Mumbai: In a consumer complaint where an insurance company had repudiated the claims of a car-owner on the basis that the insurance policy was still in the name of its former owner, the district consumer disputes redressal forum held the company’s decision unreasonable, saying the new owner should have been treated as ‘deemed insured’.
President of the forum GK Rathod and member MP Kaskar ordered that the insurance company pay Rs1.91 lakh (repair cost of the vehicle) to the new owner, a compensation of Rs10,000 for mental agony suffered and Rs5,000 for litigation cost incurred.
The accident had taken place 11 days after the vehicle was transferred in the new owner’s name, when the insurance company was yet to be informed of the sale but the RTO records reflected the transfer.
The company had repudiated the claim on the basis that the policy is name of one person and vehicle in the name of another.
The complainant had challenged the denial of claim as a provision of the Motor Vehicles Act allowed time of 14 days from transfer date to inform the insurance company about the sale.
Accordingly, the complainant had another five days' time to inform the insurance company. Till then, it is to be considered that there is a deemed transfer of policy in the name of the purchaser.
The insurance company had, in its written arguments before the forum denied deficiency in service and said as per their policies, transfer of policy in the name of transferee could be done only on getting acceptable evidence of sale and a fresh proposal form.
The forum in its judgment said both the old and new owners become the consumer and deemed consumer of insurance company, in view of the statutory provisions and the circumstances regarding transfer of vehicle.
It stated that the old owner seemed to be entitled to hold the insurance policy till the end of the 14-day period after sale, even though the vehicle is transferred in the name of the new owner.
The new owner, it held, deserved insurance rights considering the provisions of the Motor Vehicles Act which allowed for 14-days period after sale to intimate the insurance company.