NEW INDIA INSURANCE COMPANY LIMITED Vs. N GANAPATHY

JUDGEMENT

(1.) ON March 18, 1975, at about 1 p.m., one Kalidas was coming on his cycle near the Town Hall, Nethaji Road, Cuddalore. The bus, bearing registration number MDB 1291, which was driven in a rash and negligent manner, dashed against the said Kalidas and caused him multiple injuries resulting in his instantaneous death. The parents of the deceased, respondents Nos. 1 and 2 herein, filed claim Petition No. 24 of 1975, before the Motor Accidents Claims Tribunal, Cuddalore, claiming compensation of Rs. 75, 000. The vehicle was originally owned by M. Thiagarajan and it was transferred in favour of G. Govindan on August 15, 1974, and they are arraigned as respondents Nos. 3 and 4 herein. New India Insurance Company, with whom the vehicle was insured, is the appellant herein. The third respondent wanted to be absolved of the liability by pointing out that long before the accident, he had parted with the ownership of the vehicle to and in favour of the fourth respondent. The appellant herein, the insurance company, contended that since the vehicle was transferred by the insured, the third respondent, to and in favour of the fourth respondent, the policy of insurance lapsed on such transfer of ownership of the vehicle.

(2.) THE transferee, the fourth respondent, admitted the change of ownership, but contested the claim on other grounds. THEre was a general contest that the accident was not due to the rash and negligent driving of the vehicle and with regard to the quantum of compensation claimed. THE Tribunal rendered a finding that the accident was due to the rash and negligent driving of the vehicle and determined the compensation at Rs. 38, 000. THE Tribunal accepted that there was a change of ownership of the vehicle long prior to the date of the accident, but it opined that since the insurance company, the appellant, had knowledge of the transfer of ownership, it cannot escape the liability under the policy. In this view, the Tribunal passed an award directing the insurance company, the appellant, only to pay the compensation to respondents Nos. 1 and 2 with interest at 6 per cent. per annum from the date of petition till date of payment. THE appellant, the insurance company, questions the award, putting forth the contention that since the ownership of the vehicle was transferred even on August 15, 1974, long before the date of accident on May 18, 1975, the insurance policy lapsed and no liability could be pinned down on the insurance company.No submissions were made before us attacking the finding of the Tribunal that the accident was due to the rash and negligent driving of the vehicle and with regard to the determination of the compensation at Rs, 38, 000. Hence, the only question that arises for consideration in this appeal is, whether the Tribunal was correct in directing the appellant to pay the compensation in spite of the fact that the ownership of the vehicle, which was originally with the third respondent, got transferred in favour of the fourth respondent, long prior to the date of the accident on May 18, 1975.One of us, viz., Ramanujam J., had an occasion to deal with the question, even in 1971, as to whether the policy of insurance could survive when the vehicle was physically transferred by the owner, in south India Insurance Co. Ltd. v. Lakshmi and the available case-law was analysed and it has been that the policy of insurance came to an end when the vehicle was transferred by the owner s. 31 of the Motor Vehicles Act, 1939 (hereinafter referred to as "the Act"), could not have the effect of keeping the policy alive qua third parties change of registry under s. 31 was not a condition precedent for the transfer of ownership of the vehicle s. 31 merely imposed an obligation both on the transferor and the transferee of the vehicle to notify the transfer and non-compliance with the provisions of s. 31 did not invalidate the transfer.THE Tribunal, in the instant case has laboured itself by writing a lengthy judgment but still, we had to wade through it to spell out the reasoning of the Tribunal with great difficulty. THE Tribunal has not lost sight of the ratio decidendi of this court found expressed in the above decision. It referred to the decisions of the High Courts of Orissa, Allahabad and Punjab and Haryana, and distinguished the above decision of this court by stating that it applied only to a case where the insurance company was not aware of the transfer and does not apply to the facts of the present case.