NATIONAL INSURANCE CO LTD Vs. BIMLA DEVI

JUDGEMENT

(1.) The Insurance Company is in appeal, seeking for a right of recovery against the transferee from the insured since he had failed to inform the insurer in the manner provided under Section 157(2) of the Motor Vehicles Act (hereinafter referred to as the 'Act'). The decision of the Tribunal contained a reference to the fact that the Insurance Company will have a right of recovery in the manner provided in Rikhi Ram and Anr. v. Sukhrania and Ors., 2003 134 PunLR 1. The Insurance Company still felt itself aggrieved by the fact that the right must have been granted in enforcement in the very same proceedings and it could not have been through independent proceedings. The claimants themselves have preferred an appeal i.e. FAO No. 71 of 2004 for enhancement of the compensation awarded

(2.) At the time when the counsel made a statements about the right of recovery in the very same proceedings, I directed the counsel to argue even on findings rendered by the Tribunal that it had a right of recovery. Learned Counsel would submit that the protection which is offered by Section 157 of the Act is only for claimant third party and the protection will not be available for the owner himself in the light of the law laid down by the Hon'ble Supreme Court in Rikhi Ram's case(supra). The decision in the said case relies on the decision in G. Govindan v. New India Assurance Co. Ltd., 1999 122 PunLR 274 dealt with the effect of the expression contained in Chapter 21 of the Act that was captioned "insurance of motor vehicles against third pasty risk". In Rikhi Ram's case(supra), the Court held that if a purchaser of a vehicle were to be recorded as a third party, he can not get any benefit under the contract of Insurance unless there is a compliance with the provisions of the Act. The said decision makes a distinction between reference to a third party who is a victim who can enforce a claim against the insurer and third party who is a transferee and who would secure the benefit of the policy. This decision came about in the context of a case arising under the Motor Vehicles Act, 1939 and made a reference also to the provision under Section 157(2) of the Act. Section 157(2) of the Act prescribes a procedure to apply in a prescribed form to the insurer for making necessary changes in the record about the fact of the transfer in the certificate of insurance. Enforcement of claims by third parties and by a transferee stand on different footing and this distinction must be clearly kept in mind. While a transferee must be able to enforce a claim against an insurer without obtaining a transfer in the manner contemplated under Section 157(2) of the Act, it is not the same thing as denying to the transferee a right to be indemnified, if a third party claim operates. There the fact of deemed transfer that makes the insurer liable will protect the transferee also. On the other hand, if the claim proceeds from the transferee say, for enforcement of 'Own Damage' claims, he cannot make the insurer liable unless the contract of insurance itself had been transferred. This will be irrespective of the fact that the ownership of the vehicle must have been transferred by mere delivery even without recourse to following the procedure prescribed under Section 50 of the Act. The said section relates to transfer of registration of the vehicle. I have had an occasion to consider the fact of a transferee not informing the insurer and his entitlement to be protected for a claim at the instance of a third party in Lakhwinder Singh v. Tarsem Singh, FAO No. 1170 of 2009 decided on 28.09.2010. I have tried to elicit the distinction of a transferee's right of securing a claim at his instance against the insurer and a right to be indemnified in an action by a third party against the insurer. I therefore, vacate the finding given by the Tribunal that the Insurance Company has a right of recovery against the transferee purchaser. Such a right granted to the insurer is in my view wrong and not notwithstanding the fact that the owner himself has not preferred an appeal, I invoke the powers under Order 41 Rule 33 and find the insurer wholly liable to satisfy the claim.

(3.) There is claim for enhancement of compensation made at the instance of the representatives of the deceased in a motor accident. The deceased was a line man in Electricity Board, aged over 45 years and drawing a salary of Rs. 9,495/-. The Tribunal took his income after deduction at Rs. 7,500/- and took the annual dependency at Rs. 90,000/-. He would have spent 1/3rd toward personal expenses, the Tribunal had adopted a multiplier of 12 and granted compensation at Rs. 7,20,000/-. The claim on behalf of the claimants that the appropriate multiplier should have been 13 and the Tribunal has also not considered the fact that the deceased would have earned his increments having been employed in quasi government service with security of tenure. I would apply Sarla Verma v. Delhi Transport Corporation and Anr., 2009 6 SCC 121 and provide for 30% increase and taken the average salary less tax to be Rs. 11,400/-. Making a deduction of 1/4th for personal expenses. I would provide for annual dependency all to be Rs. 1,02,600/-. The amount shall increased as above. Applying a multiplier of 13, the loss of dependency at Rs. 13,33,800/-. Adding the conventional heads for loss of consortium for wife at Rs. 5,000/-, loss to estate at Rs. 5,000/-, Rs. 5,000/- for funeral expenses, the total amount that shall become payable be Rs. 13,48,800/-. The amount in excess of what has already been determined by the Tribunal will bear interest at 6% per annum from the date of the petition till the date of payment. The appeal by the Insurance Company is dismissed and the direction in the award of the Tribunal giving the recovery right is also set aside. The appeal filed by the claimant is allowed to the above extent.