Research › Search › Judgment

Himachal Pradesh High Court · body

2005 DIGILAW 114 (HP)

RAMESH CHAND v. NEW INDIA ASSURANCE COMPANY

2005-05-02

A.K.GOEL

body2005
JUDGMENT Arun Kumar Goel, J. : - This appeal has been filed by Ramesh Chand, owner of tractor bearing registration No.HP-21-1864. On the date of accident it was insured with the New India Assurance Company Ltd. under a valid policy. Nanak Chand was its driver. Policy had been issued in the name of Shiv Ram Sharma, the registered owner of the tractor. According to appellant, there was an agreement to sell the tractor in question entered into between him and registered owner, i.e. Shiv Ram, vide Ext. RW1/A. 2. In the aforesaid background, claim petition was filed by respondents No. 2 and 3, who are parents of deceased Raj Kumar, aged 18 years. He was student of 10th class in Senior Secondary School, Bijhari, Tehsil Barsar, District Hamirpur. Accident took place on 4.6.2001 at about 9.30 p.m. at village Tikkar, in Tehsil and police Station Barsar, District Hamirpur. In columns No. 10 and 24 of the claim petition, stand of the claimants is :- "10. According to FIR deceased was on the vehicle and was going from Bijhar to his native village Gumarwin, Tehsil Barsar, District Hamirpur, H.P." "24. The deceased was going from Bijhar to his native village Gumarwin and at place Tikker the tractor No. HP-21-1864 which was being driven by respondent Nank Chand in rash and negligent manner turned turtle and deceased was crushed under the tractor and died." Accident was the result of rash and negligent driving of tractor by its driver. As such, parents claimed compensation. 3. Appellant-owner, as well as Nanak Chand, tractor driver, both filed joint written statement before the Tribunal below. Amongst others estoppel was set up as defence against the parents of the deceased. Their further case was that the deceased was engaged as a labourer on the tractor at the time of accident, and claimants were not dependent upon him (i.e. the deceased). In reply to paragraphs 4 and 10 of the claim petition, it was again pleaded by both of them that the deceased Raj Kumar was engaged as labourer on the tractor at the time of accident and he used to do labour work during morning and evening hours. In reply to paragraph 24 of the claim petition, it was pleaded that accident was not the result of rash and negligent driving on the part of the driver of the tractor. 4. In reply to paragraph 24 of the claim petition, it was pleaded that accident was not the result of rash and negligent driving on the part of the driver of the tractor. 4. Stand of Insurance Company in its reply was that there was no contract of instance at the time of accident between the appellant and the insurer. Driver was not having a valid driving licence at the time of accident and the amount claimed was highly exaggerated. Contents of paragraphs 5 to 14 were not admitted as correct for want of knowledge, and those of paragraphs 15 to 24 were denied being incorrect. 5. Separate rejoinders were filed to the replies of owner and driver as well as to that of the Insurance Company. 6. In rejoinder to the reply of owner and driver, it is pleaded that deceased used to do labour work during morning and evening, before and after school hours. This supplemented the income of his parents. He was getting Rs.150/- for loading and unloading of one tractor. Thus he was earning Rs.3000/- per month. Regarding liability of Insurance Company after the transfer of vehicle in favour of the appellant, stand of respondents No. 2 and 3 was that Insurance Company is liable to indemnify the owner. 7. Learned Tribunal below framed the following issues:- 1. Whether Raj Kumar, the son of the petitioners died in the accident of tractor No. HP-21-1864 allegedly occurred due to rash and negligent driving on the part of respondent No. 1 ?OPP 2. If issuance No. 1 is held in the affirmative, to what amount of compensation the petitioners are entitled and from whom ?OPP 3. Whether respondent No. 1 was not having valid and effective driving licence to drive the tractor involved in the accident at the relevant time ? OPR-3 4. Whether the insured-respondent No. 2 has violated the terms and conditions of contract of insurance by carrying the passengers in the ill-fated tractor, if so, to what effect ? OPR-3. 5. Relief." 8. After recording evidence and taking note of both oral and documentary evidence produced by the parties, learned Tribunal below has awarded compensation to the tune of Rs. 2,41,000/- with 9% interest from the date of institution of the petition (2.8.2001) till the entire amount is deposited with the Tribunal. 9. At the time of hearing Mr. OPR-3. 5. Relief." 8. After recording evidence and taking note of both oral and documentary evidence produced by the parties, learned Tribunal below has awarded compensation to the tune of Rs. 2,41,000/- with 9% interest from the date of institution of the petition (2.8.2001) till the entire amount is deposited with the Tribunal. 9. At the time of hearing Mr. Verma submitted that in view of Ext.RW1/A, the agreement to sell between the registered owner and his client, the appellant, vehicle stood transferred in favour of his client. Further according to him, liability in this case is to be satisfied by the insurance company and findings to the contrary under issue No. 4 recorded by the learned Tribunal below exonerating it (the Insurance Company), are liable to be reversed. By referring to the provisions of Section 157 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act), it was further urged by him that transfer of insurance policy was automatic as per law. As such findings on issue No. 4 are not sustainable. 10. This stand of the appellant-owner was supported by Shri Rajinder Kishore Sharma, learned Counsel for respondent No. 4, the driver of tractor. He further submitted that when a reference is made to the contents Ext.RW1/C the policy of insurance, particularly premium having been charged in respect of 2 labourers there is no escape but for holding the Insurance Company liable for satisfying the impugned award after reversing the findings to the contrary recorded by the Tribunal below under issue No.4. 11. Mr. K.D. Sood, learned Counsel for the Insurance Company by referring to the claim petition, its reply by his client, as well as statements of PW-1 Parkash Chand father of deceased, RW-1 Ramesh Chand, owner of the tractor-appellant and of RW2 officer from the Insurance Company, urged that no exception can be taken to the findings recorded by the Ramesh Chand below under issue No. 4. Mr. Sood also urged that stand of appellant and of driver regarding deceased being a labourer engaged by him (the appellant), for loading-unloading was an afterthought. In this regard, reference was made by him to the contents of Ext. P-1, copy of FIR. Thus on its basis he urged that deceased was in fact a gratuitous passenger traveling in the tractor at the time of accident. In this regard, reference was made by him to the contents of Ext. P-1, copy of FIR. Thus on its basis he urged that deceased was in fact a gratuitous passenger traveling in the tractor at the time of accident. Therefore, on this ground also, no liability can be fixed on his client for payment of compensation, awarded by the Tribunal below. 12. He further argued that even if it be assumed for the sake of argument without conceding that his client is liable for payment of awarded compensation, still no relief can be given against his client, as according to him, as per evidence of respondents No. 2 and 3 deceased was sitting on the tractor at the time of accident and in view of registration certificate of the tractor, copy whereof is Ext.RW1/B, capacity of tractor is only for one person. 13. Again by referring to limitations, Shri Sood urged that no doubt his client incurred liability in respect of driver and two labourers after charging requisite premium, but there being no evidence that deceased was engaged for loading/unloading the tractor in question as a labourer, findings on issue No. 4 need to be upheld and consequently the appeal dismissed. 14. Shri Sood further submitted that in the event of all his above pleas being not accepted by this Court by holding his client liable to pay the amount of impugned award, liberty may be reserved to it to recover the same from the appellant, as well as Nanak Chand driver in accordance with the decisions of the Supreme Court rendered from time to time. 15. What is the effect of transfer of a vehicle on the insurance policy is the core question that needs consideration in this case. Before proceeding further in this matter Section 157 of the Act, which is relevant in the present case, needs to be examined. This for ready reference is extracted herein below:- "157. Transfer of certificate of insurance. 15. What is the effect of transfer of a vehicle on the insurance policy is the core question that needs consideration in this case. Before proceeding further in this matter Section 157 of the Act, which is relevant in the present case, needs to be examined. This for ready reference is extracted herein below:- "157. 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." 16. Before coming into force of the Act, Motor Vehicles Act, 1939, was in force. Section 103-A thereof dealt with the transfer of certificate of insurance. Again for ready reference, this Section is extracted herein below :- "Section 103A. Transfer of certificate of insurance. Before coming into force of the Act, Motor Vehicles Act, 1939, was in force. Section 103-A thereof dealt with the transfer of certificate of insurance. Again for ready reference, this Section is extracted herein below :- "Section 103A. 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 proposes to transfer 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, he may apply in the prescribed form to the insurer for the transfer of the certificate of insurance and the policy described in the certificate in favour of the person to whom the motor vehicle is proposed to be transferred, and if within fifteen days of the receipt of such application by the insurer, the insurer has not intimated the insured and such other person his refusal to transfer the certificate and the policy to the other person, the1 certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favor of the person to whom the motor vehicle is transferred with effect from the date of its transfer. (2) The insurer to whom any application has been made under sub-Section (1) may refuse to transfer to the other person the certificate of insurance and the policy described in that certificate if he considers it necessary so to do, having regard to- (a) the previous conduct of the other person -(i) as a driver of motor vehicles; or (ii) as a holder of the policy of insurance in respect of any motor vehicle; or (b) any conditions which may have been imposed in relation to any such policy held by the applicant; or (c) the rejection of any proposal made by such other person for the issue of a policy of insurance in respect of any motor vehicle owned or possessed by him. (3) Where the insurer has refused to transfer, in favour of the person to whom the motor vehicle has been transferred, the certificate of insurance and the policy described in that certificate, he shall refund to such transferee the amount, if any, which, under the terms of the policy, he would have had to refund to the insured for the unexpired term of such policy." 17. A comparative reading of both the Sections i.e. one under the Act and the other of the Act of 1939 supra, clearly suggests that under Section 157(1) transfer is automatic. Further under sub-Section (2) of Section 157, a transferee has to 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 is bound to make necessary changes in the certificate. 18. On the other hand, under Section 103-A of the Act of 1939 supra, in case insurer had not intimated the insured and such other person, its refusal to transfer the certificate of insurance, then by deeming provision certificate stood transferred. Discretion is given to the insurer to refuse transfer in favour of the other person (i.e. transferee) the certificate of insurance and the policy described in the certificate under Section 103-A (supra). That is not the situation under Section 157 of the Act. 19. Under Section 103-A (supra), insurer could refuse to transfer the certificate of insurance on the grounds as contained in sub-Sections (2)(a) to (c) thereof. And in the event of refusal to transfer the certificate of insurance to whom the motor vehicle has been transferred, insurer is liable to refund to the transferee the amount if any, in respect of unexpired period as would have been refunded to the insured. 20. As already observed, there is no such discretion vested with the insurer under Section 157 of the Act. This is the major distinguishing feature under both the Acts. Section 157 of the Act appears to have been enacted to be in consonance with the object sought to be achieved, i.e. to ensure that claimants (like respondents no. 2 and 3 in this case), are not left high and dry in a case where owner and driver are not possessed of sufficient means to recover awarded compensation from both or either of them. 21. For the purpose of determination of this appeal, certificate of insurance and the policy described in the certificate, stood transferred in favour of the appellant by operation of law, i.e. sub-Section 157(1) of the Act. As such, plea to the contrary urged by Mr. 21. For the purpose of determination of this appeal, certificate of insurance and the policy described in the certificate, stood transferred in favour of the appellant by operation of law, i.e. sub-Section 157(1) of the Act. As such, plea to the contrary urged by Mr. Sood either, to exonerate his client or to enable it to recover the amount from owner and/or the driver of the tractor, is hereby rejected. 22. This conclusion is further supported from the explanation added to Section 157(1) of the Act, by Central Act No. 54 of 1995 w.e.f. 14.11.1994. Date of accident is 4.6.2001. Therefore, doubt if any, after 14.11.1994 has also been removed. Reason being that right to be indemnified under the policy of insurance is vested in the insured owner of the vehicle and liability to indemnify is that of the insurer in terms of certificate of insurance and policy of insurance. 23. Now coming to the question whether the deceased was a labourer on the vehicle in question engaged for loading/unloading by the appellant at the time of accident or was a gratuitous passenger traveling at the time of accident. 24. Admittedly, this is a case where parents of the deceased were not present when the accident took place. Then remains the version of the appellant, who has appeared as RW1. He as well as driver of the vehicle in question in the first instance in the written statement had specifically pleaded, that the deceased was engaged as a labourer for loading-unloading of the tractor at the time accident. Whether this was the factual position or not, there is not a word said in this behalf in the reply of the insurance company during the course of proceedings before the Tribunal below. 25. In case Insurance Company was of the view that some more facts are required to be-elucidated either from the owner and driver or from the claimants, nothing prevented it to have had recourse to law by taking necessary steps in that behalf. In case it felt that owner and driver were clouding with claimants-respondents No. 2 and 3, it could have invoked Section 170 of the Act. Again no such step was taken by it. 26. Emphasis on Ext. P-1, copy of FIR by Mr. Sood, is untenable. Reason being, that there is no evidence proving it. In case Insurance Company wanted to take the benefit of Ext. Again no such step was taken by it. 26. Emphasis on Ext. P-1, copy of FIR by Mr. Sood, is untenable. Reason being, that there is no evidence proving it. In case Insurance Company wanted to take the benefit of Ext. P-1, it ought to have examined both i.e. the person who lodged it, as well as the person who recorded the same. That would have been the primary evidence. In the event of both of them having appeared as witnesses, claimants as well as the owner and driver would have had the opportunity to have cross-examined them. Thus their version would have been tested during the course of trial. As such, no benefit can be derived by Shri Sood from the stand of respondents No. 2 and 3 taken in paragraphs 10 and 24 of the claim petition relied upon by him at the time of hearing of this appeal. 27. So far deceased having been engaged as a labourer for loading-unloading the tractor is concerned, this fact is admitted by PW-1 Parkash Chand, father of deceased in cross-examination by owner and the driver. 28. PW-2 is Rakesh Kumar. Per this witness, deceased had died under the tractor. On that date, witness was carrying stones in his tractor and was on way to Dhangota. He found at village Tikkar which is at a distance of % kilometer from Bijhar that a tractor had turned turtle and three persons had come under it. One of them was tractor driver Nanak Chand. Others were deceased Raj Kumar and another person. This witness called people from the nearby shops and injured were extricated. Raj Kumar was also extracted, and in a jeep was taken to Barsar hospital, where he was declared dead. He however, admitted that his statement was recorded in Barsar Court in case State v. Nanak Chand and he had stated therein that tractor was over-turned due to sagging of retaining wall. 29. On the other hand, RW-1 Ramesh Chand appellant stated that deceased Raj Kumar was being engaged in case of need as a labourer on daily basis and on the date of accident he had been gaged as such. They were on way to load manure on that date. 30. RW-2 is Yog Raj. Assistant Administrative Officer of Insurance Company. He has proved policy of insurance Ext. They were on way to load manure on that date. 30. RW-2 is Yog Raj. Assistant Administrative Officer of Insurance Company. He has proved policy of insurance Ext. RW1/C. This policy was issued in respect of agricultural vehicle like tractor etc. Only one person could sit on it. He admitted that risk of labourers is covered for the purpose of loading/unloading. Premium having been charged for 2+1 was not disputed. 31. As already observed, parents of the deceased were not there at the spot at the time of accident. Regarding deceased having died in the accident, respondents No. 2 and 3 have pleaded as per FIR. Who lodged FIR and whether its contents are correct or not, there is no legal evidence to that effect. Faced with this situation, Shri Sood also raised an argument that FIR being exhibited and was not objected to either on behalf of the owner and driver or by respondents 2 and 3. Therefore, its contents need to be read in evidence as proved. This plea has been raised simply to be rejected in view of the decision of the Supreme Court in Sait Tarajee Khimchand and others v. Yelamarti Satyam and others, AIR 1971 SC 1865. 32. Fact that the deceased was a labourer engaged by the owner at the time of accident is proved from the statements of PW-1 and PW-2. And as already noted, this was the stand of appellant-owner as well as the driver which was supported in the rejoinder. How the Insurance Company should have preceded in the face of this situation, hardly needs to be explained. 33. Similarly, submission of Mr. Sood that seating capacity on the tractor was only one as per its registration certificate, copy Ext. RW1/B is also devoid of any merit. Reason being, that in the face of evidence, which was accepted by the Tribunal below and is also being accepted by this Court, that deceased was engaged as a labourer at the time of accident by the owner for loading-unloading, liability of satisfying the impugned award is that of Insurance Company and the findings to the contrary under issue No. 4 are liable to be reversed. 34. Now coming to the plea of Mr. 34. Now coming to the plea of Mr. Sood that if his client is held liable for payment of compensation, in such event, liberty may be reserved to it to recover this amount from the owner-appellant as well as the driver of the tractor. He placed reliance on the decision of the Supreme Court, in Rikhi Ram and another v. Sukhrania and others, 2003 ACJ 534. Again for the reasons to be recorded hereinafter, this plea cannot be accepted. 35. In this context, when a reference is made to the provisions of Section 103-A of the Act of 1939 and Section 157 of the Act, and on a comparative study of these, there is no power under the Act with the Insurance Company to refuse transfer of certificate of insurance, as well as the policy of insurance, which was there under Section 103-A (supra). In this behalf when a reference is made to the decision of the Supreme Court reported in 2003 ACJ 534, it is evident that it is a case pertaining to Motor Vehicles Act, 1939, wherein situation was totally different as compared to the one now existing after coming into force of the Act of 1988. 36. How the matter is to be dealt with after a vehicle is transferred to a person like appellant, even under the Act of 1939 had been attending the attention of different Courts, as well as the Honble Supreme Court. Reference to same such decision is being made hereinafter. In Nani Bai and others v. Ishaque Khan and others, 1995 ACJ 292, premium was being paid by the legal representatives of the deceased for many years after his death even at the time of accident. Tribunal in this case exonerated the Insurance Company by holding that contract with the dead person was void. These findings of the Tribunal were reversed in appeal by the High Court in this judgment. What was held while dealing with this aspect of the case and is relevant in the present appeal is extracted herein below:- "11. Now, so far as the liability of the Insurance Company is concerned, Section 94 (new Section 146), of the Motor Vehicles Act, 1939, makes a provision of compulsory insurance for covering the third party risk, which reads as follows :-"146. Now, so far as the liability of the Insurance Company is concerned, Section 94 (new Section 146), of the Motor Vehicles Act, 1939, makes a provision of compulsory insurance for covering the third party risk, which reads as follows :-"146. 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 no 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." 12. From the plain reading of the Section it is apparent that third party insurance in all cases of use of vehicle is necessary. Admittedly Kartar Singh died somewhere in the year 1975. The insurance company had all along been accepting the premium for the insurance of motor bus and it had accepted the premium for the year of accident also. The accident occurred on 9.8.1981. The insurance company had collected premium for the period 11.6.1981 to 10.6.1982. The Insurance Company has got a number of officers and employees to check and verify the vehicle and the owner of the vehicle. Now having accepted the premium for the insurance of the vehicle the Insurance Company cannot be allowed to say that it is not liable to compensate the persons who have been injured or who died in the accident. The contention of the learned Counsel for the respondents who was supporting the finding of the Tribunal submitted that the vehicle was owned by Kartar Singh and since he had died there is end of liability of the insurer in respect of the motor bus. 13. We are not persuaded to uphold this argument though the Tribunal was. There is nothing in the policy issued in the name of the Kartar Singh stating that it is purely personal to him. On the other hand on plain reading of the condition of the policy it is clear that the coverage is that of the motor bus and not the insured. Section 94 of the Motor Vehicles Act insists for the compulsory insurance against the third party risk and prohibits user of vehicle in a public place unless there is a policy of insurance. Section 94 of the Motor Vehicles Act insists for the compulsory insurance against the third party risk and prohibits user of vehicle in a public place unless there is a policy of insurance. The words "unless there is in force in relation to the use of the vehicle of that person......a policy of insurance" go to show that it is the vehicle that is required to be insured and not the person or the owner of the vehicle and in such a situation the Insurance Company cannot escape its liability. A similar argument was advanced before the High Court of Andhra Pradesh in a case reported in Haji Zakaria v. Naoshir Cama, 1976 ACJ 320 (AP), but the same was repelled and it was held that the insurance company is liable to compensate third party. 14. Vehicular accidents have increased and the question that arises is as to whether suffers from vehicular accident are entitled under law to get something for their survival or should be left without redress. The following observations of Lord Denning, M.R., in the case of Launchbury v. Morgans, 1971(2) QB 245, are equally relevant for our case : "A motor vehicle is a powerful engine of death and destruction. It is capable of doing much damage to persons and to property unless it is driven with due care and attention. As the number of cars increases and as their speeds get faster, so the danger grows. More and more people are killed. More and more are injured. More and more property is damaged. The suffers ought not to be left without redress. So parliament and Judges have done their best to see that they are compensated for their loss." (Emphasis supplied) 15. The benevolent object of the legislation has been considered by the Supreme Court in a number of cases. We would refer to the decision of the Supreme Court in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, AIR 1987 SC 1184 (H.N.) : 1987 ACJ 411 (SC), which reads as follows :- "In order to divine the intention of the legislature in the course of interpretation of the relevant provisions there can scarcely be a better test than that of probing into the motive and philosophy of the relevant provisions keeping in mind the goals to be achieved by enacting the same. Section 94 requiring the owner of the motor vehicle using it in a public place has been inserted in order to protect the members of the community traveling in vehicles or using the roads from the risk attendant upon the user of motor vehicles on the roads. The law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the defendants of the victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the courts would be recoverable from the persons held liable for the consequences of the accident. A court can only pass an award or a decree. It cannot ensure that such an award or decree results in the amount awarded being actually recovered from the person held liable who may not have the resources. To overcome this ugly situation the legislature has made it obligatory that no Motor vehicle shall be used unless a third party insurance is in force. To use the vehicle without the requisite third party insurance being in force is a penal offence. The legislature was also faced with another problem. The insurance policy might provide for liability walled in by conditions which may be specified in the contract of policy. In order to make the protection real, the legislature has also provided that the judgment obtained shall not be defeated by the incorporation or exclusion clauses otf ^r than those authorized by Section 96 and by providing that except and save to the extent permitted by Section 96 it will be the obligation of the insurance company to satisfy the judgment obtained against the persons insured against third party risks." 16. In our considered opinion, therefore, despite the fact that Kartar Singh was dead at the time of accident and the premium was paid by his legal heirs, the Insurance Company is liable to pay compensation to the heirs of the deceased and to the injured in the accident. If they are aggrieved by the concealment of fact or misrepresentation or fraud, if any, they can make a grievance before the appropriate forum separately but, they cannot escape their liability of payment of compensation by raising this bogey of agreement being void." 37. In G. Govindan v. New India Assurance Co. If they are aggrieved by the concealment of fact or misrepresentation or fraud, if any, they can make a grievance before the appropriate forum separately but, they cannot escape their liability of payment of compensation by raising this bogey of agreement being void." 37. In G. Govindan v. New India Assurance Co. Ltd. and others, AIR 1999 Supreme Court 1398, held that even in case of third party like respondents No. 2 and 3 under Sections 95 and 103-A of the Act of 1939 where policy had not been transferred in the name of transferee, liability is that of Insurance Company and non-transfer is not a ground to deny compensation by it to the victim or legal representatives of the victim. 38. In United India Insurance Company Ltd. v. Manjit Kaur and others, 2001 ACJ 802, a division Bench of Punjab and Haryana High Court while dealing with transfer of vehicle in the context of Section 157 of the Act, held as under :- "2. The only ground agitated before us by the Insurance Company is that the owner Yogesh Kumar Sharma had purchased the car from M/s. Khem Chand Hem Raj along with the insurance policy. However, as required under the provisions of sub-Section (2) of Section 157 of the Motor Vehicles Act, 1988 (for short the Act), he had not applied for the transfer of the certificate of insurance in his name within stipulated period of 14 days. It was, therefore, contended that there was no privily of contract between him and the Insurance Company and as such, the Insurance Company could not be held liable to indemnify him against the compensation awarded by the Tribunal. 3. To resolve the matter; it is necessary to take note of the provisions of Section 157 of the Act which reads as under :- "157…………….” 4. A plain reading of sub-Section (1) of Section 157 shows that when a vehicle is sold with the insurance policy, the same is deemed to have been transferred to the purchaser. This deeming provision is not subject to any other limitation. A plain reading of sub-Section (1) of Section 157 shows that when a vehicle is sold with the insurance policy, the same is deemed to have been transferred to the purchaser. This deeming provision is not subject to any other limitation. It is true that sub-Section (2) provides that the purchaser shall apply for the transfer of the policy in his name within 14 days to the Insurance Company but it does not, in any manner, provide that failure to make such application would nullify either the deemed transfer as envisaged under sub-Section (1) of Section 157 of the Act or the insurance policy. 7. From the above observations of the Supreme Court it is evident that the law laid down by this Court in case of Ram Chander, 2000 ACJ 727 (P&H) does not hold good any longer. The present case being a claim of the third party is squarely covered by the law laid down by the Apex Court in Complete Insulations (P) Ltd., 1996 ACJ 65 (SC) and G. Govindan 1999 ACJ 781 (SC). We, therefore, hold that the appellant Insurance Company cannot be allowed to deny its liability against the claim of a third party on the ground that intimation envisaged under sub-Section (2) of Section 157 of the Act had not been sent to it by Yogesh Kumar Sharma." 39. After placing reliance on G. Govindan v. New India Assurance Co. Ltd. and others (supra), appeal of the Insurance Company was dismissed. 40. Orissa High Court in New India Assurance Co. Ltd. v. Bhramara Bag and another, 2004(2) Accidents Compensation Judicial Reports 344, while dealing with a case where the offending vehicle was insured with the Insurance Company under a valid policy en the date of accident, held that transfer of ownership of the vehicle shall not exclude the Insurance Company from payment of compensation. 41. Again a Division Bench of Punjab and Haryana High Court in United India Insurance Company Ltd. v. Surinder and others, 2005(1) Accidents Compensation Judicial Reports 113, held that equipment attached to the tractor is a part of the tractor and covered by the policy of insurance. In this case it was further held that till the Insurance Company proved that deceased and injured were gratuitous passengers in the trolley, it cannot be exonerated from its liability. 42. In this case it was further held that till the Insurance Company proved that deceased and injured were gratuitous passengers in the trolley, it cannot be exonerated from its liability. 42. Here at the risk of repetition it may be observed that there is no evidence worth the name examined by the Insurance Company to establish its stand that deceased was a gratuitous passenger and not a labourer on the tractor in question at the time of its accident. On the other hand, appellant-owner appeared as RW-1 and has pledged his oath so far engagement of deceased as a labourer at the time of accident is concerned and this part of his statement in my considered view has not been dislodged. 43. It was incumbent upon the insurance company to have led evidence to substantiate "the plea of deceased being a gratuitous] passenger and not a labourer at the time of accident. This matter is otherwise no more res Integra in view of the decision of the Supreme Court in Narchinva V. Kamat and another etc. v. Alfredo Antonio Doe Martins and others, AIR 1985 SC 1281. Paragraph 15 of this judgment which is relevant in the present appeal, is extracted hereinbelow :- "15. To sum up the Insurance Company failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the Insurance Company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was found to satisfy the award under the comprehensive policy of insurance." 44. For the view that has been taken here in this judgment, cross-objections also deserve to be allowed. 45. No other point was urged. 46. In view of the aforesaid discussion while allowing this appeal, as well as the cross-objections, findings of the Motor Accident Claims Tribunal, Hamipur, recorded under issue No. 4 in the impugned award dated 15.1.2004, passed in MAC Petition No. 65 of 2002, titled Sheela Devi and another v. Sh. Nanak Chand and others, are set aside. Consequently, it is held that for payment of compensation awarded by the Tribunal below, liability is that of the Insurance Company. Ordered accordingly. Nanak Chand and others, are set aside. Consequently, it is held that for payment of compensation awarded by the Tribunal below, liability is that of the Insurance Company. Ordered accordingly. CMP No. 784 of 2004 In view of the disposal of the main matter, interim order dated 9.8.2004 shall stand vacated forthwith. Application stands disposed of.