Narayanan Nanu and Another vs Manuel Thomas and Others

K. Narayana Kurup, J.—0n 27.11.89 a 22 years old headload worker met with a road traffic accident resulting in his death the next day. He was survived by his father (68) and mother (63). The Tribunal on appreciation of evidence brought on record, though fixed the quantum of compensation at Rs. 75,700 with interest at 12 per cent per annum from the date of petition, however, exonerated the respondent No. 3 insurance company from liability to pay any amount on the ground that the respondent No. 1 registered owner of the vehicle has transferred the same to the respondent No. 4 on 15.1.1988. Both, the quantum of compensation and the finding of the Tribunal on the question of liability of the insurance company are under challenge in this appeal by the claimants.

Having heard the learned counsel on both sides we are of opinion that the quantum of compensation awarded is quite fair and reasonable and the same does not call for any interference. Accordingly, we confirm the quantum of compensation awarded by the Tribunal.

However, the finding of the Tribunal exonerating the insurance company cannot be legally sustained as it proceeds on an erroneous appreciation of the legal position. Of course, the respondent No. 1 registered owner of the vehicle has filed a written statement contending, inter alia, that he has transferred the vehicle in favour of respondent No. 4 and that the respondent No. 2 driver was not under his employment as on the date of accident and, therefore, he is not liable to pay any compensation. The insurance company, though filed a written statement, did not raise any specific contention repudiating its liability based on the transfer of the vehicle by the respondent No. 1 in favour of the respondent No. 4. It is not disputed that the vehicle in question was insured with the respondent No. 3 and was covered by a valid insurance policy, Exh. B4 as on the date of accident. If that is so, by virtue of the provisions in Section 157 of the Motor Vehicles Act, 1988, the insurance company is liable to pay the compensation in spite of the factum of transfer of the vehicle by the respondent No. 1. The aforesaid Section 157 provides that where a person in whose favour a certificate of insurance has been issued transfers to another person the ownership of the motor vehicle, the certificate of insurance and the policy 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. In view of the above deeming provision we have no hesitation in setting aside the finding entered by the Tribunal exonerating the insurance company from liability to pay any compensation. In our considered opinion, the Tribunal committed an error by entering a finding that the respondent No. 1 registered owner of the vehicle has no liability since he has transferred the vehicle to the respondent No. 4 before the accident. We are fortified in our view by the recent decision of the Supreme Court in G. Govindan Vs. New India Assurance Co. Ltd. and Others, , wherein it has been held that a victim or the legal representatives of the victim cannot be denied the compensation by the insurer on the ground that the policy was not transferred in the name of the transferee. Both under the old Act and under the new Act the legislature was anxious to protect the third party (victim) interest. What was implicit in the provisions of the old Act is now made explicit. The provisions under the new Act and the old Act are substantially the same in relation to liability in regard to third party. In the light of the aforesaid discussion, while confirming the quantum of compensation awarded by the Tribunal we set aside the award to the extent it exonerates the insurance company from payment of compensation to the appellants and hold that the respondent No. 3 insurance company is liable to pay the entire amount of compensation as determined by the Tribunal. Appeal allowed as above.