IMPORTANT POINT
By operation of section 157, MV Act benefits of subsisting insurance policy gets transferred to transferee owner irrespective of whether notice u/s 103 has been given to the Insurance Company or not.

JUDGMENT

N.V. Ramana, J. –

1. This appeal by special leave is directed against the impugned judgment and order dated 10th August, 2005 passed by the High Court of Karnataka in M.F.A. No. 3842 of 2003 whereby the High Court partly allowed the appeal preferred by the Respondent No. 1—National Insurance Company discharging it from the liability of payment of compensation to the claimants - Appellants.

2. The brief facts of the case leading to this appeal are that on 3rd April, 1997 at about 1.00 p.m., when Honniah @ Dodda Thimmaiah was returning from the field driving a tractor with the sand load on the trailor, the tractor overturned and Honnaih @ Dodda Thimmaiah died owing to the injuries sustained in the accident. Appellants herein are the claimants—legal representatives of the deceased Honniah @ Dodda Thimmaiah. The tractor involved in the accident had the registration number KA 18/717-718 and the tractor was originally registered in the name of one Gangadhara (Respondent No. 3) and the same was insured with the Respondent No. 1 while the deceased was employed as a driver with the Respondent No. 2-Jeeva Rathna Setty.

3. On 4th September, 1997, the legal representatives of the deceased, filed an application before the Commissioner for Workman’s Compensation, Chickmagalur (hereinafter referred to as “the Commissioner”) claiming compensation under the Workmen’s Compensation Act.

4. The Commissioner while issuing notices to the respondents called for filing of objections, if any. The respondents filed objections denying their liability to pay compensation. The National Insurance Company (Respondent No. 1) deposed before the Commissioner that as per its records on the date of accident, the vehicle was no doubt under the insurance policy but in the name of Gangadhara, not in the name of Jeeva Ratna Setty, hence there is no relation of employee-employer between the deceased and Gangadhara and therefore, it has no burden of liability to pay compensation to the claimants.

5. After hearing parties and perusing the documents brought on record, the Commissioner came to the conclusion that the deceased was employed with Jeeva Rathna Setty, hence there is an employee-employer relationship between the deceased and the Respondent No. 1 and the deceased had died during the course of his employment. At the time of accident, the age of the deceased was determined as 25 years with a monthly earning capacity of Rs.2,000/- p.m. and thereby the Commissioner fixed compensation at Rs.2,16,910/-. As the Insurance Company did not deposit the amount, the Commissioner awarded an interest @ 12% p.a. from 3rd April 1997 till the date on which he passed the order, i.e. 14th February, 2003, which amounted to Rs.1,50,265/- and ordered that the appellants are entitled to receive a total compensation of Rs.3,67,275/- from the employer Jeeva Ratna Setty and the Insurance Company. Finally, by the Award dated 28th February, 2003, the Commissioner held that though the insurance policy was in the name of Gangadhara, the ownership of the vehicle on the date of accident was with the Jeevaratna Setty; it is proved that during the validity period of the said insurance policy, the said vehicle was transferred from Gangadhara to Jeevaratna Setty; as per Section 157(1) of the Motor Vehicles Act, 1968 whenever a vehicle is transferred from one person to another, the benefits of the insurance policy shall also be transferred to the new owner; accordingly instant policy benefits will also be automatically transferred from Gangadhara to Jeevaratna Setty. Therefore, the National Insurance Company shall be liable to pay the compensation and interest thereupon to the claimants. Accordingly, the Commissioner fixed the liability of paying compensation on the Insurance Company and Jeeva Ratna Setty individually and severally and directed them to deposit the amount within a period of 30 days from the date of the Award failing which they shall further be liable to pay interest @ 9% p.a. fo