JUDGMENT
Jasbir Singh, J.
1. This order will dispose of FAO No. 488 of 1988 and also Cross Objection No. 5-CII of 2003. Respondents (claimants Nos. 1 to 9) filed an application under Section 110-A of the Motor Vehicles Act, 1939 (in short the Act) read with Section 92 of the Act, to claim compensation regarding death of their predecessor in interest, namely, Balbir Singh, who died in a motor accident, on the intervening night of 4/5th December, 1985. Factum of accident and death of Balbir Singh is not in dispute.
2. It was case of the claimants that said Balbir Singh had hired a Truck bearing No. HRO-3108, for carrying carrots to the vegetable markets in Delhi. The truck was being driven rashly and negligently by its driver and on account of that, the vehicle had turned turtle, which resulted into multiple injuries to Balbir Singh, who ultimately died in a hospital on 9.12.1985.
3. The Motor Accident Claims Tribunal, Sonepat (in short the Tribunal), vide judgment dated 24.12.1987 had granted an amount of Rs. one lac to the respondents-claimants, as compensation alongwith interest @ 12% per annum, till realisation of the compensation amount. The Tribunal further held that on the date of accident, the offending vehicle had already been sold to the appellant, by Sube Singh – respondent No. 10, who was the registered owner of the vehicle, as such, the Insurance Company was not liable to make payment of the compensation amount. Feeling dis-satisfied, Hans Raj, purchaser of the Truck, alongwith its driver, filed this appeal. Cross objections have been filed by the respondents – claimants, wherein they have claimed enhancement, in amount of compensation granted to them. Counsel for the parties heard.
4. Counsel for the appellants has vehementlsy contended that the Tribunal has gone wrong in saying that the appellant was liable to pay the compensation amount. It was brought to the notice of the Court that respondent No. 10 is the registered owner of the vehicle, he had sold it to the appellant on 16.8.1985 and the accident had occurred on 4.12.1985. It is an admitted fact that during the intervening period, the ownership of the offending vehicle was not transferred in the name of the appellant and no intimation was sent to the Insurance Company regarding change of ownership. Counsel for the appellant, by placing reliance upon a judgment of the Hon’ble Supreme Court in G.Govindan v. New India Assurance Co. Ltd , has argued that even in that situation, the Insurance Company – respondent No. 11, was liable to make payment of compensation amount and not the appellant No. 1.
5. This Court feels that the argument raised, to that extent is perfectly justified. Their Lordships of the Supreme Court in G.Govindan (supra), had held that even if the motor vehicle is not transferred in the name of its purchaser, when the vehicle is insured, the Insurance Company is still liable to make payment of the compensation. In the case, referred to above, accident had occurred on 18.5.1975, the offending vehicle had already been sold, however, entries in that regard were not made in the registration certificate and no intimation was sent even to the Insurance Company. Before their Lordships, following question was posed for consideration:
Whether the Insurance Policy lapses and consequently the liability of the insurer ceases when the insured vehicle was transferred and no application/ intimation as prescribed under the Act was made/ given.
6. After analyzing the facts of that case, their Lordships of the Supreme Court, had observed thus:
The registration of the vehicle in the name of the transferee is not necessary to pass title in the vehicle. Payment of price and delivery of the vehicle makes the transaction complete and the title will pass to the purchaser. When the policy of insurance obtained by the original owner of the vehicle is composite one covering the risks for his person, property (vehicle) and the third party claim, on passing of title the transferee cannot enforce his claim in respect of any loss or damage to his person and vehicle unless there is novation. So far the third party risk is concerned the proprietary interest in the vehicle is not necessary and the public liability continues till the transferor discharges the statutory obligation under Sections 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 of the third party risks are concerned. It must be deemed that the transferor allowed the purchaser to use the vehicle in a 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 it relates to the third party risks. We answer the second question accordingly.
7. It was further observed as under:
In our opinion that both under the old Act and under the new Act the Legislature was anxious to protect the third party (victim) interest. It appears that what was implicit in the provisions of the old Act is now made explicit, presumably in view of the conflicting decisions on this aspect among the various High Courts.
The view extracted above was subsequently re-iterated by their Lordships of the Supreme Court in Rikhi Ram and Anr. v. Smt. Sukhranta and Ors. , wherein it has been held as under:
6. On an analysis of Sections 94 and 95, we further find that there are two third parties when a vehicle is transferred by the owner to a purchaser. The purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract, cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer.
7. For the aforesaid reasons, we hold that whenever a vehicle which is covered by the insurance policy is transferred to a transferee, the liability of insurer does not ceases so far as the third party/victim concerned, even if the owner or purchaser does not give any intimation as required under the provisions of the Act.
8. To the same effect is the ratio of judgment of the Hon’ble Supreme Court in United India Insurance Co. Ltd. Shimla v. Tilak Singh and Ors. 2006(3) RCR(Civil) 169 Supreme Court. In view of ratio of the judgments, referred to above, finding of the Tribunal, to the extent, vide which, it was held that the Insurance Company was not liable to make payment of the compensation amount, is set aside and the appellant No. 1 is absolved of the liability to make that payment individually. However, the appellants, the original owner and the Insurance Company shall be liable to make payment of the compensation jointly and severally.
9. While arguing Cross Objections, a prayer has been made by counsel for the respondents-claimants, for enhancement of compensation. Age of the deceased, at the time of accident, was 40 years, the Tribunal has applied multiplier of 15, dependency of the legal heirs was assessed at Rs. 600/- and accordingly, amount of compensation was determined at Rs. 1,08,000/-, however, 10% amount was deducted on account of uncertainties of life and payment being made in lump sum. Rs. 2800/- were awarded towards medical expenses and in all Rs. one lac were awarded as compensation.
10. It is apparent from the records that there is no specific proof regarding income of the deceased. It has only come on record that the deceased was running a Cart to sell vegetables, after transporting the same, from adjoining villages to the vegetable market in Delhi. This Court feels that ends of justice would be met if instead of Rs. 600/-, the dependency of the legal representatives is fixed at Rs. 900/-. In view of age of the deceased, the multiplier applied is perfectly justified. In view of facts mentioned above, after calculation, the amount of compensation, payable to the claimants, would now come to Rs. 1,62,000/-. As per statute, liability of the insurance company is limited only up to Rs. 1,50,000/- (company is also under an obligation to pay interest on that amount), rest of the amount shall be payable by the appellants/ owner, to the claimants. Entire amount be paid with interest @ 10% per annum from the date of filing of the claim application i.e. 14.2.1986, till realisation of the compensation amount. With above-mentioned modifications, appeal and Cross Objection stands disposed of.