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2008(8) Supreme 803
SUPREME COURT OF INDIA
S.B. Sinha and Cyriac Joseph, JJ.
United India Insurance Co. Ltd. — Appellant
versus
Santro Devi & Ors. — Respondents
Civil Appeal No. 7009 of 2008
(Arising out of SLP (C) No.4301 of 2006)
Decided on : 02-12-2008
(b)Doctrine – Insurance company, with its eyes wide open, had been accepting the amount of premium every year from the widow of the vehicle owner or from the Bank – Therefore a contract had come into being by necessary implication – Even in a case of this nature, the doctrine of ‘acceptance sub silentio’ shall be applicable. (Para 19)
(c)Motor Vehicles Act, 1988 – Sections 94 and 95 – ‘Statutory contact’ and ‘Insurance simplicitor’ – Compulsory insurance is for the benefit of third parties – The provision was intended to cover two legal objectives – Firstly, that no one who was not a party to a contract would bring an action on a contract; and secondly, that a person who has no interest in the subject-matter of an insurance can claim the benefit of an insurance. (Para 20)
(2003) 3 SCC 97; (2007) 3 SCC 700; (2007) 5 SCC 428 – Relied upon.
(2008) 2 SCC 595 – Referred.
Facts of the case :
1. One Atma Ram Sharma was the owner of a truck hypothecated to a Bank. Atma Ram Sharma died sometime in 1991.
2.The said vehicle was insured with the appellant. Renewal of the contract of insurance, however, used to be done by the Bank. Despite the death of the said Atma Ram Sharma, no step was taken either by the Bank or by his heirs and legal representatives to get the registration of the vehicle transferred in their names. The insurance policy also continued to be renewed in the name of Atma Ram Sharma.
3. The said vehicle met with an accident while being driven by Shri Chhater Singh on 15.9.1994 in which he died. The legal heirs and representatives of the said Chhater Singh filed an application for grant of compensation under Section 4 of the Workmen’s Compensation Act, 1923 against the widow of the deceased Atma Ram Sharma as also the appellant-Insurance Company claiming a sum of Rs.1,22,400/-.
4.A sum of Rs.1,42,465/- was directed to be paid by way of compensation. An appeal preferred thereagainst by the appellant herein has been dismissed by the High Court.
Finding of the Court :
There is no infirmity in the impugned judgment.
Result : Appeal dismissed.
JUDGMENT
S.B. Sinha, J. —
1.Leave granted.
2.One Atma Ram Sharma was the owner of a truck bearing registration No.HIN-4737. It was hypothecated to a Bank. Atma Ram Sharma died sometime in 1991. The said vehicle was insured with the appellant. Renewal of the contract of insurance, however, used to be done by the Bank. Despite the death of the said Atma Ram Sharma, no step was taken either by the Bank or by his heirs and legal representatives to get the registration of the vehicle transferred in their names. The insurance policy also continued to be renewed in the name of Atma Ram Sharma.
3.The said vehicle met with an accident while being driven by Shri Chhater Singh on 15.9.1994 in which he died. The legal heirs and representatives of the said Chhater Singh filed an application for grant of compensation under Section 4 of the Workmen’s Compensation Act, 1923 against the widow of the deceased Atma Ram Sharma as also the appellant-Insurance Company claiming a sum of Rs.1,22,400/-.
4.Appellant, having been given notice by the Commissioner of Workmen Compensation, in its reply, raised the following purported primary objections :
1.That the para No.1 of the petiion as stated is wrong hence denied. In fact Shri Atma Ram died in the year 1991 and on the date of alleged accident no legal insurance policy was in force. It is pertinent to say that alleged offending vehicle No.HIN-4737 was fraudulently got insured vide policy No.111302/31/16/21/0065/94 on 12.5.1994 by concealing the true facts. Even according to law the contract cannot be made in favour of dead person. So under the Indian Contract Act, 1872 the alleged contract of Insurance is not liable to pay any amount of compensation. The respondent No.1 was not insured, so as per the terms and conditions of the insurance policy, the company is not bound to indemnify the claim.”
5.The Commissioner, Workmen’s Compensation, having regard to the pleadings of the parties, framed several issues, issue No.5 whereof reads as under :
“5.Whether the contract of insurance of the truck in question between Atma Ram & Co. is void and not enforceable as alleged. ... OPP.II”
6.From the order of the Commissioner, Workmen Compensation, it does not appear that any witness was examined on behalf of the appellant. The learned Commissioner, Workmen Compensation, determined issue No.5 in favour of the respondent, stating :
“Whether the contract of insurance of the truck in question between Atma Ram and Co. is void? RW1 Rati Ram has deposed in his statement that Shri Atam Ram was the owner of the truck and after his death his wife is owner of the said truck. He is general power of attorney of Gumani Devi. He further deposed that the truck was insured with United India Insurance Company and copy of Insurance Cover is Ex.RW1/8. The driver of ill-fated truck was Chattar Singh who died in truck accident near Ronhat in year 1994 who was given Rs.2000/- per day (sic). In cross-examination he admitted that Atma Ram died in 1991 and the truck was insured with SBI Kafetta. He denied that Chattar Singh was gratuitous passenger in the ill fated truck. Since the truck was insured with the respondent No.2, therefore, it is the liability of the Insurance Co. to pay the amount of compensation. Therefore, this issue is decided in favour of the petitioners and against the respondents.”
7.A sum of Rs.1,42,465/- was directed to be paid by way of compensation. An appeal preferred thereagainst by the appellant herein under Section 30 of the Workmen Compensation Act has been dismissed by the High Court relying on or on the basis of the decision of this Court in Rikhi Ram & Anr. v. Sukhrania (Smt.) & Ors.1 [(2003) 3 SCC 97], stating :
“It is thus clear that whether intimation is given or not given to the Insurance Company with regard to the transfer of a vehicle. The Insurance Company under the provisions of the Motor Vehicles Act, 1988 is liable to pay compensation. The Insurance Company at the time when it renewed the policy of insurance
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