1. Transfer of motor vehicle — Accident resulting in death — Claim for compensation — Dispute over insurance liability under Section 103-A, Motor Vehicles Act, 1939. (Para 2 , 3 )
Back
Next 
1998 Supreme(SC) 984
SUPREME COURT OF INDIA
K. VENKATASWAMI AND A.P. MISRA, JJ.
The New India Assurance Co. Ltd., Appellant
Versus
Smt. Sheela Rani and others, Respondents.
Civil Appeal No. 5525 of 1995, D/- 15-9-1998.
Advocates appeared
S. C. Paul, Advocate for Ms. Indra Sawhney, Advocate, for Appellant; Indra Makwana, Advocate, (for No. 1), B.S. Chahar, Advocate, for Ashok Mathur, Advocate, (for Nos. 4-6), for Respondents.
The insurance company is liable to pay compensation to third parties even if the transfer of the insurance policy is not done in the prescribed form.
Headnote:
MOTOR VEHICLES ACT - SECTION 103-A - TRANSFER OF INSURANCE POLICY - LIABILITY OF INSURANCE COMPANY - THIRD PARTY CLAIMS - SUMMARY
Fact of the Case:
The appellant-Insurance Company denied liability for a compensation claim arising from an accident involving a car that had been transferred to a new owner. The transferor had not informed the insurance company about the transfer as required by Section 103-A of the Motor Vehicles Act, 1939.
Finding of the Court:
The High Court and the Tribunal held that the insurance company was liable to pay compensation, as the transferee had informed the insurance company about the transfer, even though not in the prescribed form.
Issues: Whether the insurance company was liable to pay compensation in the absence of a valid transfer of the policy in favor of the transferee.
Ratio Decidendi: The court held that the insurance company was liable to pay compensation, as the transferee had informed the insurance company about the transfer, even though not in the prescribed form. The court relied on the judgment of the Full Bench of the Andhra Pradesh High Court in Madineni Kondaiah v. Yaseen Fatima, which held that the policy does not lapse in the absence of proper intimation about the transfer by the transferor in the prescribed form.
Final Decision: The appeal was dismissed, and the insurance company was held liable to pay compensation.
Legal Category Hierarchy
Table of Contents
2. Insurer contends liability is void as transfer of vehicle was not intimated in the prescribed form under Section 103-A, Motor Vehicles Act, 1939. (Para 3 , 4 )
3. Intimation of transfer by transferee, even if not in prescribed form, prevents policy lapse if the insurer fails to respond or refuse. (Para 4 , 10 )
4. Third-party liability subsists upon transfer of vehicle; insurance is deemed transferred under Section 103-A, Motor Vehicles Act, 1939, absent refusal by the insurer. (Para 8 , 10 )
5. Appeal dismissed; insurance company held liable for compensation. (Para 11 )
6. Does the insurance policy lapse if the transfer of the vehicle is not intimated in the prescribed form?
No. If the transferee intimates the transfer and the insurer does not respond or refuse, the certificate and policy are deemed transferred under Section 103-A of the 1939 Act or Section 157 of the 1988 Act. (Para 8 , 10 )
7. Does the deemed transfer of an insurance policy cover damage to the vehicle itself?
No. The deemed transfer under Section 157 of the 1988 Act applies only to third-party risks. Coverage for damage to the insured's own vehicle requires a separate agreement between the insurer and the transferee. (Para 8 )
8. What is the effect of the insurer's silence after receiving intimation of vehicle transfer?
In the absence of a refusal communicated by the insurance company to the transferor or transferee, the certificate and policy are deemed to have been transferred in favor of the new owner. (Para 8 , 10 )
Judgement
VENKATASWAMI, J. :- This appeal arises out of a judgment dated 8-4-87 of the Division Bench of the Rajasthan High Court in D. B. Civil Special Appeal No. 29 of 1987.
2. Brief facts leading to the filing of this appeal are given below :-
The sixth respondent herein was the owner of a Fiat Car bearing Registration No. RSM-9701. The said Car was insured with the appellant-Insurance Company for the period 16-6-76 to 5-6-77 (or 15-6-77). It appears that the sixth respondent sold the said Car to the fourth respondent on 18-6-76. This transfer was accepted on 24-6-76 by the Regional Transport Authority, Jaipur. The said Car met with an accident on 10-5-77 in which one Moti Lal Jain, husband of the first respondent, died.
3. A claim petition was filed before the Motor Accident Claims Tribunal, Jaipur, in M.A.C. No. 291/77 by the first and second respondents, widow and minor son of the deceased, respectively. The third respondent, mother of the deceased, was shown as respondent later on transposed as claimant in the Claim Petition. We are not concerned with the quantum of compensation in this appeal as the sole issue raised by the appellant-Insurance Company was with reference to its liability. In other words, according to the appellant, the transfer of the Car by the sixth respondent to fourth respondent was not informed to it by the sixth respondent (transferor) as required under Section 103-A of the Motor Vehicles Act, 1939 (hereinafter called the "Act") and, therefore, the accident having taken place subsequent to the transfer, the appellant-Insurance Company cannot be held liable. All the Courts below, namely, the Tribunal, a learned single Judge as also the Division Bench of the High Court have rejected such a contention holding that the appellant-Insurance Company was liable to pay the compensation.
4. It is not in dispute that the fourth respondent (transferee) vide letters dated 23-6-76 and 30-6-76 had informed the appellant about the transfer of the Car, to which there was no reply from the appellant. The contention raised on behalf of the appellant before the Tribunal and the High Court as well as in this Court was to the effect that the intimation about the transfer by the transferee was not in accordance with the prescribed form and, therefore, it was not taken note of by the appellant-Insurance Company. Though, it was contended before the Tribunal and the High Court that no such letters said to have been sent under Certificate of Posting, were received by the appellant-Insurance Company, in the light of concurrent findings on facts by the Tribunal and the High Court, we cannot allow such contention to be raised in this Court.
5. In coming to the conclusion that in the absence of proper intimation about the transfer by the transferor in the prescribed form, the policy will not lapse, the learned single Judge of 57 the High Court placed reliance on a judgment of the Full Bench of the Andhra Pradesh High Court in Madineni Kondaiah v. Yaseen Fatima, reported in AIR 1986 Andh Pra 62.
6. Applying the principles laid down in the said judgment, the learned single Judge rejected the contention of the Insurance Company that it was not liable on the facts of this case. The Division Bench also rejected a similar contention and affirmed the view taken by the learned single Judge after referring to some more cases.
7. Learned counsel appearing for the appellant-Insurance Company reiterating the same contention, namely, that the appellant was not liable to pay the compensation in the absence of valid transfer of the Policy in favour of the transferee, invited our attention to a recent judgment of this Court in Complete Insulations (p) Ltd. v. New India Assurance Co. Ltd. ((1996) 1 SCC 221 : (1995 AIR SCW 4520)). After carefully going through the facts and the ratio of the said judgment, we find that this judgment instead of supporting the appellant, it supports the view taken by the High Court. As a matter of fact, in the said judgmen
