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PUNJAB & HARYANA HIGH COURT
Pritam Singh Pattar, J.
Oriental Fire & General Insurance Co. Ltd.
Versus
Meena Sharma
F.A.O. No. 136 of 1967,
Decided On : MAY 2, 1975
MOTOR VEHICLES ACT - INSURANCE - LAPSE OF POLICY - TRANSFER OF VEHICLE - LIABILITY OF INSURER - INSURANCE POLICY BEING A CONTRACT OF PERSONAL INDEMNITY, THE INSURERS CANNOT BE COMPELLED TO ACCEPT RESPONSIBILITY IN RESPECT OF A THIRD PARTY, WHO MAY BE QUITE UNKNOWN TO THEM.
Fact of the Case:
The case involved two fatal accidents caused by a truck insured with the appellant insurance company. The claimants, the widows and children of the deceased, filed claims for compensation under the Motor Vehicles Act. The insurance company denied liability, arguing that the policy had lapsed as the truck had been transferred to a new owner before the accidents.
Finding of the Court:
The court found that the insurance policy had indeed lapsed as the truck had been transferred to a new owner before the accidents. The court held that the insurance company was not liable to pay any compensation to the claimants.
Issues: 1. Whether the insurance policy had lapsed due to the transfer of the truck to a new owner. 2. Whether the insurance company was liable to pay compensation to the claimants.
Ratio Decidendi: The court held that a contract of insurance is a contract of personal indemnity and that the policy remains effective while the policy holder retains an interest in the vehicle. In the absence of any express stipulation to the contrary, in the policy, the moment the insured parts with the car, the policy relating to it lapses.
Final Decision: The court allowed the appeals filed by the insurance company and set aside the awards passed by the Accidents Claims Tribunal against the insurance company. The claims petitions against the insurance company were dismissed.
PRITAM SINGH PATTAR, J.
1. By this judgment, the following two first appeals which are directed against the order dated June 21, 1967 of the Motor Accidents Claims Tribunal Punjab (Chandigarh) will be decided :
(1) Oriental Fire and General Insurance Company v. Mrs. Meena Sharma and others F.A O. No. 136 of 1967; and
(2) Oriental Fire and General Insurance Company v. Mrs. Devki and others, F.A.O. No. 135 of 1967.
2. The facts of this case are that on September 22, 1966, Ram Pal deceased along with Kishan Chand Dhiman was going from Phagwara to Ludhiana on Scooter No. WBN-3904 and at that time the scooter was being driven by Ram Pal deceased while Kishan Chand Dhiman was sitting on the pillion. When they reached near the Police Traning Centre, Phillaur, ruck No. DLJ-6470, came from the opposite direction which was being driven rashly and negligently by Chanchal Singh, driver, who swerved to the wrong side of the road and struck against the scooter driven by Ram Pal. The scooter was damaged and it was dragged along with the truck which stopped at a distance of about 50 karams from the place of impact. Both Ram Pal and Kishan Chand Dhiman died and their dead bodies were thrown on the kacha portion of the road. The claim application No. 345 of 1966 was filed by Mrs. Meena Sharma, widow of Ram Pal deceased, Rameema Sharma daughter and Bawa son, minor children of Ram Pal deceased through their mother, under section 110-A of the Motor Vehicles Act, against M/s. Amritsar Transport Company Limited, Amritsar, the owners of the truck, Chanchal Singh, the driver of the truck at the time of the accident, and the Oriental Fire and General Insurance Company Limited with which the truck had been insured. They claimed Rs. three lacs as compensation. It was alleged that the accident took place due to rash and negligent driving of the truck by its driver Chanchal Singh, respondent No. 4, that the monthly income of Ram Pal deceased was Rs. 1000/- and that respondent No. 1 Amritsar Transport Company Limited, Amritsar, its owners, Chanchal Singh, driver and the insurance company were liable to pay them Rs. three lacs as compensation.
3. The second claim applicatian No. 347 of 1966, was filed by Devki, widow of Kishan Chand Dhiman, Joginder Kumar and Janak Rani, minor children of Kishan Chand Dhiman deceased and Kishan Dai, the mother of Kishan Chand Dhiman deceased, on similar allegations. They alleged that the monthly income of Kishan Chand Dhiman was Rs. 500/- and they claimed Rs. 1,50,000/- as compensation on similar grounds. Since both these applications pertained to the same accident, these were consolidated by the Motor Accident Claims Tribunal (hereinafter called the Tribunal) and were disposed of by one judgment. The proceedings were recorded in claim application No. 346 of 1966.
4. In both these petitions, the name of the respondent insurance company was not mentioned. The Amritsar Transport Company Private Limited, respondent No. 1, and Chanchal Singh, driver, respondent No. 3 admitted in their written statement that the truck was owned by respondent No. 1 and that it was insured with the Oriental Fire and General Insurance Company, Limited, Bombay. The other allegations made in the petitions were denied. It was pleaded that the truck was not driven rashly or negligently by Chanchal Singh, driver, that the scooter was driven by the deceased rashly and negligently and they struck against the truck and died. Later on, it transpired during the pendency of the cases before the Tribunal that the original owners of this truck were M/s. Victory Transport Company, and, therefore, on the application of the petitioners, that company was added as respondent No. 4. Notices were issued to the Victory Transport Company, but it refused to accept service and was proceeded against ex-parte.
5. The Oriental Fire and General Insurance Company in its written statement raised a preliminary objection to the effect that this truck was insured with them
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