E-Paper
SCDRC upholds ₹8.5 lakh insurance award against AIG in stolen vehicle case
Theft occurred within 7 days of the ownership transfer, before the 15-day statutory period for applying for insurance policy transfer expired, the panel noted
The state consumer disputes redressal commission, Chandigarh, has dismissed an appeal filed by Tata AIG General Insurance Company, upholding a district consumer commission order directing the insurer to pay ₹8.5 lakh with interest to a vehicle owner whose theft claim had been repudiated on the ground that the insurance policy had not been transferred to his name.
The commission, comprising justice Raj Shekhar Attri (president) and member Preetinder Singh, also imposed costs of ₹15,000 on the insurer, observing that it had engaged in “unnecessary litigation” despite the factual and legal position being clear.
According to the order, complainant Bachittar Singh had purchased a Mahindra Scorpio that was already insured with Tata AIG for an Insured Declared Value (IDV) of ₹8.5 lakh. The ownership of the vehicle was transferred in his favour on May 14, 2023, and the vehicle was stolen in Delhi seven days later, on May 21, 2023. The insurer, however, rejected the claim on September 25, 2023, contending that the insurance policy continued in the name of the previous owner and had not been transferred to the complainant, leaving him without an insurable interest or contractual relationship with the company.
The district consumer commission had partly allowed the complaint in October 2025 and directed Tata AIG to pay the insured value of ₹8.5 lakh with 9% annual interest from the date of repudiation, ₹15,000 as compensation for mental agony and harassment, and ₹10,000 towards litigation expenses.
Challenging the order, Tata AIG argued that under Section 157(2) of the Motor Vehicles Act (MVA), the purchaser was required to apply for transfer of the insurance policy within 15 days of transfer of ownership and that the failure to do so justified repudiation of the claim. The insurer relied on Supreme Court (SC) and National Consumer Commission judgments to support its stand.
Rejecting the contention, the state commission held that the ownership of the vehicle stood transferred only on May 14, 2023, when the registration certificate was issued, and not on March 7, 2023, as claimed by the insurer. It observed that the earlier date merely reflected payment of the transfer fee.
The commission further noted that the theft took place within seven days of the transfer of ownership, well before the expiry of the statutory 15-day period prescribed for applying for transfer of the insurance policy. It held that Section 157(1) of the MVA provides for a deemed transfer of the certificate of insurance along with transfer of ownership and that the requirement under Section 157(2) is procedural in nature and cannot defeat a genuine insurance claim when the loss occurs before the expiry of the prescribed period.
The commission also ruled that the Supreme Court (SC) and National Commission decisions cited by Tata AIG were distinguishable on facts since, in the present case, the complainant had completed the ownership transfer formalities and the theft occurred within a week of such transfer.
Finding no illegality or infirmity in the district commission’s order, the state commission dismissed the appeal and affirmed the compensation awarded to the complainant while directing the insurer to pay an additional ₹15,000 as costs for pursuing the appeal.
