JUDGMENT
Krishnamoorthy, J
1. This is an appeal by the 1st respondent, the owner of the vehicle, in a motor accident claim. The application for compensation arose out of an accident at Pariyapuram on 1-2-1983 involving motor cycle No. KRR 5250 belonging to the 1st respondent who was driving the same at that time. The 2nd respondent before the Tribunal was the insurer and the supplemental 3rd respondent was impleaded on the contention put forward by the 1st respondent that the 3rd respondent is the owner of the vehicle. According to the claimant he was walking towards east through the northern side of the road of the road on 1-2-1983 when all on a sudden the motor cycle owned and driven by the 1st respondent Came from east through the wrong side of the road in an uncontrollable speed and hit him. He sustained serious injuries and regained consciousness only while he was in then hospital. He had to undergo prolonged treatment, he is unable to move his right hand properly, he is having acute headache and his capacity to earn has been totally affected. He claimed an amount of Rs. 35,000/- as compensation.
2. The 1st respondent filed a written statement contending that he is not the owner of the vehicle, that it belong to one A.K. Chandrasekharan (who was later impleaded as additional 3rd respondent) and he being a friend of Chandrasekharan was riding the vehicle with his consent and knowledge, that it has been insured with the 2nd respondent by the said Chandrasekharan and that he is not liable to pay any compensation.
3. That 2nd respondent-Insurance Company filed a written statement contending that the accident occurred not due to any rash or negligent act of the 1st respondent but due to the negligence of the claimant himself and that the amount claimed is excessive.
4. The 3rd respondent filed a written statement contending that he was not the owner of the vehicle as he had transferred the same to the 1st respondent as per the sale agreement Ext.B1 dated 29-8-1981 after receiving full consideration and giving off possession to him on the same day. He further contended that as he was not the owner of the vehicle at the time of the accident, he is not liable to pay any compensation and that he is an unnecessary party to the proceedings.
5. After taking evidence in the matter, the Tribunal came to the conclusion that the accident occurred due to the negligence of the 1st respondent and that the 3rd respondent had transferred the vehicle to the 1st respondent, long before the date of the accident. The Tribunal further held that the Insurance Company is also not liable as the transfer of the vehicle was not intimated to them and as they have not issued any policy in favour of the 1st respondent. It was also found by the Tribunal that the claimant is entitled to a total compensation of Rs. 21,500/- under various heads and that the appellant — 1st respondent is solely liable to pay the above amount. The appeal is by the 1st respondent, against the above award.
6. The evidence in this case is clear to the effect that the accident occurred due to the rash and negligent driving of the vehicle by the appellant — 1st respondent. It is clear form Ext. B1 that the vehicle had been transferred to the 1st respondent by the 3rd respondent, though no doubt, the registration still stood in the name of the 3rd respondent. It is well settled that an ownership of vehicle will pass by payment of consideration and handing over of possession and transfer of registration under the Motor Vehicles Act is not at all necessary for the passing of title. As seen from Ext. B1, the total consideration had been paid by 1st respondent to the 3rd respondent and possession also was handed over to him. In these circumstances, the finding of the Tribunal that the 1st respondent was the owner at the time of the accident is correct and it is confirmed.
7. The serious contentions raised by the appellant are regarding the quantum of the compensation and the liability of the Insurance Company. As stated earlier the vehicle was transferred to the 1st respondent, but the insurance policy was not transferred. It still stood in the favour of the 3rd respondent and the question is whether in such circumstances, Insurance Company can be made liable for any compensation payable by the owner of the vehicle. This Court has in a series of decisions namely National Insurance Co. Ltd. V. Rajan 1982 KLT 700 New India Assurance Co. Ltd. V.E.K. Mohammed ILE 1985 (1) Kerala 631 and Swaminathan V. Jayalakshmi Amma 1987 (2)KLT 292, held that in such circumstances an insurance company will not be liable. In the first mentioned case 1982 KLT 700, a Division Bench of this Court held:
The contract of insurance is a contract of personal indemnity and therefore the insured cannot transfer the benefit under a policy so long as such benefits are contingent. In short an insurance policy cannot be transferred by the insured without the consent of the insurer. On the insurer agreeing to such a transfer there is a novation of the contract by which the original assured is substituted by the new assured, the transferee to whom the policy has been transferred. The insurance policy lapses upon the transfer of the ownership of the motor vehicle unless the insurance company agrees to accept the transferee as the insured in relation to the vehicle either at the instance of the transferor or of the transferee.
8. The principle has been followed in the other decisions mentioned above. But learned Counsel for the appellant relied on a Full Bench decision of the Andhra Pradesh High Court in M. Kondaiah V. Yaseen Fattma AIR 1986 A.P. 62 : 1986 (1) ACC 501 in which it was held that the Insurance Company in such circumstances will he liable. Counsel argued that in the light of the above decision of the Andhra Pradesh High Court, the decisions of this Court on the question-require reconsideration. With great respect, we cannot agree with the dictum laid down by the Andhra Pradesh High Court in the said decision. The learned Judge in that decision held that under Section 96(2) of the Motor Vehicles Act the defence which are open to the Insurance Company in a proceeding under the Act are only the grounds mentioned therein as this is not a ground mentioned in Section 96(2), they cannot raise the same. Secondly it was held:
So far as the third party risk is concerned, the proprietary interest in the vehicle is not necessary and the principal liability continues till the transferor discharges the statutory obligation under Section 29-A and 31 read with Section 94 of the Act. Till he complies with the requirement of Section 31 of the Act the public liability will not cease and that constitutes the insurable interest to keep the policy alive in respect to the third party risks. It must be deemed that the transferor allowed the purchaser to use the vehicle in public place in the said transitional period and accordingly till the compliance of Section 31, the liability of the transferor subsists and the policy is in operation so far as it relates to the third party risks.
9. Insurance Company cannot raise any defence not contemplated Section 96(2). Though the defence that original policy was not issued by the company or it is a forged one is not barred under Section 96(2), but the defence of the insurer that the policy has lapsed in view of transfer of vehicle touched the merits of the case and is barred under Section 96(2) of the Act.
10. We cannot agree with the view of the Andhra Pradesh High Court that the Insurance Company is not entitled to raise that defences under Section 9(2). The duty of the insurer to satisfy the judgment arises under Section 96(1) of the Act which is to the following effect:
96. Duty of insurers to satisfy judgments against persons insured in respect of third party risks – (1) If after a certificate of insurance has been issued under Sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub- section (1) of S.95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding, that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable there under, as if he were the judgment — debtor, in respect of the liability, together with any amount payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
11. From the above section it is clear that the Insurance Company is liable to satisfy only a judgment in respect of any liability under the Motor Vehicles Act which is obtained against any person insured by the policy. In other words, the Insurance Company is liable to indemnify only the person in whose favour a policy is issued. The limiting of the defences which can be raised by the Insurance Company as is mentioned under Section 96(2) will arise only in respect of liabilities mentioned in S.96(1) which is only the liability of the person insured. The liability of the Insurance Company under Section 96(1) is only to indemnify the person insured and there is no bar/for them to raise the plea that they are not liable to indemnify any person other than the insured. That is a fact which goes to the root of the matter and only if a policy comes strictly under Section 96(1) the bar under Section 96(2) will apply. In cases like there is no liability for the Insurance Company under Section 96(1) and the defence under Section 96(2) is immaterial as there is no policy which satisfies the requirement of S.96(1) . Regarding the second reason given by the Andhra Pradesh High Court it is clear from Sections 95(5) and 96(1) that the contract of insurance is a contract of personal indemnity and therefore the insured cannot transfer the benefit under a policy so long as such benefits are contingent. S.95(5) clearly stated that insurer shall liable only to indemnify the person or class of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person. That makes it clear that the policy covers only the liability of the person in whose favour the policy is issued and the insurance cover is hot in respect of the vehicle as started in the Andhra Pradesh decision. It is also well-settled that the provisions of the Motor Vehicles Act have not changed the general law applicable in such cases and the provisions of Chapter VII only make it obligatory for a person to have a policy of insurance complying with the requirement of that Chapter before using any vehicle in a public place. S. 103 A of the Motor Vehicles Act provides for giving of a notice to the insurer on a transfer of vehicle being made. It also provides that on an application being made in the prescribed form, the insurer may either effect a transfer of insurance in favour of the insurance Company on a transfer of vehicle will arise only if the transfer is recognised and accepted by them. The original contract of insurance will lapse by transfer without the consent of the Insurance Company and it will revive in favour of the transferee only if it is recognised or accepted by them. For both these reasons we find it unable to agree with the dictum laid down by the Full Bench of the Andhra Pradesh and we follow the decisions of this Court mentioned above. As admittedly the vehicle had been transferred to the 1st respondent by the 3rd respondent long before the date of the accident. Without the transfer being accepted by the Insurance Company, the finding of the Tribunal that the insurer is not liable is correct and is confirmed.
12 Now we will deal with the question of compensation which the claimant is entitled to get., As a result of the accident he has sustained some lacerated injuries and from the certificates and the medical evidence it is found that there was a dislocation of achromio clavicular joint on the right side. P W 4 who issued Ext. A1 certificate has also stated that the claimant has suffered a permanent disability of 10% and that the claimant will find it difficult to do his work. The tribunal has awarded Rs. 2,000/- towards loss of earnings, Rs. 500/- towards medical expenses and Rs. 4,000/- towards pain and suffering. On going through the evidence in the case we find that no deduction is called for in the award of compensation under these three” heads.
13 But the Tribunal had awarded a sum of Rs. 15,000/- as compensation for permanent disability as against a claim of Rs. 25,000/-. As stated earlier, the permanent disability of the claimant is only 10%. He was a coconut climber by profession. There is no evidence to show that he was permanently disabled from carrying on his work. He admitted in his examination that he is still climbing trees, though there is some difficulty for him to do that and that even now he is doing the said work permanently- for 5 or 6 people. From the evidence it is clear that inspite of the disability he is able to carry on his work though there is some difficulty in doing it. There is a controversy between the parties regarding his age. Though he claims that he was only 51 years old at the time of the accident, Exts. A1 and A2, the wound certificate and the medical certificate issued to him, show that his age was 60 at that time. The age in the above certificates must have been shown on the intiniation given by the claimant himself and would feel that it is more safe to rely on the two certificates to prove his age rather than the evidence given by him that he was only 51 years old at that time. Considering the 10% disability suffered by him and also the fact. that he is able t,3 continue his avocation even after the accident, we feel that he is able “/o continue his avocation oven after the accident, we feel that the award of Rs. 15,000/- as compensation for permanent disability by the Tribunal is high and the proper compensation in the circumstances will be Rs. 7,500/- under this head.Thus the award of the Tribunal has to be modified by granting a total compensation of Rs. 14.000/-to the claimant.
14 In the result, we modify the award by granting the claimant a compensation of Rs. 14,000/- to be recovered from the appellant- 1st respondent with interest as provided for by the Tribunal. The appeal is partly allowed as mentioned above and the parties shall bear their costs.