January 10, 2026 : The Karnataka State Consumer Disputes Redressal Commission, Circuit Bench-2 at Belagavi, has dismissed an appeal filed by Shriram General Insurance Company Ltd., holding that an insurance policy is deemed to be transferred along with the vehicle under Section 157(2) of the Motor Vehicles Act, 1988. The Bench comprising Hon’ble Sri Ravi Shankar (Judicial Member) and Hon’ble Smt. Sunita C. Bagewadi (Lady Member) upheld the order of the District Consumer Disputes Redressal Commission, Belagavi, confirming that repudiation of an own-damage claim on the ground that the policy remained in the name of the previous owner was unjustified

The case arose out of a claim relating to a Toyota Etios car bearing Registration No. KA-01-AC-9783, which had been insured under a “PCCV 4 Wheelers Motors Commercial Vehicle Package Policy” valid from November 19, 2020 to November 18, 2021. On August 10, 2021, the vehicle was sold to the purchaser and the Registration Certificate was transferred in his name on the same day. The purchaser applied for transfer of the insurance policy, and the process was underway when the vehicle met with an accident on August 14, 2021 on NH-4 near Vantamuri Ghats, Belagavi.

Following the accident, the damaged vehicle was taken to Shoda Toyota, Belagavi, where the repair cost was estimated at ₹2,66,379. The insurer appointed a surveyor who assessed the loss at ₹1,60,000. However, by a letter dated January 8, 2022, the insurer repudiated the claim on the ground that the insurance policy stood in the name of the previous owner while the Registration Certificate stood in the name of the purchaser.

The District Consumer Commission partly allowed the complaint and directed the insurer to pay ₹1,60,000 along with interest at 6 percent per annum from the date of filing of the complaint until realization. It also awarded ₹5,000 towards mental agony and ₹2,000 towards litigation expenses. Challenging this order, the insurer contended before the State Commission that there was no insurable interest in favour of the purchaser as the policy had not yet been formally transferred. It further argued that Section 157 of the Motor Vehicles Act applies only to third-party risks and not to own-damage claims, and also raised objections regarding discrepancies in driver details and licence validity.

The State Commission noted that the validity of the policy during the relevant period was undisputed, as was the fact that the vehicle had been sold and the Registration Certificate transferred on August 10, 2021. The accident had occurred within four days of that transfer. The insurer had also appointed a surveyor who assessed the loss at ₹1,60,000, indicating that the claim had been examined on merits.

Referring to Section 157(2) of the Motor Vehicles Act, 1988, the Commission held that the provision clearly contemplates a deemed transfer of the insurance policy along with the transfer of the vehicle. The Bench relied on the Supreme Court’s decision in Surendra Kumar Bhilave v. New India Assurance Co. Ltd., wherein it was held that upon transfer of the vehicle, the insurance policy automatically stands transferred in favour of the transferee and the insurer cannot deny an own-damage claim on technical grounds.

The Commission further observed that the insurer had initially shown readiness to settle the claim in accordance with the survey report, which reinforced that the claim was otherwise genuine. Repudiation solely on the ground that the policy remained in the name of the previous owner was found to be neither just nor proper.

Holding that the order of the District Consumer Commission did not warrant interference, the State Commission dismissed the appeal and confirmed the impugned order dated November 16, 2023 in CC No. 1062/2023. No order as to costs was made.

Cause Title: The Branch Manager, M/s Shriram General Insurance Company Ltd. v. Ashok S/o Mahalingappa Doni (deceased, represented by LRs) & Anr.
Case No.: Appeal No. 1161/2024
Coram: Hon’ble Sri Ravi Shankar (Judicial Member) and Hon’ble Smt. Sunita C. Bagewadi (Lady Member)
Date of Decision: January 9, 2026