Ramesh Chand and Another vs Vijay Singh and Another

Rajesh Bindal, J.—Owner and driver of the vehicle are before this Court challenging the award dated 12.2.2009, passed by Motor Accidents Claims Tribunal, Narnaul (for short, `the Tribunal''), whereby the appellants as well as the Insurance Company were held liable to satisfy the award jointly and severally. However, the Insurance Company was given right to recover the amount from the appellants on the ground that the vehicle having been sold by the earlier owner-Brij Mohan to D. R. High School and the intimation about transfer having not been furnished to the Insurance Company, it was not liable to indemnify the transferee of the vehicle in whose name the policy does not stand.

Briefly, the facts are that on 30.4.2006, respondent No. 1-claimant along with his uncle and brother was returning after attending the marriage in bus No. HR-66/3024, being driven by its driver rashly and negligently. He suddenly turned the vehicle, as a result of which respondent No. 1 fell on the road and the rear tyre of the bus crushed his leg. In the claim petition, the learned Tribunal awarded a sum of Rs. 1,00,000/- as compensation to the claimant.

Learned counsel for the appellants relying upon Gobind Ram v. Umed Singh and Ors. 2008(3) RCR (Civil) 276 submitted that even if the Insurance Company was not informed of the transfer of vehicle with the Registering Authority, still the amount of compensation on account of third party claim is to be borne by the Insurance Company.

On the other hand, learned Counsel for respondent No. 2, relied upon a judgment of this Court in Ram Chander Vs. Naresh Kumar and Others, to submit that unless the information regarding transfer of the vehicle is given to the Insurance Company, it is not liable to satisfy the award against the insured.

Heard learned Counsel for the parties and perused the paper book.

The only issue, which requires consideration by this Court is as to who is liable to satisfy the award against the insured in a third party claim, where the vehicle had been transferred from one person to another, however, the intimation regarding such transfer has not been furnished to the Insurance Company.

In G. Govindan v. New India Assurance Co. Ltd. 1999(2) RCR (Civil) 489, Hon''ble the Supreme Court held that on transfer of vehicle, there was no automatic transfer of insurance policy qua other claims than third party claims. Transferee, who did not follow the procedure of intimation and getting the policy transferred was not entitled to claim for his personal damages and to the vehicle from the insurer. However, the third party interest remained protected.

In United India Insurance Co. Ltd. v. Manjit Kaur and Ors. 2000(3) PLR 102, a Division Bench of this Court opined that the deemed fiction of automatic transfer clearly shows intention of legislature that any lapse on the part of transferee or transferor of an insured vehicle will not affect the third party claim for non-transfer of the policy in the name of the transferee.

In United India Insurance Co. Ltd. v. Sharanjit Kaur and Ors. 2005(1) PLR 34, a Division Bench of this Court opined that when a vehicle is transferred by the owner, the policy will also be deemed to be transferred as it is the vehicle which is insured and not the owner. Failure on the part of the transferee to intimate the insurance company will not exonerate it from its liability.

In United India Insurance Co. Ltd. Shimla v. Tilak Singh and Ors. 2006(2) PLR 297, Hon''ble the Supreme Court opined that even if no intimation of the transfer of vehicle is sent to the insurer, liability of an insurer does not cease as far as third party claim is concerned. It is not the transfer of the vehicle but the accident which furnishes the cause of action before the Tribunal. Similar view was expressed by this Court in FAO No. 1729 of 1993 National Insurance Company Ltd. v. Sushma Rani and Ors. decided on 17.2.2009.

In the aforesaid judgments, it has been opined consistently that on account of non-intimation of transfer of vehicle to the Insurance Company, the rights of third party are not affected. In the present case, the claim has been made by the third party, who suffered serious injuries in the accident. Considering the principles of law laid down in the aforesaid judgments, the insurance company is clearly liable to indemnify the insured as far as claim of third party is concerned.

Accordingly, the finding of the learned Tribunal granting recovery rights to the insurance company from the appellants cannot be sustained and the same is set aside.

The appeal is disposed of in the manner indicated above.