United India Insurance Company Limited v. Smt. Mamta Rani & Ors.

Judgment

1. All the 25 cases (FAO Nos.602 to 626 of 2008) relate to the same accident, resulting in death and injuries to passengers in a stage carriage. The accident was alleged to have taken place by the negligent driving of the driver in dashing against a tree. The Court found the negligence of the driver as the cause for the accident and made the insurer liable.

2. The insurer is aggrieved on three counts: (i) the vehicle was having a permit to run from Guruharshai-Panje Ke Uttar via Goluka- Mohanke-Hithar-Saideke-Jiwan Arian. It was elicited in evidence of FAO No.602 of 2008 - 2 - RW-1 that the place of accident which was on Zira to Makhu road was

not covered under the route permit. The first contention therefore was that the owner had driven the vehicle at a place other than to which the permit extended and, therefore, the Insurance Company was not liable; (ii) the second point urged was that the insured was one Ramesh Kumar son of Pannu Ram but it was claimed that the vehicle had been transferred to one Rajpreet Singh through a general power of attorney on

18.09.2003 and the vehicle had not been in the custody of the insured. Any transfer of the vehicle had not been informed and, therefore, the Insurance Company was not liable; (iii) the third point urged was that the driver did not have a valid driving licence. The driver had produced two licences, of which, one was said to have been issued from Hamirpur, authorizing him to drive a heavy motor vehicle. A Clerk from the RTO's office, Hamirpur, was examined, who gave evidence to the effect that there were entries mentioning his name but the entries contained different inks. It was elicited in the cross-examination as follows:- “It is correct that there is difference of ink with the remaining entries with Entry No.1080. It is correct that figure 1080 is written with the same ink as of other entries, but the remaining entry is with different ink.” The attempt was therefore to show that the driver and the owner had connived with the authorities to create a false entry in the licence register.

3. I would find each one of these contentions to be not tenable. The first contention that the vehicle had been driven on a route which was not permitted and, therefore, the Insurance Company is not liable, has no meaning for the permissible defence under Section 149 (2) (c ) FAO No.602 of 2008 which reads thus, - 3 - for a purpose not allowed by the permit under which (c ) the vehicle is used, where the vehicle is a transport vehicle This expression of an use of a vehicle other than that for which the permit allowed for must be understood only with respect to the purpose of permit, which are delineated under Section 66 of the MV Act. The permit shall be necessary for use of a vehicle as a 'transport vehicle'. It may either be for carrying passengers or goods. They may be attached with conditions for route; for use as stage carriage; for use as goods carriage, etc. The focus here for a permit is the purpose and not the distance to be traversed or the necessary conditions for conforming to the permit. What would become possible for the transport authorities to take action against the holder of a permit for any violation is not also what is possible for an insurer to plead in defence as constituting a justification for exclusion of liability.

4. The learned counsel relies on a judgment of the Hon'ble Supreme Court in National Insurance Company Limited Versus Challa Bharthma-2004 ACJ 2094. This case simply does not answer the point which we are examining. The Hon'ble Supreme Court in the above case was considering a claim in relation to death of two persons and injuries to another involving an auto rickshaw. The insured in that case had not obtained permit to ply the vehicle. The user of the vehicle was for hire that required a permit that was the cause for exclusion. In other words, he was putting it to the use for a purpose which had not been authorized. On the other hand, in the instant case, the purpose was to carry passengers as a stage carriage. That there was a deviation from the route FAO No.602 of 2008 - 4 - is not in any way a violation for the purpose of the permit. The reliance on the above judgment therefore cannot carry weight for the benefit of the insurer. I, therefore, reject his contention that the Insurance Company will not be liable.

5. On the issue relating to the lack of communication by the person, who was in control of the vehicle about the transfer, it must be examined under two contexts: (i) of what the statute provides for under Section 157 and what we mean by transfer. Section 157 reads thus:- “157. Transfer of certificate of insurance.-(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers 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, the certificate of insurance and the policy described in the certificate 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.”

6. After 1988 Act, it is no defence for an insurer to contend that the owner did not inform the transfer, for, it is the deemed transfer that will make an insurer liable for a claim at the instance of third parties. A protection that is extended to a third party may not probably be available for damage claims by the owner of the vehicle. We are now examining, in this case, only claims by third parties, who are passengers in a transport vehicle. The transfer is, therefore, irrelevant for an Insurance Company to plead in defence for immunity against the claim. Even otherwise a transfer of a vehicle could be done by delivery and by change of registration with the transport authority. Section 50 of MV Act deals with transfer of ownership. The Section reads as follows:-

50. Transfer of ownership.-(1) Where the ownership of FAO No.602 of 2008 - 5 - any motor vehicle registered under this Chapter is transferred,- (a) the transferor shall,- (i) in the case of a vehicle registered within the same State, within fourteen days of the transfer, report the fact of transfer, in such form with such documents and in such manner, as may be prescribed by the Central Government to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; and in the case of a vehicle registered outside the (ii) State, within forty five days of the transfer, forward to the registering authority referred to in sub-clause (i)-- (A) the non objection certificate obtained under Section 48; or (B) in a case where no such certificate has been obtained,-- (I) the receipt obtained under sub- section (2) of Section 48; or (II) the postal acknowledgment received by the transferee if he has sent an application in this behalf by registered post acknowledgment due to the registering authority referred to in section 48, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted; (b) the transferee shall, within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept as the case may be, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration. (2) Where-- (a) stands registered dies, or (b) a motor vehicle has been purchased or acquired at a public auction conducted by, or on behalf of, Government, the person in whose name a motor vehicle the person succeeding to the possession of the vehicle or, as the case may be, who has purchased or acquired the motor vehicle, shall make an application for the purpose of FAO No.602 of 2008 - 6 - transferring the ownership of the vehicle in his name, to the registering authority in whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, in such manner, accompanied with such fee, and within such period as may be prescribed by the Central Government. (3) If the transferor or the transferee fails to report to the registering authority the fact of transfer within the period specified in clause (a) or clause (b) of sub-section (1), as the case may be, or if the person who is required to make an application under sub-section (2) (hereafter in this section referred to as the other person) fails to make such application within the period prescribed, the registering authority may, having regard to the circumstances of the case, require the transferor or the transferee, or the other person, as the case may be, to pay, in lieu of any action that may be taken against him under Section 177 such amount not exceeding one hundred rupees as may be prescribed under sub-section (5): Provided that action under Section 177 shall be taken against the transferor or the transferee or the other person, as the case may be, where he fails to pay the said amount. (4) Where a person has paid the amount under sub- section (3), no action shall be taken against him under Section 177. (5) For the purposes of sub-section (3), a State Government may prescribe different amounts having regard to the period of delay on the part of the transferor or the transferee in reporting the fact of transfer of ownership of the motor vehicle or of the other person in making the application under sub-section (2). (6) On receipt of a report under sub-section (1), or an application under sub-section (2), the registering authority may cause the transfer of ownership to be entered in the certificate of registration. (7) A registering authority making any such entry shall communicate the transfer of ownership to the transferor and to the original registering authority, if it is not the original registering authority.”

7. The consequence of a non-transfer under this Section is altogether a different fact (see R. Venkatappa Naidu Versus Thammi Devi Sugunamma-1990 ACJ 1080 (AP)). It must be remembered that this provision Section 50 is independent of the provision contained in Section 157 extracted above. The latter section however enacts only a FAO No.602 of 2008 -7 - rule of procedure for transfer of certificate of insurance and not for the ownership of the vehicle. This Hon'ble Court has held that for transfer of trucks and other heavy vehicles, it is common knowledge that it is effected by handing over the registration book and their affidavits to transferees (Please see Kulwant Singh Versus Nand Kaur-(1977) 99 PLR 463) and change in registration is not a sine qua non for transfer of ownership.

8. In this case, admittedly there was no change of registration. If the vehicle must have been transferred by delivery, then the transfer of ownership must be done under a contract of sale and a mere authorization to yet another person to have the vehicle will not constitute transfer in the eye of law. A holder of power of attorney is not a person, who is a transferee. It has been held by the Hon'ble Supreme Court in Rikhi Ram Versus Sukhiamia-(2003) 3 SCC 97, even while considering Section 94 of the MV Act, 1939 that there is no requirement that any person who will use the vehicle shall insure the vehicle in respect of his separate use. The judgment specifically makes various legislations enacted in England and interest of the 3rd party and how they were followed while enacting Chapter VIII of MV Act, 1939. The position is even better with the enactment of MV Act, 1988, with a specific provision for deemed transfer under Section 157. In The United India Insurance Company Limited Versus Tilak Singh-(2006) 4 SCC 404, the Hon'ble Supreme Court underscored the legal position that whether the old 1939 Act applied or the new Act 1988 applied, as far as the deceased third party was concerned, the result would not be different (see paras 12 FAO No.602 of 2008 - 8 - and 13). The Insurance Company cannot therefore seek for exclusion of liability on that ground. In either way, the Insurance Company cannot be in any better position.

9. As regards the contention that the driving licence is not valid, I have to go only by what was brought forth through a register summoned at the instance of the insurer himself. If the document produced by his witness contained variation in ink, to suggest that the validity of the whole document must be discounted is asking for a position that will be difficult to accept for variation in ink may be one of several factors for consideration whether any manipulation could have been done or not. If that is going to be taken as the only ground to suspect the genuineness of the document, then I would rather lean in favour of a finding of the Tribunal that holds the document to be valid, than take a view different from how the Tribunal has approached this issue. The claim of the Insurance Company that the particulars entered in the register have been manipulated, is not accepted. Even apart from the licence said to have been issued by Hamirpur, the driver had shown yet another licence said to have been issued by another authority for scooter, motorcycle and car. The contention is, there could not have been two licences. The possession of two licences could result in some penal action if there exists a provision for punishing a person for applying for licences in two places. I cannot doubt the genuineness of either one of them by the fact that the driver has produced two licences. It must have been a point that was required to be elicited at the trial. If nothing could be brought out through trial as to how the driver possessed FAO No.602 of 2008 - 9 - two licences, it cannot avail to the insurer to contend here that by the fact that he owned two licences, both the licences must be found to be false.

10. All the appeals are consequently dismissed.

22.07.2010 sanjeev (K.KANNAN) JUDGE