Case Note & Summary
The case arises from a motor accident claim petition filed by the legal representatives of Rekha, who died in a vehicular accident on 10.10.2011. The offending vehicle was a Mahindra Max Pickup bearing registration No. MH 29/T-3657. The claimants filed a claim petition before the Motor Accident Claims Tribunal, Amravati, which awarded total compensation of Rs.6,43,000/- along with interest. The United India Insurance Co. Ltd. appealed, challenging only the liability fastened on them, contending that the offending vehicle was not insured with them at the time of the accident. The record showed that the insurance policy (Exh.30) was in the name of respondent no.3 Hanif, the erstwhile owner of the vehicle. The vehicle had been sold to respondent no.4 Mohd. Wasim Mohd. Kasam, but the policy was not transferred to the new owner. The Tribunal held the insurer liable. The High Court, relying on Section 157 of the Motor Vehicles Act, 1988, held that the policy is deemed to be transferred in favour of the transferee, and the insurer cannot avoid liability. The appeal was dismissed, and the impugned judgment and award were confirmed.
Headnote
A) Motor Accident Claims - Insurance Policy - Transfer of Vehicle - Section 157 Motor Vehicles Act, 1988 - The issue was whether the insurer is liable when the offending vehicle was insured in the name of the previous owner and the policy was not transferred to the new owner. The Court held that under Section 157 of the Motor Vehicles Act, 1988, the insurance policy is deemed to be transferred in favour of the transferee, and the insurer cannot avoid liability merely because the policy was not formally transferred. The Court upheld the Tribunal's award holding the insurer liable. (Paras 2-6)
Issue of Consideration
Whether the insurance company is liable to pay compensation when the offending vehicle was insured in the name of the previous owner and the policy was not transferred to the new owner at the time of accident.
Final Decision
The appeal is dismissed. The impugned judgment and award dated 09.06.2016 passed by the Chairman, Motor Accident Claims Tribunal, Amravati in Claim Petition No.483/2011 is confirmed. No order as to costs.
Law Points
- Insurance policy coverage
- Transfer of vehicle
- Liability of insurer
- Section 157 Motor Vehicles Act
- 1988
- Deemed transfer of policy
Case Details
2019 LawText (BOM) (11) 108
First Appeal No. 1132 of 2016
Shri Asgar Hussain for Appellant, Shri M. Masodkar for Respondent Nos. 1 and 2, Shri S. Raisuddin for Respondent No.4
The United India Insurance Co. Ltd.
Rameshrao Bapuraoji Gulhane, Gopal Rameshrao Gulhane, Abdul Khalid s/o Abdul kadir, Mohd. Wasim Mohd. Kasam, Haji Rauf Haji Sattar
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Nature of Litigation
Appeal against judgment and award of Motor Accident Claims Tribunal challenging liability of insurance company.
Remedy Sought
Insurance company sought to avoid liability for compensation awarded to claimants.
Filing Reason
Insurance company contended that the offending vehicle was not insured with them at the time of accident.
Previous Decisions
Motor Accident Claims Tribunal, Amravati, in Claim Petition No.483/2011 dated 09.06.2016, awarded compensation of Rs.6,43,000/- with interest, holding the insurer liable.
Issues
Whether the insurance company is liable to pay compensation when the offending vehicle was insured in the name of the previous owner and the policy was not transferred to the new owner at the time of accident.
Submissions/Arguments
Appellant (Insurance Company): The offending vehicle was not insured with them; the policy was in the name of the previous owner and not transferred.
Respondents (Claimants): The policy was valid and covered the vehicle; insurer is liable under Section 157 of the Motor Vehicles Act.
Ratio Decidendi
Under Section 157 of the Motor Vehicles Act, 1988, when a vehicle is transferred, the insurance policy is deemed to be transferred in favour of the transferee. The insurer cannot avoid liability merely because the policy was not formally transferred. The insurer remains liable to third parties.
Judgment Excerpts
The only challenge is about coverage of insurance to the offending vehicle namely Mahindra Max Pickup bearing registration No. MH 29/T-3657.
On perusal of the policy document it reveals that the said policy is in the name of respondent no.3 Hanif [erstwhile owner of the vehicle].
Section 157 of the Motor Vehicles Act, 1988 provides that the policy of insurance shall be deemed to have been transferred in favour of the transferee.
Procedural History
Claim Petition No.483/2011 was filed before the Motor Accident Claims Tribunal, Amravati, which awarded compensation on 09.06.2016. The Insurance Company filed First Appeal No.1132 of 2016 before the Bombay High Court, Nagpur Bench, challenging the award only on the issue of insurance coverage. The appeal was heard and dismissed on 27.11.2019.
Acts & Sections
- Motor Vehicles Act, 1988: Section 157
