NATIONAL INSURANCE COMPANY LTD. Vs. LABANYA ROY

JUDGEMENT

(1.) THIS appeal is directed against the judgment and award passed by the Motor Accidents Claims Tribunal, Hooghly in M. A.C. Suit No. 25 of 1978.

(2.) THE claimant Respondent No. 1, Labanya Roy made an application before the Motor Accidents Claims Tribunal, Hooghly claiming compensation in the prescribed form on account of the death of her son Jayanta Kumar Roy due to fatal injury suffered by him by lorry No. WGA 1622 on 22nd November, 1977. The claimant contended that because of the rash and negligent driving of the said lorry, her son Jayanta died and at the time of his death he was a student of Rishi Bankim Chandra College, Naihati and used to earn Rs. 150/ - per month as private tutor and also from side business. She made a claim for a sum of Rs. 75,000/ - on account of the death of her son. In the claim petition, Gurubala Mal was impleaded as the owner of the said lorry and Dilip Kumar Mal was also impleaded being the driver of the said lorry. The National Insurance Company Limited was also impleaded as the insurer of the said lorry. The opposite parties contested the said claim petition and filed written objections. It was contended on behalf of Gurubala Mal and Dilip Kumar Mai, Respondent Nos. 2 and 3 in this appeal, that the said accident was not caused due to rash and negligent driving of the said lorry but the accident took place because of the negligence on the part of Jayanta who suddenly came in front of the said running lorry. It was also contended on their behalf that the claim for compensation was highly inflated and that the said Jayanta had no independent income at the time of the accident. The Appellant, National Insurance Company Limited, initially filed a written objection and contended that it was not liable because the accident had happened due to the fault of the said Jayanta and it also disputed the quantum of compensation claimed by the Applicant. Later on an additional written statement was filed on behalf of the Appellant and it was contended therein that the said lorry was insured by its erstwhile owner one Bimal Sarkar but at the time of the said accident the said lorry had been transferred in favour of Gurubala Mal and as the insurance policy lapsed because of the transfer effected at the time of the accident, the insurance company had no liability whatsoever under the insurance policy taken by the erstwhile owner. The insurance company, therefore, contended that they had been wrongly impleaded as a party in the said claim petition.

(3.) MR . Chowdhury, Learned Counsel appearing for the Appellant has contended that although in respect of a vehicle an insurance policy is issued, the policy essentially and basically is an indemnity to the person insured and such insurance policy does not run with the vehicle. He has submitted that after the transfer of ownership of the vehicle the insurance policy comes to an end. He has contended that the learned Tribunal failed to appreciate the facts of the case and erroneously proceeded on the footing that since the vehicle was insured at the relevant time with the insurance company, it was liable to the extent of Rs. 50,000/ - under the law for the said accident caused to the deceased Jayanta. In support of this contention he has referred to a decision of the Madras High Court made in the case of South India Insurance Company Ltd. v. Lakshmi : 1971 ACJ 122 (Madras). It has been held in the said decision that policy of insurance comes to an end when vehicle stands physically transferred by the owner. Section 31 of the Motor Vehicles Act cannot have the effect of keeping the policy alive qua third parties. Change of registration of owner under Section 31 of the Motor Vehicles Act is not a condition precedent for the transfer of ownership of the vehicle. It merely imposes an obligation both on the transferor and the transferee to notify the transfer. But noncompliance with Section 31 does not invalidate the transfer. He has also referred to a decision of the Delhi High Court in the case of Oriental Fire and General Insurance Company Ltd. v. Vimal Roy : 1972 ACJ 314 (Delhi). It appears that the Delhi High Court has also held the same view. It has been held that transfer of motor vehicle is governed by the Sale of Goods Act and not by the Transfer of Property Act and such sale is completed on payment of consideration money coupled with delivery of possession irrespective of the fact that the said vehicle is registered or not with the Motor Vehicles Department. It has also been held that although certificate of registration is an important piece of evidence to ostensibly show the owner of the vehicle who has to pay taxes and perform the duties and obligations under the Motor Vehicles Act, the endorsement of transfer on the certificate is not a condition precedent and its absence does not make the transfer invalid. It may be noted that by the said decision the Division Bench allowed the appeal preferred by the Oriental Fire and General Insurance Company Ltd. against the decision made by a single Judge since reported in the case Vimal Rai v. Gurucharan Singh : 1967 ACJ 115 (Delhi). The Division Bench in the said case has further held that where the existence or subsistence of a contract of insurance is challenged or insurance company contends that the policy has lapsed or is not available to cover the liability of the purchaser of the vehicle, the restriction contained in Sub -section (2) of Section 96 is not attracted. Mr. Chowdhury has also referred to a decision of the Supreme Court made in the case of Panna Lal v. Sri Chand Mal : 1980 ACJ 233 (SC). The Supreme Court has held that transfer of a motor vehicle is a valid transfer even when such vehicle is not registered with the Motor Vehicles Authority. Mr. Chowdhury has contended that under Section 103 -A of the Motor Vehicles Act the certificate of insurance can be transferred in favour of the subsequent purchaser of a motor vehicle provided an application is made within the prescribed time and the prescribed manner and such transfer is accepted by the insurer. It appears that if 15 days prior to such transfer an application is made by the owner of the vehicle for transfer of an insurance policy in favour of the intending purchaser, the insurance company may accept such transfer of policy in favour of the intending purchaser. It has also been provided for in the said section that if the decision of the insurance company is not communicated within the prescribed time it will be deemed that such transfer has been accepted by the insurance company. Mr. Chowdhury has contended that no such application under Section 103 -A had been made by Mr. Sarkar who was the previous owner of the said vehicle and in whose name the insurance policy had been issued and as such there was no occasion to transfer the certificate of insurance in favour of Gurubala Mai. Mr. Chowdhury has contended that when admittedly Gurubala Mal became the owner of the said vehicle and when the insurance company specifically stated that there was no insurance policy in favour of the said Gurubala Mal and the policy came to an end with the transfer, it was the duty of the Applicant to establish by leading proper evidence that the said Gurubala Mal was covered by the insurance policy for which the insurance company could be held liable for the said accident. He has submitted that the claimant should have called for the relevant document of insurance policy for the purpose of proving that the said Gurubala Mal was covered by the valid insurance policy. He has submitted that the basic burden of proof not having been fulfilled by the claimant, the learned Tribunal was absolutely wrong in passing the award only against the insurance company. Mr. Chowdhury has also referred to a Bench decision of this Court made in the case of Bir Singh v. Hanshi Rashi Banerjee : AIR 1956 Cal 555. He has submitted that in the said decision also, the Division Bench has held that the insurance policy indemnifies the insured and it does not run with the vehicle and it comes to an end after the transfer of the said vehicle. He has submitted that in the facts of the said case the Division Bench, however, held that since the insurance company being in possession of relevant documents failed to produce the registers to show that the insurance policy had not been transferred in favour of the subsequent purchaser of the vehicle in question, an adverse inference should be drawn by the Division Bench against the insurance company and the award was therefore made against the insurance company. Mr. Chowdhury has, however, submitted that in the instant case there is no material on the basis of which such adverse inference can be drawn against the insurance company and it can be held that Gurubala Mal was also covered by a valid insurance policy for which the liability can be fixed on the insurance company.