GULAB BAI DAMODAR TAPSE v. PETER K. SUNDER — 1974 DIGILAW 35 (BOM)

JUDGMENT : P.M. Mukhi, J. 1. This is a First Appeal filed by Mrs. Gulabbai Damodar Tapse, Appellant (original Plaintiff), against the decision of the Second Joint Civil Judge, Senior Division, Poona, in Special Suit No. 73 of 1967 filed by her claiming therein Rs. 30,000 by way of damages for loss of pecuniary support by reason of the death of her husband Damodar Tapse in a motor accident which occurred on January 28, 1965. The Special Suit No. 73 of 1967 which was in forma pauperis was filed by her as the legal representative of her deceased husband against Peter K. Sunder, the driver of the vehicle, Puranbhau Khairave, the owner of the vehicle and the Motor Owners Insurance Co. Ltd. with which the vehicle in question was insured. The trial Court decreed the suit for Rs. 5,000 only with proportionate costs against Defendants Nos. 1 and 2 but the suit against Defendant No. 3 as the Insurance Company was dismissed without any order with regard to costs. It requires to be noticed that at the trial of the suit Defendant No. 1 the driver of the vehicle remained exparte. Defendant No. 2, the owner of the vehicle, appeared and was represented by an advocate but did not file any written statement. The Insurance Company as Defendant No. 3 appeared and filed a written statement which, therefore, is the only written statement on record. It is also to be noticed that the two witnesses who were examined by the Plaintiff were not cross examined by Defendant No. 2. 2. Some of the facts with relevant dates may now be set out. On January 20, 1965 at about 10.00 p.m. deceased Damodar Tapse was returning home from Kirkee on his bicycle. At a place near the railway crossing at Wakade Wadi, he was knocked down and injured by a car bearing registration No. DLE 1057, which car was being driven by Defendant No. 1. As the result of the injuries so received by the deceased Damodar Tapse he died on January 31, 1965. The widow of the deceased Mrs. Gulabbai who is the Appellant before us and (who will hereinafter be referred to as "the Plaintiff") filed a suit, after notice and correspondence with the Respondents which had produced no results. 3. As the result of the injuries so received by the deceased Damodar Tapse he died on January 31, 1965. The widow of the deceased Mrs. Gulabbai who is the Appellant before us and (who will hereinafter be referred to as "the Plaintiff") filed a suit, after notice and correspondence with the Respondents which had produced no results. 3. The Plaintiff alleged that Defendant No. 1 caused the accident by his rash and negligent driving of the motor car and that Defendant No. 1 as the driver, Defendant No. 2 as the owner, and Defendant No. 3 as the Insurance Company, were liable for satisfying the Plaintiff's claim. The Plaintiff further alleged that her husband was earning Rs. 300 p.m. from the bakery business which he was doing at Kirkee ; that he was about 38 years old at the time of his death and that she therefore claimed the sum of Rs. 30,000 by way of damages. It has already been mentioned that Defendants Nos. 1 and 2 did not file any written statement and therefore put up no defence whatsoever. Defendant No. 3 as the Insurance Company put in a written statement at Exh. 11 and contended that there was no privities of contract between Defendant No. 2 and the Insurance Company because the car in question, DLE 1057 was insured with Defendant No. 3 by the former owner one Major Mujumdar and that after the car was sold by Major Majumdar to Defendant No. 2 the insurance policy in respect of the said car came to an end and, therefore, Defendant No. 3, as the Insurance Company, was not liable to satisfy the claim of the Plaintiff. The Insurance Company as Defendant No. 3 also sought to contest the suit on merits, although it was clearly not entitled to do so, and denied the allegations of the Plaintiff that Defendant No. 1 was driving the said car rashly and negligently. The Insurance Company also contested the quantum of damages as claimed, although such a plea was not open to them. 4. The trial Court raised the necessary issues on the question of (1) Negligence of Defendant No. 1 ;. (2) Whether Defendant No. 2 was liable ; and (3) Whether Defendant No. 3 as the insurer was liable to satisfy the claim in suit. There was also an issue as to the quantum of damages. 5. 4. The trial Court raised the necessary issues on the question of (1) Negligence of Defendant No. 1 ;. (2) Whether Defendant No. 2 was liable ; and (3) Whether Defendant No. 3 as the insurer was liable to satisfy the claim in suit. There was also an issue as to the quantum of damages. 5. The trial Court found that the accident in which the Plaintiff's husband had been killed was due to the rash and negligent act of Defendant No. 1. It will not be necessary for us in this appeal to deal with the question of negligence and rashness because no appeal has been filed by the Defendants and so far as this aspect of-the matter is concerned it is concluded. As regards the liability of Defendant No. 2, if he is the owner of the car which killed the Plaintiff's husband then it is settled law that he would also he liable as master for the negligent act of his servant who was driving the vehicle in the course of his employment. The important point, therefore, which will have to be considered by us, is whether on the facts and circumstances of the case Defendant No. 3, as the Insurance Company, is liable even though the car was transferred by the previous owner Major Mujumdar to Defendant No. 2. 6. The Plaintiff, no doubt, seeks to hold Defendant No. 3 liable as the Insurance Company with which the vehicle in question was insured under a policy of insurance which it is not disputed was valid till March 30, 1965. 7. It has been stated that the Insurance Company was in fact impleaded as a party Defendant although strictly speaking it is not necessary for the Plaintiff to do so. The Insurance Company, no doubt, can under the law apply to be made a party but that is another matter. Liability attaches to the Insurance Company however by reason of the provisions of Section 96 of the Motor Vehicles Act. In the written statement filed by Defendant No. 3 (hereinafter referred to as the Insurance Company) it has taken up the contention that because the former owner of the vehicle Major Mujumdar, (who had insured the car with the Insurance Company) had sold it to Defendant No. 2, the Insurance Company was not liable. 8. In the written statement filed by Defendant No. 3 (hereinafter referred to as the Insurance Company) it has taken up the contention that because the former owner of the vehicle Major Mujumdar, (who had insured the car with the Insurance Company) had sold it to Defendant No. 2, the Insurance Company was not liable. 8. Although the pleadings are not very clear it would appear that the Insurance Company really seeks to avoid the liability on the ground that if there is a change in the ownership of the vehicle insured with them then the insurance policy will cease to be effective unless the Insurance Company has assented to the transfer. We will, therefore, have to consider whether on the facts and circumstances of the case and on the evidence before the Court it can be said that the Insurance Company had not assented to the transfer and, was therefore, not liable. 9. It is significant that in the written statement filed by the Insurance Company it admits that Major Mujumdar as the original owner, and as the person who had insured the vehicle with them and to whom the certificate of insurance and the policy had been issued, had informed the Insurance Company that he had sold the vehicle to Defendant No. 2. The Insurance Company was, therefore, much before the accident fixed with notice that Major Mujumdar had sold the vehicle in question. We shall, therefore, have to examine as to what happened after the Insurance Company was informed by Major Mujumdar that he had transferred the vehicle to Defendant No. 2. We shall revert to this aspect of the matter when we proceed to consider the evidence. Mr. Gadgil, the learned advocate for the Plaintiff, has contended that on the facts of this case and on the basis of evidence on record an inference can be legitimately drawn by the Court that the Insurance Company had assented to the transfer of the vehicle and that, therefore, the Insurance Company was liable to satisfy any judgment obtained by the Plaintiff against Defendant No. 2. He has also contended that on a proper construction of the Motor Vehicles Act, the Court must hold that the Insurance Company cannot avoid their liability even if it were to be held that the original owner had parted with the vehicle in question and the Insurance Company had not expressly assented or agreed to the transfer. For these two propositions Mr. Gadgil relied only on three authorities which appear however to be in his favor and they are Bir Singh and Another Vs. Sm. Hashi Rashi Banerjee and Others, , Madras Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, and Gyarsilal Jagannathprasad Mor Vs. Pandit Sitacharan Dubey and Others, . 10. Before we consider the contentions of Mr. Gadgil it is appropriate to notice the various provisions of the Motor Vehicles Act and other relevant statutes governing the insurance of motor vehicles against third party risks. Chapter VIII of the Motor Vehicles Act, 1939 is under the heading "Insurance of Motor Vehicles Against Third Party Risks". After some definitions, with which we are not concerned, the Chapter begins with Section 94 which refers to the necessity for insurance against third party risk and provides that- No person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter. 11. This would go to show that the insurance is to be in relation to a vehicle and is then to cover the liability against specific persons, if such liability arises by reason of the use of the vehicle in a public place. In Pesumal Dhanmal Vs. New Asiatic Insurance Co. Ltd. and Others, a Division Bench of this Court held that on a reading of Sections 94, 95 and 96 of the Motor Vehicles Act, 1939 together it was clear that the insurance was required to be in respect of the vehicle which was being used and while driving which the accident was committed. New Asiatic Insurance Co. Ltd. and Others, a Division Bench of this Court held that on a reading of Sections 94, 95 and 96 of the Motor Vehicles Act, 1939 together it was clear that the insurance was required to be in respect of the vehicle which was being used and while driving which the accident was committed. It was further held that mere insurance of the driver of a vehicle without reference to the use of any particular vehicle against claims made against him by reason of an accident that he may commit does not make the insurer liable directly to the person who has suffered the injury. The liability of the insurer arises only if it had insured the driver in respect of the vehicle by the use of which the accident is committed It is clear therefore that there is a nexus with the motor vehicle and it would follow that any change in the ownership of the vehicle would produce certain legal results. 12. Section 95 of the Motor Vehicles Act prescribes the requirements of policies and limits of liability and in particular by Sub-clause (4) thereof that "A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance. 13. The next Section 96 is perhaps the most important section because it lays down the duty of the insurers to satisfy judgments against persons insured in respect of third party risks. 13. The next Section 96 is perhaps the most important section because it lays down the duty of the insurers to satisfy judgments against persons insured in respect of third party risks. It is appropriate to set out Sub-section (1) of Section 96 which reads as follows: If, after a certificate of insurance has been issued under Sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section pay to the person entitled to the benefit of the decree any sum not exceeding the sun assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sure by virtue of any enactment relating to interest on judgments. If these section are scrutinised then it becomes abundantly clear that although insurance is to be in relation to a motor vehicle, the insurance cover is extended so far third party risks are concerned to any person insured by the policy. It is only a judgment obtained against any person insured by the policy that is relevant for the purpose of casting liability against the insurer. It will therefore be necessary in every case before fixing the liability of an insurance company to ascertain whether the judgment has been obtained against any "such person." If it cannot be said that a person against whom the judgment has been obtained is a person insured by the policy, then obviously the insurers cannot be held to be liable. Sub-section (2) says that no sum shall be payable by insurers under Sub-section (1) in respect of any judgment unless the insurer has notice through Court of the bringing of any proceedings or in respect of any judgment. The liability of the insurers therefore, arises only after such a notice has been issued. Sub-section (2) says that no sum shall be payable by insurers under Sub-section (1) in respect of any judgment unless the insurer has notice through Court of the bringing of any proceedings or in respect of any judgment. The liability of the insurers therefore, arises only after such a notice has been issued. Then there are certain defences which are open to the insurer and reference may be made to a judgment of the Supreme Court in B.I.G. Insurance Co. v. Itbar Singh AIR S.C. 1331, where the Supreme Court has held that the defences open to an insurer are only those mentioned in Section 96(2) of the Motor Vehicles Act, and no other. A brief reference may by made to Section 97 which creates a statutory provision that rights of third party against insurers are not affected on insolvency of the insurer. Section 102 contains the statutory provision as to the effect of death of the insured if it occurs after the happening of the accident which has given rise to a claim under Chapter VIII of the Motor Vehicles Act, 1939. Section 103 deals with the effect of certificate of insurance and Section 105 prescribes the duty of the insurer to notify the registering authority the cancellation or suspension of the policy. 14. We may now consider Mr. Gadgil's second contention that the insurance company cannot avoid the liability even if it were to be held that the original owner had parted with the vehicle. Mr. Gadgil has relied on a judgment of a single Judge of the Madras High Court in Madras Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, where it was held that the right of the insurer to avoid his liability under the policy is confined to certain grounds specified in Section 96(2) and the Court cannot add to those grounds for reasons of hardship A transfer of the vehicle during the currency of a policy is not one of such grounds as are mentioned in Section 96. The policy does not lapse by such transfer. Reliance was placed on the Supreme Court judgment in ltbar Singh's case. The learned single Judge of the Madras High Court in Madras Motor Insurance Co. Ltd., Madras Vs. The policy does not lapse by such transfer. Reliance was placed on the Supreme Court judgment in ltbar Singh's case. The learned single Judge of the Madras High Court in Madras Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, after considering certain English authorities seems to have felt that the law in England was different and that a scrutiny of specific provisions of the Motor Vehicles Act showed that there was no condition to that effect in the Act that sale of the car during the validity of the policy renders the policy void or results in the lapse of the policy. It requires to be noticed that this judgment of the Madras High Court has been overruled by a subsequent decision of a Division Bench of that Court in Bhoopathy v. Vijayalakshmi 1966 A.C.J. 1. But apart from that we may mention with respect that the learned single Judge appears to have ignored the first part of Sub-section (1) of Section 96 which provides that there must first of all be in existence a certificate of insurance in favour of the person by whom the policy has been effected covering the required liability. As the Division Bench of the Madras High Court has observed, Section 96(1) of the Motor Vehicles Act itself presupposed and proceeded on the basis that there was a subsisting policy and that once the subject-matter of the policy disappeared as and when it is parted with by the insured, the policy automatically lapsed and there was nothing for the insurer to avoid. It is no doubt true that the defences open to the insurance company u/s 96(2) are limited and cannot be extended. But these are defences which can be taken when there is in fact, in existence, a policy. We may take an illustration. Supposing an insurance company has not issued a policy at all and it is alleged that it has issued one. Can it be said that the insurance company will be prevented by Section 96(2) from taking up that defence ? Again suppose there was a forged policy of insurance, would again the insurance company be prevented from taking up such a defence ? Can it be said that the insurance company will be prevented by Section 96(2) from taking up that defence ? Again suppose there was a forged policy of insurance, would again the insurance company be prevented from taking up such a defence ? In our view it is clear that although the defences open to the insurance company are strictly limited to those enumerated by the section it can never be said with any show of reason that the insurance company cannot take up a defence which goes to the root of the matter in so far as the very existence of the policy and factum of insurance is challenged. The judgment of the learned single Judge in Md. Mustafa's case, therefore, does not help Mr. Gadgil. 15. Our attention has been invited to a judgment of the Delhi High Court in Oriental Fire & Gen Ins. Co. v. Vimal Roy 1972 A.C.J. 314 where the learned Judges of that Court have discussed most of the relevant authorities on the effect of the transfer of a vehicle and have held that the sale of a motor car is governed by general law and the Sale of Goods Act and that, therefore, if the property in motor vehicle by the insured was parted with the policy in his favour would automatically lapse. We are in respectful agreement with this view and are of the opinion that the provisions of law applicable to the sale of a motor vehicle are those contained in the Sale of Goods Act. As a matter of fact in Bishopsgate Motor Finance Corporation v. Transport Brakes Ltd. 1948 All E.R. 408 a motor car was held to be movable property. It may be mentioned that the discussion on the property aspect of a motor car by the learned Judges of the Delhi High Court was occasioned by the fact that in the decision of a single Judge of that Court from which the Division Bench appeal arose, the learned single Judge had observed that the sale of motor vehicle would not be governed by the ordinary law relating to sale of movable property but that it was governed by the provisions of the Motor Vehicles Act which makes it compulsory for every owner of motor vehicle to get the motor vehicle registered with the registering authority. This is what the learned single Judge observed (p. 117): There is another aspect of this matter. To my mind, the sale of a motor vehicle will not be governed by the ordinary law relating to sales of movable property. The Motor Vehicles Act, 1939 makes it compulsory for every owner of a motor vehicle to get the motor vehicle registered with the Registering Authority (vide Section 22). The Act prescribes by Section 24 the method of registration of a motor vehicle and by Section 31 of the transfer of ownership of a motor vehicle. A perusal of the various provisions of the Act leads to only one conclusion that ownership of a motor vehicle is to be evidenced by the registration as such with the Motor Registering Authority and the registration book which is supplied is the document of title. I think the Act proceeds on the basis that it is only the ostensible owner who is entered as such in the registration books, who is to be considered to be the owner of the motor vehicle irrespective of the fact that the real ownership may be with somebody else. It is true that under the Motor Vehicles Act a motor vehicle is to be compulsorily registered but that does not alter the fact that if the property in the vehicle which is after all movable property has passed and the original owner has no insurable interest in it then the policy of insurance may not survive and may hose unless the insurance company assents to the transfer and accepts the transferee as the insured person. The Division Bench of the Delhi High Court dealt with this aspect in the case referred to and observed as follows (p. 119): Mr. Dhanda, counsel for the Appellant has strongly contended that effect of the sale of the vehicle by the insured has the effect of causing lapse of the policy. He has relied upon Shawcross on Motor Insurance, page 93 for the proposition that only parties to the contract and not the transferees have rights under the contract. In Rogerson v. Scot. Auto. Ins Co. (1931) All. E.R. 605, the House of Lords held that the coverage under the policy depended on the hypothesis of an insured car and if the assureds lights in its respect had ceased when he sold it, no rights could be claimed under the policy. In Rogerson v. Scot. Auto. Ins Co. (1931) All. E.R. 605, the House of Lords held that the coverage under the policy depended on the hypothesis of an insured car and if the assureds lights in its respect had ceased when he sold it, no rights could be claimed under the policy. In this case, the assured claimed rights in respect of a new car purchased which was not covered by the policy, in Tattersall v. Drysdale (1935) All E.R. 112 Goddard. J. observed that where a policy insured the Plaintiff in respect of the ownership and user of a specified car, he could not avail of the protection of the policy if he divested himself of his interest in the car. A more specific decision of assistance in the case before us is Peters v. Gen. Ace. & Life Assce. Co. (1937) 4 All E.R. 628 . The facts of the case were that the vendor of a motor car insured by the insurance company handed over the insurance policy with the car to the vendee. The car was involved in an accident and damages were awarded against the purchaser who sought to recover the same from the insurance company on the basis of the policy under the provisions of the Road Traffic Act, 1934. The Court held that when the vendor had sold the car, the insurance policy automatically lapsed. A Division Bench of the High Court of Madras in M. Bhoopathy v. M.S. Vijayalashmi 1966 A.C.J. 1 held that Section 96 of our Motor Vehicles Act was on pari material with Section 10 of the English Road Traffic Act, 1934 and in overruling its previous decision in Madras Motor Insurance Co. Ltd., Madras Vs. Mohamed Mustafa Badsha and Others, held that in the absence of an express stipulation to the contrary in the policy, the moment the insured person parts with his vehicle, the policy relating to it lapses. Same view has been taken by another Division Bench of the High Court of Madras in Queensland Ins. Co. v. Rajalakshmi Ammal (1970) A.C.J. 104. The High Court of Punjab has also taken the same view in Des Raj v. Concord of India Insurance Co. AIR 1951 P.H 114 and in Mehtab Singh v. N.F. & G.I. Company AIR 1963 P.H 103. Co. v. Rajalakshmi Ammal (1970) A.C.J. 104. The High Court of Punjab has also taken the same view in Des Raj v. Concord of India Insurance Co. AIR 1951 P.H 114 and in Mehtab Singh v. N.F. & G.I. Company AIR 1963 P.H 103. This Court, P N. Khanna J., has taken the same view in Nanu Mai v. Inder Singh 1971 A.C.J. 88 , and his lordship observed that the liability of the insurance company lapsed on the transfer of the motor vehicle. We are, therefore, clearly of the view that in the absence of a stipulation to the contrary, an insurance policy which is a personal contract for indemnity, lapses upon the transfer of the motor vehicle and the benefit of the policy is not available to the transferee without an express agreement with the insurance company. 16. We are in agreement with the view expressed by the Division Bench of Delhi High Court and must hold that as the law stands today the insurance policy would lapse upon transfer of the motor vehicle unless, of course, the insurance company agrees to accept the transferee as the insured person in relation to the vehicle. Reliance was then placed on a judgment of the M.P. High Court in Gyarsilal Jagannathprasad Mor Vs. Pandit Sitacharan Dubey and Others, where it was held that even if a vehicle is transferred the insurance company remains liable and cannot avoid its liability. We have looked into the relevant provisions of the Motor Vehicles Act and we are unable to find any provision which would support the contention of Mr. Gadgil that even if the insured transfers or sells away the vehicle the insurance company continues to remain liable. 17. We shall now consider Mr. Gadgil's first contention that on the facts of this case and the evidence before us the insurance company had in fact assented to the transfer of the vehicle and was, therefore, liable. It has already been mentioned by us that the insurance company, as Defendant No. 3, filed their written statement and in para. 8 of the said written statement they stated that Major Majumdar had informed the insurance company of the sale of the car to Defendant No. 2 but the policy continued in the name of Major Majumdar and it was not assigned to Defendant No. 2. Nor was the car insured with Defendant No. 3. 8 of the said written statement they stated that Major Majumdar had informed the insurance company of the sale of the car to Defendant No. 2 but the policy continued in the name of Major Majumdar and it was not assigned to Defendant No. 2. Nor was the car insured with Defendant No. 3. Therefore it was pleaded that Defendant No. 3, as the insurance company, was not liable in any manner. Although these contentions were taken, the insurance company did not choose to lead any evidence or to produce any documentary evidence before the Court to show that the policy had lapsed. As a matter of fact on their own showing the vehicle was insured by Major Mujumdar for the period from December 23, 1963 and continued except for a short break till March 31, 1965. The original policy has not been produced but there is on record a copy, which is said to be a true copy and one endorsement thereon shows that the vehicle was laid up from July 1, 1964 so that the insurance was cancelled but on November 9, 1964 an endorsement was issued by the insurance company for reinstatement of insurance which states: "It is hereby understood and agreed that the insurance of this policy is reinstated in full as from the 8th October 1964." This would go to show that the insurance cover in relation to the vehicle was subsisting on the date of the accident i.e. January 28, 1965. The learned trial Judge on noticing that, the original policy was not before the Court passed the following order: It appears from that the evidence on record that the motor car which killed the Plaintiff's husband was insured with Defendant No. 3, by Major Mujumdar on 23-12-1963, and after he sold the said car to Defendant No. 2 he had intimated the fact to Defendant No. 3. It is the contention of the insurance co., that there was no proper assignment of the said policy in favour of Defendant No. 2. The original policy is not before the court In the interest of justice I think it is desirable that Defendant No. 3, should produce the relevant certificate extracts of the register maintained of such policies in order to find out whether there is an entry in this register after the car was sold by Major Mujumdar to Defendant No. 2. The original policy is not before the court In the interest of justice I think it is desirable that Defendant No. 3, should produce the relevant certificate extracts of the register maintained of such policies in order to find out whether there is an entry in this register after the car was sold by Major Mujumdar to Defendant No. 2. I, therefore, direct that Defendant No. 3, shall produce the relevant extracts in this Court on or before 18th Sept. 1968. In other words Defendant No. 3 as the insurance company was called upon to produce in Court the relevant extracts from their policy registers. 18. Notwithstanding the order of the trial Court, it would appear that the insurance company did not produce either the original policy or the relevant extracts in the Court but instead filed an affidavit of one Dattatraya Gundopant, Regional Manager of the insurance company, to say that a true copy of the extract from the policy register was being produced which showed that a policy register was maintained at the Delhi office of the insurance company. There was a reference to comprehensive policy No. DLH-1201/R-524/R-524/63 (PES) standing in the name of Major A.B.N. Mujumdar regarding the motor car (Renault) bearing Registration mark No. D.L.E. 1057. The Defendants also stated that the policy was issued through the Delhi Branch of the insurance company and that it stood in the name of the said Major Mujumdar as the insured for the period ending March 30, 1965. Paragraph 4 of the affidavit curiously states as follows: That from the register of the Policy the interest of the Insured under the Policy does not appear to have been effectively transferred to any other person by any proper assignments with the consent of the Insurer till the date of the expiry of 30th March 1965. We must observe that here is an insurance company which in an affidavit by their own Regional Manager of the Delhi Branch, from which the policy was issued, cannot in terms say that they have not asserted to the transfer but evasive phraseology is used such as "does not appear to" "effectively transferred" and "proper assignment." 19. We must observe that here is an insurance company which in an affidavit by their own Regional Manager of the Delhi Branch, from which the policy was issued, cannot in terms say that they have not asserted to the transfer but evasive phraseology is used such as "does not appear to" "effectively transferred" and "proper assignment." 19. There was nothing to prevent the Regional Manager of the insurance company particularly as the Insurance Company was already a party-Defendant to step into the box and depose to the correct state of facts and affirmatively say and lead necessary evidence to prove that the insurance company had never assented to the transfer by Major Mujumdar of the vehicle to Defendant No. 2. As a matter of fact the correspondence between the Plaintiff and the company, which is on record, reveals a curious state of affairs which cannot but lead to grave suspicion. Exhibit 33 is the letter dated November 10, 1965 signed by the Plaintiff's advocate to Motor Insurance Company Limited, New Delhi. This letter informs the insurance company about the accident and their liability and the claim of the sum of Rs. 30,000. The Regional Manager of the insurance company in its letter of November 19, 1965 which is at Exh. 35 on record states as follows: In this connection we have to advise that you have not given full particulars of insurance in respect of the vehicle No. DLE 1057 alleged to have been insured with us and caused death of your client's husband named Damodar Tapse as such we cannot take action in this respect. (Emphasis supplied.) It is significant that in the affidavit filed by Dattatraya Gundopant Yadwad, the Regional Manager on September 16, 1968 full particulars of the comprehensive policy of insurance with its number, the name of the insured, the number of the vehicle and the period of the insurance have been given, and yet although the number of the vehicle was communicated to the insurance company as its Delhi Branch, the Regional Manager suggests that the vehicle is not insured with them. What is worse, even thorn h the insurance is said to have been taken out at Delhi, the Regional Manager at Delhi invites the Plaintiff's advocate to write to the insurance company's Head Office at Belgaum. 20. What is worse, even thorn h the insurance is said to have been taken out at Delhi, the Regional Manager at Delhi invites the Plaintiff's advocate to write to the insurance company's Head Office at Belgaum. 20. We should have thought that once the number of the vehicle is known then the records of any insurance company would show whether the vehicle was insured with them or not. It would appear that the Plaintiff's advocate in fact wrote a letter to the Head Office of the insurance company at Belgaum to which also he received an evasive reply from the Claims Officer of the insurance company to the effect that "you have not mentioned the owner of the vehicle in question and as such we are unable to ascertain the particulars of the said vehicle." There is a foot note to this letter which is an endorsement to the Regional Manager at Delhi who is asked to find out if motor vehicle No. DLE 1057 is insured with the insurance company or not. Then there is another letter of December 30, 1965 from the Claims Officer at the Head Office addressed to the Plaintiff's advocate which may be reproduced in extenso. We have duly received your letter dated 23rd December, 1965 communicating the name of the owner of vehicle No. DLE 1057 involved in an accident on or about 28-1-1965. On a careful search of our records we have not been able to trace out the insurance particulars of the said vehicle said to be standing in the name of Major Mujumdar c/o Chief Inspectorate of Armaments, Kirkee, Poona-3. We would like to know on what ground you have stated the name of our company as insurers. If you know the Certificate No. or the Cover note No. or the Policy No. issued by our Company kindly let us know immediately when the matter may be further considered. Since the vehicle did not stand insured with us on the date of the accident, we regret our inability to entertain this or any other claim arising out of the said accident. You may, therefore, go through your records and elucidate us on the above subject i.e. supply us the Policy No. or Certificate No. or Cover-note No. which is alleged to have been issued by our Company, when we may proceed further in the matter. You may, therefore, go through your records and elucidate us on the above subject i.e. supply us the Policy No. or Certificate No. or Cover-note No. which is alleged to have been issued by our Company, when we may proceed further in the matter. If in spite of our clear denial as stated above your client is advised to proceed against us she shall be doing so entirely at her own risk as to costs and consequences. It does not require much imagination to come to a conclusion that the insurance company was determined to avoid their liability by taking up false and frivolous contentions. A statement like "We would like to know on what ground you have stated the name of our company as insurers" clearly sounds dishonest. Either the vehicle was insured with this company or it was not and if the records of the insurance company have been properly maintained (and there is no suggestion to the contrary) it should have been possible for the insurance company to say that such a vehicle was not insured with them, or that it was insured with them but in the name of Major Mujumdar. It is to be noticed that in their written statement there is an admission that Major Mujumdar had informed them that he had sold the vehicle to Defendant No. 2. In the affidavit filed by the Regional Manager full and detailed particulars have been given. Even the car is described as a saloon model. There is no explanation as to how in 1965 these gentlemen could not find out if the particular car of which at least the registered number was known was insured with them or not and in 1968 they come out with full particulars. We cannot fail to notice that the insurance company although it had the opportunity to do so has not placed any evidence before the Court in order to enable the Court to determine whether the insurance company was not liable to satisfy the claim in suit. 21. We have discussed the nature of the policy required to be taken out against third party risks under Chapter VIII of the Motor Vehicles Act, 1939. 21. We have discussed the nature of the policy required to be taken out against third party risks under Chapter VIII of the Motor Vehicles Act, 1939. Although the insurance has to be in relation to a vehicle it is nevertheless a contract of indemnity which seeks to indemnify persons referred to against any liability arising out of the use of the vehicle. Now there may be a term in the policy itself providing for such a transfer but in the absence of such a term and particularly when there is no prohibition the insurance company may assent to the transfer and novation may take place. It has been held that the clause in a motor car insurance policy with regard to the transfer of the policy in the event of the sale of the car to which it related is really not a clause with regard to the assignment of the policy. The policy being a contract of personal indemnity cannot really be assigned. When it is transferred with the assent of the insurance company then there is a novation of the contract by which the original assured is released and new assured is accepted. (See Barnard v. Sully (1931) 47 T.L.R. 557) . We have therefore to see if in the circumstances of the case it cannot be said that the insurance company assented to the transfer and there was a novation of contract of indemnity with the result that Defendant No. 2 was in fact and in law the person insured. Mr. Gadgil cited a decision of the M.P. High Court in Gyarsilal Jagannathprasad Mor Vs. Pandit Sitacharan Dubey and Others, where it was observed that one of the requisites for such novation is that there must be agreement of all the parties to the new contract The consent of par lies to a novation may be established by circumstances showing such assent, as well as by express words. The question whether there was an agreement to substitute a new contract or not is a question of fact depending on the intention of the parties and one must look to the substance of the matter and not to mere form. In that case the policy contained a clause about its transfer to a purchaser of the car to which it related and the transfer had been assented to by the insurance company. In that case the policy contained a clause about its transfer to a purchaser of the car to which it related and the transfer had been assented to by the insurance company. One J transferred the insured car along with the policy to G and the parties informed the insurance company about the transfer. The policy was sent to the company for recognition of the transfer in pursuance of the clause about transfer in the policy. The company however did not return the policy and did not send any reply that the company was willing to accept the transfer. There was an accident and it was held that in the circumstances of the case the company impliedly assented to the transfer and therefore there was a novation of contract of indemnity, with the result that G was in effect and in law the person insured by the policy even though his name was not substituted in place of J. 22. In the case before us we do not have the original policy on record but there is a copy and from the copy it appears that there is no clause with regard to transfer of the policy to a purchaser of the car to which it relates. Now when we consider the question of novation, it is really the assent of the insurance company which is material and once there is an assent whether implied or express then a new contract of indemnity would come into existence. We have noticed that Major Mujumdar promptly informed the insurance company that he had sold the car to Defendant No. 2 and this is admitted by the insurance company. It requires, therefore, to be considered as to what the insurance company did. Their contention is that the policy had lapsed and, therefore, they are no longer liable. But as has been stated, the insurance company did not lead any evidence or even produce the original records which would have shown as to what was the correct state of affairs. In spite of the order of the trial Court, the relevant documents were not produced and we cannot but hold that the original documents which would have shown the correct state of affairs, have been kept back and withheld by the insurance company. In spite of the order of the trial Court, the relevant documents were not produced and we cannot but hold that the original documents which would have shown the correct state of affairs, have been kept back and withheld by the insurance company. It is not the case of the insurance company that they informed Major Mujumdar that by reason of the transfer of the vehicle the policy had lapsed. There are no averments to that effect in the written statement filed by the insurance company. There is no such statement in the affidavit filed by the Regional Manager. The nature of the correspondence to which we have referred, clearly shows the evasive and dishonest attitude adopted by the insurance company. 23. It is significant that the insurance company was a party-Defendant and admitted that it had notice of the transfer but that is where they were content to leave the matter. They have therefore failed to produce the necessary evidence in support of their claim that the policy had lapsed. In the circumstances we are entitled to draw an adverse inference that if the original policy and the original documents including relevant registers had been produced they would have disclosed a state of affairs contrary to the averments of the insurance company, that they are not liable. 24. There is one another aspect, which requires to be considered on this point. It is admitted that the insurance policy was to remain valid till March 31, 1965. It is also admitted that the insurance company had been informed by Major Mujumdar that he had sold the vehicle to Defendant No. 2 many months back and yet there is no mention by the insurance company as to what they did about it and whether they cancelled the policy, for the unexpired period and refunded the balance premium to Major Mujumdar. Section 105 of the Motor Vehicles Act casts a duty on the insurer to notify to the registering authority the cancellation or suspension of the policy. When the information reached the Insurance Company that Major Mujumdar had parted with the vehicle and if, therefore, the policy lapsed because the insurance company did not assent to the transfer it would have been the duty of the insurance company to notify the registering authority that the policy of insurance in relation to the vehicle was no longer in force. There is no suggestion that Section 105 was complied with or any reply was sent to Major Mujumdar. 25. The burden of showing that an insurance company is liable to satisfy the judgment may initially be on the Plaintiff but, as, in the present case, once it is shown that the insurance company had been informed of the transfer of the vehicle then the burden or onus would shift and it would lie on the insurance company to show how by reason of such a transfer no liability attaches to them to satisfy the judgment. The facts and evidence as to what had transpired after the insurance company had received information about the transfer are within the knowledge of the insurance company and the Plaintiff who is widow of a person killed in the car accident cannot be expected to produce the necessary evidence. We are satisfied that on the facts of this case, the burden of proving that Defendant No. 3 as insurance company had not assented to the transfer and the policy had lapsed or had been cancelled and that there was no novation of contract, lay on the Insurance Company which they have failed to discharge although they are on record as a party-Defendant and the learned trial Judge had given them specific opportunity to produce the necessary documentary evidence. In the circumstances of the case, therefore, we hold that the Insurance company impliedly assented to the transfer and, therefore, there was a novation of the contract of indemnity with the result that Defendant No. 2 Pooranbhau Khairale became in fact and in law the person insured under the relevant policy. On this view, the insurance company would be clearly liable under the provisions of Section 96 of the Motor Vehicles Act to satisfy the judgment passed against Defendants Nos. 1 and 2. 26. Now we may refer to Section 103A of the Motor Vehicles Act, 1969 which was introduced by an amendment in 1939 and which provides an opportunity to the insurance company with whom the vehicle is insured to state if there is any objection to accept the purchaser of the vehicle as the insured person as a result of transfer of the motor vehicle. This has to be done within fifteen days of the receipt of the application by the insurer. This has to be done within fifteen days of the receipt of the application by the insurer. The section thus provides that if there is no intimation of the insurer's refusal to transfer the certificate and the policy to the other person i.e. the purchaser then by the deeming provision the certificate of insurance shall be deemed to have been transferred in favour of the purchaser. This is indeed a salutary provision and would now prevent the insurer from seeking to avoid liability unless they have affirmatively declined to agree to the novation of the contract of indemnity. 27. This brings us to the question of quantum of damages. Mr. Gadgil pointed out that the Plaintiff in her evidence has stated that her deceased husband used to sell bread and butter and that the total sales were about Rs. 15 to Rs. 20 whereas the cost of purchasing the same from other bakeries was about Rs. 10 to Rs. 15. It is argued on this basis that the minimum income of the deceased could be safely calculated at least at Rs. 150 p.m. less expenses in the nature of rent payable for the premises on which the business was carried on. On this calculation the amount earned by the deceased would come to Rs. 138 per month although there is a general assertion by the Plaintiff that the deceased used to earn a profit of Rs. 250 to Rs. 300 per month. Now by discounting a certain amount of exaggeration which is always bound to exist we may safely come to the conclusion that the deceased was earning at least Rs. 125 per month. The learned trial Judge has taken the income of the deceased to be only Rs. 50 per month and although he has taken 20 years purchase price, he has somehow come to the conclusion that Rs. 5,000 by way of damages would be adequate. There is no indication as to how the learned Judge arrived at this conclusion. Assuming that the deceased spent Rs. 25 on himself it would leave Rs. 100 per month as the loss suffered by the Plaintiff. The annual pecuniary loss would have been Rs. 1,200 a year and even at 20 years purchase the amount would be Rs. 24,000. There is no indication as to how the learned Judge arrived at this conclusion. Assuming that the deceased spent Rs. 25 on himself it would leave Rs. 100 per month as the loss suffered by the Plaintiff. The annual pecuniary loss would have been Rs. 1,200 a year and even at 20 years purchase the amount would be Rs. 24,000. It is to be noticed that the deceased was 38 years old and the learned trial Judge seems to feel that a shopkeeper would only live till the age of 58 years even in these years of longevity. It is regrettable that the evidence led in this case is far from adequate but taking into consideration matters of public general knowledge we would feel that the deceased might have lived up to at least 60 years if not 65 years. On that basis the amount would increase to Rs. 24,400. If this amount is amortized and the fact that there is depreciation in the value of rupee is taken into account we feel that a sum of Rs. 16,000 would represent a fair figure to be a awarded to the Plaintiff. 28. Mr. Abhyankar, who appeared for Defendant No. 2 sought to suggest that Rs. 5,000 was adequate but it is to be noticed that Defendant No. 2 did not file any written statement and did not cross-examine the Plaintiff when she appeared as a witness and, therefore, Mr. Aphyankars contention cannot be accepted, we have mentioned above on a conservative assessment the Plaintiff has suffered a pecuniary loss of Rs. 100 per month for a period of at least 22 years. The Plaintiff in her evidence has stated that the deceased had no issue, nor is there any evidence on record that the deceased's parents were alive who would otherwise have a claim under the relevant provisions of the Fatal Accidents Act and therefore it does not require that any apportionment be made by the Court. 29. The appeal is, therefore, allowed and the order of the trial Judge modified so that the suit is decreed for Rs. 16,000 with interest at 6 per cent, per annum from the date of the suit till realisation. Defendant No. 3 as the insurance company shall satisfy the judgment and pay the decrial amount to the Plaintiff. Defendants to pay the costs of the Plaintiffs throughout. 16,000 with interest at 6 per cent, per annum from the date of the suit till realisation. Defendant No. 3 as the insurance company shall satisfy the judgment and pay the decrial amount to the Plaintiff. Defendants to pay the costs of the Plaintiffs throughout. Copy of the decree to be sent to the Collector for recovery of Court-fees from the Defendants.