IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 21242 of 2008(D)
1. T.V.KURIAN, S/O.MATHAI VARKEY,
... Petitioner
Vs
1. UNITED INDIA INSURANCE COMPANY LTD.
... Respondent
2. LISUMON JAMES, S/O.DEVASSIA CHACKO,
For Petitioner :SRI.GIGIMON ISSAC
For Respondent :SRI.P.RAMAKRISHNAN
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :01/12/2010
O R D E R
S. Siri Jagan, J.
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W.P(C) No. 21242 of 2008
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Dated this, the 1st day of December, 2010.
J U D G M E N T
The petitioner was the owner of an autorickshaw. He
transferred the same to the 2nd respondent and the registration of the
autorickshaw was also transferred in the name of the 2nd respondent
with effect from 4.5.1995. On 16.7.1995, the autorickshaw was
involved in an accident, in which one Sri. M.K. Raveendran was
injured. The said Sri. M.K. Raveendran filed O.P (MV) No. 33/1996
before the MACT, Muvattupuzha, claiming compensation for the
injuries suffered by him in the accident. In that O.P, both the
petitioner as well as the 2nd respondent were impleaded as
respondents apart from the 1st respondent insurance company with
whom the petitioner had insured the vehicle when he was the owner
of the vehicle, the period of which insurance spilled over beyond the
date of the accident. Neither the petitioner nor the the 2nd
respondent took the trouble to intimate the 1st respondent about the
transfer of the vehicle. The 2nd respondent did not bother to insure
the vehicle against third party risk, although the same was
mandatory under the Motor Vehicles Act. In the award, the Tribunal
came to the finding that the said Sri. M.K. Raveendran is entitled to
compensation for the injuries suffered by him on account of the
accident caused by the negligence of the driver of the vehicle. The
Tribunal passed an award against all the respondents directing
payment of compensation to the injured. The Insurance Company
challenged that award in M.F.A.No. 459/1999 disclaiming liability to
pay the award amount, on the ground that the driver did not have a
valid licence at the time of the accident, in which a Division Bench of
this Court passed Ext. P2 judgment, which reads thus:
“Appellant is the Insurance Company. Compensation of
Rs.23,750/- was awarded to the claimant in O.P.(MV) No. 33/96 on
the file of the Motor Accidents Claims Tribunal, Muvattupuzha.
W.P.C. No. 21242/08 -: 2 :-
The Tribunal found that the accident occurred due to the
negligence of the 2nd respondent driver of the autorickshaw
insured by the appellant. He was charge-sheeted for driving the
autorickshaw without driving licence as can be seen from Ext. A3
charge-sheet. The 2nd respondent was called upon to produce his
driving licence as per I.A.No. 420/98. Even though notice was
accepted, driving licence was not produced. Therefore, admittedly
the vehicle was driven without valid driving licence. The Apex
Court has held that even if there is no driving licence, liability to
third party cannot be avoided by the Insurance Company.
Therefore, Insurance Company is liable to deposit the amount
awarded. Since there is violation of policy condition as the driver
was not having valid licence to drive the vehicle at the time of the
accident, Insurance Company is allowed to recover the amount
from the insured. The entire amount with interest should be
deposited by the Insurance Company. The appellant Insurance
Company is free to recover the amount from the insured as the
driver of the autorickshaw was not holding a valid driving licence
at the time of the accident.”
In that judgment, this Court did not specify as to who is the insured
from whom the Insurance Company can recover the amount. The
petitioner herein filed a review petition, which was disposed of by Ext.
P3 order, which reads as follows:
“Motor Accidents Claims Tribunal awarded a compensation
of Rs. 23,750/- and also directed respondents 1 to 4 including the
petitioner in this review petition to pay the amount. Review
petitioner did not file any appeal. Insurance Company filed appeal.
We have in the appellate judgment which was dictated in the open
court in the presence of the advocate directed that since there is
valid insurance, Insurance Company should deposit the amount of
compensation and the insurance Company can recover the same
from the insured as there was violation of policy condition. We
have not stated who is the insured. According to the petitioner, he
transferred the vehicle to the fourth respondent and registered
owner at the time of accident was the fourth respondent and,
therefore, fourth respondent is the insured. That is a matter to be
considered by the execution court. There is no point to review.
The review petition is dismissed with the above observation.”
Subsequently, the Insurance Company filed an execution petition
before the Tribunal against the petitioner alone. In that execution
petition, the petitioner took the contention that by virtue of the
W.P.C. No. 21242/08 -: 3 :-
deeming provision in Section 157 of the Motor Vehicles Act, the
petitioner is not the insured and therefore he is not liable to pay the
amount to the Insurance Company. Rejecting that contention, by Ext.
P4 order, the Tribunal held that the petitioner is the insured and
overruled the objection filed by the petitioner in that regard. The
petitioner is challenging Ext. P4 order of the Tribunal in the E.P in
this writ petition.
2. The contention of the petitioner is that the petitioner,
admittedly, was not the registered owner of the vehicle on the date of
the accident. Therefore, by virtue of the deeming provision in Section
157(1) of the Motor Vehicles Act, the insurance of the vehicle also
stands transferred to the registered owner of the vehicle and
therefore only the registered owner can be made liable to make good
the compensation amount to the Insurance Company on account of
the violation of the policy condition.
3. Both the Insurance Company and the 2nd respondent support
Ext. P4. According to them, Section 157 has been enacted only to
protect the interest of the third party and not the owner of the vehicle
or the insured. According to them, Section 157 can be invoked only
for the benefit of the third party and no right emanates from it in
favour of the registered owner or the insured as per the insurance
policy. The 2nd respondent relies on the decision of the Supreme
Court in Complete Insulations (P) Ltd. v. New India Assurance
Co. Ltd., 1996 ACJ 65 for the proposition that the legal fiction under
Section 157 is limited to third party risks and the transferee of the
vehicle is not a third party qua the vehicle.
4. I have considered the rival contentions in detail.
5. Admittedly, as on the date of the accident, the petitioner was
not the registered owner of the vehicle and the driver who was
driving the vehicle causing the accident by his negligence was not
W.P.C. No. 21242/08 -: 4 :-
employed by him. Admittedly, the 2nd respondent was the registered
owner of the vehicle and for the act of the driver of the vehicle
employed by him, he only was vicariously liable to the person who was
injured in the accident caused on account of the negligence of the
driver of the vehicle. As such, here, the petitioner is a stranger to the
accident. By no stretch of imagination, could the petitioner have been
made liable to pay compensation in respect of the accident caused by
the driver of the 2nd respondent by negligently driving the vehicle
owned by the 2nd respondent. That being so, it is a travesty of justice
to make the petitioner liable for making good the compensation paid
to the injured by the Insurance Company on the ground of violation of
the policy conditions, I am of opinion that an interpretation contrary
to the same would be against all canons of justice and fair play. In
Ext. P4 order, the Tribunal held that since the petitioner had not
informed the Insurance Company about the transfer of the vehicle, the
petitioner becomes liable. I do not think that that view is correct.
The liability to pay compensation for injuries caused in a motor
accident is tortious in nature. The petitioner can be made liable only
vicariously. Vicarious liability would arise only if the petitioner was
the owner of the vehicle and the driver of the vehicle was his
employee. In this case, on the date of the accident, the petitioner was
neither the owner of the vehicle nor the employer of the driver, who
caused the accident by his negligence. Therefore, simply because the
petitioner failed to inform the Insurance Company about the transfer
of the vehicle, he does not become liable to make good the
compensation amount paid to the insurance Company. I am of opinion
that the judgment of the Supreme Court in Complete Insulations’
case (supra) does not lay down any contrary proposition of law.
Simply because the deeming provision in Section 157 is limited in
application in favour of a third party only and the transferee of the
W.P.C. No. 21242/08 -: 5 :-
vehicle is not a third party qua the vehicle, a person who has nothing
to do with the vehicle or the accident as on the date of the accident,
does not become liable to make good the compensation amount to the
Insurance Company on the ground of violation of policy condition. In
this case, insofar as the petitioner cannot be made liable in tort for
the injuries suffered by the victim of the accident on account of the
negligence of the employee of the 2nd respondent, for disclaiming
liability, he does not need to take advantage of either the insurance
policy or the deeming provision of Section 157. In fact, it is not the
petitioner who seeks indemnification under the insurance policy. If
anybody needed to seek such indemnification, it is only the 2nd
respondent. Therefore, if at all anybody needs to take advantage of
the policy or the deeming provision under Section 157, it is only the
2nd respondent. The insurance company can at the best recover the
amount paid by them only from the persons on whom the tortious
liability lies for the accident, insofar as they have only satisfied the
liability of the persons responsible for the accident. In fact, the
Insurance Company can now recover the compensation paid by them
to the claimant from the tortfeasor, only if they contend that by virtue
of the deeming provision of Section 157, the policy stands transferred
to the present owner and since the present owner violated the policy
condition, he is liable to make good the amount paid by the Insurance
Company to the victim of the accident caused by the tortfeasors. That
being so, I am of opinion that by no stretch of imagination can the
petitioner be mulcted with the liability to make good the
compensation amount paid by the Insurance Company to the injured,
on the ground of violation of the policy conditions.
Therefore, Ext. P4 holding that the petitioner is the insured who
is liable to make good the compensation amount paid by the
Insurance Company to the injured, back to the Insurance Company,
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is quashed. It is up to the Insurance Company to take appropriate
steps to recover the amount paid by them from any other person who
is liable to pay the amount. The right in that regard is left open to be
agitated by them again before the Tribunal appropriately. The writ
petition is allowed as above.
Sd/- S. Siri Jagan, Judge.
Tds/