NATIONAL INSURANCE CO. LTD Vs. THOMAS

JUDGEMENT

(1.) The National Insurance Company Ltd., the third respondent in O. P. (MV) No. 426/89 on the file of the M.A.C.T., Kottayam is the appellant before us. The 2nd respondent is the claimant and the first respondent is the transferee of the offending vehicle involved in the case. The 2nd respondent filed the above application claiming compensation of Rs. 1 lakh on account of the injuries sustained by him in the accident occurred on 29-12-1988 involving two vehicles, one is motor cycle KLO 1956 and the other is autorickshaw KRK 6529. After the enquiry the Tribunal found that the driver of the autorickshaw was negligent. Finally it passed an award allowing a sum of Rs. 60,780/- with 12% interest as compensation. It also found that the transferee was primarily liable to pay the compensation, but since the existence of insurance policy was admitted the insurer was made liable to indemnify the owner in respect of the compensation awarded. The Insurance Company being dissatisfied with the award filed this appeal.

(2.) The only point which requires to be decided in this appeal is whether the appellant insurance company is liable to indemnify the owner of the vehicle for the compensation awarded by the Tribunal. The counsel for the appellant pointed out that the transferee of the vehicle had not intimated the factum of transfer to the insurance company and hence it has no liability to satisfy the award. He places reliance on S.103A of the Motor Vehicles Act, 1939 (hereinafter referred to as the 'Act'). The said section contemplates an application for transfer of certificate of insurance and consequent fictional transfer with effect from the date of transfer. In order to transfer the certificate of insurance along with transfer of ownership of the motor vehicle transferor has to apply in the prescribed form to the insurer for such transfer and the policy described in the certificate in favour of the transferee. If within fifteen days of the receipt of such application by the insurer, the insurer has not intimated the insured his refusal to transfer the certificate and the policy, then there shall be a deemed transfer in favour of the transferee with effect from the date of transfer. However, the appellant in this case admits that the transferor has intimated the transfer to the registering authority as required under S.31 of the Act. S.31 deals with transfer of ownership of a motor vehicle registered under Chap.3. This is different from the transfer contemplated under S.103A which relates to transfer of certificate of insurance alone.

(3.) Thus what is involved in this case is the default committed by the transferor to intimate the fact of transfer to the insurer as required under S.103A. Therefore the question that emerges is that by virtue of the aforesaid default of the person in whose favour the certificate of insurance has been issued, can the insurance company avoid the payment of compensation to the third party (victim) No; insurer cannot disown the liability in view of the provisions contained in S. 94 and 95 of the Act. The Supreme Court in Complete Insulations (P) Ltd. v. New India Assurance Co. Ltd. ( 1996 (1) SCC 221 ) while dealing with the relevant provisions contained in old Act and New Act held thus: