Hema Ramaswami vs K.M. Valarence Panjani and Others

Ramanujam, J.—This Civil Miscellaneous Appeal is directed against the award of the Motor Accidents Claims Tribunal, Cuddalore, in so

far as it is against the appellant, who is the fourth claimant before the Tribunal.

On 9th July, 1971, at about 6.15 p.m. near Vellar Bridge, Thozhudur, South Arcot Dt., on the Madras Trichi Main Road, lorry bearing

registration No. PYK 1249 driven by one Veeraswami collided with an Ambassador car MSC 7340 driven by one Ramaswami, husband of the

appellant. As a result of the said collision, the said Ramaswami sustained multiple grievous injuries and he succumbed to those injuries on the way

to the hospital. The driver of the car, who was also travelling with the said Ramaswami, also sustained injuries. On the ground that the said collision

was due to rash and negligent driving of the lorry, the dependants, the mother, wife and two children of the deceased Ramaswami, filed a claim

before the Claims Tribunal claiming a compensation of Rs. 2,00,000. The first claimant was the mother and claimants Nos. 2 and 3 were the

children of the deceased by his first wife and the fourth claimant was his second wife.

The said claim was resisted by the first respondent, the original owner of the lorry and the third respondent, the insurance company with which

the lorry had been insured. The second respondent, who was the transferee of the lorry some time before the accident, however, remained ex

parte. The stand taken by respondents Nos. 1 and 3 in the claim petition before the Tribunal was that they are not liable to meet the claim for

compensation, that the lorry had been transferred in favour of the second respondent on 17th April, 1971, and the accident having taken place on

9th July, 1971, neither the first respondent, the original owner of the vehicle, nor the third respondent, insurance company, are liable to meet the

claim and that it is only the transferee who has become the owner of the vehicle that is liable to meet the claim.

In a reply statement the claimants stated that the claim that the vehicle was alleged to have been sold by the first respondent to the second

respondent was false, that on enquires it was learnt that the first respondent was the owner of the vehicle at the time of the accident and that the

certificate of registration and the public carrier permit stood only in the name of the first respondent at the first respondent at the relevant date. If at

all a sale had taken place, it should be only long subsequent to the date of the accident.

The Tribunal, after analysing the evidence adduced by the parties held, that the accident was caused by the rash and negligent driving of the lorry

by its driver, who was an employee of the second respondent and that since the ownership of the lorry stood transferred to the second respondent

at the time of the accident, he was liable to pay compensation in respect of the accident. The Tribunal also specifically found that the lorry which

caused the accident had been transferred in favour of the second respondent by the first respondent on 17th April, 1971; but the registration

certificate and the permit relating to the vehicle had not been transferred though the sale had been duly intimated to the Secretary, State Transport

Authority, Pondicherry, on 20th April, 1971.

On the quantum of compensation, the Tribunal held that the deceased would have earned at least Rs. 1,200 per month and his total earning for

the period of 28 years would come to Rs. 4,03,000. But, taking into account the benefit of lump sum payment, it awarded a compensation of Rs.

1,00,000, for all the claimants and the appellant was held to be entitled to Rs. 50,000 out of the said amount of Rs. 1,00,000 which has been

awarded as compensation. The fourth claimant has alone appealed and the other claimants have not agitated the matter further.

In this appeal filed by the fourth claimant the findings of the Tribunal exonerating respondents Nos. 1 and 3 from liability has been challenged.

The compensation awarded by the Tribunal has also been attacked as being too low and inadequate having regard to the status of the deceased

and the income he was earing while alive.

Thus, the two questions that arise for consideration in this appeal are - 1. Whether respondent Nos. 1 and 3 are rightly exonerated; and 2. Is he

compensation of Rs. 1,00,000 awarded by the Tribunal inadequate ?

In this appeal also, the owner of the lorry, the second respondent, remains ex parte. But, however, the appellant is not satisfied with the award

passed against the second respondent alone and seeks an award as against the first and third respondents as well. It is not in dispute that the

vicarious liability in respect of the accident has to be determined with reference to the ownership of the vehicle on the date of the accident. In this

case, there is no dispute that the lorry PYK 1249 belonged originally to the first respondent. On 8th April, 1971, there had been an agreement

between the first respondent and the second respondent to sell the lorry and on 17th April, 1971, the sale transaction had been completed and the

vehicle was in fact put in possession of the second respondent by the first respondent. On 20th April, 1971, the first respondent had reported

about the sale of the vehicle to the State Transport Authority, Pondicherry. The said report has been marked as Ex. R-1 in this case. Ex. R-1

shows that it was received by the Regional Transport Authority on 21st April, 1971. It also shows that the application filed by the parties for

transfer of registry of the vehicle in the name of the second respondent was returned by the Regional Transport Office on 12th May, 1971, and no

steps were taken for transferring the registry till 9th July, 1971, the date of the accident. In view of the fact that the transfer had not been ordered

by the Regional Transport Authority, the public carrier permit of the lorry stood in the name of the first respondent on the date of the accident and

the certificate of registration also stood in the name of the first respondent, the original owner, even after the transfer. The question is whether under

these circumstances the transferor and his insurer are liable in respect of the accident which had taken place subsequent to the transfer of the

ownership of the vehicle but before the transfer is recognised by the Regional Transport Authority.

According to Mr. V. P. Raman, learned counsel for the appellant, the first and the third respondents would continue to be liable under the

policy until the first respondent transferred the vehicle in the name of the second respondent within the meaning of law and as the transfer was

admittedly not the effected in the records of the Regional Transport Authority on the date of the accident the insurance company would continue to

be liable under the policy. In dealing with this question, the Tribunal relying on a decision of a Division Bench of this court in M. Bhoopathy v.

Vijayalakshmi [1966] ACJ 1 (Mad) held that notwithstanding the fact that the registry and the permit of the vehicle had not been transferred on the

date of the accident, the transferor cannot be made liable if the vehicle had in fact been transferred to the transferee and that if the accident had

happened after the vehicle had been transferred and when it was in the custody and possession of the transferee, the transferee alone is liable to

meet the claim for compensation. The learned counsel for the appellant contends that the said decision relied upon by the Tribunal has no

application to the facts of this case especially when it is found in the case before that court that there was in fact a transfer of registry of the vehicle

even before the date of the accident. It is true, in M. Bhoopathy v. Vijayalakshmi [1966] ACJ 1 (Mad), it has been found that the transfer of the

vehicle was duly recognised by the Regional Transport Authority; but the transferor did not inform the insurance company about the transfer and

those facts are not in pari materia with the facts of the present case. But, however, even assuming that the said decision does not apply to the facts

of this case, where the transfer of the vehicle had not been recognised by the Regional Transport authority on the date of the accident, the case

before us appears to be an a fortiori case. Herein there has been transfer of the vehicle long before the accident and the same has been notified to

the concerned Regional Transport Authority. But, there is no evidence as to whether the transfer was notified to the insurance company either by

the transferor or by the transferee. Thus, there has been a factual and physical transfer of the vehicle by the first respondent in favour of the second

respondent as early as 17th April, 1971. Though the transfer has been notified to the Transport Authority, the registration of the vehicle had not

been changed and the registry continued in the name of the transferor. In the light of these facts, we have to determine the liability of the first

respondent, the original owner of the vehicle, and the third respondent, the insurance company, with which the vehicle stood insured.

In Madras Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, , Ananthanarayanan J., as he then was, took the

view that a policy of insurance did not lapse the moment the insured parted with the ownership of the insured vehicle and that, notwithstanding such

transfer of ownership, the insurer having regard to the terms of s. 96 of the Motor Vehicles Act could not escape its liability in respect of the third-

party risks. This view was not accepted by the Division Bench in M. Bhoopathy v. Vijayalakshmi [1966] ACJ 1 (Mad), referred to above. The

Bench disagreed with the view but agreed with the view expressed by Goddard J. in Tattersall v. Drysdale [1935] 2 KB 174. In that case, there

was a clause in the policy extending the cover against third-party risks to the temporary user by the insured of another car, and during the

continuance of the policy, the insured sold the car during the continuance of the policy, the insured sold the car covered by the policy, the subject-

matter of the insurance. The accident having occurred, while the insured used another car, he made a claim. Rejecting that claim, Goddard J. held

that the policy insured the plaintiff in respect of the ownership and user of a specified car and when he divested himself of his interest in that car the

extension clause ceased to have effect. Goddard J. has observed -

The true view in my judgment is that the policy insures the assured in respect of the ownership and user of a particular car, the premium being

calculated as was found in Rogerson''s case [1931] 146 LT 26, partly as on value and partly on horse power ..... To construe this policy otherwise

would be to hold in effect that two distinct insurances were granted, one in respect of the scheduled car and another wholly irrespective of the

ownership of any car.

It is seen that the view of Anantanarayanan J. in Madras Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, , did

not find favour with the Punjab High Court in Des Raj Pahwa v. Concord of India Insurance Co., AIR 1951 Punj 114, and the Madhya Pradesh

High Court in Gyarsilal v. Sitacharan 1958 ACJ 352. It is, therefore, clear that the decision taken by Anantanarayanan J. as he then was in Madras

Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, , cannot be taken to lay down the correct law on the subject.

Therefore, if there is a transfer of a vehicle, the insurance policy taken by the transferor cannot be taken to subsist unless the benefits of the policy

are transferred to the transferee. Section 96 of the Motor Vehicles Act, which is taken to be a basis for the view taken in Madras Motor Insurance

Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, , does not in our opinion warrant the view that a sale or transfer of an insured car

by the insured during the currency of the policy, does not terminate the policy in view of section 96 of the Motor Vehicles Act.

We are not also in a position to agree with the learned counsel for the appellant that unless the sale of the vehicle has been recognised and the

transfer of registry is effected by the Transport Authority, there is no completed transfer in law and, therefore, the liability of the insured shall be

taken to continue until the registry of the vehicle is transferred in the name of the transferee. It has been held by this court in South India Insurance

Co. Ltd. v. Lakshmi [1971] ACJ 122 (Mad), that if there has been a transfer of ownership of vehicle before the date of the accident, the liability

for the accident cannot be fastened on the transferor even though the transfer has not been recognised by the Regional Transport Authority and the

registration has continued in the name of the transferor. In that case, the vehicle involved in the accident had been transferred by the insured before

the accident, but the registration still continued to remain in his name. The insurance company repudiated the lability on the ground that the policy

lapsed upon the physical transfer of the vehicle and, therefore, they were not liable to meet a claim for compensation. It was contended on behalf

of the claimant that the transfer of the vehicle did not take effect, in so far as the third parties were concerned, until the transfer was duly registered

with the registry as envisaged under s. 31 of the Motor Vehicles Act, 1939. It was held by one of us that policy of insurance came to an end when

a vehicle was physically transferred by the owner. Section 31 of the Motor Vehicles Act, 1939, could not have the effect of keeping the policy

alive qua third parties, that a change of registry under s. 31 was not a condition precedent for the transfer of ownership of the vehicle, that the said

section merely imposed an obligation both on the transferor and the transferee of the vehicle to notify the transfer and that the non-compliance

thereof will not invalidate the transfer as such which has already taken place. The same view has been taken by the Delhi High Court in Oriental

Fire and General Insurance Co. v. Vimal Roy [1972] ACJ 314 by the Orissa High Court in The South India Insurance Co. Ltd. Vs. Purna

Chandra Misra and Others, , by a Division Bench of the Bombay High Court in Gulab Bai Damodar Tapse v. Peter K. Sunder [1975] ACJ 100,

and by the Punjab and Haryana High Court in State of Punjab v. Brij Mohan Singh [1975] ACJ 372. Having regard to the preponderance of

judicial opinion, it is not possible to accept the submission of the learned counsel that the transfer of the vehicle will not put an end to the policy, but

it is only the transfer of the registry from the name of the transferor in the name of the transferee alone will have the effect of putting an end to the

policy, cannot be accepted. We are, therefore, of the view that in this case, the vehicle having been transferred long before the accident, the

transferor and the insurance company with which the vehicle had been insured by the first respondent, cannot be made liable in respect of the

accident which admittedly took place long after the transfer while the vehicle was in possession and custody of the second respondent and it is the

second respondent''s driver who caused the accident by his rashness and negligence in driving the vehicle. We have to therefore sustain the

dismissal of the claim as against the first and third respondents by the Tribunal.

Coming to the question of quantum of compensation, the learned counsel for the appellant contends that the deceased would have earned

throughout if he had been alive, a sum of Rs. 4,03,000, but reduced the dependency of the family to Rs. 1,00,000. According to the learned

counsel, the deduction for lump sum payment cannot be to the extent of 75% as has been adopted by the Tribunal. The Tribunal has held, referring

to the Income Tax assessment orders and also the other materials, that the deceased would have earned at least Rs. 1,200 per month if he had

been alive for a period of 28 years. The deceased was aged, 42 years at the date of his death and the Tribunal assumed his longevity to be 70

years and it has only on that basis chosen to multiply the annual dependency by 28. On the materials on record, we are inclined to agree with the

Tribunal that the deceased would have earned at least Rs. 1,200 per month. But out of the sum of Rs. 1,200 he had to attend to his personal needs

and also to maintain his mother, the first claimant, claimants 2 and 3, his minor children and his wife, the 4th claimants. Having regard to the number

of persons depending on him, we can assume that a sum of Rs. 750 per month, out of Rs. 1,200 earned by him, would have gone to the benefit of

the claimants who are his dependants. Thus, the annual dependency of the claimants on the deceased will be Rs. 750 per month. Having regard to

the age of the deceased at the time of his death, we are inclined to adopt 15 as the multiplier. On this basis, the loss of pecuniary benefit arising out

of the death would be Rs. 1,35,000.

Apart from this, the claimants are entitled to compensation under the head ""loss of expectation of life"". The deceased who was the only earning

member and head of the family and on whom the entire family relied for support had died and, therefore, the loss is all the more greater. We,

therefore, award a sum of Rs. 15,000 as compensation for loss of expectation of life. Thus, the total compensation comes to Rs. 1,50,000.

However, the other claimants not having appealed and the 4th claimant alone having come before us in appeal, we increase the sum of Rs. 50,000

awarded as compensation to the appellant to Rs. 75,000 taking into account the overall increase in the compensation from Rs. 1,00,000 to Rs.

1,50,000. The benefit of the increase in compensation will not enure to the other claimants as they have not filed the appeal. The appellant will,

therefore, be entitled to a sum of Rs. 75,000 as compensation from the second respondent. Thus, the appeal is party allowed to the extent

indicated above. No costs.