Authority of the sale. The complainant paid the insurance premium to Oriental Insurance and requested a transfer of the policy to their name. However, the insurer issued the policy in the original owner’s name. When the car was involved in an accident, the complainant alerted the insurer and highlighted the error in the insured party’s name. The insurer replied that the policy could only be transferred after the car’s Registration Certificate (RC) was updated to the complainant’s name. The repair costs were estimated at ₹21,36,572 by an authorized service center. The complainant filed a claim with the insurer, which was denied because the RC remained in the original owner’s name. Subsequently, the complainant sought compensation from the State Commission, which dismissed the complaint due to jurisdictional issues. The complainant then filed a revision petition before the National Commission.
Insurer’s Contentions
The insurer argued that the original owner, having sold the vehicle, no longer had an insurable interest in it. They claimed there was no contractual relationship with the complainant. The insurer also noted that the Insured Declared Value (IDV) of the vehicle was ₹14,15,780, suggesting the State Commission lacked pecuniary jurisdiction to entertain the complaint. Additionally, they alleged that the complainant inflated the claim amount to meet jurisdictional requirements, noting the sale price of the vehicle was ₹11,26,475.
National Commission’s Observations
The National Commission observed that the State Commission dismissed the complaint because the car’s registration had not been transferred to the complainant when the insurer was informed of the purchase. The registration was transferred later, but the insurer was not notified as required by General Regulation (GR) 17, justifying the claim’s repudiation. The Commission cited the case of Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., affirming that the total claim amount determines pecuniary jurisdiction. The complainant’s claim of ₹32,57,572 fell within the State Commission’s jurisdiction, contrary to the State Commission’s findings.
Regarding the insurable interest, the National Commission upheld the State Commission’s conclusion that the complainant had no insurable interest at the accident’s time due to the unrecorded ownership transfer in the insurer’s records. The Commission rejected the complainant’s reliance on GR 17, which deems the policy transferred to the new owner upon intimation, due to insufficient evidence of proper notification. They referenced Shri Narayan Singh vs. New India Assurance Company Ltd., emphasizing the importance of proper procedures for policy transfers.
Ultimately, the National Commission supported the insurer’s decision to repudiate the claim, agreeing that the policy was not effectively transferred and the complainant lacked insurable interest during the accident. The argument concerning the claim exceeding the IDV was deemed irrelevant since the claim was not valid.
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