UNITED INDIA INSURANCE CO LTD Vs. TILAK SINGH

JUDGEMENT

(1.) The core issue involved in this appeal is: Whether a statutory insurance policy under the Motor Vehicles Act, 1988, intended to cover the risk to life or damage to properties of third parties, would cover the risk of death or injury to a gratuitous passenger carried in a private vehicle.

(2.) Respondent No.5 Bal Krishan had insured his scooter with the appellant-insurance company for the period 7-3-1989 to 6-3-1990. For covering liability to pillion passengers endorsement of I.M.T. 70 pertaining to accident to unnamed hirer/driver/pillion passenger, is required on the insurance policy, which may be obtained by payment of additional premium. The insurance policy covering the scooter of respondent No. 5 did not contain an endorsement of IMT 70.

(3.) On 23rd March, 1989 the scooter was admittedly sold by respondent No.5 to respondent No.1, Tilak Raj. It is also an admitted position that the registration certificate of the scooter was transferred in the name of Tilak Raj but no notice thereto was given by the transferor respondent No.5 to the appellant-insurance company for transfer of the insurance policy and the insurance certificate in the name of the transferee i.e. respondent No.1. With effect from 1-7-1989 the Motor Vehicles Act, 1939 (hereinafter referred to as the 1939 Act) was repealed and the Motor Vehicles Act, 1988 (hereinafter referred to as the 1988 Act) came into force. On 31-10-1989 one Rajinder Singh, who was riding as a pillion rider while the scooter was being driven by respondent No.1, died as a result of an accident. Respondents 2 to 4 being the legal heirs (wife and minor daughters) of the deceased Rajinder Singh moved an application under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for the death of the deceased Rajinder Singh. This petition was opposed by the insurance company on two grounds (a) that the deceased was a pillion rider and the insurance policy did not cover the liability towards a pillion rider and, (b) that, although, the original insurer respondent No.5 had sold the scooter to respondent No.1 before the accident, neither was any intimation of such sale was given, nor was the insurance policy got transferred in favour of respondent No.1. Respondent No. 5 denied his liability on the ground that he had ceased to be the owner of the scooter much prior to the accident. The Motor Accidents Claims Tribunal (hereinafter referred to as the tribunal) made an award dated 8-12-1992 and came to the conclusion that the accident had taken place due to rash and negligent driving on the part of respondent No.1. It also held that the claimants (respondents 2 to 4) were entitled to a total compensation of Rs. 3,89,000/-. The tribunal absolved the appellant-insurance company from liability on the ground that no notice of the transfer of the insured vehicle had been given to the appellant-insurance company in the manner prescribed by the 1939 Act. Only respondent No.1 was held liable for payment of the compensation determined by the tribunal together with interest and costs.