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Firm told to pay claim even if vehicle sold to 3rd party

BENGALURU: The state consumer court has upheld a district consumer forum direction to an insurer to clear a Bengaluru woman’s Rs 1.4 lakh insurance claim towards her stolen motorcycle.

The insurer had turned down her claim, saying the vehicle’s insurance policy was still in the name of the first owner and hadn’t been transferred to her.

Liberty Videocon General Insurance Ltd had appealed against a Bengaluru district consumer forum’s June 30, 2020 verdict ordering that the insured value of the vehicle — Rs 1,37,824 — be paid with interest to Sheela Shantharaj, 57, of Kuvempunagar, apart from Rs 10,000 towards damages and Rs 5,000 towards litigation cost.

Sheela purchased a Bajaj KTM Duke 200 motorcycle on April 27, 2017 from its original owner Mahesh P by paying Rs 1.5 lakh.

On June 2, 2017, the motorcycle was stolen from her residence and she lodged a complaint with Chandra Layout police.

With the vehicle carrying an active insurance policy in the name of the original owner till September 26, 2017, Sheela approached the insurer, Liberty Videocon General Insurance Ltd, for a claim for the stolen bike. But despite an active policy in place, the insurance firm turned down her claim, stating that the vehicle was yet to be transferred in her name and she had failed to apply for an insurance transfer till the time of theft.

Next, the woman approached a local consumer court, which ruled in her favour. It ordered the firm to pay Rs 15,000 compensation for the delay, apart from granting her the insurance claim of Rs 1,37,824.

Claiming that the local court erred in its judgment, Liberty Videocon General Insurance appealed to Karnataka State Consumer Disputes Redressal Commission on October 22, 2020.

The judges, however, noted that on the date of theft, the vehicle was under insurance cover and the complainant intimated the firm for settlement of the claim and also lodged a police complaint.

Further, she had requested the RTO for transfer of vehicle ownership and the stand taken by the insurer that there is no privity of contract between her and them cannot be accepted and they cannot repudiate the claim of the transferee, as there was still an active insurance coverage.

The judges further observed that though the woman hadn’t given any application to the opposite party, she had indeed applied to the RTO for transfer.

Hence, there was no negligence on her part as long as a valid insurance cover was present, either in the name of the original owner, or in the name of the transferee.

In the circumstances, denial of claim money is illegal and the order passed by the district commission is upheld, the judges stated in their ruling on September 7, 2021. Source: Times Of India