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Gujarat High Court
Judgename :B.C.PATEL, C.K.BUCH
UNITED INDIA INSURANCE COMOANY LIMITED - Appellant
Versus
MOHANLAL NANDIRAM - Respondent
L.P.A. 309 of 1984
Decided On : 11/10/1998
Sections 94, 95 and 96 if read together it becomes clear that the owner of the vehicle is to be insured. Coverage is that of insured and not that of a vehicle. Sec. 96 will come into picture if there is a certificate of insurance existing on the date of cause of action.
[Para 18]
Thus it is very clear that it is because of a contractual obligation the liability of the Insurance Company to indemnify the person insured arises. If the preson insured is held liable, then certainly the insurance compnay is liable to indemnify the insured person. In the instant case the insured person having expired 45 days before the accident the respondent No. 2 was plying the vehicle of his own and was holding out as an owner of the vehicle insurer cannot be held liable.
[Para 19]
Policy protects the insured owner. Either in case of a special statutory provision or by novation, amount may be claimed from the insurer but not otherwise. Insurer issuing a policy on the basis of a personal contract, personal indemnity cannot be assigned. However, with the consent of all the parties concerned, a new contract can be substituted for one that was already made. In view of such a contract, the purchaser of a vehicle from the owner of it may become a policy holder after purchasing a vehicle. After the death of a policy holder of a vehicle, person who inherited or acquired that vehicle has to get his name substituted under the agreement with the insurer if any, or has to get the policy afresh.
[Para 20]
(b) Insurance Act, 1938 - Sec. 38 - Transfer or assignment of policy - Not automatic - Operative against insurer only after a notice while the contract was subsisting - However on account of death where policy lapses nothing devolves on heirs - No question of transfer or assignment arises unless there is mutual agreement substituting the policy in existence.
Under the Insurance Act, 1938, there is no provision for assignment and transfer of a policy save and except policy of life insurance. Under Sec. 38 of the Insurance Act, 1938, the transfer of assignment will be operative against insurer only after a notice in writing to that effect is served on the insurer with a copy of endorsement of instrument. There is nothing like automatic assignment of contractual rights upon the death of one of the contracting party.
It is well recoginzed that on the death of a contracting party all causes of action subsisting against or vested in him shall survive against or as the case may be, for the benefit of his estate. In view of what we have expressed, policy with rights thereunder does not devolve on the heir in the absence of provisions of law or contract to that effect. Policy is an instrument on the basis of which either insured or his heir can take action. However, on account of death as policy lapsed and before death under that policy no right accrued in favour of the insured, nothing devolves on heirs. As stated earlier, by mutual agreement there can be a substitution of the policy holder in case of occurring an event that may be referred in policy during the continuance of the policy.
[Para 21]
( 1 ) (PER B. C. Patel, J) united India Insurance Co. Ltd. (hereinafter referred to as Insurance Company) being aggrieved by a decision of learned Single Judge dated 28. 12. 83 in F. A. Nos. 1317/79 to 1322/79 and F. A. No. 308/80 allowing the appeals partly, holding Insurance Company, respondent No. 3 in appeals, the appellant i. e. original opponent No. 2 and the driver, original opponent No. 1 (before the Tribunal) jointly and severally responsible for the amount awarded by the Motor Accident Claim Tribunal at Rajkot in MACP Nos. 163/77, 166/77, 177/77 to 180/77 and 51/79 dated 30. 6. 79, has preferred these appeals.
( 2 ) THE claim petitions were filed before the Motor Accident Claim Tribunal arising out of a common cause and therefore instead of referring different petitions it will be just and proper to narrate the facts, which emerge from the record of one of the applications. On 15. 5. 77 at about 9:30 a. m. the original claimants travelling in a truck No. GTA - 1648, contended in the applications that on account of rash and negligent driving of the driver of the vehicle in question, the truck turtled and fell in a ditch, as a result of which the applicants sustained injuries for which they were treated at Civil Hospital, Junagadh. For the damages claim petitions were submitted before the Motor Accident Claims Tribunal, Rajkot.
( 3 ) AT the initial stage only the driver of the vehicle was a party respondent. The claimants did not join the owner of the vehicle or the Insurance Company at the initial stage. However, the Tribunal vide order dated 1. 12. 78, permitted the claimants to join respondent No. 2 in his individual capacity and as the owner of the vehicle. Thus vide Ex. 9 Mohanlal Nandiram original opponent No. 2 - the appellant in all the appeals before the learned Single Judge was permitted to be joined not as an heir of deceased Nandiram Parumal but in his individual capacity and application Ex. 8 to join Nandiram Parumal came to be rejected by a common order dated 1. 12. 78. Nandiram expired on 1. 4. 1977. The accident occurred on 15. 5. 1977.
( 4 ) ON appreciation of the evidence, the Tribunal dismissed the claim against opponent No. 3, Insurance Company. The appellant in the present appeals and opponent nos. 1 and 2 were held jointly and severally liable for the amount awarded including interest and costs, by the learned Single Judge.
( 5 ) THE Tribunal ordered to join respondent No. 2 not as heir of the deceased Nandiram but in his individual capacity and held that the respondent No. 2 cannot avail the benefit of insurance policy as heir of Nandiram. The Tribunal also held that in view of clause 3 of section 2 of the policy the Insurance Company cannot be held liable. The said section II - liability to third parties which is relevant reads as under:-"3. The terms and subject to the limitations of the indemnity which is granted by this section to the insured company will indemnify who is driving the motor vehicle on the insureds order or with his permission provided that such driver :-
( 6 ) AS per the policy the name of the person insured was Nandiram Parumal and not respondent No. 2 Mohanmal Nandiram. Nandiram Parumal expired before about 45 days from the date of the accident and respondent No. 1 certainly was not driving the vehicle at the relevant time on the insureds order or with his permission. The learned single Judge pointed out that the respondent No. 2 was rightly joined in his individual capacity. The question of impleading the heirs of Nandiram did not arise. The submission made before the learned Single Judge was that the Insurance Company could not have been exonerated as it did not produce the Permit under which the vehicle was plying. Further contention was also raised that deceased Nandiram was a registered owner of the vehicle and as respondent No. 2 has not been impleaded as heir of said Nandiram but only impleaded in his individual capacity as a person with whom the contrac
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