Surendra Kumar Bhilawe


The New India Assurance Company

18 June, 2020

Provisions Involved

Special Leave Petition


This appeal is against a judgment and order dated 23.2.2015 passed by the National Consumers Disputes Redressal Commission, New Delhi, hereinafter referred to as Signature Not Verified ‘National Commission’, allowing Revision Petition Digitally signed by MAHABIR SINGH Date: 2020.06.18 17:41:18 IST Reason:No.4126/2014 filed by the Respondent, hereinafter referred to as ‘the Insurer’,setting aside an order dated 09.1.2014 passed by the District Consumer Disputes Redressal Forum, Raipur, hereinafter referred to as ‘the District Forum’ allowing the Complaint Case No.404 of 2012; and an order dated 22.7.2014 passed by the Chhattisgarh State Consumer Disputes Redressal Commission Pandri, Raipur (C.G), hereinafter referred to as the State Commission, dismissing an appeal being Appeal No.FA/14/85 of the Insurer against the said order of the District Forum; and dismissing the said complaint filed by the Appellant. The Appellant was the owner of Ashok Leyland 2214 Truck 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.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. 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 Toil Police Station, Gumlain 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. 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. 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.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. 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.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 couldnot 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 ofICICI Bank had not been repaid in full till the date of the accident. 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.



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 transfer ability of a policy of insurance under Section 157. 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. The judgment of this Court in Oriental Insurance vs. Sony Cheriyam 6 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 toa third party by entering into a sale agreement.


The appeal is, therefore, allowed. The impugned order of the National Commission under appeal is set aside and the order of the District Forum is restored. The Insurer shall pay to the Appellant a sum of Rs.4,93,500/- as directed by the District Forum with interest as enhanced by this Court to 9% per annum from the date of claim till the date of payment. The sum of Rs.5,000/- awarded by the District Forum towards compensation for mental agony and Rs.2,000/- awarded towards the cost of litigation, is in our view grossly inadequate. The Insurer shall pay a composite sum of Rs.1,00,000/- to the Appellant towards costs and compensation for the agony caused to the Appellant by withholding his legitimate dues. The amounts as directed above shall be paid to the Appellant within six weeks from date of the judgment and order.

Ishika Sahay