In a fresh development, the Supreme Court just recently on June 18, 2020 in a latest, landmark and extremely laudable judgment titled Surendra Kumar Bhilawe vs The New India Assurance Company Limited in Civil Appeal No. 2632 of 2020 (Arising out of Special Leave Petition (C) No. 20569 of 2016) has laid down in no uncertain terms that it is the person in whose name the motor vehicle stands registered, who would be treated as the owner of the vehicle, for the purposes of the Motor Vehicles Act. The case arose out of an insurance claim made by one Surendra Kumar Bhilawe. Surendra’s insurance claim was thus upheld!
To start with, this noteworthy judgment authored by Justice Indira Banerjee for herself and Justice R Banumathi sets the ball rolling in para 2 wherein it is observed that, “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 ‘National Commission’, allowing Revision Petition No. 4126/2014 filed by the Respondent, hereinafter referred to as ‘the Insurer’, setting aside an order dated 09.01.2014 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 Chhatisgarh 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.”
To be sure, para 3 then states that, “The Appellant was the owner of Ashok Leyland 2214 Truck bearing Registration Number C.G.04/JA3835, 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.”
Needless to say, it is then mentioned in para 4 that, “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.”
While elaborating further, it is then specified in para 5 that, “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, Gumla in 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.”
On expected lines, we then see that it is revealed in para 6 that, “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.”
What followed next is then stated in para 7 that, “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.”
As it turned out, para 8 then notes that, “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.”
While explaining the twists and turns that followed, it is then enunciated in para 9 that, “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 has 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.”
While dwelling on the appellant’s version, it is then enshrined in para 10 stating: “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 could not 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 of ICICI Bank had not been repaid in full till the date of the accident. Admittedly, however, the Appellant had entered into a sale agreement with the said Mohammad Iliyas Ansari.”
While carrying on forward in the same vein, it is then pointed out in para 11 that, “The Appellant claims that he duly replied to the show cause letter and that he also sent a legal notice on 2.6.2012 to the Insurer to which there was no reply. The Insurer was disputing the claim, as it had been submitted by Mohammad Iliyas Ansari, and also on the ground of delay in filing the police complaint and in reporting the accident to the Insurer.”
Furthermore, it is then revealed in para 12 that, “The Appellant himself submitted a motor claim again on 22.8.2012, but the Insurer refused to accept the same. Under cover of a letter dated 22.8.2012, the Appellant sent the claim form, along with the requisite documents, to the Insurer by Registered Post.”
As a consequence, what then unfolds is elaborated in para 13 stating that, “Aggrieved by the action of the Insurer company in not releasing the claim of the Appellant, towards reimbursement of losses on account of the Accident, the Appellant approached the District Forum with the complaint numbered Case No. 404 of 2012, referred to above.”
What came as a shot in the arm for the Appellant is then enumerated in para 14 stating that, “By a judgment and order dated 9.1.2014, 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 interest @ 6% per annum from the date of filing of the complaint, that is, 6.10.2012 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.”
Against this backdrop, what follows next is then explained in para 15 holding that, “The Insurer appealed to the State Commission. The said appeal, being Appeal No. FA/14/85, was dismissed by the State Commission by an order dated 22.7.2014, which was challenged by the Insurer before the National Commission by filing the Revision Petition No. 4126 of 2014.”
What ultimately turned the tables is then stated in para 16 as follows: “By the judgment and order impugned bfore us, 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.”
No doubt, the tables were again restored to its original state by the Supreme Court Bench and this is best manifested in para 29 wherein it is held that, “There was no material evidence at all before the National Commission, on the basis of which the National Commission could have reversed the concurrent factual findings of the District Forum and the State Commission which unerringly led to the conclusion that ownership of the said truck never stood transferred to Mohammad Iliyas Ansari.”
In a stinging rebuke to the National Commission, the Apex Court Bench also noted in para 28 that, “The National Commission completely ignored the following concurrent findings of the District Forum and State Commission:-
(i) Even after the date of the purported sale agreement, that is, 11.4.2008, the Appellant continued to pay instalments to ICICI Bank towards repayment of the loan for purchase of the said truck.
(ii) The ICICI Bank had neither released the said truck from hypothecation nor given ‘No Objection’ for the sale of the said truck.
(iii) The Appellant paid the premium and took out the policy of insurance on or about 31.5.2011 covering the period from 2.6.2011 to 1.6.2012 in his own name. This was over three years after the date of the purported sale agreement.
(iv) No steps were taken by the Appellant or by Mohammad Iliyas Ansari to have the registration of the said truck transferred in the name of Mohammad Iliyas Ansari.
(v) The permit for operating the said truck was still in the name of the Appellant over three years after the purported sale agreement.”
More damningly, it is then also held in para 39 that, “It appears that the National Commission patently erred in holding that the Appellant had been paid the consideration without even examining if Mohammad Iliyas Ansari had paid any instalments to ICICI Bank.”
Most significantly, it is then very rightly held in para 53 that, “In our considered opinion, the National Commission erred in law in reversing the concurrent factual findings of the District Forum and the State 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 and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 157.”
Be it noted, it is then envisaged in para 54 that, “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.”
Finally, it is then held in the last para 57 that, “The judgment and order of the National Commission is unsustainable. 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 cost 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.”
To sum up, this carefully drafted, excellently worded and well reasoned judgment delivered by a two Judge Bench of the Apex Court comprising of Justice Indira Banerjee and Justice R Banumathi speaks for itself! It makes it abundantly clear that the Insurer cannot shirk of his responsibility in case of an accident on any ground if the insured continues to remains the owner of the vehicle as we see in this case also! Very rightly so! No denying or disputing it!
Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi,
A 82, Defence Enclave,
Sardhana Road, Kankerkhera,
Meerut – 250001, Uttar Pradesh.
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