Facts of the Case:-
The Appellant was the owner of the Truck , which was covered by a Policy of Insurance issued by the Insurer (New India Assurance Company Limited), effective for the period one year. The lorry was loaded with Ammonia Nitrate met with an accident. The accident was reported to the Police and after few days the Appellant lodged a claim with the Insurer, through one Mohammad Iliyas Ansari. Accordingly, the Insurer appointed two Surveyor and Loss Assessor to conduct a spot survey & final survey. The final reported was assessing the loss recoverable from the insurer at Rs.4,93,500/- after deduction. 9. However, instead of reimbursing the loss, the Insurer issued a show cause Letter 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. 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 because truck was purchased on a loan from the ICICI bank & bank has not issued no objection certificate.
Later, the Appellant visited the insurer but the insurer refused to accept the claim of the Appellant. Aggrieved by the action of the Insurer company, the Appellant approached the District Forum. And accordingly District forum directed the Insurer to pay Rs.4,93,500/- to the Appellant with interest. Further, insurer approached the State Commission which refused the appeal. Aggreived by the State Commission, insurer approached National Commission which dismissed the order of the District forum & State Commission.
Findings of the District Forum and State Commission:-
(I) Even after the date of the purported sale agreement, 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) 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.
(iv) The permit for operating the said truck was still in the name of the Appellant over three years after the purported sale agreement.
The Supreme Court Decision:-
The Apex Court said that there was no material evidence at all before the National Commission, on the basis of which the National Commission could have reversed the 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.
Also, the court said that if there is an impediment to the transfer, as in the instant case, where ‘No Objection’ of the financier bank was imperative for transfer of the said truck, there could be no question of transfer of title until the impediment were removed, for otherwise the contract for transfer would be injurious to the financier bank, immoral, unlawful and void under Section 10 read with Sections 23 and 24 of the Contract Act, 1872.
Further, the apex Court made important observations & said that:
“It would also be pertinent to note the difference between the definition of owner in Section 2(30) of the Motor Vehicles Act, 1988 and the definition of owner in Section 2(19) of the Motor Vehicles Act, 1939 which has been repealed and replaced by the Motor Vehicles Act, 1988. Under the old Act ‘owner’ meant the person in possession of a motor vehicle. The definition has undergone a change. Legislature has consciously changed the definition of ‘owner’ to mean the person in whose name the motor vehicle stands.”
Furthermore, the Apex Court referred to the the Judgment of Supreme Court in Pushpa @ Leela & Ors. vs. Shakuntala and Naveen Kumar vs. Vijay Kumar were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this 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 claims 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.
While answering to the delay in FIR which was reflected in judgment of the National Commission the Apex Court said that the FIR was lodged within three 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 to lodge an FIR, cannot defeat the legitimate claim of the Insured. Of course in our view, there was no delay at all in lodging the FIR. In case of a serious accident in course of inter-state transportation of goods, delay of 20 days in lodging a claim is also no delay at all.
Allowing the appeal, the Court observed that Bhilawe(Appellant) remained the owner of the 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.
Therefore, the Apex Court set aside the order of National Commission and the order of the District Forum is restored. Also, the Court ordered that 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 and other sums (Including composite sum).
Case Name: Surendra Kumar Bhilawe vs The New India Assurance Company Ltd,
Case no.: CIVIL APPEAL NO. 2632 OF 2020
Read Judgment: Click Here