Madhya Pradesh High Court
Ashok Kumar And Anr. vs Mohan Lal Kehar And Anr. on 8 December, 1995
Equivalent citations: 1997ACJ1383
Author: R.S. Garg
Bench: R.S. Garg
JUDGMENT R.S. Garg, J.
1. This judgment shall also dispose of M.A. No. 102 of 1991. A motor car No. MPK 2125 was originally belonging to Pushpa Bhatnagar. Pushpa Bhatnagar transferred the vehicle to appellant No. 2 Asha Waswani on 30.5.1983. The insurance policy was taken on 2.6.1983 in the name of Pushpa Bhatnagar. It is said that Pushpa Bhatnagar after transfer, and appellant No. 1 Ashok Kumar informed the insurance company that Pushpa Bhatnagar had transferred the vehicle to Asha Waswani. Ashok Kumar stated that on 3.6.83, he had informed that after purchasing the vehicle from Pushpa Bhatnagar, the vehicle was got insured by him for the benefit of his wife in the name of Pushpa Bhatnagar as appellant No. 2 was not the registered owner. The said vehicle was involved in accident on 4.6.1983. Malkibai, wife of Mohan Lai, filed Claim Case No. 16 of 1983 against the present appellants and respondent No. 2. Similarly, Mohan Lai filed Claim Case No. 17 of 1983 against the aforesaid persons. As the claims were the result of the same accident, Case No. 17 of 1983 was consolidated with Case No. 16 of 1983. The defence of the present appellants was that as they were not the registered owners, they had to take the policy in the name of the registered owner and that the insurance would enure to their benefit. The insurance company in its defence submitted that the vehicle was already transferred on 30.5.1983 therefore any policy issued subsequent to the date of transfer in the name of the earlier owner would not enure to the benefit of the subsequent owner because on the date of the policy the earlier owner had no insurable interest. After hearing the parties and recording evidence, the learned trial court, holding that the accident was the result of rash and negligent act held that Mohan Lal was entitled to Rs. 25,000/- and Malkibai was entitled to Rs. 36,000/- as compensation. The trial court though awarded the claim but, however, further held that because of the transfer of the vehicle, the insurance policy would not provide any protection to the present appellants. These appeals were filed against the claimants and the insurance company. The matter between the appellants and the claimants was compromised and it was so recorded by the court, therefore, the question of rash and negligent act, compensation and disability suffered by the claimants is no more open. The dispute between the appellants and the insurance company is regarding the liability and indemnity.
2. Mr. Vishwakarma and Mr. Pathak, with their usual vehemence, contended that as the appellants were not registered owners, they could not have obtained the policy in their name, therefore, Rajkumar, husband of appellant No. 2, as advised by the Insurance Inspector (some) Chouhan, was asked to take the policy in the name of the registered owner. It is also contended that the insurance company after issuing the policy and even after receiving the intimation did not revoke or cancel the policy. Even after notice of the claim it did not cancel the policy under the provisions of Section 103-A of the Motor Vehicles Act. It is submitted by them that the insurance policy even if taken in the name of the earlier owner, the insurance company cannot avoid its liability. On the other hand, Mr. Naik, who was no less vehement, contended that the agreement of insurance is between the parties, i.e., the insured and the insurer. The insurer has certainly to fulfil the terms when it accepts the premium and undertakes to indemnify the insured. He submitted that while taking the insurance policy, the person taking the policy must have some insurable interest and if a person did not have any insurable interest, then the insurance policy would in fact be good for nothing. The said insured would not be entitled to any protection or a transferee from him would also not get any rights.
3. Section 103-A of the Act states that where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of chapter VIII, proposes to transfer to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, he may apply in the prescribed form to the insurer for the transfer of the certificate of insurance and policy described in the certificate in favour of the person to whom the motor vehicle is proposed to be transferred. The Section further says that if within 15 days of the receipt of such application by the insurer, the insurer has not intimated the insured and such other person his refusal to transfer the certificate and the policy described in the certificate, it shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.
4. A true reading of Section 103-A would depend upon certain interpretations. The section requires that the person must be the owner of the vehicle, then there must be wish or proposal to transfer the ownership of the vehicle and the transferor/ owner has already taken an insurance policy. If these three situations or circumstances are available, then the transferor may ask the insurance company to transfer the policy in favour of the person to whom the vehicle and the policy is proposed to be transferred. Intimation to the insurance company must be that the vehicle belongs to the earlier holder and is proposed to be transferred with the policy to someone else. If the insurance company within 15 days of the receipt of this intimation does not communicate its refusal, the law provides for a deeming fiction in favour of the subsequent owner.
5. In the instant case, undisputedly the vehicle was transferred on 30.5.1983. It is also not in dispute that no policy was in force on 30th May. It is also not in dispute that before the 30th May no intimation regarding the transfer of the vehicle or of the existing policy was ever sent to the insurance company. The policy was taken on 2.6.1983 by the husband of appellant No. 2 in the name of Pushpa Bhatnagar. Under the ordinary common law and the Sale of Goods Act, the moment possession of movable property is delivered and the price was paid, the agreement of sale is concluded and is final. If on 30th May, possession of the vehicle was delivered and price was paid to Pushpa Bhatnagar, then Pushpa Bhatnagar lost her right, title and interest in the property. Her title is absolutely extinct. Her right to possess the property is lost and the interest, which for the purposes of this appeal would be taken as insurable interest, would also come to an end. A person can obtain an insurance policy provided he is a registered owner or is the true owner or he is a person who because of his possession is entitled to obtain an insurance policy. Pushpa Bhatnagar on 30.5.1983 did not possess any interest in the property. She was not even examined by the appellant to prove that for the disputed transfer she had authorised appellant No. 2 or her husband to take the policy in her name. The policy, as I have already observed, is a contract between the insurer and the insured. The husband of appellant No. 2 could not act as an agent of Pushpa Bhatnagar. I fail to understand as to how he could obtain a policy in the name of the earlier owner without her consent.
6. So far as the liability of the insurance company is concerned, it is to be seen that the insurance company would be liable only if there is a valid policy and the conditions of the policy were not violated. In the instant case, the very foundation for issuance of policy is missing. A castle of arguments may be built but the liability cannot be fastened on the insurance company on a foundation which is yet to be founded. If somebody takes a policy in the name of another person, then the insurance company would not be answerable to indemnify such person who has obtained the policy under the name of another person.
7. Mr. Pathak submitted that from para 12 of the reply of the insurance company, it is clear that Pushpa Bhatnagar had informed the insurance company about the transfer. True it is that the insurance company has said so, but the insurance company has nowhere accepted that it was informed on 2.6.83 that Pushpa Bhatnagar was taking the policy despite transfer of the vehicle to another person. The reply of the insurance company is to be read in its true perspective. It merely says that the insurance company is not answerable to meet the claim of the claimants or indemnify appellant No. 2.
8. Mr. Pathak further submitted that from Exh. D-2, it is clear that the intimation was sent to the insurance company by husband of appellant No. 2, that after the purchase of the vehicle the husband of appellant No. 2 had obtained a policy in the name of the earlier owner. It is also suggested that Exh. D-3 is the postal receipt. It is also submitted that under Exh. D-4, the insurance company was informed of the accident. Ordinarily, otherwise, this statement of Rajkumar and the documents could have been relied upon, but what halts me is the documents Exh. D-2 and Exh. D-4. It is to be seen from the statement of Rajkumar that according to him he has sent the intimation to the insurance company and wanted to produce the copies of the letters in the court. A perusal of Exhs. D-2 and D-4 conclusively proves that these are not the copies of Exhs. D-2 and D-4 but are the originals. According to the statement of Rajkumar, the originals were already sent. It is surprising to note that he is still in possession of the originals. Mr. Pathak and Mr. Vishwakarma, trying to meet the situation, submitted that the originals were sent and another copy of Exhs. D-2 and D-4 was made. From the word 'copy' they mean to say copy subsequently prepared, but the argument deserves to be rejected for the simple reason that Rajkumar does not say what his counsel are trying to assert.
9. Relying upon the judgments in Gyarsilal Jagannath Prasad Mor v. Sitacharan Dubey 1958-65 ACJ 352 (MP); Padma Devi v. Gurbakhsh Singh 1973 ACJ 460 (Rajasthan); and National Insurance Co. Ltd. v. Ajit Doshi 1979 ACJ 433 (Rajasthan), it was contended that even after the transfer of the vehicle, if the insurance company has not cancelled the policy, the insurance company would be liable to indemnify the subsequent purchaser in view of the deeming fiction. A deeming fiction has its own limitations. It is not that in every situation or under any circumstances, the deeming fiction would come to help or assist the person seeking protection under it. A deeming fiction cannot be used beyond the region where it is to be used. Deeming fiction merely says that there must be existing ownership, existing insurance policy, a proposal to transfer and the silence on the part of the insurance company for 15 days. If these four conditions are not available, then the deeming fiction would not give any protection or shelter to the transferee. The deeming fiction in the instant case would not be applicable because on the date when the intimation was sent to the insurance company, neither there was existing ownership nor existing policy nor there was any proposal for transfer. The policy was taken by another person in the name of the registered owner who was no more the true owner. In my opinion, the protection under Section 103-A of the Act would not be available to the present appellant. A policy taken in contravention of law can always be repudiated. This was sought to be made capital by the learned Counsel for the appellant by stating that if the insurance company had received the intimation regarding transfer of the vehicle, then it was duty bound to revoke or cancel the policy and in absence of such cancellation or revocation, it must be deemed that the insurance company issued the policy in the name of Pushpa Bhatnagar knowing fully well that she was not the owner but the policy could be issued in her name to protect the interest of the subsequent purchaser. I am unable to accept this contention. The document Exh. D-2 was ever sent is a doubtful position. Exh. D-4 if was sent was ever received by the insurance company or not cannot be said from the record. If these two documents are excluded from consideration, then the only intimation which the insurance company received was the summons of the court wherein it was arrayed as a defendant. If the insurance company during the pendency of the claim petition did not cancel or revoke the policy no fault can be found with it.
10. The husband of appellant No. 2, on the date when he obtained the policy, suppressed material facts. An insurance policy is confidence reposed by the insured and the insurer inter se. Suppression of material facts, ordinarily even under the law, would be against public policy and would make the agreement between the parties a void one. In case of an insurance policy where the facts are suppressed, the person taking the policy cannot be permitted to take the benefit under such a void policy. Concealment of material facts would be a lethal blow to such a policy and such a policy would not be enforceable under the law.
11. Mr. Pathak submitted that as the Insurance Inspector Chouhan asked them to obtain the policy in the name of the earlier owner, bona fide believing that they may do so, they obtained the policy. This defence has come for the first time in the statement of Rajkumar. It is not to be seen in Exh. D-2, nor this defence was taken in the written statement. A belated disclosure of the material facts would show that the fact at the subsequent stage was either concocted or manufactured. In the instant case, illegality is writ large. The facts, floating on the surface, show that the policy was taken by the person who had no surviving interest in the property. An insurance company, when it accepts the premium for issuance of the policy, believes on the bona fides of the proposal and issues the policy in good faith. We do not know as to whether the insurance company would have insured the vehicle, if these facts were brought to the notice of the insurance company. The insurance company, in the instant case, under the provisions of Section 103-A of the Motor Vehicles Act, 1939, was not even obliged to transfer the policy because there was no existing policy on the date of transfer of the vehicle. To my mind, the insurance company cannot be held liable to indemnify the appellants.
12. I do not find any force in this appeal. It is liable to be and is accordingly dismissed. There shall, however, be no orders as to costs.