Bombay High Court
Anguribai Babulal Patodi, Proprietor ... vs United India Insurance Co. Ltd. And Ors. on 24 November, 2003
Equivalent citations: (2004)106BOMLR555
Author: S.T. Kharche
Bench: S.T. Kharche
JUDGMENT S.T. Kharche, J.
1. This Appeal is directed against the judgment and Award dated 7.1.2000 passed by the Motor Accident Claims Tribunal in Claim Petition No. 71 of 1991 absolving the respondent No. 3 United India Insurance Company Ltd. from the liability to pay compensation on the ground that the insured did not comply with the provisions of Section 103A of the Motor Vehicles Act. 1939 (for short the Act).
2. Brief facts are as under :
Smt. Shakuntalabai died in an accident arising out of the use of the motor vehicle on 10.11.1989 at 7.30 a.m. Respondent Nos. 3 to 7 are the legal representatives of deceased Shakuntala and they filed the Claim Petition on the ground that deceased Shakuntalabai was standing at a distance of 5 to 6 feet away from the tar road. I One Ambassador car bearing No. MOR 269 owned by the appellant came from Saoner side and gave dash to Shakuntalabai. It is contended that the oar was being driven in a rash and negligent manner by respondent No. 2. The car involved in the accident was duly insured with respondent No. 3 and, therefore, the legal representatives of deceased Shakuntala claimed compensation from the appellant who is the owner of the motor vehicle as well as from respondent No. 1, who is the Insurance Company, with whom the vehicle was insured by virtue of the insurance policy.
3. The parties adduced evidence and the Tribunal on considering the evidence recorded the finding that the driver of the car was rash and negligent in driving the motor vehicle involved in the accident. The Tribunal, however, also recorded finding that the motor vehicle involved in the accident was not transferred by Vimalabai Agrawal to the appellant and, as such, the Insurance Company is not liable to pay the compensation. Consequently, the Tribunal absolved the Insurance Company from the liability. This finding has been challenged in this appeal.
4. Ms. Thakkar, learned Counsel, for the appellant contended that the Ambassador car involved in the accident was originally owned by Vimalabai Agrawal and she had sold the said vehicle on 25.3.1989 to the appellant Anguribai and the name of the appellant was transferred in the transfer register maintained by the R.T.O. on 29.3.1989. She contended that the insurance policy was valid for the period 15.1.1989 to 14.1.1990. She further contended that the accident occurred on 10.11.1989, the Insurance Company would be liable to indemnify the owner of the motor vehicle involved in the accident by virtue of the terms and conditions of the insurance policy which was covering third party risk. Therefore, the impugned order passed by the Tribunal absolving the Insurance Company from the liability to indemnify the owner of the motor vehicle is not sustainable in law. In support of her submissions, she relied on the decision of Supreme Court in Rikhi Ram and Anr. v. Smt. Sukhrania and Ors. .
5. The learned Counsel for respondent No. 3 Insurance Company contended that the insurance policy was not transferred in the name of the appellant on the date of the accident and, therefore, the Insurance Company is not liable to indemnify the owner and, therefore, the Trihunal by placing reliance on the decision of Supreme Court in G. Gouindana v. New India Assurance Co. Ltd. was justified in absolving the Insurance Company from the liability.
6. I have considered the contentions canvassed by the learned Counsel for the parties. It is not in dispute that the motor car involved in the accident has been duly insured with the Insurance Company for the period 15.1.1989 to 14.1.1990. It is also not in dispute that the vehicle involved in the accident was owned by one Vimlabai Agrawal who sold it to Anguribai on 25.3.1989 and the name of Anguribai was entered as an owner on 29.3.1989 in the register maintained by the R.T.O.
7. In Rikhi Ram's case 2003 AIR S.C.W. 780, (cited supra), the Supreme Court observed that "whenever a vehicle which is covered by the insurance policy is transferred to a transferee, the liability of insurer does not cease so far as the third party/victim is concerned, even if the owner or purchaser does not give any intimation of transfer to Insurance Company as required under the provisions of the Act. The reasons being as below :-
Insurance against third party is compulsory, and once the Insurance Company had undertaken liability to third party incurred by the persons specified in the policy, the third party's right to recover any amount is not affected by virtue of the provisions of the Act or by any condition in the policy. Further the liability of an insurer does not come to an end even if the owner of-the vehicle does not give any intimation of transfer to the Insurance Company.
The Supreme Court further observed, "a perusal of Sections 94 and 95 would further show that the said provisions do not make compulsory insurance to the vehicle or to the owners. Thus, it is manifest that compulsory insurance is for the benefit of third parties. The scheme of the Act shows that an insurance policy can cover three kinds of risks, i.e. owner of the vehicle, property (vehicle) and third party. The liability of the owner to have compulsory insurance is only in regard to the third party and not to the property. Section 95(5) of the Act shows that it was intended to cover two legal objectives. Firstly, that no one who was not a party to a contract would bring an action on a contract, and secondly, that a person who has no interest in the subject matter of an insurance can claim the benefit of an. insurance. Thus, once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 94 does not provide that any person who will use the vehicle shall insure the vehicle in respect of his separate use. On an analysis of Sections 94 and 95, it is found that there are two-third parties when a vehicle is transferred by the owner to a purchaser. The purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far as the transferee who is the third party in the contract he cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party Injured or victim is concerned, he can enforce liability undertaken by the insurer."
8. Having regard to the decision of the Supreme Court, the contention of the learned Counsel for the Insurance Company that the Insurance Company is absolved from the liability for want of privity of contract between the owner and the Insurance Company is not acceptable because so far as the third party injured or victim is concerned, the victim can enforce the liability undertaken by the insurer. In that view of the matter, it is manifest that the impugned order passed by the Tribunal cannot be sustained in law and, therefore, for the aforesaid reasons, the Appeal is allowed and impugned Judgment and Award passed by the Tribunal is set aside. So far as the liability of the Insurance Company is concerned, it is directed that the legal representatives of the deceased Shakuntala, i.e. respondent Nos. 3 to 7, would be entitled to recover the entire amount of compensation as awarded by the Tribunal from the Insurance Company and it would be open to the insurer to recover the said amount either from the insured or transferee of the vehicle. However, there shall be no order as to costs.