Order Name: IFFCO Tokio General Insurance Company Ltd. vs. Harmanpreet Singh
Case No.: R.P. No. 1195/2022
The National Consumer Disputes Redressal Commission (NCDRC), led by AVM J. Rajendra, has ruled that when a vehicle’s ownership changes, the insurance policy is automatically transferred as well. Therefore, the insurance company cannot reject a claim simply because the policy wasn’t formally transferred to the new owner’s name.
Brief Facts of the Case
The complainant purchased a vehicle that had an insurance policy with IFFCO General Insurance. After an unfortunate accident rendered the vehicle a total loss, IFFCO General Insurance denied the claim, arguing that the complainant did not have an insurable interest. This was despite timely notification and an inspection by their surveyor.
Initially, the District Forum dismissed the complaint. The complainant then appealed to the State Commission, which ruled in their favor. The State Commission ordered the insurer to pay Rs. 7,37,134 with 9% interest, along with Rs. 30,000 as compensation and Rs. 15,000 for litigation costs. Unsatisfied with this decision, the insurer filed a revision petition with the National Commission.
Insurer’s Argument
The insurer argued that on the date of the accident, the complainant was not the insured party. The insurance policy was originally purchased by a third party, and the complainant had not submitted the necessary ‘GR-17’ form to transfer the policy to his name. However, they admitted that the vehicle was insured for an Insured Declared Value (IDV) of Rs. 7,37,134.
National Commission’s Observations
The main issue before the National Commission was whether the complainant, who owned the vehicle at the time of the accident but had not transferred the insurance policy to his name, could claim compensation under the original policy. The Commission referred to Section 157 of the Motor Vehicles Act, which states that the insurance policy is automatically transferred when vehicle ownership changes. The Supreme Court’s decision in Surendra Kumar Bhilawe vs. The New India Assurance Company was also cited, which supports that insurers cannot deny liability based on the non-transfer of the policy.
Conclusion
The National Commission found the insurer’s denial of the claim to be illegal and upheld the State Commission’s decision, dismissing the revision petition.
Takeaway
This ruling underscores the importance of understanding that an insurance policy is automatically transferred with the ownership of a vehicle. Insurance companies cannot deny claims based on technicalities like non-transfer of the policy. If you’re buying a second-hand vehicle, ensure you’re aware of your rights regarding the insurance policy that comes with it.
