1995 Supreme(MP) 547

R.S. Garg, J.
National Insurance Co. Ltd. v. Ravishankar
M.A. No. 483 of 1990 (J); Decided on 10.5.1995.

Headnote:Motor Vehic1es Act, 1988 -- S. 140 -- stage of interim award -- transfer of vehicle not a factor to be considered -- if vehicle is covered by the policy, it is sufficient.

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        It was contended on behalf of the appellant that the scooter was insured in the name of Jaipal Rao and as he has not been joined as a party, the Insurance Company cannot be held liable. Relying upon New India Assurance Co. Ltd. v. Ajay and others, 1994 ACT 987, it was contended that the Insurance Co. cannot be directed to make payment of the interim award on the basis of no fault liability even in a case of clear breach of conditions of the policy. It was also contended that when a vehicle is transferred and the insurance policy is not transferred in the name of the transferee, there would be no privity of contract between the transferee owner and the insurance company and the insurance company cannot be held liable to indemnify the transferee owner. It was submitted that the approach of the trial Court was patently wrong. Replying the above arguments, it was contended by the counsel for the claimant and the owner that these defences are not available to the insurance company at this stage and, therefore, the insurance company at this stage cannot take the advantage of this legal plea. It was also submitted that prima facie there does not appear breach of the policy and in any case the matter is yet to be decided and if the trial Court holds that the insurance company is not answerable to the claim it can recover back the amount. Relying upon Santosh Rani v. Sheela Rani, 1988 ACJ 299, it was submitted that where a vehicle is transferred much prior to the date of accident, the insurance company would be held liable as the liability would subsist irrespective of the transfer since neither the policy was cancelled nor the premium for the period after the transfer was refunded. It was also submitted that in view of New India Assurance Co. Ltd. v. Avinash, 1988 ACJ 322, the defence regarding transfer of the vehicle and lapse of policy is not available to the insurance company under section 96 (2) of the Motor Vehicles Act. Placing reliance on National Insurance Co. v. Thaglu Singh, 1994 MPLJ 663, it was contended that in case of no fault liability, such a defence is not available to the insurance company. Reliance was also placed on a Single Bench judgment of this Court reported in Har Charan Singh v. Turza Bai 1994 JLJ 197.

        Held : It. is no doubt true that if there a case of breach of policy from a bare reading of the petition and/or the policy itself, the Court can take notice of the fact. In the instant case, this will be decided by the trial Court after recording evidence that whether the vehicle was transferred and the insurance company had agreed to or not to transfer the policy. For the purposes of section 140, all such legal pleas are not to be considered. The Court is called upon to see whether the vehicle was insured or not. In the matter of National Insurance Co. v. Thaglu Singh (supra), it was contended before this Court that the policy covered only 6 employees other than the driver and the deceased persons being gratuitous passengers were not covered. This Court held that such a defence was not available to the insurance company in respect of application by claimants under section 140.

        In this case, there is no contention that the vehicle involved in the accident is not covered by the policy. There is also no dispute that the vehicle was involved in the accident and the claimant suffered grievous injuries as a consequent of the accident. Once it is held that the vehicle was insured and was involved in the accident and the claimant suffered grievous injuries causing some permanent disability, section 140 would immediately come into play. This Court must therefore, hold that such a defence at the stage of consideration of the application under section 140 would not be available to the insurance company. It is not a case of breach of policy. The decision reported in New India Assurance Co. Ltd. v. Ajay, 1994 ACJ 987, has no application to the present case. I would respectfully follow the Division Bench judgment of this Court reported in National Insurance Co. Ltd. v. Thaglu Singh, 1994 MPLJ 663, and hold that such defence is not available. Appeal dismissed.