FAO (MVA) No.72 of 2011,FAO No.73 of 2011,FAO No.74 of 2011,FAO Nos.79-90 of 2011,FAO No.163 of 2011,FAO No.183 of 2011,FAO No.185 of 2011,FAO No.331 of 2011,FAO No.350 of 2011,FAO No.393 of 2016

12th August, 2016.

Petitioner Counsel: Mr. LALIT K. SHARMA
Respondent Counsel: Mr. G.S. RATHORE, M/s. KARAN SINGH KANWAR, V.S. CHAUHAN, RAJINDER DOGRA, RAJESH VERMA, C.S. THAKUR, VIR BAHADUR VERMA, D.S. CHAUHAN and SANJAY RANTA

Cases Cited:
National Insurance Company Limited Vs. Anjana Shyam & Ors., 2007(5) ALL MR 436 (S.C.)=2007 AIR SCW 5237 [Para 10]
National Insurance Company Ltd. Vs. Smt. Sumna @ Sharda & Ors., FAO No.257/2006, Dt.10.04.2015 (HP) [Para 11,13]
Hem Ram & Anr. Vs. Krishan Chand & Anr., FAO No. 224/2008, Dt.29.05.2015 [Para 11]
Oriental Insurance Company Vs. Smt. Indiro & Ors., FAO No.256/2010, Dt.19.6.2015 [Para 11]
Lakhmi Chand Vs. Reliance General Insurance Co. Ltd., (2016) 3 SCC 100 [Para 12]
Ashok Kumar and Anr. Vs. Smt. Kamla Devi & Ors., FAO No.7/2007, Dt.5.9.2014 (HP) [Para 16]
U.P. State road Transport Corporation Vs. Kulsum & Ors., 2011(5) ALL MR 355 (S.C.)=2011 ACJ 2145 [Para 17]
United India Insurance Company Limited Vs. K.M. Poonam & Ors., 2011 ALL SCR 719=2011 ACJ 917 [Para 20]
Oriental Insurance Co. Ltd. Vs. Smt. Gurmeet Rani & Ors., FAO No.107/2011, Dt.29.7.2016 (HP) [Para 21]

JUDGMENT

JUDGMENT :- CMP(M) No. 1396 of 2016 in FAO No. 393 of 2016.

This application has been filed for condonation of delay which has crept-in in filing the present appeal. For the reasons that so many appeals are pending before this Court relating to the same accident, have been admitted and are being disposed of today, I deem it proper to condone the delay which has crept-in in filing the present appeal. Thus, the application is allowed and the delay in filing the appeal is condoned. The application is disposed of.

2. The appeal is already diarized.

3. The FAOs No. 350 of 2011 and 393 of 2016 are also taken on Board and are being disposed of today alongwith connected appeals.

4. All these appeals are outcome of a common accident and arise out of the different awards made by the Motor Accidents Claims Tribunal-I Sirmaur at Nahan, H.P. in different claim petitions decided on different dates. Thus, I deem it proper to determine all these appeals by this common judgment.

5. Following compensation came to be granted by the Tribunal, for short "the Tribunal", in favour of the claimants in different claim petitions and insurer was saddled with the liability, hereinafter referred to as "the impugned awards", for short.

Sr. Claim petition No/title Decided on Compensation Subject matter No. awarded of appeal. 1. 138-MAC/2 of 2007 titled 4.1.2011 Rs.1,90,000/- FAO(MVA) No. Shri Hitender Singh and alongwith interest 72 of 2011. another versus Sh. Jatti @7.5% per annum Ram and others 2. 158-MAC/2 of 2007 titled 11.1.2011 Rs.1,90,800/- FAO(MVA) No. Smt. Durma and anr. versus alongwith interest 73 of 2011. Sh. Jatti Ram and others @7.5% per annum 3. 140-MAC/2 of 2007 titled 04.1.2011 Rs.3,80,000/- FAO(MVA) No. Sh. Joginder Paul versus alongwith interest 74 of 2011. Sh. Jatti Ram and others @7.5% per annum 4. 48-MAC/2 of 2008 titled 22.11.2010 Rs.3,49,452/- FAO(MVA) No. Nilesh Pundir versus Sh. alongwith interest 79 of 2011. Jatti Ram and others. @7.5% per annum 5. 53-MAC/2 of 2008 titled 10.12.2010 Rs.3,34,000/- FAO(MVA) No. Smt. Tara Devi and another alongwith interest 80 of 2011. versus Sh. Balwant Singh @7.5% per annum and others. 6. 72-MAC/2 of 2008 titled 10.12.2010. Rs.1,59,339/- FAO(MVA) No. Kumari Sonam versus Ram alongwith interest 81 of 2011. Lal and others. @7.5% per annum 7. 136-MAC/2 of 2007 titled 10.12.2010 Rs.5,50,000/- FAO(MVA) No. Smt. Sunita Devi and others alongwith interest 82 of 2011. versus Sh. Ram Lal & others. @7.5% per annum. 8. 144-MAC/2 of 2007 titled 10.12.2010 Rs.3,34,000/- FAO(MVA) No. Smt. Meera Devi versus alongwith interest 83 of 2011. Sh. Jatti Ram and others. @7.5% per annum 9. 124-MAC/2 of 2007 titled 30.10.2010. Rs.5,24,000/- FAO(MVA) No. Salig Ram and others versus alongwith interest 84 of 2011. Sh. Balwant Thapa and others @7.5% per annum 10. 128-MAC/2 of 2007 titled 30.10.2010 Rs.6,22,000/- FAO(MVA) No. Kumari Rajni Bala and others alongwith interest 85 of 2011. versus Sh.Ram Lal and others. @7.5% per annum 11. 130-MAC/2 of 2007 titled 30.10.2010 Rs.6,22,000/- FAO(MVA) No. Kumari Rajni Bala and others alongwith interest 86 of 2011. versus Sh. Ram Lal and others @7.5% per annum. 12. 40-MAC/2 of 2008 titled Sh. 30.10.2010 Rs.4,50,800/- FAO(MVA) No. Jatti Ram and another versus alongwith interest 87 of 2011. Sh. Ram Lal and others. @7.5% per annum 13. 45-MAC/2 of 2008 titled Smt. 22.11.2010 Rs.6,26,440/- FAO(MVA) No. Kamla Devi and others versus alongwith interest 88 of 2011. Sh. Jatti Ram and others. @7.5% per annum 14. 153-MAC/2 of 2007 titled Sh. 22.11.2010 Rs.6,22,000/- FAO(MVA) No. Sanjeev Kumar and others alongwith interest 89 of 2011. versus Sh. Balwant Thapa @7.5% per annum and others 15. 155-MAC/2 of 2007 titled 22.11.2010 Rs.5,50,000/- FAO(MVA) No. Smt Surendera Devi and alongwith interest 90 of 2011. others versus Sh. Balwant @7.5% per annum Thapa and others. 16. 38-MAC/2 of 2008 titled 5.3.2011 Rs.15,584/- FAO(MVA) No. Sanjeev Kumar versus Sh. alongwith interest 163 of 2011. Balwant Thapa and others @7.5% per annum 17. 39-MAC/2 of 2008 titled 5.3.2011 Rs.25,500/- FAO(MVA) No. Kumari Shagun versus Sh. alongwith interest 183 of 2011. Balwant Thapa and others @7.5% per annum 18. 132-MAC/2 of 2007 titled Sh. 4.3.2011 Rs.1,54,000/- FAO(MVA) No. Surender Singh versus Sh. alongwith interest 185 of 2011. Ram Lal and others @7.5% per annum 19. 11-MAC/2 of 2008 titled 1.7.2011 Rs.1,50,000/- FAO(MVA) No. Smt. Rekha versus Sh. Jatti alongwith interest 331 of 2011. Ram and others. @7.5% per annum 20. 71-MAC/2 of 2008 titled 1.7.2011 Rs.27000/- FAO(MVA) No. Smt. Rekha and others versus alongwith interest 350 of 2011. Sh. Ram Lal and others. @7.5% per annum 21. 9-MAC/2 of 2008 titled Smt. 2.6.2011. Rs.6,11,000/- FAO(MVA) No. Rekha and others versus alongwith interest 393 of 2011. Sh. Jatti Ram and others. @7.5% per annum.

6. Claimants and owner-insured have not questioned the impugned awards on any ground; have attained finality so far as they relate to them.

7. The appellant/ insurer has questioned the impugned awards on the following grounds;

(i) That the accident was outcome of overloading.

(ii) The owner/insured has transferred the vehicle to transferee, who is party before this Court, thus has committed breach of policy, in terms of the mandate of Section 157 of the Motor Vehicles Act, for short "the Act."

(iii) The original owner has not been arrayed as party respondent.

(iv) In the alternative, insurer can be saddled with the liability to the extent of risk covered as provided in the terms and conditions of the policy.

8. I have gone through all the impugned awards and the pleadings.

9. The insurer has failed to prove that the accident was outcome of overloading. It is beaten law of the land that overloading cannot be a ground to seek exoneration.

10. The Apex Court in the case titled as National Insurance Company Limited versus Anjana Shyam & others, reported in 2007 AIR SCW 5237 : [2007(5) ALL MR 436 (S.C.)] has laid down the same principles of law. It is also apt to reproduce para 15 of the judgment of, herein:

"15. In spite of the relevant provisions of the statute, insurance still remains a contract between the owner and the insurer and the parties are governed by the terms of their contract. The statute has made insurance obligatory in public interest and by way of social security and it has also provided that the insurer would be obliged to fulfil his obligations as imposed by the contract and as overseen by the statute notwithstanding any claim he may have against the other contracting party, the owner, and meet the claims of third parties subject to the exceptions provided in Section 149(2) of the Act. But that does not mean that an insurer is bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all. In other words, the insured is covered only to the extent of the passengers permitted to be insured or directed to be insured by the statute and actually covered by the contract. The High Court has considered only the aspect whether by overloading the vehicle, the owner had put the vehicle to a use not allowed by the permit under which the vehicle is used. This aspect is different from the aspect of determining the extent of the liability of the insurance company in respect of the passengers of a stage carriage insured in terms of Section 147(1)(b)(ii) of the Act. We are of the view that the insurance company can be made liable only in respect of the number of passengers for whom insurance can be taken under the Act and for whom insurance has been taken as a fact and not in respect of the other passengers involved in the accident in a case of overloading."

11. This Court in batches of appeals, FAO No. 257 of 2006, titled as National Insurance Company Ltd. versus Smt. Sumna @ Sharda & others, being the lead case, decided on 10.04.2015, FAO No. 224 of 2008, titled as Hem Ram & another versus Krishan Chand & another, being the lead case, decided on 29.05.2015, and FAO No. 256 of 2010 titled Oriental Insurance Company versus Smt. Indiro and others, being the lead case, decided on 19.6.2015, has laid down the same principle, which is not disputed by the learned counsel for the insurer.

12. The apex Court in case titled Lakhmi Chand versus Reliance General Insurance Co. Ltd. reported in (2016) 3 SCC 100, held that the mere factum of carrying more passengers than the permitted seating capacity in the goods carrying vehicle by the insured does not amount to a fundamental breach of the terms and conditions of the policy so as to allow the insurer to eschew its liability towards the damage caused to the vehicle. It is apt to reproduce para 14 of the said judgment herein.

"14. The National Commission upheld the order of dismissal of the complaint of the appellant passed by the State Commission. The National Commission however, did not consider the judgment of this Court in the case of B.V. Nagaraju v. Oriental Insurance Co. Ltd Divisional Officer, Hassan, 1996 4 SCC 647. In that case, the insurance company had taken the defence that the vehicle in question was carrying more passengers than the permitted capacity in terms of the policy at the time of the accident. The said plea of the insurance company was rejected. This Court held that the mere factum of carrying more passengers than the permitted seating capacity in the goods carrying vehicle by the insured does not amount to a fundamental breach of the terms and conditions of the policy so as to allow the insurer to eschew its liability towards the damage caused to the vehicle. This Court in the said case has held as under:-

"It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry six workmen, excluding the driver. If those six workmen when travelling in the vehicle, are assumed not to have increased risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the pose, keeping apart the load it was carrying.

In the present case the driver of the vehicle was not responsible for the accident. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which by themselves, had gone to contribute to the causing of the accident."

13. This Court in a batch of appeals, FAO No. 257 of 2006, titled as National Insurance Company Ltd. versus Smt. Sumna @ Sharda & others, being the lead case, decided on 10.04.2015, has held that the insurer has to satisfy the awards which are on higher side.

14. There are only 21 appeals arising out of 21 claim petitions till date, falls within the risk covered and the insurer has to satisfy the said awards. It is made clear that in case more than 39 claim petitions are filed out of the same accident in that event, the insurer is within its right to raise the ground that it has only to satisfy 39 awards, i.e., claims and not more than that.

15. The arguments advanced by the learned counsel for the insurer that the vehicle was transferred and insured has committed breach of policy, is devoid of any force as the insurer has failed to discharge the onus to prove that it has complied with the mandate of Section 157 of the Act.

16. This Court has held and disused this issue in FAO No. 7 of 2007 titled Ashok Kumar and another versus Smt. Kamla Devi and others decided on 5.9.2014. It is apt to reproduce paras 13 to 22 of the said judgment herein.

"13. Insurance Policy, (Mark-B) was valid from 18th December, 1999 to 17th December, 2000 and the registered owner of the vehicle was Anupam Hardware Store, i.e. respondent No. 3-A in the claim petition.

14. The Tribunal has fallen in error in holding that the insurer has not to indemnify, which is an eye opener for the said Presiding Officer, how casually he has dealt with the case.

15. Section 157 of the Act reads as under:

"Transfer of certificate of insurance.

(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate 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.

[Explanation.-For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.]

(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance."

While going through the aforesaid provision, one comes to an inescapable conclusion that transfer of a vehicle cannot absolve insurer from third party liability and the insurer has to satisfy the award.

16. Admittedly, on the date of accident, i.e. 05.06.2000, the offending vehicle was not transferred in the name of appellant-Ashok Kumar. It was transferred in his name w.e.f. 17.06.2000. Thereafter, the appellant-respondent No. 1 Ashok Kumar was supposed to give information regarding transfer of the vehicle to the insurer-Insurance Company. The vehicle was not transferred on the date of accident, thus the question of informing the insurer about the transfer of the vehicle does not arise, at all. If the offending vehicle would have been transferred on the date of accident, i.e. 5th June, 2000, that can not be a ground to defeat the rights of the third party. As per the mandate of the Section (supra), the insurance policy shall be deemed to have been issued in favour of the transferee.

17. My this view is fortified by the Apex Court Judgment in case titled as G. Govindan versus New India Assurance Company Ltd. and others, reported in AIR 1999 SC 1398. It is apt to reproduce paras-10, 13 & 15 of the aforesaid judgment herein:

"10. This Court in the said judgment held that the provisions under the new Act and the old Act are substantially the same in relation to liability in regard to third party. This Court also recognised the view taken in the separate judgment in Kondaiah's case that the transferee-insured could not be said to be a third party qua the vehicle in question. In other words, 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.

11. ........................

12. ........................

13. In our opinion that both under the old Act and under the new Act the Legislature was anxious to protect the third party (victim) interest. It appears that what was implicit in the provisions of the old Act is now made explicit, presumably in view of the conflicting decisions on this aspect among the various High Courts.

14. .........................

15. As between the two conflicting views of the Full Bench judgments noticed above, we prefer to approve the ratio laid down by the Andhra Pradesh High Court in Kondaiah's case (AIR 1986 Andh Pra 62) as it advances the object of the Legislature to protect the third party interest. We hasten to add that the third party here will not include a transferee whose transferor has not followed procedure for transfer of policy. In other words in accord with the well-settled rule of interpretation of statutes we are inclined to hold that the view taken by the Andhra Pradesh High Court in Kondaiah's case is preferable to the contrary views taken by the Karnataka and Delhi High Courts (supra) even assuming that two views are possible on the interpretation of relevant sections as it promotes the object of the Legislature in protecting the third party (victim) interest. The ratio laid down in the judgment of Karnataka and Delhi High Courts (AIR 1990 Kant 166 (FB) and AIR 1989 Delhi 88) (FB) (supra) differing from Andhra Pradesh High Court is not the correct one."

18. The Apex Court in case titled as Rikhi Ram and another versus Smt. Sukhrania and others, reported in AIR 2003 SC 1446 held that in absence of intimation of transfer to Insurance Company, the liability of Insurance Company does not cease. It is apt to reproduce paras 5, 6 & 7 of the judgment, supra, herein:-

"5. The aforesaid provision shows that it was intended to cover two legal objectives. Firstly, that no one who was not a party to a contract would bring an action on a contract; and secondly, that a person who has no interest in the subject matter of an insurance can claim the benefit of an insurance. Thus, once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 94 does not provide that any person who will use the vehicle shall insure the vehicle in respect of his separate use.

6. On an analysis of Ss. 94 and 95, we further find that there are two third parties when a vehicle is transferred by the owner to a purchaser. The purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract, cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer.

7. For the aforesaid reasons, we hold that whenever a vehicle which is covered by the insurance policy is transferred to a transferee, the liability of insurer does not ceases so far as the third party/victim is concerned, even if the owner or purchaser does not give any intimation as required under the provisions of the Act."

19. The Apex Court in latest judgment titled as United India Insurance Co. Ltd., Shimla versus Tilak Singh and others, reported in (2006) 4 SCC 404 has held the same principle. It is apt to reproduce paras- 12 & 13 of the said judgment herein:

"12. In Rikhi Ram v. Sukhrania [(2003) 3 SCC 97 : 2003 SCC (Cri) 735] a Bench of three learned Judges of this Court had occasion to consider Section 103-A of the 1939 Act. This Court reaffirmed the decision in G. Govindan case and added that the liability of an insurer does not cease even if the owner or purchaser fails to give intimation of transfer to the Insurance Company, as the purpose of the legislation was to protect the rights and interests of the third party.

13. Thus, in our view, the situation in law which arises from the failure of the transferor to notify the insurer of the fact of transfer of ownership of the insured vehicle is no different, whether under Section 103-A of the 1939 Act or under Section 157 of the 1988 Act insofar as the liability towards a third party is concerned. Thus, whether the old Act applies to the facts before us, or the new Act applies, as far as the deceased third party was concerned, the result would not be different. Hence, the contention of the appellant on the second issue must fail, either way, making a decision on the first contention unnecessary, for deciding the second issue. However, it may be necessary to decide which Act applies for deciding the third contention. In our view, it is not the transfer of the vehicle but the accident which furnishes the cause of action for the application before the Tribunal. Undoubtedly, the accident took place after the 1988 Act had come into force. Hence it is the 1988 Act which would govern the situation."

20. Having said so, the Tribunal has fallen in error in exonerating the insurer-Insurance Company from liability and saddling owner Ashok Kumar and driver Kalyan Chand with liability.

21. The Tribunal has discussed the Apex Court judgment titled as United India Insurance Company Limited Shimla versus Tilak Singh & others, reported in 2006 SCCR, 473, but has wrongly applied it. The Tribunal has also not taken note of the fact that on the date of accident, the vehicle was in the name of registered owner-Anupam Hardware Store and was not transferred to Ashok Kumar, son of Shri Kishori Lal.

22. Having said so, it is held that the insurer-Insurance Company has to indemnify. Accordingly, issues No. 1, 3, 4, 5 & 6 are decided against the insurer and in favour of the claimants."

17. Mr. Lalit K. Sharma, the learned counsel for the insurer has also placed reliance on the judgment delivered by the apex Court in case titled U.P. State road Transport Corporation versus Kulsum and others reported in 2011 ACJ 2145 : [2011(5) ALL MR 355 (S.C.)], to this effect.

18. Having said so, this ground is not available to the insurer.

19. The apex Court and this Court in various judgments have held that the insurer has to satisfy the award to the extent of the risk covered and if the claim petitions are more than the risk covered, then it is for the insured-owner to satisfy the same.

20. The Apex Court in the case titled as United India Insurance Company Limited versus K.M. Poonam & others, reported in 2011 ACJ 917 : [2011 ALL SCR 719], has laid down the law. It is apt to reproduce para 24 of the judgment herein:

"24. The liability of the insurer, therefore, is confined to the number of persons covered by the insurance policy and not beyond the same. In other words, as in the present case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the provisions of sub-section (1) of Section 149 of the Act, as it would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle."

21. This Court in FAO No. 107 of 2011, titled Oriental Insurance Co. Ltd. versus Smt. Gurmeet Rani and others decided on 29.7.2016 has laid down the same principles of law.

22. Viewed thus, the impugned awards are upheld.

23. The Tribunal has rightly held that the factum of insurance is admitted and the insurer has to satisfy. The Tribunal has rightly made the discussion in para 15 of the impugned award, needs no interference.

24. The Registry is directed to release the awarded amount in favour of the claimant(s), through payees' cheque account or by depositing the same in their bank accounts, strictly in terms of the conditions contained in the impugned award.

25. Keeping in view the discussion made hereinabove, all the impugned awards are upheld and the appeals are disposed of.

26. Send down the record forthwith, after placing a copy of this judgment on each file.

Ordered accordingly.