NATIONAL INSURANCE CO LTD Vs. RAVISHANKAR

JUDGEMENT

(1.) THE appellant insurance company being aggrieved by the order dated 5. 9. 1990, passed in Claim Case No. 51 of 1990, by the learned Additional Member, Motor Accidents Claims Tribunal, Katni, has filed the present appeal. Brief facts leading to the present case are that the claimant Ravishankar, on 13. 5. 1990, while riding a cycle was hit by the non-applicant No. 1, when he was driving a scooter No. ATS 4014. As a result of the accident, respondent No. 1 suffered grievous injury, including a compound fracture. According to the claimant, non-applicant No. 2, Dashrath Prasad, was the owner of the vehicle and the vehicle was insured with the appellant insurance company. The claimant, on these facts, filed a claim petition and also moved an application under Section 140 of the Motor Vehicles Act. It was contended by Dashrath Prasad that neither he was riding the scooter nor there was any accident. A false report has been lodged against him. The insurance company contended that the claimant did not suffer any grievous injury and in any case, scooter No. ATS 4014 has been insured in the name of one Jaipal Rao. According to them, as Jaipal Rao has not been joined as a party to the claim petition, they cannot be compelled to answer the award or the claim.

(2.) THE trial court, after considering the arguments of the parties, held that the non-claimants should deposit a sum of Rs. 12,000/- under Section 140 of the Motor Vehicles Act. Being aggrieved by the order, the insurance company has filed the present appeal on various grounds.

(3.) IT was contended on behalf of the appellant that the scooter was insured in the name of Jaipal Rao and as he has not been joined as a party, the insurance company cannot be held liable. Relying upon New India Assurance Co. Ltd. v. Ajay 1994 ACJ 987 (MP), it was contended that the insurance company cannot be directed to make payment of the interim award on the basis of no fault liability even in a case of clear breach of conditions of the policy. It was also contended that when a vehicle is transferred and the insurance policy is not transferred in the name of the transferee, there would be no privity of contract between the transferee owner and the insurance company and the insurance company cannot be held liable to indemnify the transferee owner. It was submitted that the approach of trial court was patently wrong. Replying the above arguments, it was contended by the counsel for the claimant and the owner that these defences are not available to the insurance company at this stage and, therefore, the insurance company at this stage cannot take the advantage of this legal plea. It was also submitted that prima facie there does not appear to be breach of the policy and in any case, the matter is yet to be decided and if the trial court holds that insurance company is not answerable to the claim it can recover the amount. Relying upon Santosh Rani v. Sheela Rani 1988 ACJ 299 (Rajasthan), it was submitted that where a vehicle is transferred much prior to the date of accident, the insurance company would be held liable as the liability would subsist irrespective of the transfer since neither the policy was cancelled nor the premium for the period after the transfer was refunded. It was also submitted that in view of New India Assurance Co. Ltd. v. Avinash 1988 ACJ 322 (Rajasthan), the defence regarding transfer of the vehicle and lapse of policy is not available to the insurance company under Section 96 (2) of the Motor Vehicles Act. Placing reliance on National Insurance Co. Ltd. v. Thaglu Singh 1995 ACJ 248 (MP), it was contended that in case of no fault liability, such a defence is not available to the insurance company. Reliance was also placed on a single Bench judgment of this court reported in Harcharan Singh v. Tuna Bai 1995 ACJ 423 (MP ).