NATIONAL INSURANCE CO LTD Vs. CHAND CHHABRA

JUDGEMENT

(1.) The insurance company challenges the liability on the ground that the vehicle had been actually transferred and the same had not been brought to the notice of the insurer. The contract of insurance will come to an end and the liability could not be fastened on the insurer. It was the further contention of the insurance company that one of the witnesses on the side of the claimant, Sunder Singh, PW 4, had admitted that all the passengers in the car had hired it as a taxi and the accident had taken place by the negligent driving of the driver of the taxi. The last contention raised was that the Tribunal determined the compensation at Rs. 3,16,000 for the representatives of the deceased, who was 37 years of age. The Tribunal adopted a multiplier of 16, which was high and runs counter to the several decisions of the Hon'ble Supreme Court with regard to the quantum and choice of multiplier. On the issue of liability of the insurer notwithstanding the transfer of the vehicle, the matter has been finally settled by a decision of the Hon'ble Supreme Court in United India Insurance Co. Ltd. v. Tilak Singh, 2006 ACJ 1441, where the registered owner was contesting the case and the plea of transfer itself had been denied. The liability of the insurer to a passenger in a Comprehensive Policy was dealt with by the Hon'ble Apex Court in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Company, 1977 ACJ 343. In fact, subsequent to the judgment of the Hon'ble Apex Court an amendment was made by the Tariff Advisory Committee by a circular dated 17.3.1978 to bind the insurer to liability accepting the interpretation as adopted by the Hon'ble Apex Court to section 95 of the old Motor Vehicles Act, 1939. The third party cover under the Comprehensive Policy then prevailing from 25.3.1977 was worded as follows:

(2.) The circular makes it clear that the intention was never to deny cover for liability to occupants in a private car under a Comprehensive Policy. However, in view of the Supreme Court judgment, lest it be applied even for a Comprehensive Policy, it was decided to amend the policy to clarify and expressly hold out that such occupants are covered under a Comprehensive Policy. Accordingly, the policy wording in section II was modified as follows:

(3.) Although circular was dated 17.3.78, TAC made the amendment retrospectively effective from 25.3.1977, the date of the Supreme Court judgment in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Company, 1977 ACJ 343, apparently to give the benefit of the amendment to all subsequent policies.