The Oriental Fire And General ... vs Laxmi Malhotra And Ors.
1989 Latest Caselaw 367 Del

JUDGMENT

Malik, J.

(1) These two appeals arise out of an award dated 13th of August 1978 by which the Motor Accident Claims Tribunal, Delhi, has awarded compensation to the tune of Rs. 5000 for the death of Kumari Meenu, daughter of Shri Sat Pal Malhotra and Smt. Laxmi Malhotra, Rs. 3000 were allowed as condensation to Smt. Laxmi Malhotra and Rs. 500 to Shri Sat Pal Malhotra.

(2) This followed an incident in which Kumari Meenu died while her parents Shri Sat Pal Malhotra and Smt. Laxmi Malhotra sustained injuries as a result of the accident caused by truck No. DLL-2124 which, at the relevant time, was being driven by Bhai Ram Singh and the ownership whereof had been transferred to Shri Attar Singh by the registered owner Shri Kali Ram. They were respondents No. 1, 2 and 4 respectively in the suits while the appellant was cited as respondent No. 3. Three suits were filed, one by Shri Sat Pal Malhotra and his wife Srpt. Laxmi Malhotra for compensation in respect of their deceased daughter and they also filed two more independent suits claiming Compensation for the injuries sustained by them. The Tribunal while awarding compensation directed that the recovery be made from the respondents, namely, Bhai Ram Singh, Shri Attar Singh and the Oriental Fire & General Insurance Comnany. Respondent Kali Ram was absolved from the liability on the ground that the vehicle even though registered in his name had actually been transferred to Shri Altar Sinh before the date of accident.

(3) Mr. Chaudhry submits that the insurance company is not liable for the payment of compensation as there was no privity of contract between the insurance company and the owner of truck on the date of accident. The point, therefore: that arises for consideration falls within a narrow compass and has to be determined in the light of the admitted facts. In the Tribunal the respondent Bhai Ram Singh and Attar Singh did not appear and they were proceeded exparte. While the appellant's stand before the Tribunal was that Shri Attar Singh was not insured with it on the date of accident. The respondent Kali Ram had taken the stand that the offending vehicle had already been sold by him to Attar Singh, respondent No. 2. in the suit. The admitted nosition. therefore, is that on the date of accident the offending truck had been transferred by Kali Ram to Attar Singh and there was no contract of insurance in existence between the insurance company and Attar Singh. This question came un for consideration of a Full Bench of this court as is evident from Anand Sarup Sharma vs. P. P. Khurana and others. . The question that was posed before the Full Bench was as under : "Whether the third party liability of insurance company comes to an end on transfer of vehicle by the insured to someone else ?"

This question has been answered in the affirmative by the Full Bench, thus clearly laying down the proposition of law that unless the transferee gets the insurance policy endorsed by the company in his name there will be an end of the contract and the insurance company will not be liable in such circumstances. That being the state of law, the appeals filed by the insurance company are to be allowed. Both appeals are accordingly allowed and the award of the Tribunal shall stand modified to the extent, that it shall be enforceable only against respondents No. 1 and 2 in the suit and the insurance company will not be liable to make any payment. Both the appeals are accordingly allowed.