Back
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.S. SUBRAMANI
Branch Manager, National Insurance Co. Ltd.
Versus
Murugesh & Others
C.R.P. Nos. 1564 to 15688 of 1994 & A.A.O. Nos. 1368 to 1371 of 1995
Decided On :Decided On : 14-02-1997
MOTOR VEHICLE INSURANCE - LIABILITY OF INSURANCE COMPANY - TRANSFER OF VEHICLE - VIOLATION OF POLICY CONDITIONS - LIABILITY LIMITED TO SIX PERSONS - INTERPRETATION OF EXCLUSION CLAUSE - MAIN PURPOSE OF INSURANCE POLICY.
Fact of the Case:
The case involves multiple Revision and Civil Miscellaneous Appeals arising from a common judgment passed by the Motor Accidents Claims Tribunal, Pudukottai. The Insurance Company, being the revision petitioner or appellant in all cases, disputed its liability under three main grounds: (1) transfer of the vehicle without informing the Insurance Company, (2) violation of policy conditions by carrying more than six loadmen, and (3) alternative contention that liability should be limited to six loadmen.
Finding of the Court:
1. The Tribunal's finding that there was no transfer of the vehicle and that Muthu was not the owner was upheld due to lack of evidence to prove otherwise. 2. The Insurance Company's argument that there was a violation of the policy by carrying more than six loadmen was rejected based on the settled law that the breach must be willful and the Insurance Company failed to establish that the insured was at fault. 3. The Insurance Company's alternative contention that its liability should be limited to six persons was accepted, and the Insurance Company was held liable only in respect of six claimants.
Issues: 1. Whether the Insurance Company is liable for compensation when the vehicle was transferred without informing the Insurance Company. 2. Whether the Insurance Company is exonerated from liability due to violation of policy conditions by carrying more than six loadmen. 3. Whether the Insurance Company's liability can be limited to six persons.
Ratio Decidendi: 1. The Court held that the Insurance Company cannot be exonerated from liability based on the alleged transfer of the vehicle without informing the Insurance Company, as there was no evidence to prove the transfer. 2. The Court interpreted the exclusion clause in the insurance policy in light of the main purpose of the provision, which is to provide an easy mode of getting compensation for victims of accidents. It held that the Insurance Company must establish that the breach of policy conditions was willful and that it contributed to the accident, which the Insurance Company failed to do in this case. 3. The Court accepted the Insurance Company's alternative contention that its liability should be limited to six persons, as the policy permitted only six loadmen excluding the driver.
Final Decision: 1. C.M.A. Nos. 1368, 1369, 1370, and 1371 of 1995 and C.R.P. Nos. 1567 and 1568 of 1994 were dismissed, holding the Insurance Company liable in respect of six claimants. 2. C.R.P. Nos. 1564, 1565, and 1566 of 1994 were allowed, holding that the Insurance Company was not liable in those cases.
1. All these Revision and Civil Miscellaneous Appeals arise from a common judgment passed by the Motor Accidents Claims Tribunal (Sub Court) Pudukottai.
2. In all these cases, Insurance Company who is second or third respondent before the Tribunal, is the revision petitioner or appellant.
3. In the counter - affidavit filed by the Insurance Company, it disputed its liability mainly under three heads namely, (1) the vehicle that was involved in the accident, was already transferred to one S.K. Muthu, and the transfer has not been informed to the Insurance Company, and so long as there is no contract between the purchaser and the Insurance Company, it is not liable to compensate the victims; (2) at the time when the accident occurred, there were more than 13 persons as loadmen in the lorry, which is violation of the conditions of the policy which permits only six loadmen excluding the driver. Since the driver has carried more than six persons, it is exonerated from the liability, and
(3) alternatively, it contended that even if the company is held liable it could be made liable only to six loadmen, and not to all the injured.
4. I will consider these points in seriatim.
5. The accident happened during the late hours of 25.3.1988. At the time of accident, the admitted registered owner of the vehicle was one S. Panchavarnam, who is impleaded as one of the respondents in all the claim petitions. The permit also stands in the name of Panchavarnam and that permit is valid between 22.9.1987, to 22.2.1992. It is seen that subsequent to that period, the permit stands in the name of one Muthu.
6. Learned counsel for the appellant submitted that in all the Claim Petitions, the claimants have said that Muthu is the registered owner and even one witness (P.W.1) has spoken about the same. Learned counsel, therefore, said that if Muthu is the registered owner, the Company cannot be made liable for it.
7. The said argument cannot be accepted. The claimants are only illiterate strangers, who happened to be in the lorry at the time of accident. They cannot be expected to have any personal knowledge whether the vehicle has been transferred by Panchavarnam to Muthu. The Tribunal has entered a finding on the basis of other evidence that Muthu is only a Contractor under Panchavarnam, and in that capacity, the vehicle came into his possession at the time of accident. There is no transfer. The Insurance Company has also failed to prove any transfer by Panchavarnam to Muthu. No evidence was also adduced or attempted to be adduced by the appellant either by examining Panchavarnam or Muthu, to prove the so called sale or transfer of the vehicle.
8. Learned counsel for the appellant relied on the decision reported in 1991 1 L.W. 635 (The Oriental Insurance Company Ltd. v. Rajamani and others) and also the decision reported in A.I.R. 1997 Kerala 26 (S. Sudhakaran v. A.K. Francis and others) to contend that if there is a transfer and the same is not informed to the Insurance Company, it is not liable to pay the compensation amount.
9. In the first decision, there was no evidence to prove that there was a transfer of the Motor Vehicle. In fact, the registered owner of the vehicle has proved the transfer by documentary evidence in that case, That is clear from paragraph 5 of the judgment.
10. In the decision of the Kerala High Court, there was an agreement for sale of a Motor Vehicle with certain conditions. The vehicle was also in possession of the intended purchaser. Conditions had not been complied with. The question was, whether there was a transfer or sale of the vehicle. Their Lordships said that unless the conditions were complied with, there cannot be a sale. Even though the proposed purchaser is in possession, the sale is not complete and, therefore, the registered owner continues, to be liable. The Insurance Company also continued to be liable along with the owner. I do not think the above decision will help the appellant in any way.
11. T
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
