Oriental Fire and General Insurance Co. Ltd. vs Meena Sharma and Others

Pritam Singh Pattar, J.—By this judgment, the following two first appeals which are directed against the order dated June 21, 1967 of the Motor Accidents Claims Tribunal Punjab (Chandigarh) will be decided:

(1) Oriental Fire and General Insurance Company v. Mrs. Meena Sharma and Ors. F.A.O. No. 136 of 1967; and

(2) Oriental Fire and General Insurance Company v. Mrs. Devki and Ors. F.A.O. No. 135 of 1967.

The facts of this case are that on September 22, 1966, Ram Pal deceased along with Kishan Chand Dhiman was going from Phagwara to Ludhiana on Scooter No. WBN-3904 and at that time the scooter was being driven by Ram Pal deceased while Kishan Chand Dhiman was sitting on the pillion. When they reached near the Police Training Centre, Phillaur, truck No. DLJ-6470, came from the opposite direction which was being driven rashly and negligently by Chanchal Singh, driver, who swerved to the wrong side of the road and struck against the scooter driven by Ram Pal. The scooter was damaged and it was dragged along with the truck which stopped at a distance of about 50 karams from the place of impact. Both Ram Pal and Kishan Chand Dhiman died and their dead bodies were thrown on the kacha portion of the road. The claim application No. 345 of 1966 was filed by Mrs. Meena Sharma, widow of Ram Pal deceased, Rameema Sharma daughter and Bawa son, minor children of Ram Pal deceased through their mother, u/s 110-A of the Motor Vehicles Act, against M/s. Amritsar Transport Company Limited, Amritsar, the owners of the truck, Chanchal Singh, the driver of the truck at the time of the accident, and the Oriental Fire and General Insurance Company Limited with which the truck had been insured. They claimed Rs. three lacs as compensation. It was alleged that the accident took place due to rash and negligent driving of the truck by its driver Chanchal Singh, Respondent No. 4, that the monthly income of Ram Pal deceased was Rs. 1000/- and that Respondent No. 1 Amritsar Transport Company Limited, Amritsar, its owners, Chanchal Singh, driver and the insurance company were liable to pay them Rs. three lacs as compensation.

The second claim application No. 347 of 1966, was filed by Devki, widow of Kishan Chand Dhiman, Joginder Kumar and Janak Rani, minor children of Kishan Chand Dhiman deceased and Kishan Dai, the mother of Kishan Chand Dhiman deceased, on similar allegations. They alleged that the monthly income of Kishan Chand Dhiman was Rs. 500/- and they claimed Rs. 1,50,000/- as compensation on similar grounds. Since both these applications pertained to the same accident, these were consolidated by the Motor Accident Claims Tribunal (hereinafter called the Tribunal) and were disposed of by one judgment. The proceedings were recorded in claim application No. 346 of 1966.

In both these petitions, the name of the Respondent insurance company was not mentioned. The Amritsar Transport Company Private Limited, Respondent No. 1, and Chanchal Singh, driver, Respondent No. 3 admitted in their written statement that the truck was owned by Respondent No. 1 and that it was insured with the Oriental Fire and General Insurance Company, Limited, Bombay. The other allegations made in the petitions were denied. It was pleaded that the truck was not driven rashly or negligently by Chanchal Singh, driver, that the scooter was driven by the deceased rashly and negligently and they struck against the truck and died. Later on, it transpired during the pendency of the cases before the Tribunal that the original owners of this truck were M/s. Victory Transport Company, and, therefore, on the application of the Petitioners, that company was added as Respondent No. 4. Notices were issued to the Victory Transport Company, but it refused to accept service and was proceeded against ex-parte.

The Oriental Fire and General Insurance Company in its written statement raised a preliminary objection to the effect that this truck was insured with them by M/s. Victory Transport Company and on the day of the accident M/s. Amritsar Transport Company Private Limited, were not the insured and, therefore, this insurance policy had lapsed and they were not liable to pay any compensation to the claimants. It was pleaded that even according to the pleadings of the claimants, the owners of the vehicle, on the day of the accident, were M/s. Amritsar Transport Company. The other allegations made in the petition were denied. On these pleadings of the parties, the following issues were framed by the Tribunal:

Was the accident due to any negligent act on the part of the driver of the truck involved or that of the deceased or that of both and with what effect ?

What is the quantum of compensation due and from whom to whom?

Is not the insurance company liable to pay compensation for any reason ?

Relief.

The Tribunal held that the accident took place due to the rash and negligent driving of the truck by Chanchal Singh driver and decided issue No. 1 in favour of the claimants. On issue No. 2, it was held that at the time of the accident, Ram Pal deceased was 30 years of age and his monthly income was Rs. 400/-. The Tribunal, therefore, held that Mrs. Meena Sharma the widow of the deceased and his two minor children, namely, Rameema Sharma and Bawa, were entitled to Rs. 50,000/- as compensation. In the other compensation application Kishan Chand Dhiman was held to be 40 years of age at the time of his death and his monthly income was fixed by the Tribunal at Rs. 250/- per mensem. The Tribunal held that Devki, the widow and other dependents of Kishan Chand Dhiman deceased, were entitled to Rs. 20,000/- as compensation from the Respondents and issue No. 2 was decided accordingly. It was held that M/s Oriental Fire and General Insurance Company was liable to indemnify the insured to the extent of Rs. 20,000/- only. The Tribunal awarded Rs. 50,000 as compensation in favour of Mrs. Meena Sharma and others in claim application No. 346 of 1966, with costs against the Respondents and it was ordered that out of this amount only Rs. 14,000/- plus costs will be recoverable from the insurance company M/s. Oriental Fire and General Insurance Company. In the other case Mrs. Devki and others were awarded Rs. 20,000/- as compensation with costs against the Respondents with the direction that the Oriental Fire and General Insurance Company will be liable to pay Rs. 6,000/- only. Feeling aggrieved, the Oriental Fire and General Insurance Company filed these appeals Nos. 135 and 136 of 1967, against the order dated June 21, 1967, of the Tribunal, alleging that the decision of the Tribunal is wrong, and incorrect and it may be set aside and the petitions of the claimants may be dismissed against them. The Amritsar Transport Company, Respondent No. 1, filed two separate appeals F.A. Os. Nos. 142 and 143 of 1967, against the claimants alleging that the decision of the Tribunal is wrong and incorrect and it may be set aside and the petitions of the claimants may be dismissed against them. However, on March 14, 1973, a compromise was arrived at between the Amritsar Transport Company Limited and Mrs. Devki and others, Respondents in F.A.O. No. 143 of 1967. On the same day, a compromise was also effected between the said company and Mrs. Meena Sharma and other, Respondents in F.A.O. No. 142 of 1967, and both these appeals were disposed of in terms of the compromise.

The Appellant has contested the decision of the Tribunal on issue No. 3 only. It was firstly alleged that the onus on this issue was wrongly placed on the Appellant in view of the admission made by the claimants in their claim petitions that the owners of the truck were the Amritsar, Transport Company, Amritsar.

Exhibit RW 5/1, the copy of the insurance policy shows that this truck No. DLJ-6470, was insured by M/s. Victory Transport Company for Rs. 20,000/- for a period of one year from August 25, 1966, to August 24, 1967, with the Appellant Oriental Fire and General Insurance Company, Bombay. Thus on August 25, 1966, the owners of this truck were M/s. Victory Transport Company, Delhi. In paragraph 16 of the claim petitions, the claimants had mentioned that the owners of this truck were M/s. Amritsar Transport Company Limited. Amritsar, and this company was impleaded as Respondent being the owner of the truck. This fact was admitted by M/s. Amritsar Transport Company Limited, Amritsar in paragraph 16 of their written statements. The case of the Appellant insurance company is that according to the admission made by the claimants in their claim applications, the owners of the truck on the date of accidents viz. September 22,1966, were M/s. Amritsar Transport Company Limited, Amritsar, and therefore, they were not liable to pay any amount in respect of that insurance policy. According to them, the insured was the Victory Transport Company which appeared to have transferred this truck before September 22, 1966, to the Amritsar Transport Company Limited, Amritsar, and therefore, this insurance policy lapsed and they were not liable to pay any amount.

It is well-settled law that a contract of insurance is nothing but a contract of indemnity. The policy issued is with reference to a specified vehicle owned by the policy holder and consequently the policy remains effective while the policy holder retains an interest in the vehicle. In the absence of any express stipulation to the contrary, in the policy, the moment the insured parts with the car, the policy relating to it lapse. The insurance policy being a contract of personal indemnity, the insurers cannot be compelled to accept responsibility in respect of a third party, who may be quite unknown to them, vide South India Insurance Co. Ltd. v. Puma Chandra Misra and Ors. 1973 A.C.J. 46 ; M. Bhoopathy and Ors. v. M.S. Vijayalakshmi and Anr. 1966 A.C.J. 1; Nanu Mal v. Inder Singh and Ors. 1971 A.C.J 88; Queenland Insurance Company Limited v. Rajalakshmi Ammal and Ors. 1970 A.C.J. 104 and Roshan Lal Bhalla and Anr. v. Sudesh Kumar and Ors. 1968 A.C.J. 63 In the instant case, the truck in dispute admittedly belonged to the Victory Transport Company, Delhi, on August 25, 1966, and this company insured the same with the Appellant-insurance: company for a period of one year with effect from August 25, 1966 to August 24, 1967, vide copy of the insurance policy, Exhibit R.W. 5/1. In the claim petitions filed by the Respondents Petitioners, it was stated in para No. 16 that the owners of this truck were M/s. Amritsar Transport Company Limited, Amritsar, and this fact was admitted by the Appellant-company in its written statement. There was no mention in the claim petitions of any date of transfer of this truck by M/s. Victory Transport Company, Delhi, in favour of M/s. Amritsar Transport Company. However, the Petitioners admitted that the owner of the truck was M/s. Amritsar Transport Company Limited and they claimed compensation from it.

During the course of arguments, the claimants-Respondents made an application under Order 41, Rule 27, Code of Civil Procedure, for permission to produce additional evidence to prove the date of transfer of this vehicle by M/s. Victory Transport Company in favour of M/s. Amritsar Transport Company Limited, Amritsar. This application was contested by the Appellant insurance company. However by order dated March 31, 1975, this application was accepted and the claimants-Respondents were permitted to produce the additional evidence on April 18, 1975. The Appellant-company was also directed to produce its rebuttal evidence on that day. No evidence was produced by the claimants-Respondents on April 18, 1975. Neither any witness was summoned nor was present on that day. The counsel for the Respondents stated that one adjournment may be given to enable them to produce their evidence at their own responsibility and no further adjournments may be given. In the interest of justice, this request was accepted and the case was then adjourned to May 2, 1975, with a direction that the Respondents shall produce all their evidence on that day at their own (responsibility. However they could get the witnesses summoned through Court, but they were made responsible for the service and production of the witnesses and no further opportunity was to be granted to them. No witness was either summoned or was present today. The Respondents did not produce any evidence today. No further opportunity was granted to the Respondents and their evidence was closed.

In their claim petitions, the Respondent-claimants admitted that on the date of the accident, the owner of the truck in dispute was M/s. Amritsar Transport Company Limited Amritsar. Therefore, it follows that the transfer of the truck in favour of M/s Amritsar Transport Company Limited, Amritsar was made by the Victory Transport Company after August 25, 1966, and before September 22, 1966. There is no express stipulation in the policy that the policy will not lapse in case the truck is transferred. Consequently, this insurance policy lapsed on the date of the transfer of the truck and, therefore, the Appellant-company is not liable to pay any compensation to the Respondents-claimants and the award against it is liable to be set aside. The decision of the Tribunal on issue No. 3 is incorrect and the same is reversed.

As a result, both the appeals are accepted and the impugned awards passed by the Accidents Claims Tribunal, Punjab, against the Appellant-company are set aside and the claims petitions against the Appellant-company are dismissed. Under the circumstances of the case, the parties are left to bear their own costs.