Sahib Singh and Others vs Hari Singh and Others

Hemant Gupta, J.—The present appeal is by owner and driver of tractor No. PUC 4763, aggrieved against the award dated 14.3.1985 passed by the Motor Accident Claims Tribunal, Patiala (for short, the Tribunal).

The brief facts of the present appeal are that on 12.3.1982 Sukhvinder Singh son of Hari Singh died in an accident between his Motor Cycle No. PUV 764 and the tractor driven by the present appellant No. 1 The learned Tribunal has found that the accident had occurred due to negligent driving of the said appellant. Such finding is not in dispute in the present appear. However, the learned Tribunal has held that Avtar Singh was original owner of the tractor who had died prior to the date of accident on 12.3.1982 and thus the Insurance Company cannot be made liable to make the payment of compensation. The Tribunal has relied upon the judgment of this Court in Oriental Fire and General Insurance Company v. Harbans Kaur and Ors. (1983)85 PLR 492. -

Learned counsel for the appellants argued that there is no evidence regarding the date of death of Avtar Singh inasmuch as when the appellant-Sahib Singh appeared as his own witness, he was not cross-examined in respect of the date of death of Avtar Singh. It is contended that the judgment relied upon by the learned Tribunal has since been reversed in appeal in a judgment reported as B.B. Bhagwat Vs. Oriental Fire and General Insurance Co. Ltd. and Others, . The learned counsel for the appellants has also relied upon G. Govindan Vs. New India Assurance Co. Ltd. and Others, , wherein the Hon''ble Supreme Court of India has followed the Full Bench Judgment of Andhra Pradesh High Court reported as Madineni Kondaiah and Others Vs. Yaseen Fatima and Others, , wherein it has been held that mere passing of title in the vehicle to the transferee will not put an end to the third party liability of the Insurance Company. The Hon''ble Supreme Court has approved the view of the Andhra High Court that even if there is transfer of vehicle, the obligation u/s 94 of the Motor Vehicle Act, 1939 does not cease. Normally, the policy is to the vehicle and has to be run with the vehicle. Learned counsel, for the appellants has also relied upon a judgment in National Polymers and Others Vs. Eastern Polymers, to contend that once the Insurance Company has issued the policy, it is liable to indemnify the third party risk.

Learned counsel for the respondent-Insurance Company on the other hand relied upon a Full Bench judgment of this Court in The Oriental Fire and General Insurance Co. Ltd Bombay v. Bachan Singh and Ors. (1982)84 PLR 280, to contend that the insured Avtar Singh has not been impleaded as party and, therefore, in the absence of insured, the Insurance Company cannot be liable to pay the compensation.

After hearing the learned counsel for the parties and going through the record of the case, I feel that the appeal deserves to succeed. Sahib Singh, driver son of Avtar Singh has appeared as RW-1 on 7.2,1985. He was cross examined by the counsel for the claimants. Opportunity of cross examination was given to the counsel for the Insurance Company. However, no cross examination was conducted. The Insurance Company has led no evidence regarding the date of death of Avtar Singh. It only tendered a copy of the policy into evidence. The question which now arises is whether the Insurance Company is liable to indemnify the legal representatives of Avtar Singh or not or the fact that Avtar Singh was not alive on the date of accident will be sufficient to absolve the Insurance Company from the liability.

Learned counsel for the appellants, has referred to Clause 5 of the Section II Insurance Policy, in respect of liability to third parties. The said clause reads as under: -

"5. In the event of the death of any person entitled to indemnify under this Policy the company will in respect of the liability incurred by such person indemnify his personal representatives in the terms of and subject to the limitations of this policy provided that such personal representatives shall as through, they were the Insured observe fulfil and be subject to the terms and exceptions and conditions of this policy . is so far as they can apply.

The learned counsel for the appellants contended that the Insurance Policy was issued in the name of Avtar Singh. The Insurance Company accepted the amount of premium and by virtue of Clause 5, the Insurance Company is liable to indemnify his representatives in the terms of and subject to the limitations of the policy. A Division Bench of this Court in B.B. Bhagwat Vs. Oriental Fire and General Insurance Co. Ltd. and Others, has held that burden of proving the fact that the insured was dead was on the Insurance Company. The Insurance Company has taken a plea that the contract of policy was void since Avtar Singh was not alive on the date of accident. However, in view of Clause 5 of the Insurance Policy, the Company is liable to indemnify the personal representatives, if he has died after taking of a policy. In ''the absence of any evidence to the fact that Avtar Singh was not alive on the date of the policy i.e. on 26.7.1981, in the name of Avtar Singh, the Insurance Company cannot be absolved from the liability to indemnify the third party claim. As a matter of fact, learned Single Judge in Om Parkash ''s case (Supra) has taken a view that even if the Insurance Company has renewed the Policy in the name of registered owner, still the Insurance Company is liable to indemnify, a duty is cast upon the Insurance Company to verify whether the owner of the vehicle is alive or not and also to verify the credentials of the person offering premium,

The Hon''ble Supreme Court of India in G. Govindan Vs. New India Assurance Co. Ltd. and Others, has considered the scope of Section 103-A of Motor Vehicle Act, 1939. Section 103-A of the Act contemplates/permits the transfer of the policy on compliance of the procedure and on payment of fee prescribed. The Hon''ble Supreme Court has followed the judgment of the Andhra Pradesh High Court - Madinen Kondaiah''s case (supra) in preference to the Full Bench judgment of Karnataka and Delhi High Court as it advances the object of the Legislature to protect the third party interest. The Full Bench of Andhra Pradesh High Court has held that the policy is to vehicle and normally it should run with the vehicle and the obligations u/s 94 of the Act does not cease with the passing of the property in the vehicle. Thus, the findings of the Tribunal absolving the Insurance Company from the liability to pay the compensation to third party is not sustainable.

The Full Bench judgment relied upon by the learned counsel for the respondent is clearly distinguishable. In the said case, the insured was not impleaded as a party and still the Insurance Company was sought to be made liable. In the present case, the legal representatives of the insured have been impleaded as a party. The Insurance Company has not been able to prove that the insured was not alive on the date the policy was issued i.e. on 26.7.1981 in his name.

In view thereof, the award of the Tribunal is modified and it is held that Insurance Company is liable to indemnify the legal heirs of deceased Avtar Singh owner of the vehicle. The Insurance Company has been wrongly absolved of the liability by the learned Tribunal.

Learned counsel for the appellants pointed out that the amount of compensation has been paid by the appellants although the Insurance Company was liable to be in demnify the appellants. In view thereof the appellants shall be entitled to recover the amount of compensation by way of execution from the Insurance Company, if the amount has already been paid. No costs.