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2014 DIGILAW 398 (PNJ)

United India Insurance Co. Ltd. v. Baldev Singh

2014-02-19

HEMANT GUPTA

body2014
JUDGMENT Mr. Hemant Gupta, J.: - The challenge in the present Regular Second Appeal is to the judgment and decree dated 22.8.1996 passed by the learned first Appellate Court, dismissing the appeal of the appellant and affirming the judgment and decree dated 20.12.1993 passed by the learned Senior Sub Judge, whereby the suit for recovery on account of damages to the owner of the truck bearing No.PBN-9777 was decreed. 2. In the present appeal, the appellant has claimed the following substantial question of law: “Whether Section 157 of the Motor Vehicles Act, is applicable in own damage claim or not especially when it was admitted case of the parties that the policy had not been transferred in favour of the plaintiff, the subsequent purchaser?” 3. The plaintiff has asserted that he is a purchaser of the truck bearing the aforesaid registration number from Didar Singh, defendant No.3. The said vehicle was insured with the present appellant for the period 29.12.1989 to 18.12.1990. The plaintiff asserts that he could not get the certificate of registration transferred in his name. The cover note and the Insurance Policy, was issued in the name of Didar Singh, the previous owner after its purchase by the plaintiff. 4. The defendant-appellant asserted that the plaintiff has no locus standi to file a suit and that the cover note has been obtained with mala-fide intention. It is asserted that Didar Singh got the truck insured on a day when he was neither the owner nor in possession of the truck. 5. The learned trial Court framed the following issues:- “1. Whether the plaintiff has got the locus standi to file this civil suit? OPP 2. Whether the plaintiff was owner of truck bearing registration No. PBN 9777? OPP 3. Whether the said truck was stolen on the night of 2/3rd Jan, 1990? If so to what effect? OPP. 4. Whether the suit is bad for misjoinder of the parties? OPD Nos.1 & 2. 5. Whether the plaintiff is estopped by his act and conduct from filing the civil suit? OPD 1 & 2. 6. Whether the plaintiff is entitled to recover a sum of Rs.1,50,000/- from defendant Nos. 1 & 2? OPP. 7. Relief.” 6. On issue No.1, the learned trial Court returned a finding that Didar Singh has sold the truck for a sum of Rs.1,35,000/- on 4.11.1989, when possession was also delivered. OPD 1 & 2. 6. Whether the plaintiff is entitled to recover a sum of Rs.1,50,000/- from defendant Nos. 1 & 2? OPP. 7. Relief.” 6. On issue No.1, the learned trial Court returned a finding that Didar Singh has sold the truck for a sum of Rs.1,35,000/- on 4.11.1989, when possession was also delivered. A sum of Rs.45,000/- was paid and the remaining amount was to be paid on 31.1.1990. 7. The argument of the plaintiff before the learned trial Court was that sale is complete when it was followed by the actual delivery of possession. As per the assertion of the plaintiff, the sale was complete on 4.11.1989. However, relying upon Section 157 of the Motor Vehicles Act, 1988 (for short ‘the Act’), the suit was decreed holding that the Insurance Company will be bound by the policy, even though the vehicle has been transferred. The said decree has been affirmed in appeal as well. 8. In the present second appeal, learned counsel for the appellant has relied upon the judgment of the Hon’ble Supreme Court reported as M/s Complete Installations (P) Ltd. v. New India Assurance Company Ltd., AIR 1996 SC 586 , to contend that Chapter XI of the Act, does not contemplate payment of own damage by the Insurer in terms of Section 157 of the Act. It is contended that Section 157 of the Act, protects the claim of the third person and not the claim of own damage. Reliance has been made on the following observation of the Hon’ble Supreme Court: “10. There can be no doubt that the said chapter provides for compulsory insurance of vehicles to cover third party risks. Section 146 forbids the use of a vehicle in a public place unless there is in force in relation to the use of that vehicle a policy of insurance complying with the requirements of that chapter. Any breach of this provision may attract penal action. In the case of property, the coverage extends to property of a third party i. e. person other than the insured. This is clear from Section 147 (1) (b) (i) which clearly refers to ‘damage to any property of a third party’ and not damage to the property of the ‘insured’ himself. And the limit of liability fixed for damage to property of a third party is rupees six thousand only as pointed out earlier. This is clear from Section 147 (1) (b) (i) which clearly refers to ‘damage to any property of a third party’ and not damage to the property of the ‘insured’ himself. And the limit of liability fixed for damage to property of a third party is rupees six thousand only as pointed out earlier. That is why even the claims Tribunal constituted under Section 165 investigated with jurisdiction to adjudicate upon claims for compensation in respect of accidents involving death of or bodily injury to persons arising out of the use of motor vehicles, or damage to any property of a third party so arising, or both. Here also it is restricted to damage to third party property and not the property of the insured. Thus, the entire Chapter XI of the New Act concerns third party risks only. It is, therefore, obvious that insurance is compulsory only in respect of third party risks since Section 146 prohibits the use of a motor vehicle in public place unless there is in relation thereto a policy of insurance complying with the requirements of Chapter XI. Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157 of the New Act must be limited thereto. The Certificate of insurance to be issued in the prescribed from (See From 51 prescribed under Rule 141 of the Central Motor Vehicles Rules, 1989) must, therefore, relate to third party risks. Since the provisions under the New Act and the Old Act in this behalf are substantially the same in relation to liability in regard to third parties, the National Consumer Disputes Redressal Commission was right in the view it took based on the decision in Kondaiah’s case because the transferee-insured could not be said to be a third party qua the vehicle in question. It is only in respect of third party risks that Section 157 of the New Act provides that the certificate of insurance together with the policy of insurance described therein “shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred”. It is only in respect of third party risks that Section 157 of the New Act provides that the certificate of insurance together with the policy of insurance described therein “shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred”. If the policy of insurance covers other risks as well, e. g., damage caused to the vehicle of the insured himself, that would be a matter failing outside Chapter XI of the New Act and in realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle. In the present case since there was no such agreement and since the insurer had not transferred the policy of insurance in relation thereto to the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken by the National Commission is therefore correct.” 9. A perusal of the aforesaid judgment of the Hon’ble Supreme Court shows that a distinction has been drawn between the damages suffered by a third person and the own damage suffered by the owner of the vehicle. In terms of Section 157 of the Act, the rights of third persons, who are unconnected with the vehicle, are protected and not the person, who is owner of the vehicle. 10. In view of the aforesaid judgment, I find that the judgment and decree passed by the Courts below suffer from patent illegality. Consequently, the judgment and decree passed by the Courts below are set aside and while answering the substantial question of law in favour of the appellant, it is held that in the absence of transfer of policy in favour of the transferee, the plaintiff is not entitled to claim any amount of his own damage. 11. Appeal, thus, stands allowed and the suit is dismissed with no order as to costs. ---------0.B.S.0------------ —————————