SURENDRA KUMAR BHILAWE versus THE NEW INDIA ASSURANCE COMPANY LIMITED on 18 June 2020

SURENDRA KUMAR BHILAWE

v.

THE NEW INDIA ASSURANCE COMPANY LIMITED

(Civil Appeal No. 2632 of 2020)

JUNE 18, 2020

[R. BANUMATHI AND INDIRA BANERJEE, JJ.]

Motor Vehicles Act, 1988:

ss. 2(30) and 157 – Damage to the insured vehicle in roadaccident – FIR lodged regarding the accident – Spot survey bySurveyor and Loss Assessor appointed by insurer – Insurance claim– Repudiated by insurer on the ground that the insured vehicle wasalready sold to someone else and that there was delay in filing policecomplaint and reporting the accident to the insurer – Case of theclaimant was that though Sale agreement was entered into but thevehicle was not transferred to the transferee as the financier Bankhad not issued ‘No Objection’ to the claimant for transfer – Districtconsumer Forum as well as State Commission allowed the claim ofthe insured – National Consumer Commission disallowed theinsurance claim – Appeal to Supreme Court – Held: NationalCommission erred in reversing the concurrent factual findingsignoring the admitted facts that the registration of the insured vehicleand permit was in the name of the claimant on the date of accident;that claimant was paying insurance premium; that insurance policywas in the name of the claimant and that the financer Bank had notissued ‘No Objection’ for transfer of the insured vehicle – NationalCommission also overlooked the definition of ‘owner’ in s. 2(30)and provision for transferability of a policy of insurance u/s. 157.

Words and Phrases:

“Owner” – Meaning of, in the context of s. 2(30) of MotorVehicles Act, 1988.

Allowing the appeal, the Court

HELD: 1. There can be no doubt that property in a specificmovable property is transferred to the buyer at such time asparties to the contract intend it to be transferred, provided such

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Aimmovable property is free to be transferred, and/or in otherwords capable of being transferred. If there is an impediment tothe transfer, as in the instant case, where ‘No Objection’ of thefinancier bank was imperative for transfer of the said truck, therecould be no question of transfer of title until the impediment wereremoved, for otherwise the contract for transfer would beBinjurious to the financier bank, immoral, unlawful and void underSection 10 read with Sections 23 and 24 of the Contract Act, 1872.It was thus, an implicit condition of the agreement for transfer ofthe said truck, that the transfer would be complete only uponissuance of ‘No Objection” by the financier bank and uponCcompliance with the statutory requirements for transfer of a motorvehicle. The contract in the present case, could not possibly havebeen an unconditional contract of transfer of movable property indeliverable state, but a contract to transfer, contingent upon ‘NoObjection” from financier Bank, and compliance with the statutoryprovisions of the Motor Vehicles Act, 1988 and the Rules framedDthereunder. Sections 19 and 20 of the Sale of Goods Act are notattracted. [Paras 31-34][53-G-H; 54-A-C]

2. The National Commission overlooked the definition of‘owner’ in Section 2(30) of the Motor Vehicle Act, 1988. In Section2(30) ‘owner’ has been defined to mean “a person in whose nameEa motor vehicle stands registered and, where such person is aminor, the guardian of such minor, and in relation to a motorvehicle which is the subject of a hire purchase agreement, or anagreement of lease or an agreement of hypothecation, the personin possession of the vehicle under that agreement”. EvenFassuming that the purchaser was in possession of the said truckat the time of the accident, such possession was not under anyagreement of lease, hire purchase or hypothecation with thefinancier Bank. The definition of owner under the old MotorVehicles Act, 1939 has undergone a change. Legislature hasconsciously changed the definition of ‘owner’ to mean the personGin whose name the motor vehicle stands. [Paras 35 and 36][54-D-G]

3. The National Commission also overlooked otherapplicable provisions of the Motor Vehicle Act 1988, particularlySections 39 to 41, 50, 51, 66, 69, 82, 84(g), 86(c), 146, 157, 177H

and 192A. The National Commission patently erred in holdingthat the appellant had been paid the consideration without evenexamining if the purchaser had paid any instalments to thefinancier Bank. [Paras 37 & 39][54-G; 59-B]

4. The finding of the National Commission that the fact ofregistration of the said truck in the name of the appellant wasinconsequential is also not sustainable in law. Section 2(30) ofthe Motor Vehicles Act, 1988 defines ‘owner’ to mean the personin whose name the motor vehicle stands registered. The definitionof ‘owner’ has been overlooked and ignored by the NationalCommission. Had ownership of the said truck intended to betransferred forthwith, the registration would have beentransferred in the name of the transferee, as also the permit tooperate the said truck for carriage of goods. [Para 40][59-B-C]

5. It is difficult to accept that a person who has transferredthe ownership of a goods carriage vehicle on receipt ofconsideration, would not report the transfer or apply for transferof registration, and thereby continue to incur the risks andliabilities of ownership of the vehicle under the provisions of lawincluding in particular, under the Motor Vehicles Act, 1988 andother criminal/penal laws. It does not also stand to reason why aperson who has transferred the ownership of the vehicle should,for over three years, benevolently go on repaying the loan forpurchase of the vehicle, take out insurance policies to cover thevehicle or otherwise discharge obligations of ownership. It isequally incredible that an owner of a vehicle who has paidconsideration to acquire the vehicle would not insist on transferof the permit and thereby expose himself to the penalconsequence of operating a goods vehicle without a valid permit.[Paras 41-42][59-D-F]

6. The National Commission also failed to appreciate thatSection 157 of the Motor Vehicles Act, 1988 provides that wherea person, in whose favour the certificate of insurance has beenissued in accordance with the provisions of Chapter XI of theMotor Vehicles Act, transfers to another person the ownershipof the motor vehicle in respect of which such insurance was takentogether with the policy of insurance relating thereto, the A

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Acertificate of insurance and the policy described in the certificateare to be deemed to have been transferred in favour of the personto whom the motor vehicle is transferred, with effect from thedate of its transfer. [Para 43][59-G-H; 60-A]

7. The explanation to Section 157 clarifies, for the removalBof all doubts, that such deemed transfer would include transfer ofrights and liabilities of the said certificate of insurance and policyof insurance. The transferee might, within 14 days from the dateof transfer, apply to the Insurer in the prescribed form, for makingrequisite changes in the certificate of insurance and the policy ofinsurance with regard to the factum of transfer of insurance. ThereCcould be no reason for a transferee of an insured motor vehicle,to refrain from applying for endorsement of the transfer in theInsurance Policy Certificate when insurance covering third partyrisk is mandatory for using a vehicle. [Para 44][60-B-C]

8. In any case, there could be no reason for the AppellantDto take out an insurance cover in his own name as late as on31.5.2011, covering the period from 2.6.2011 till 1.6.2012, if theAppellant had transferred ownership of the vehicle in April 2008.It is incredible that the transferee would take the risk of operatinga vehicle, owned by him, without taking out a policy of InsuranceEin his own name, inter alia, covering third party risks,notwithstanding the mandate of Section 146 of the Motor VehiclesAct, 1988 prohibiting the use of a motor vehicle without thirdparty insurance. [Para 45][60-D]

9. The policy of insurance in the present case, wasFapparently a comprehensive policy of Insurance which coveredthird party risk as well. The Insurer could not have repudiatedonly one part of the contract of insurance to reimburse the ownerfor losses, when it could not have evaded its liability to thirdparties under the same contract of Insurance in case of death,injury, loss or damage by reason of an accident. [Para 50][61-G;G62-A]

10. The FIR was lodged within three days of the accident.In the case of a major accident of the kind as in this case, wherethe said truck had turned turtle and fallen into a river, slight delayif any, on the part of the traumatized driver to lodge an FIR, cannotH

defeat the legitimate claim of the Insured. In case of a seriousaccident in course of inter-state transportation of goods, delay of20 days in lodging a claim is also no delay at all. It is nobody’scase that the claim application filed by the Appellant was timebarred. Moreover, the Insurer had, in any case, duly sent itsSurveyors/Assessors to assess the loss. The claim of theAppellant could not have, in this case, been resisted, either onthe ground of delay in lodging the FIR, or on the ground of delayin lodging an Accident Information Report, or on the ground ofdelay in making a claim. [Para 51][62-B-C]

11. The National Commission erred in law in reversing theconcurrent factual findings of the District Forum and the StateCommission ignoring vital admitted facts including registrationof the said truck being in the name of the Appellant, even as onthe 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, permitin the name of the Appellant even after three years and sevenmonths, absence of ‘No Objection’ from the financier bank etc.and also overlooking the definition of owner in Section 2(30) ofthe Motor Vehicles Act, as also other relevant provisions of theMotor Vehicles Act and the Rules framed thereunder, includingin particular the transferability of a policy of insurance underSection 157. [Para 53][62-E-G]

12. There was no material evidence at all before the NationalCommission, on the basis of which the National Commission couldhave reversed the concurrent factual findings of the DistrictForum and the State Commission which unerringly led to theconclusion that ownership of the said truck never stoodtransferred to the transferee. [Para 29][52-D-E]

13. The impugned order of the National Commission underappeal 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/- asdirected by the District Forum with interest as enhanced by thisCourt to 9% per annum from the date of claim till the date ofpayment. The sum of Rs. 5,000/- awarded by the District Forum AB

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Atowards compensation for mental agony and Rs. 2,000/- awardedtowards the cost of litigation are grossly inadequate. The Insurershall pay a composite sum of Rs. 1,00,000/- to the Appellanttowards costs and compensation for the agony caused to theAppellant by withholding his legitimate dues. [Para 57][63-D-F]

BPushpa @ Leela and Others v. Shakuntala and Others(2011) 2 SCC 240 : [2011] 1 SCR 334; Naveen Kumarv. Vijay Kumar and Others (2018) 3 SCC 1 : [2018] 2SCR 572; Om Prakash v. Reliance General Insuranceand Another (2017) 1 SCC 724 – relied on.

CComplete Insulations Private Limited v. New IndianAssurance Company Limited (1996) 1 SCC 221 : [1995]5 Suppl. SCR 500; Dr. T.V. Jose v. Chacko P.P. @Thankachan and Ors. (2001) 8 SCC 748 : [2001] 3Suppl. SCR 366; Oriental Insurance v. Sony Cheriyam(1999) 6 SCC 451 : [1999] 1 Suppl. SCR 622 –Ddistinguished.

From the Judgment and Order dated 23.02.2015 of the NationalConsumers Disputes Redressal Commission, New Delhi in RevisionPetition No. 4126 of 2014.G

Ms. Swati Arya, Pawan Kumar Ray, Ms. Rit Arora, Mohit Rai,Deepak Goel, Ms. Divya Roy, Salil Paul, Sahil Paul, Ms. Manjeet Chawla,Advs. for the appearing parties.

The Judgment of the Court was delivered by INDIRA BANERJEE, J.

1. Leave granted.

2. This appeal is against a judgment and order dated 23.2.2015passed by the National Consumers Disputes Redressal Commission, NewDelhi, hereinafter referred to as ‘National Commission’, allowing RevisionPetition No.4126/2014 filed by the Respondent, hereinafter referred toas ‘the Insurer’, setting aside an order dated 09.1.2014 passed by theDistrict Consumer Disputes Redressal Forum, Raipur, hereinafter referredto as ‘the District Forum’ allowing the Complaint Case No.404 of 2012;and an order dated 22.7.2014 passed by the Chhattisgarh State ConsumerDisputes Redressal Commission Pandri, Raipur (C.G), hereinafterreferred to as the State Commission, dismissing an appeal being AppealNo.FA/14/85 of the Insurer against the said order of the District Forum;and dismissing the said complaint filed by the Appellant.

3. The Appellant was the owner of Ashok Leyland 2214 Truckbearing Registration Number C.G.04/JA 3835, which was covered by aPolicy of Insurance issued by the Insurer being Policy Number was45030031110100001693, effective for the period from 2.6.2011 to1.6.2012.

4. On 11.11.2011, the said lorry, which was loaded with AmmoniaNitrate at Raipur, commenced its journey for Dhanbad, where theAmmonia 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 onits journey from Raipur to Dhanbad, it met with an accident near BhakuwaToil Police Station, Gumla in Jharkhand. It is stated that while negotiatingthe 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 turtleand 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, DistrictGumla, Jharkhand on 16.11.2011 and on 25.11.2011 the Appellant lodgeda 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 BC

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Aconduct a spot survey. The independent Surveyor and Loss Assessorappointed by the Insurer, namely, Shri Birendra Kumar Gupta, conducteda 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 finalBsurvey. The said Shri Gyan Chandra submitted a report dated 25.1.2012assessing the loss recoverable from the insurer at Rs.4,93,500/- afterdeduction of salvage value.

9. However, instead of reimbursing the loss, the Insurer issued ashow cause Letter dated 22.3.2012 to the Appellant requiring the AppellantCto 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 saidMohammad Iliyas Ansari on 11.4.2008. It is, however, not in dispute thatthe Appellant continued to be the registered owner of the said truck, onthe date of the accident.

D10. It is the case of the Appellant, that the said truck which hadbeen purchased with finance from ICICI Bank, stood hypothecated toICICI Bank, and the same could not be transferred without the consentof ICICI Bank. ICICI Bank had not issued ‘No Objection’ to the Appellantfor transfer of the said truck, as the dues of ICICI Bank had not beenrepaid in full till the date of the accident. Admittedly, however, theEAppellant had entered into a sale agreement with the said MohammedIliyas Ansari.

11. The Appellant claims that he duly replied to the show causeletter and that he also sent a legal notice on 2.6.2012 to the Insurer, towhich there was no reply. The Insurer was disputing the claim, as it hadFbeen submitted by Mohammad Iliyas Ansari, and also on the ground ofdelay in filing the police complaint and in reporting the accident to theInsurer.

12. The Appellant himself submitted a motor claim again on22.8.2012, but the Insurer refused to accept the same. Under cover of aGletter dated 22.8.2012, the Appellant sent the claim form, along with therequisite documents, to the Insurer by Registered Post.

13. Aggrieved by the action of the Insurer company in not releasingthe claim of the Appellant, towards reimbursement of losses on accountof the accident, the Appellant approached the District Forum with theHcomplaint numbered Case No. 404 of 2012, referred to above.

14. By a judgment and order dated 9.1.2014, the District Forumallowed the complaint filed by the Appellant and directed the Insurer topay 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, 6.10.2012till the date of payment and further directed the Insurer to pay the Appellanta sum of Rs.5,000/- towards compensation for mental agony andRs.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 byan order dated 22.7.2014, which was challenged by the Insurer beforethe National Commission by filing the Revision Petition No. 4126 of2014.

16. By the Judgment and order impugned before us, the NationalCommission has allowed the Revision Petition, set aside the orders ofthe District Forum and the State Commission respectively, and dismissedthe complaint of the Appellant.

17. From the judgment and order dated 9.1.2014 of the DistrictForum, it is patently clear that the complaint had been resisted by theInsurer on the purported ground that the Appellant had sold the saidtruck 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 lodgingthe claim for reimbursement of losses.

18. Before the district Forum, the Insurer contended that the claimof the Appellant had been rejected by the Insurer by a letter dated22.3.2012, 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 Appellantcontended that even though he had entered into a sale agreement withMohammad Iliyas Ansari, he had not actually transferred ownership ofthe vehicle to him. Even after the sale agreement, the Appellant hadhimself been paying instalments, to ICICI Bank, towards repayment ofthe loan obtained by him for purchase of the said truck.

19. The Appellant contended that he had not been paid the fullconsideration for the said truck, even as late as on 13.11.2011, when theaccident occurred. That is why the Appellant had himself paid insurancepremium and taken out the Policy No. 45030031110100001693. TheAppellant strenously contended that the Insurer had not produced a scrapof document before the District Forum to show that the premium for the A

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Asaid Insurance Policy No. 45030031110100001693 had been paid byMohammad Iliyas Ansari. No proceedings had also been initiated forchange of registration of the vehicle, which was in the name of theAppellant, to Mohammad Iliyas Ansari. The permit for operating thesaid truck also stood in the name of the Appellant.

B20. The District Forum accepted the contention of the Appellantthat the ownership of the said truck did not stand transferred toMohammad Iliyas Ansari, and allowed the complaint, by its order dated9.1.2014, for the reasons summarized briefly hereinbelow:-

1. Even though the sale agreement with Mohammad Iliyas AnsariCwas dated 11.4.2008, the Appellant continued to pay instalmentstowards repayment of the loan obtained from ICICI Bank, forpurchase of the said truck, long thereafter.

2. The Appellant had produced documents to show that he hadpaid the premium for the insurance policy after 11.4.2008, andeven as late as on 31.05.2011.D

3. The Insurer had not produced any materials to show said thatthe insurance premium had not been paid by the Appellant, buthad been paid by Mohammad Iliyas Ansari.

4. The said truck was registered in the name of the Appellant andEthe permit for operating the said truck for carriage of goods alsostood in his name.

5. Mohammad Iliyas Ansari had not objected to release ofcompensation to the Appellant for damage caused to the vehicle,by reason of the accident.

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6. The Insurer had not established that Driver, Rajendra Singhwas an employee of Mohammad Iliyas Ansari.

21. It had also been argued on behalf of the Appellant, before theDistrict Forum, that the Surveyor appointed by the Insurer had taken aconsent letter from the Appellant after the Survey, but had not taken anyGstatement from Mohammad Iliyas Ansari or from the Driver which couldshow that Mohammad Iliyas Ansari was the owner of the said truck, orthe 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 basisH

of the report of the Surveryor, the gross liability was calculated atRs.8,48,500/- from which salvage value of Rs. 3,55,000/- was deductedand the net loss recoverable from the Insurer computed atRs.4,93,500/-.

23. The District Forum directed the Insurer to pay to the Appellantthe said sum of Rs.4,93,500/-, with simple interest at 6% per annumfrom the date of the institution of the complaint, that is, 6.10.2012, a sumof Rs.5,000/- for mental harassment and a sum of Rs.2,000/- towardslitigation expenses.

24. In appeal the State Commission found:- “11. We have perused the record of the District Forum. InCertificate of Registration of the vehicle in question, the nameof the Respondent (complainant) Surendra Kumar Bhilawe isrecorded as registered owner. In the license of Good Vehiclealso vehicle bearing No.C.G.04-JA-3835 is registered in thename of the Respondent (Complainant) Surendra KumarBhilawe and the Insurance Policy was issued in the name ofRespondent (Complainant) Surendra Kumar Bhilawe for theperiod from 02.06.2011 to 01.06.2012. Looking to the abovedocuments, it appears that the vehicle in question was stillrecorded in the name of Respondent (Complainant) himselfobtained insurance policy from the Appellant (InsuranceCompany).

12. The Respondent (Complainant) filed documents i.e. letterdated 08.01.2014 sent by ICICI Bank to the Respondent(complainant) Surendra Kumar Bhilawe and Statement ofAccount. It appears that the loan was being deposited by theRespondent (Complainant) himself and the Appellant (Ops)could not filed any document which shows or indicates thatthe amount of loan was paid by Mohd. Iliyas Ansari, in thename of the Respondent (Complainant). It appears that theRespondent (complainant) himself had deposited loan amountwith the ICICI Bank from where he had obtained loan.

13. An agreement was executed between the Respondent(complainant) Surendra Kumar Bhilawe and Mohammad IliyasAnsari on 11.04.2008 and the Insurance Policy was obtainedby the Respondent (Complainant) on 02.06.2011, which was A

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effective from the period from 02.06.2011 to 01.06.2012. Hadthe vehicle in question was transferred by the Respondent(complainant) to Mohammad Iliyas Ansari, the Respondent(Complainant) could have intimated the R.T.O. regardingtransferring the vehicle in favour of Mohammad Iliyas Ansariand Mohammad Iliyas Ansari himself could have depositedthe amount of loan with the ICICI Bank. In the instant case,Mohammad Iliyas Ansari is a material evidence for theAppellant (Ops) to prove that he purchased vehicle in questionfrom the Respondent (complainant) and Mohammad IliyasAnsari, therefore, on merely filing an agreement executedbetween the Respondent (Complainant) and Mohammad IliyasAnsari, it cannot be said the vehicle in question was dulytransferred by the Respondent (Complainant) to MohammadIliyas Ansari and Mohammed Iliyas Ansari is owner of thevehicle in question.

14. Ld. District Forum, in para 12 of the Impugned Orderhas observed that Mohammad Iliyas Ansari has not raisedany objection against the complaint filed by the Respondent(complainant) from which it is proved that sale agreement ismeaningless. The Appellant (OPs) could not prove that riverRajendra Singh was an employee of Mohammad Iliyas Ansari,whereas the contention of the Respondent (complainant) isthat vide letter dated 08.08.2012 which was received by theAppellant (OPs) (Insurance Company) wherein it wasmentioned by him that by the above sale agreement, thepurchaser has not received any right and the Respondent (complainant) only is registered owner of the vehicle. In para13, the District Forum has observed that the contention ofthe Respondent (complainant) is that the Surveyor, who wasappointed by the Insurance company, has taken consent letterdated 02.01.2012 of Respondent (complainant) afterconducting survey. The Appellant (OPs) had not filed anyevidence that they had taken statement of Mohammad IliyasAnsari or statement of the driver who mentioned that thevehicle was of the ownership of Mohammad Iliyas Ansari.

15. The finding recorded by the District Forum, is just andproper and does not suffer from any jurisdictional erroneously, irregularity or illegality, hence does not call forany interference by this Commission.”

25. The National Commission set aside the orders of the DistrictForum and the State Commission, thereby rejecting the concurrent factualfinding of both the fora, and dismissed the complaint on the ground thatthe Appellant had sold his vehicle to Mohammad Iliyas Ansari.

26. The National Commission observed that when an owner of avehicle sells his vehicle and executes a sale letter without in any mannerpostponing passing of the title to the property in the vehicle, the ownershipin the vehicle passes to the purchaser on execution of the sale letter.The delivery of the vehicle, to the purchaser, reinforces the title whichthe purchaser gets to the vehicle, on execution of the sale letter in hisfavour. The National Commission also drew adverse inference againstthe 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 wasgiven to the Appellant 12 days after the accident, that is, on 25.11.2011.

27. The National Commission Held:-

27. The National Commission Held:-

“A perusal of the sale agreement dated 11.4.2008 executedby the complainant with Shri Mohd. Iliyas Ansari would showthat the complainant handed over the possession of theaforesaid vehicle to Shri Ansari on payment of Rs.1,40,000/-Since the vehicle had been got financed from ICICI Bank theremaining payment was to be made by the purchaser directlyto the said bank. The aforesaid document also shows that asum of Rs.1,40,000/- was received by the complainant fromShri Ansari on 11.4.2008. Thus, it stands duly proved thatnot only had the complainant received the sale considerationagreed with Shri Ansari he had also delivered the possessionof the vehicle to him on 11.4.2008.

7. Though the vehicle was not got registered in the name ofShri Ansari by the time it met with an accident, that in ouropinion, would be of no consequence in view of the sale havingbeen already completed on 11.4.2008.”

28. The National Commission completely ignored the followingconcurrent factual findings of the District Forum and State Commission:-

(I) Even after the date of the purported sale agreement, that is, AB

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A11.4.2008, the Appellant continued to pay instalments to ICICIBank towards repayment of the loan for purchase of the saidtruck.

(ii) The ICICI Bank had neither released the said truck fromhypothecation nor given ‘No Objection” for the sale of the saidBtruck.

(iii) The Appellant paid the premium and took out the policy ofinsurance on or about 31.5.2011 covering the period from 2.6.2011to 1.6.2012 in his own name. This was over three years after thedate of the purported sale agreement.

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(iv) No steps were taken by the Appellant or by Mohammad IliyasAnsari to have the registration of the said truck transferred in thename of Mohammad Iliyas Ansari.

(v) The permit for operating the said truck was still in the name ofthe Appellant over three years after the purported sale agreement.D

29. There was no material evidence at all before the NationalCommission, on the basis of which the National Commission could havereversed the concurrent factual findings of the District Forum and theState Commission which unerringly led to the conclusion that ownershipof the said truck never stood transferred to Mohammad Iliyas Ansari.E30. In fact, the National Commission did not address the followingquestions:-

(i) Who actually paid instalments to ICICI Bank after 11.4.2008 –the Appellant or Mohammad Iliyas Ansari? The concurrent findingof the District Forum and the State Commission that the AppellantFpaid instalments to ICICI Bank even after 11.4.2008, therefore,remained unshaken.

(ii) If the ownership of the said truck stood transferred on11.4.2008, why would the Appellant continue to pay the instalmentsto ICICI Bank towards repayment of the loan for purchase of theGsaid truck?

(iii) Was any ‘No Objection’ obtained from ICICI Bank for transferof the said truck?

(iv) Could the Appellant have transferred the said truck withoutH‘No Objection’ from ICICI Bank?

(v) Who actually paid the Insurance Premium on 31.5.2011 forthe said Policy No.45030031110100001693 effective from 2.6.2011to 1.6.2012?

(vi) If the ownership of the said truck were transferred, why wouldthe Appellant have taken out an Insurance Policy covering thesaid truck in his own name even on 31.5.2011, after over threeyears?

(vii) Was the Driver Rajendra Singh employee of the Appellant orof Mohammad Iliyas Ansari? Was any statement in this regardtaken either from Driver Rajendra Singh or Mohammad IliyasAnsari?

(viii) Were any steps ever taken for transfer of registration of thesaid truck in the name of Mohammad Iliyas Ansari?

(ix) If the ownership of the said truck stood transferred toMohammad Iliyas Ansari, why did he not take steps to have theregistration of the said truck transferred in his own name evenafter 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 witha permit in the name of the Appellant, if he was its owner, therebyexposing himself to penal consequences under the Motor VehicleAct and the Rules framed thereunder?

(xii) Could ownership of the said truck be transferred withouttransfer of registration in the name of the transferee, in view ofthe Motor Vehicle Act, 1988 and the Rules framed thereunder?

31. In our considered opinion, Sections 19 and 20 of the Sale ofGoods Act, 1930, which deal with the stage at which the property inmovable goods passes to the buyer, is of no assistance to the Insurer.There can be no doubt that property in a specific movable property istransferred to the buyer at such time as parties to the contract intend itto be transferred, provided such immovable property is free to betransferred, and/or in other words capable of being transferred.

32. If there is an impediment to the transfer, as in the instant case,where ‘No Objection’ of the financier bank was imperative for transferof the said truck, there could be no question of transfer of title until the AB

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Aimpediment were removed, for otherwise the contract for transfer wouldbe injurious to the financier bank, immoral, unlawful and void underSection 10 read with Sections 23 and 24 of the Contract Act, 1872.

33. It was thus, an implicit condition of the agreement for transferof the said truck, that the transfer would be complete only upon issuanceBof ‘No Objection” by the financier bank and upon compliance with thestatutory requirements for transfer of a motor vehicle.

34. The contract in this case, could not possibly have been anunconditional contract of transfer of movable property in deliverablestate, but a contract to transfer, contingent upon ‘No Objection” fromCICICI Bank, and compliance with the statutory provisions of the MotorVehicles Act, 1988 and the Rules framed thereunder. Sections 19 and 20of the Sale of Goods Act are not attracted.

35. The National Commission overlooked the definition of ‘owner’in Section 2(30) of the Motor Vehicle Act, 1988. In Section 2(30) ‘owner’Dhas been defined to mean “a person in whose name a motor vehiclestands registered and, where such person is a minor, the guardian ofsuch minor, and in relation to a motor vehicle which is the subject of ahire purchase agreement, or an agreement of lease or an agreement ofhypothecation, the person in possession of the vehicle under thatagreement”. Even assuming that Mohammad Iliyas Ansari was inEpossession of the said truck at the time of the accident, such possessionwas not under any agreement of lease, hire purchase or hypothecationwith ICIC Bank.

36. It would also be pertinent to note the difference between thedefinition of owner in Section 2(30) of the Motor Vehicles Act, 1988 andFthe definition of owner in Section 2(19) of the Motor Vehicles Act, 1939which has been repealed and replaced by the Motor Vehicles Act, 1988.Under the old Act ‘owner’ meant the person in possession of a motorvehicle. The definition has undergone a change. Legislature hasconsciously changed the definition of ‘owner’ to mean the person inwhose name the motor vehicle stands.G

37. The National Commission also overlooked other applicableprovisions 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.

38. Some of the relevant provisions of the Motor Vehicles ActHare set out hereinbelow:- “50. Transfer of ownership-

1) Where the ownership of any motor vehicle registered underthis 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, asmay be prescribed by the Central Government to theregistering authority within whose jurisdiction the transfer isto be effected and shall simultaneously send a copy of thesaid report to the transferee; and

(ii) ……

(b) the transferee shall, within thirty days of the transfer, reportthe transfer to the registering authority within whosejurisdiction he has the residence or place of business wherethe vehicle is normally kept, as the case may be, and shallforward the certificate of registration to that registeringauthority together with the prescribed fee and a copy of thereport received by him from the transfer of ownership may beentered in the certificate of registration.

(3) If the transferor of the transferee fails to report to theregistering authority the fact of transfer within the periodspecified in clause (a) or clause (b) of sub-section (1), as thecase may be, or if the person who is required to make anapplication under sub-section (2) (hereafter in this sectionreferred to as the other person) fails to make such application within the period the period prescribed, the registeringauthority may, having regard to the circumstances of the case,required the transferor or the transferee, or the other person,as the case may be, to pay, in lieu of any action that may betaken against him under section 177 such amount notexceeding one hundred rupees as may be prescribed undersub-section (5).

Provided that action under section 177 shall be taken againstthe transferor or the transferee or the other person, as thecase may be, where he fails to pay the said amount.

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A66. Necessity for permits-

(1) No owner of a motor vehicle shall use or permit the use ofthe vehicle as a transport vehicle in any public place whetheror not such vehicle is actually carrying any passengers orgoods save in accordance with the conditions of a permitgranted or countersigned by a Regional or State TransportAuthority or any prescribed authority authorising him the useof the vehicle in that place in the manner in which the vehicleis being used.

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82. Transfer of permit-

(1) Save as provided in sub-section (2), a permit shall not betransferable from one person to another except with thepermission of the transport authority which granted the permitand shall not, without such permission, operate to confer onany person to whom a vehicle covered by the permit istransferred any right to use that vehicle in the mannerauthorised by the permit.

D

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84. General conditions attaching to all permit E

The following shall be conditions of every permit-

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(g) that the name and address of the operator shall be paintedor otherwise firmly affixed to every vehicle to which the permitrelates on the exterior of the body of that vehicle on bothsides thereof in a colour or colours vividly contrasting to thecolour of the vehicle centered as high as practicable belowthe window line in bold letters.

F

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86. Cancellation and suspension of permits.-

(1) The Transport Authority which granted a permit may cancelthe permit or may suspend it for such period as it thinks fit-

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(c) if the holder of the permit ceases to own the vehicle coveredby the permit, ×××××××××

140. Liability to pay compensation in certain cases on theprinciple of no fault-

(1) Where death or permanent disablement of any person hasresulted from an accident arising out of the use of motor vehicleor motor vehicles, the owner of the vehicle shall, or, as thecase may be, the owners of the vehicles shall, jointly andseverally, be liable to pay compensation in respect of suchdeath or disablement in accordance with the provisions ofthis section.

×××××××××

146. Necessity for insurance against third party risk-

(1) No person shall use, except as a passenger, or cause orallow any other person to use, a motor vehicle in a publicplace, unless there is in force in relation to the use of thevehicle by that person or that person, as the case may be, apolicy of insurance complying with the requirement of thisChapter.

157. Transfer of certificate of Insurance—

(1) Where a person in whose favour the certificate of insurancehas been issued in accordance with the provisions of thisChapter transfers to another person the ownership of themotor vehicle in respect of which such insurance was takentogether with the policy of insurance relating thereto, thecertificate of insurance and the policy described in thecertificate shall be deemed to have been transferred in favourof the person to whom the motor vehicle is transferred witheffect from the date of its transfer.

(2) The transferee shall apply within fourteen days from thedate of transfer in the prescribed form to the insurer formaking necessary changes in regard to the fact of transfer inthe certificate of insurance and the policy described in the A

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SUPREME COURT REPORTS

certificate in his favour and the insurer shall make thenecessary changes in the certificate and the policy ofinsurance in regards to the transfer of insurance.

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163A. Special provisions as to payment of compensation onstructured formula basis-

(1) Notwithstanding anything contained in this Act or in anyother law for time being in force or instrument having theforce of law, the owner of the motor vehicle or the authorisedinsurer shall be liable to pay in the case of death or permanentdisablement due to accident arising out of the use of motorvehicle, compensation, as indicated in the Second Schedule,to the legal heirs or the victim, as the case may be.

×××

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177. General provision for punishment of offences- Whoever contravenes any provisions of this Act or of anyrule, regulation or notification made thereunder shall, if nopenalty is provided for the offence be punishable for the firstoffence with fine which may extend to one hundered rupees,and for any second or subsequent offence with fine whichmay extend to three hundred rupees.

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192A. Using vehicle without permit-

(1) Whoever drives a motor vehicle or causes or allows amotor vehicle to be used in contravention of the provisions ofsub-section (1) of section 66 or in contravention of anycondition of a permit relating to the route on which or thearea in which or the purposes for which the vehicle may beused, shall be punishable for the first offence with a finewhich may extend to five thousand rupees and for anysubsequent offence with imprisonment which may extend toone year but shall not be less than three months or with finewhich may extend to ten thousand rupees but shall not beless than five thousand rupees or with both.

Provided that the Court may for reasons to be recorded, imposea lesser punishment.

39. It appears that the National Commission patently erred inholding that the Appellant had been paid the consideration without evenexamining if Mohammad Iliyas Ansari had paid any instalments to ICICIBank.

40. The finding of the National Commission that the fact ofregistration of the said truck in the name of the Appellant wasinconsequential is also not sustainable in law. Section 2(30) of the MotorVehicles Act, 1988 defines ‘owner’ to mean the person in whose namethe motor vehicle stands registered. The definition of ‘owner’ has beenoverlooked and ignored by the National Commission. Had ownership ofthe said truck intended to be transferred forthwith, the registration wouldhave been transferred in the name of the transferee, as also the permitto operate the said truck for carriage of goods.

41. It is difficult to accept that a person who has transferred theownership of a goods carriage vehicle on receipt of consideration, wouldnot report the transfer or apply for transfer of registration, and therebycontinue to incur the risks and liabilities of ownership of the vehicleunder the provisions of law including in particular, under the MotorVehicles Act, 1988 and other criminal/penal laws. It does not also standto reason why a person who has transferred the ownership of the vehicleshould, for over three years, benevolently go on repaying the loan forpurchase of the vehicle, take out insurance policies to cover the vehicleor otherwise discharge obligations of ownership.

42. It is equally incredible that an owner of a vehicle who has paidconsideration to acquire the vehicle would not insist on transfer of thepermit and thereby expose himself to the penal consequence of operatinga goods vehicle without a valid permit.

43. The National Commission also failed to appreciate that Section157 of the Motor Vehicles Act provides that where a person, in whosefavour the certificate of insurance has been issued in accordance withthe provisions of Chapter XI of the Motor Vehicles Act, transfers toanother person the ownership of the motor vehicle in respect of whichsuch insurance was taken together with the policy of insurance relatingthereto, the certificate of insurance and the policy described in thecertificate are to be deemed to have been transferred in favour of the AB

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[2020] 7 S.C.R.

Aperson to whom the motor vehicle is transferred, with effect from thedate of its transfer.

44. The explanation to Section 157 clarifies, for the removal of alldoubts, that such deemed transfer would include transfer of rights andliabilities of the said certificate of insurance and policy of insurance.BThe transferee might, within 14 days from the date of transfer, apply tothe Insurer in the prescribed form, for making requisite changes in thecertificate of insurance and the policy of insurance with regard to thefactum of transfer of insurance. There could be no reason for a transfereeof an insured motor vehicle, to refrain from applying for endorsement ofthe transfer in the Insurance Policy Certificate when insurance coveringCthird party risk is mandatory for using a vehicle.

45. In any case, there could be no reason for the Appellant to takeout an insurance cover in his own name as late as on 31.5.2011, coveringthe period from 2.6.2011 till 1.6.2012, if the Appellant had transferredownership of the vehicle in April 2008. It is incredible that the transferee,DMohammad 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 ofSection 146 of the Motor Vehicles Act, 1988 prohibiting the use of amotor vehicle without third party insuranceE

46. The judgment of this Court in Complete Insulations PrivateLimited vs. New Indian Assurance Company Limited[1] was renderedin the context of Motor Vehicle Act, 1939 which has been repealed andreplaced by the Motor Vehicles Act, 1988. As observed in the saidjudgment itself, under Section 103-A of the old Act, the Insurer had theFright to refuse to transfer the certificate of insurance and/or the Insurancepolicy. However, Section 157 of the Motor Vehicles Act, 1988 introducesa deeming provision whereby the transfer of the certificate of Insuranceand the policy of Insurance are deemed to have been made, where thevehicle along with the Insurance policy is transferred by the owner toanother person. This provision has taken away the Insurer’s right ofGrefusal to transfer the Policy Certificate of Insurance. which was thereunder the old Act. The judgment of this Court in Dr. T.V. Jose vs. ChackoP.P. @ Thankachan and Ors.[2] was also rendered in the context of theMotor Vehicles Act of 1939.

1 (1996) 1 SCC 221H2 (2001) 8 SCC 748

47. In Pushpa @ Leela And Others vs. Shakuntala and Others[3],the question before this Court was, whether liability to pay compensationto third parties as determined by the Motor Vehicles Accidents ClaimsTribunal in case of an accident, was that of the purchaser of the vehiclealone, or whether the liability of the recorded owner of the vehicle wascoextensive, and from the recorded owner it would pass on to the Insurerof the vehicle. This Court found that the person whose name continuedin the records of the registering authority as the owner of the truck wasequally liable for payment of the compensation, having regard to theprovisions of Section 2(30) read with Section 50 of the Motor VehiclesAct, 1988 and since an insurance policy had been taken out in the nameof the recorded owner, he was indemnified and the Insurer would beliable to satisfy the third party claims.

48. In Naveen Kumar vs. Vijay Kumar and Others[4], a three-Judge Bench of this Court held that in view of the definition of theexpression ‘owner’ in Section 2(30) of the Motor Vehicles Act, 1988, itis the person in whose name the motor vehicle stands registered, who,for the purposes of the said Act, would be treated as the owner of thevehicle. Where the registered owner purports to transfer the vehicle,but continues to be reflected in the records of the Registering Authorityas the owner of the vehicle, he would not stand absolved of his liabilityas owner.

49. The Judgment of this Court in Pushpa @ Leela & Ors. vs.Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) wererendered in the context of liability to satisfy third party claims and assuch distinguishable factually. However, the dictum of this Court thatthe registered owner continues to remain owner and when the vehicle isInsured in the name of the registered owner, the Insurer would remainliable notwithstanding any transfer, would apply equally in the case ofclaims made by the insured himself in case of an accident. If the insuredcontinues to remain the owner in law in view of the statutory provisionsof the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof,the Insurer cannot evade its liability in case of an accident.

50. The policy of insurance in this case, was apparently acomprehensive policy of Insurance which covered third party risk aswell. The Insurer could not have repudiated only one part of the contract 3 (2011) 2 SCC 240

4 (2018) 3 SCC 1

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Aof insurance to reimburse the owner for losses, when it could not haveevaded its liability to third parties under the same contract of Insurancein case of death, injury, loss or damage by reason of an accident.

51. The FIR was lodged within three days of the accident. In thecase of a major accident of the kind as in this case, where the said truckBhad turned turtle and fallen into a river, slight delay if any, on the part ofthe traumatized driver to lodge an FIR, cannot defeat the legitimate claimof the Insured. Of course in our view, there was no delay at all in lodgingthe FIR. In case of a serious accident in course of inter-state transportationof goods, delay of 20 days in lodging a claim is also no delay at all. It isnobody’s case that the claim application filed by the Appellant was timeCbarred. 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 theFIR, or on the ground of delay in lodging an Accident Information Report,or on the ground of delay in making a claim.D52. In any case, as held by this Court in Om Prakash vs. RelianceGeneral Insurance and Another[5] delay in intimation of accident, orsubmission of documents due to unavoidable circumstances, should notbar settlement of genuine claims.

53. In our considered opinion, the National Commission erred inElaw in reversing the concurrent factual findings of the District Forumand the National Commission ignoring vital admitted facts as statedabove, including registration of the said truck being in the name of theAppellant, even as on the date of the accident, over three years after thealleged transfer, payment by the Appellant of the premium for theFInsurance Policy, issuance of Insurance Policy in the name of theAppellant, permit in the name of the Appellant even after three yearsand seven months, absence of ‘No Objection’ from the financier banketc. and also overlooking the definition of owner in Section 2(30) of theMotor Vehicles Act, as also other relevant provisions of the MotorVehicles Act and the Rules framed thereunder, including in particularGthe transferability of a policy of insurance under Section 157.

54. In view of the definition of ‘owner’ in Section 2(30) of theMotor Vehicles Act, the Appellant remained the owner of the said truckon 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 ofownership to Mohammad Iliyas Ansari.

55. The judgment of this Court in Oriental Insurance vs. SonyCheriyam[6] was rendered in the context of liability of an Insurer in termsof the insurance policy and is not attracted in this case, where the claimof the insured has not been rejected on the ground of the same not beingcovered by the policy of insurance, but on the ground of purported transferto a third party by entering into a sale agreement.

56. We have not dealt with the judgments of the NationalCommission and/or other Fora under the Consumer Protection Act, 1986,relied upon by the parties, as they are factually distinguishable and are inany case, not precedents binding on this Court. In any case, we haveconsidered and dealt with the submission of the respective parties atlength.

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

Kalpana K. Tripathy

Appeal allowed.

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