NIRMAL RANI SIBBAL Vs. S AMARJIT SINGH

JUDGEMENT

(1.) This appeal is directed against the judgment of the Motor Accident Claims Tribunal whereby the tribunal after holding that the vehicle in question having been transferred by the original owner, in whose name the policy of insurance was issued by the insurance company, the insurance company could not be held liable to pay compensation to the claimants, directed the same to be recovered from the owner.

(2.) The tribunal while passing the impugned judgment has relied upon the judgment of this Court in Oriental Fire and General Insurance Co. Ltd. Vs. Vimal Roy 1972 ACJ 314 and New India Assurance Co. Ltd. Vs. Veena 43 (1991) DLT 372 wherein it was held that where a vehicle had been transferred the insurance company would be absolved from its liability to pay compensation arising from an accident caused after the transfer of the vehicle unless of course the insurance policy has also been transferred in the name of the transferee. The Delhi High Court besides the aforesaid judgment in Oriental Fire and General Insurance Co. Ltd. Vs. Vimal Roy (supra) had also in a full bench judgment of this Court reported as Anand Swaroop Sharma Vs. P.P. Khurana 1989 ACJ 577 held that where the policy of insurance is not transferred in the name of transferee after the transfer of vehicle, the insurance company would not be liable to pay compensation to the claimants arising out of the accident caused after the transfer of the vehicle. A contrary view was, however, taken by the full bench of the Andhra Pradesh High Court in Madineni Kondaiah Vs. Yaseen Fatima, 1986 ACJ 1 (AP). It was held in that judgment that the public liability to notify the transfer and securing no objection certificate under Section 31 read with Section 94 of the 1939 Act, would make the original owner retain the insurable interest. It was held that the insurable interest in that case was not proprietary interest but the public liability, not to run the vehicle or cause or allow any person to run the vehicle without insurance and also to notify the transfer of such vehicle to the registering authority. It was held that so long such obligations continues notwithstanding the cessation of proprietary interest, the insurable interest which is the foundation for the continuance of the operation of the policy stands. It was held that when the transferor is liable to pay penalty under Section 31 and also liable to be prosecuted under Section 112 for not notifying the transfer, such transfer makes him to retain the insurable interest as the liability subsists till he discharges the statutory obligations. It was also observed that till the transfer or complies with the requirement of Section 31 of the Act, the public liability will not cease and that constitutes the insurable interest to keep the policy alive in respect of the third party risks concerned, then it must be deemed that the transferor allowed the purchaser to use the vehicle in a public place in the said transitional period and accordingly till the compliance of Section 31, the liability of the transferor subsists and the policy is in operation so far it relates to the third party risks.

(3.) The Delhi High Court in Anand Swaroop Sharma Vs. P.P. Khurana 1989 ACJ 577 had, however, it did not agree with the view taken by the Andhra Pradesh High Court in the aforesaid judgment and held that the third party liability of the insurer comes to an end on transfer of vehicle by the insured to someone else unless the procedure prescribed for transfer is fulfilled.