Karnataka High Court
ORIENTAL INSURANCE COMPANY LIMITED, BANGALORE - Appellant
Versus
RAVICHANDRAN - Respondent
Decided On : 07-12-96
Motor Vehicles Act, 1939-Sections 95 and 31-Transfer of Vehicle-when the insured party transfers the vehicle without intimation to the insurance company the liability of the insurance company ceases because the contract comes to an end-delivery note cannot be held sufficient proof of transfer-Tribunal held rightly that transfer of ownership not established.
( 1 ) THIS civil revision petition has been preferred by the insurance Company and is directed against an order dated 17-8-1991 of the Motor Accident Claims Tribunal, Bangalore city in M. V. C. No. 2474 of 1989. The brief facts are that on 18-11-1989 at about 11. 40 p. m. , the claimant was riding his scooter bearing Registration No. MKI 65 near Netkallappa circle when a motor cycle bearing Registration No. CAU 7346 is alleged to have approached at a high speed and dashed against the scooter. The claimant sustained injuries and he was taken to hospital for treatment. He thereafter filed a claim before the motor Accident Claims Tribunal for compensation. As was to be expected, the registered owner of the motor cycle and the insurance Company were proceeded against. The first respondent took up the plea that he had sold the motor cycle on 12-5-1989 to one Bopanna whose address he had disclosed. The insurance Company took up the plea that since the first respondent has transferred the vehicle to some other party during the pendency of the policy, that the Insurance Company is not liable because the change of ownership was not intimated to the Insurance Company nor has the Insurance Company recognised the subsequent transferor. The contention was that under these circumstances the insurance policy itself had lapsed and that therefore no liability arose vis-a-vis, the Company. The tribunal rejected the defence particularly on the ground that the first respondent, though he gave evidence stating that he had transferred the vehicle and though he produced the delivery note, had not produced any further evidence. The Tribunal had occasion to comment on the evidence regarding the alleged transfer and to hold that in the circumstances of the case the evidence was not good enough and that therefore the respondent 1 and the Insurance Company i. e. , respondent 2 are liable. It is against this order that the present civil revision petition has been preferred.
( 2 ) THE learned Advocate who represents the petitioner-Insurance Company submitted that in the facts and circumstances of the case, the decision is clearly erroneous. He points out that the insurance policy was issued when the old Act was in operation and furthermore that the transfer of the vehicle has also taken place when the old Act was in operation. His submission is that as far as the law as it stood at that point of time is concerned, that the position is virtually concluded by two decisions of the Full Bench of this Court which followed each other and in both of these cases the same position of law has been determined though the second decision clarifies the matter even further. The first one is in National Insurance Company limited v Mallikarjuna and Others, and the second one in paragounda v Bhimappa and Others. The learned Advocate points out to the Court that these two decisions have unequivocally laid down that where the transfer takes place, that under the provisions of the Sale of Goods Act the property in the goods passes to the purchaser and irrespective of the registered ownership as reflected in the documents that are issued by the Competent Authorities such as the R. T. O. , that the original owner or the seller ceases to have any interest in the vehicles. The contract of insurance is one entered into between the Insurance Company and the insured and therefore when the insured party transfers the vehicle without intimation to the insurance Company, the liability of the Company ceased because the contract comes to an end. The position in law as pointed out by the learned Advocate is unambiguous and he submits that on this basis it will have to be held that since the vehicle in the present instance has been transferred on 12-5-1989 without intimation to the Insurance Company when this incident took place that the insurance policy cannot be pressed into operation for purposes of fastening liability on the Company. I do concede that this position is
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