V.S. Dhandapani vs Rani and Others

V. Bakthavatsalu, J.—The first respondent in the O.P. is the appellant herein. Respondents 1 to 4 herein filed O. P. claiming compensation. The case of the claimant is as follows:-On 4.2.85, the deceased was sleeping inside his hut on the southern side of Kodambakkam High Road and at that time, a van bearing registration number TNZ 8077, came in a rash and negligent manner from east to west and ran into the hut, as a result of which the deceased sustained multiple injuries and died. The respondents as owner and insurer are liable to pay compensation. The 3rd respondent is the mother of the deceased.

The case of the first respondent is as follows :- This respondent sold the vehicle for Rs. 17,500/- to one Velu through a broker, Hiralal on 12.6.83. The said Velu took delivery of the van and also issued a delivery note dated 13.6.83. This respondent had also signed the statutory transfer forms and handed them to the purchaser and also the letter of the Insurance Company informing them of the sale, on the assurance given by Velu that he will deliver them to the authorities concerned. Only now the respondent learns that the said transfer forms were not delivered to the concerned authorities and this respondent''s name appears in the record still as the registered owner, which is mistake of fact. The said Velu did not take any steps to have the transfer of ownership intimated to the Traffic police or the Insurance Company. The Insurance Policy regarding the vehicle had also lapsed and was not renewed by this respondent. The vehicle appears to have been used after the transfer of ownership without the insurance policy. After the date of the accident, this respondent sent letters to the Deputy Commissioner of Police and United India Insurance Company regarding the sale and transfer of ownership. This respondent was not the owner on the date of the accident and he is not liable to pay compensation.

The second respondent filed counter stating that the vehicle involved in the accident was not insured with this respondent on the date of the accident and that the first respondent is not the owner of the vehicle and that only S.R. Velu is the owner of the vehicle and that the second respondent is an unnecessary party to this petition. The alleged transferee of the vehicle S.R. Velu who is the fourth respondent remained exparte.

On a consideration of oral and documentary evidence, the Tribunal has held that the accident occurred due to the rash and negligent driving of the lorry driver. On the question of liability the Tribunal has held that the first respondent was the owner of the vehicle on the date of the accident and ultimately, the Tribunal has passed on award for Rs. 67,500/- against the first respondent, the owner of the vehicle. Aggrieved by the said award, the owner of the lorry has come forward with this appeal.

The Learned counsel for the appellant contended that the Tribunal failed to consider the documentary evidence and oral evidence adduced by the appellant to prove that he sold the vehicle to the fourth respondent long before the date of the accident and that the Tribunal failed to take into consideration the fact that the alleged transferee Velu was set exparte and that in any event, the Insurance Company must have been directed to bear its statutory liability, inasmuch as the subsistence of the insurance policy is not a relevant criterion.

The arguments of the respondent are heard. It is contended by the respondent that on the date of the accident, the vehicle was not covered by the insurance and that the insurance policy issued to the first respondent lapsed and that therefore, the findings of the Tribunal do not merit any interference.

It is not in dispute that the first respondent was the owner of the vehicle involved in the accident. The accident occurred on 4.2.85. It is the case of the first respondent that he sold the vehicle to the fourth respondent on 12.6.83. In support of the same, the first respondent has also produced documents and examined R.W. 1. The Tribunal did not place any reliance upon the above evidence. On reading the evidence of R.W.1, I hold that the Tribunal is justified in rejecting his evidence.

R.W. 1 has stated that he was employed as an accountant under the first respondent and that one Velu purchased the Lorry and issued delivery note Ex. R. 1. He has stated that Ex. R.2 is the letter written by him to the Deputy Commissioner of Police informing about die transfer of ownership of the vehicle. He has also admitted that on the date of transfer of the vehicle, it was covered by the insurance policy and that thereafter, it was not renewed. It is seen from Ex. R 1 that the above letter was given by one S.R. Velu to the first respondent stating that he took delivery of the vehicle on 12.6.83. But, R.W. 1 has stated that he did not see the said Velu at all. As R.W. 1 is not known to Velu, the first respondent ought to have been examined to prove the letter Ex. R 1. The contents of the above letter and signature of the author should be proved only by examining the author or the first respondent. In the absence of any such evidence, much reliance cannot be placed upon Ex. R 1 for coming to the conclusion that the vehicle was sold by the first respondent on 12.6.83. Ex. R 2 is the letter sent to the Deputy Commissioner of Police dated 7.2.85. It is stated in the above letter that the first respondent sold the vehicle to the fourth respondent. R.W. 1 has stated that the above letter was sent by the first respondent. Even though the vehicle is said to have been sold on 12.6.83 the letter Ex. R. 2 was sent on 7.2.85, nearly two years after the date of the alleged transfer. It is not shown that the first respondent sent intimation to the Insurance Company and other authorities about the sale of the lorry of prior to Ex. R 2. Though R.W. 1 has stated that copy of the delivery note was also sent to the insurance company, no document is produced to substantiate the said version of R.W. 1.

There is no dispute that the name of the first respondent is still shown as the owner of the vehicle in the records. R.W. I has admitted that even on the date of the accident only the name of the first respondent is registered as the owner of the vehicle. No steps were taken either by the 1st respondent or the alleged transferee for effecting the transfer and registering the name of the owner in the statutory records.

Learned Counsel for the appellant contended that the Insurance Company has admitted in the counter that the fourth respondent was the owner of the vehicle and that the Insurance Company has not filed the policy of the present owner, the case of the first respondent should have been accepted by the Tribunal. The fact that the Insurance company has alleged in the counter that the fourth respondent is the owner, is not a ground for directing the Insurance Company to pay compensation. It is for the first respondent to establish by acceptable evidence that the vehicle was sold and delivered to the fourth respondent. It is further contended by the learned counsel for the appellant that even in the absence of intimation to the authorities under the Act, the delivery of the vehicle is sufficient to fasten the liability on the transferee. Learned counsel for the appellant also relies upon certain decisions on this aspect.

In M/s. United India Insurance Company Limited, Paramakudi v, Thangaraj (1999 MLJ 708) this court has held that it is well stated that mere passing of title in the vehicle to the transferee would not put an end to the liability of the Insurance Company and that if the title passes to the transferee, the transferee shall take steps to get the policy transferred to him under the Act. In Hema Ramaswami Vs. K.M. Valarance Panjani and Others, the Division Bench of this Court has held that change of registry u/s 31 of the Act was not a condition precedent for the transfer of ownership of the vehicle. In The The New India Assurance Co. Ltd. Vs. Smt. Sheela Rani and Others, , the Apex Court has held thus : -

" As in the case of Complete Insulations (supra) in the present case also the transferee had intimated to the appellant Insurance Company about the transfer of the vehicle in his favour though not in the prescribed form and sought transfer of the Insurance Policy. No reply was given by the appellant and in the absence of such reply the certificate shall be deemed to have been transferred in favour of the transferee as per section 103-A of the Act."

In G. Govindan Vs. New India Assurance Co. Ltd. and Others, it is held thus:

"Thus 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 transfer in the name of the transferee. However, the third party here will not include a transferee whose transferor has not followed procedure for transfer of policy."

In The Oriental Insurance Company Limited'' v. Rajamani (1991 1 MLJ 474) it is held thus: -

"The consistent view taken in a long line of decisions of Division Benches of this Court is to the effect that on transfer of the vehicle, the policy of insurance issued already in favour of the transferor lapsed and the insurance company cannot be fastened with liability.

In view of the aforesaid well settled legal position and the factual situation that the lorry TNY 4692 had been transferred by the 6th respondent to the 7th respondent long prior to the date of the accident, and the transfer was not intimated either by the transferor or by the transferee to the insurance company the policy issued by the insurance company to the transferor lapsed, on the transfer of the vehicle and thereafter no liability could be fastened upon the insurance company on the basis of such lapsed policy."

The respondent relies upon a decision reported in Ghisalal v. Nihalsing (1922 ACJ 181) wherein it is held that the record of RTO establish that truck was registered in the name of the registered owner on the date of the accident and was transferred thereafter and that it cannot be said that the vehicle was transferred by the registered owner prior to the accident. In Paragounda Vs. Bhimappa and others, the Karnataka High Court has held that registered owner continues to be liable in respect of third party claims unless it is proved that he ceased to be the owner of the vehicle.

The decisions relied on by the appellant, which are referred to above will apply only if the transfer of the vehicle had in fact been proved by the transferor. The first respondent has to further establish that on the date of the accident, the policy in respect of the vehicle was in force. As already stated Exs. R 1 and R 2 would not establish the case of the first Respondent that he sold the vehicle to the fourth Respondent. The first respondent did not send the letters to the authorities immediately after the date of the alleged transfer. On the other hand Ex. R 2 will show that the letter was issued nearly after two years. In the above circumstances, I am unable to see any reason to disagree with the finding of the Tribunal that the first respondent continued to be the owner on the date of the accident. As the first respondent failed to prove that he sold the vehicle to the fourth respondent prior to the date of the accident and as it is admitted that the name of the first respondent is still registered as the owner in the statutory records, the contention of the appellant/first respondent that delivery of the vehicle as evidenced by Ex. R. 1 is sufficient to prove the transfer of the vehicle cannot be accepted.

It is admitted by the first respondent in the counter that the insurance policy which had lapsed was not renewed by the first respondent and that the vehicle was used after the transfer without the insurance policy. It is, thus, clear that on the date of the accident, the policy taken by the first respondent was not in force. Therefore I hold that the Insurance Company cannot be held liable to pay compensation.

Learned Counsel for the appellant relies upon a decision reported in G. Govindan Vs. New India Assurance Co. Ltd. and Others, wherein it is held that as far as the interest of the third party risk is concerned the proprietary interest is not necessary and that the liability continues till the transferor discharges the statutory obligation. Learned counsel for the appellant also relies upon a decision reported in A. K. Thanga Pillai and Others vs. Meenakshi and Others ( 2000 (2) T.L.N.J. 136) wherein it is held that it is the duty of the insurer to produce the policy. The above decisions will not assist the case of the appellant in any way, since it is not shown that the policy issued by the second respondent herein was subsisting on the date of the accident. On the other hand, it is admitted that the insurance policy was not renewed after the alleged sale of the vehicle to the fourth respondent by the first respondent. If the policy was in force on the date of the accident and the policy did not expire on the date of the accident, the Insurance Company cannot escape from the liability on the ground that the transfer of the vehicle was not effected in accordance with the provisions of the Act. The Insurance Company has stated in the counter that the lorry was not insured with them. In the above circumstances, it has to be held that the vehicle was not covered by the policy on the date of the accident. If that is so, the Insurance Company cannot be saddled with any liability. For the above reasons. I hold that the Tribunal has come to a correct conclusion in passing an award against the first respondent. The findings of the Tribunal on this aspect have to be upheld. In the result, the Civil Miscellaneous Appeal is dismissed. No costs. The award of the Tribunal is confirmed.