THIRUVANANTHAPURAM: The Kerala State Consumer Disputes Redressal Commission (KSCDRC) has directed National Insurance Company Ltd (NICL) to pay Rs 3.5 lakh as compensation to the owner of a stolen car, upholding an earlier order by the Ernakulam CDRC. The company had rejected the compensation claim citing the car was ‘sold’ by the original owner and the theft occurred when it was in the possession of the purchaser.
The commission issued the order on an appeal petition filed by the NICL against the Ernakulam CDRC’s order to provide Rs 3.5 lakh compensation to the owner Syamkumar, an Ernakulam resident. Syamkumar had purchased a Tata Indica under the hire purchase agreement and it was insured with the NICL.
The insurance was valid from November 1, 2011 to October 31, 2012. The car was stolen on August 9, 2012. The NICL rejected the insurance claim saying Syamkumar sold the car to a person named Reji E V on October 11, 2011, and hence did not have insurable interest over the vehicle. The policy was also void as it was taken without disclosing the fact that the complainant ceased to be the vehicle’s owner. The company said it was not liable to compensate the complainant. Though a sale of agreement was executed between Syamkumar and Reji, the registration certificate of the vehicle was still in the former’s name. Also, the purchaser had not paid the entire sum.
The case was considered by the KSCDRC bench comprising president Justice B Sudheendra Kumar, judicial member Ajith Kumar D and member Radhakrishnan K R. Quoting a Supreme Court order, the commission observed that under Section 2(30) of the Motor Vehicles Act, 1988, an owner is defined as the person in whose name the motor vehicle stood registered and the person be treated as the owner of the vehicle for the purposes of the Act. If the registered owner purports to transfer the vehicle, but continues to be reflected in the records of the registering authority as the owner of the vehicle, he would not stand absolved of his liability as the owner.
The KSCDRC order said the rejection of compensation claim by the NICL amounted to deficiency in service. It should pay Rs 3.50 lakh with interest and an additional Rs 10,000 as compensation.