Areekachalil Rema Amma and Others v. K. Iqbal and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE A.K.BASHEER** **& THE HONOURABLE MR. JUSTICE P.Q.BARKATH ALI** **TUESDAY, THE 4TH JANUARY 2011 / 14TH POUSHA 1932** **MACA.No. 1711 of 2006(F)** **-----------------------------OPMV.43/2001 of MOTOR ACCIDENT CLAIMS TRIBUNAL, VADAKARA** **....................** **APPELLANTS/PETITIONERS:** **----------------------------------** **1. AREEKACHALIL REMA AMMA, W/O.LATE GANGADHARA KURUP, LAKSHMI NILAYAM, KARUVANNUR P.O., NADUVANNUR (VIA), KOYILANDY TALUK, KOZHIKODE DISTRICT-673 614.** ## **2. AREEKACHALIL JEEJABAI,** **D/O.LATE GANGADHARA KURUP, LAKSHMI NILAYAM, KARUVANNUR P.O., NADUVANNUR (VIA), KOYILANDY TALUK, KOZHIKODE DISTRICT-673 614.** ## **3. AREEKACHALIL RAJASREE,** - **D/O.LATE GANGADHARA KURUP, LAKSHMI NILAYAM, KARUVANNUR P.O., NADUVANNUR (VIA) KKOYILANDY TALUK, KOZHIKODE DISTRICT-673 614.** ## **4. AREEKACHALIL RAJAGOPAL,** **S/O.LATE GANGADHARA KURUP, LAKSHMI NILAYAM, KARUVANNUR P.O., NADUVANNUR (VIA) KOYILANDY TALUK, KOZHIKODE DISTRICT-673 614.** ## **5. VIJAYALAKSHMI A.C.,** **D/O.LATE GANGADHARA KURUP, LAKSHMI NILAYAM, KARUVANNUR P.O., NADUVANNUR (VIA), KOYILANDY TALUK, KOZHIKODE DISTRICT-673 614.** **6. JALAJA A.C., S/O.LATE GANGADHARA KURUP, LAKSHMI NILAYAM, KARUVANNUR P.O., NADUVANNUR (VIA), KOYILANDY TALUK, KOZHIKODE DISTRICT-673 614.** **BY ADVS. SRI.P.S.SREEDHARAN PILLAI SMT.C.G.PREETHA** **SRI.M.PRAVEESH SRI.C.S.SUNIL** **svs** **...........2/-...** **...2...** ## **MACA.No. 1711 of 2006(F)** ## **RESPONDENT(S):** - **---------------** **1. K. IQBAL, S/O. POCKER, PULILYULLATHIL HOUSE, MARUTHENKARA P.O., KUTTIADY.** - **(R.C.OWNER OF KL-11-F-0697 AUTORIKSHAW).** **2. B.P. RAJEESH, S/O. BALAKRISHNAN, VALLYAPARAMBIL HOUSE, THRIKKUTTISSERY AMSOM VAKAYAD DESOM, P.O. VAKAYAD, VIA.NADUVANNUR-673 614. (AGREEMENT OWNER KL 11 F.0697 AUTORIKSHAW).** **3. GIREESH P.P. S/O. ARIYAN, PADATHALANDAN POYIL HOUSE, VAKAYAD P.O., NADUVANNUR (VIA), KOZHIKODE DISTRICT. DRIVER OF KL-11-F-0697 AUTORIKSHAW, DL NO.3824/97, BADGE NO.2164/97.** **4. M/S. ORIENTAL INSURANCE COMPANY LTD., P.B.NO.27, NARAYANA NAGAR, VATAKARA, PIN-673 101, POLICY NO.6246/2000.** **R1,R2 BY ADVS. SMT.LATHA PRABHAKARAN SMT.C.SEENA R2 BY ADV. SRI.ZUBAIR PULIKOOL R2 & R3 BY ADV. SRI.K.M.JAMALUDHEEN R4 BY ADVS. SRI.P.JACOB MATHEW** **SRI.MATHEWS JACOB(SR)** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 04/01/2011, ALONG WITH MACA NO. 1088 OF 2009 THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **svs** **A.K.BASHEER & P.Q.BARKATH ALI, JJ. -------------------------------------------------M.A.C.A. Nos. 1711 of 2006 & 1088 of 2009 --------------------------------------------------------------Dated this the 4[th] day of January, 2011. J U D G M E N T** ## **A.K.BASHEER., J.** These two appeals are being disposed of through this common judgment, since they arise from the same award passed by the Motor Accidents Claims Tribunal. 2. In M.A.C.A.No.1711/2006, the appellants / claimants seek enhancement of compensation. The appellant in M.A.C.A No.1088/2009, who is the transferee-owner of the vehicle is aggrieved by the direction issued by the Tribunal giving right of recovery to the Insurance Company as against him. 3. On June 30, 2000, an autorickshaw bearing registration No.KL/11-F-0697 hit one Gangadhara Kurup resulting in certain fatal injuries to him. The wife and children of deceased Gangadhara Kurup instituted the claim petition under Section 166 of the Motor Vehicles Act claiming a total sum of Rs.4,00,000/towards compensation from the original owner, transferee-owner, driver and insurer of the alleged offending vehicle. The claim was M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 2 primarily resisted by the Insurance Company contending that the original owner of the vehicle, though covered under a policy cover had not informed the Company about the subsequent transfer of the vehicle, allegedly on the strength of a so called agreement for sale. The Company contended that it would not be liable to indemnify the “transferee-owner”, who was stated to be in actual control and possession of the vehicle at the time of the accident. 4. The transferee-owner did not contest the case though he had entered appearance through a counsel. 5. The Tribunal after considering the documentary evidence available on record, passed an award directing the Insurance Company to pay a sum of Rs.1,55,000/- with 6% interest to the claimants. However, the Tribunal further directed that the company would be entitled to recover the award amount from the owner and transferee-owner of the offending vehicle. 6. As has been indicated earlier, the claimants have come up in appeal challenging the inadequacy of compensation awarded to them, while, the transferee-owner challenges the award to the extent it gives liberty to the Insurance Company to M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 3 recover the amount of compensation from him. 7. We will first of all deal with the appeal preferred by the transferee-owner viz; M.A.C.A.No.1088/2009. 8. It is beyond controversy that the appellant had purchased the alleged offending vehicle from its original owner on the strength of an agreement for sale prior to the accident. It is also not in dispute that the original owner had got the vehicle insured against statutory third party risk with M/s. Oriental Insurance Company Ltd, respondent No.9 in this appeal. But, the transferee-owner had admittedly failed to make a formal application to the insurer for making necessary changes with regard to the transfer in the certificate of insurance as stipulated in Sub Section 2 of Section 157 of the Act. The Tribunal therefore proceeded to hold that the failure of the transferee-owner to comply with the statutory obligation under Section 157(2) of the Act amounted to violation of policy conditions, thus enabling the Insurance Company to recover the amount of compensation from the owner and transferee-owner. M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 **==> picture [7 x 10] intentionally omitted <==** 9. Sri.Mathews Jacob, learned Senior Counsel, who appears for the Insurance Company stoutly supports the view taken by the Tribunal. It is contended by the learned Senior Counsel that the statutory protection available to a third party, as envisaged under Section 147 cannot be extended to the transferee-owner even though he might have purchased the vehicle at a later stage. In other words, the contention of the learned Senior Counsel is that the contract of insurance though statutory in nature, was between the company and the original owner. The insured cannot seek protection of the policy cover for indemnification, if he fails to comply with the statutory mandate under Section 157(2) of the Act. Learned Senior Counsel places heavy reliance on the decision of their lordship of the Supreme Court in _**Rikhi Ram and another v. Sukhrania (SMT) and others 2003 (3) SCC 97**_ in this context. He points out that a three judge bench of the Apex Court in the above decision has laid down that the insurer would be entitled to recover the amount of compensation from the transferee-owner, if he had failed to intimate the factum of transfer to the Insurance M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 5 Company as provided under the Act. 10. In Rikhi Ram (supra) the appellants were transfereeowners of the offending vehicle, which was involved in the accident. Admittedly, the appellants had not intimated about the purchase of the vehicle by them from the original owner to the Insurance Company. The Tribunal held that the transferee-owners were liable to pay compensation to the claimants and exonerated the Insurance Company from the liability. The appeal preferred by them before the High Court of Punjab and Hariyana was dismissed upholding the view taken by the Tribunal. 11. It may at once be noticed that the above case before the Apex Court arose under the unamended Motor Vehicles Act 1939. Section 103(A) of the old Act reads thus:- ## _**“Transfer of certificate of insurance:-**_ _**(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter proposes to transfer to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, he may apply in the prescribed form to the insurer for the transfer of the certificate of insurance and the policy described in the certificate in favour of the person to whom the motor vehicle is proposed to be transferred, and if within fifteen days of the receipt of such application by the**_ M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 6 _**insurer, the insurer has not intimated the insured and such other person, his refusal to transfer the certificate and the policy to the other person, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.**_ _**(2) The insurer to whom any application has been made under sub section (1) may refuse to transfer to the other person the certificate of insurance and the policy described in that certificate, if he considers it necessary so to do, having regard to-**_ _**(a) the previous conduct of the other person,-**_ _**(i) as a driver of motor vehicles; or**_ _**(ii) as a holder of the policy of insurance in respect of any motor vehicle; or**_ _**(b) any conditions which may have been imposed in relation to any such policy held by the applicant; or**_ _**(c) the rejection of any proposal made by such other person for the issue of a policy of insurance in respect of any motor vehicle owned or possessed by him.**_ _**(3) Where the insurer has refused to transfer, in favour of the person to whom the motor vehicle has been transferred, the certificate of insurance and the policy described in that certificate, he shall refund to such transferee the amount, if any, which, under the terms of the policy, he would have had to refund to the insured for the unexpired term of such policy”**_ M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 7 A perusal of the provisions contained in the above Section will unambiguously show that it was obligatory on the holder of a certificate of insurance, to make an application in the prescribed format to the insurer, if he proposed to transfer the ownership of the vehicle in respect of which, he had obtained the certificate of insurance, before such transfer of ownership was effected. Sub Section (2) gave liberty to the insurer to refuse to transfer the certificate of insurance under certain circumstances enumerated thereunder. But, in the event of refusal, the insurer was obliged to refund to the transferee, such amount, which under the terms of the policy, he would have had to refund to the insured for the unexpired term of such policy. 12. However, in the 1988 Act, the above statutory position underwent a sea change as can be seen from Section 157 which is extracted hereunder:- ## _**“157. Transfer of certificate of insurance:-**_ _**(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the**_ M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 8 _**certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.**_ _**Explanation:- For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.**_ _**(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance.” (emphasis supplied)**_ 13. Sub Section (1) postulates that where a person, in whose favour a certificate of insurance has been issued in accordance with the provisions of Chapter-X, transfers to another person, ownership of the motor vehicle in respect of which, such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the Motor Vehicle is transferred with effect from the date of its transfer . The explanation under Sub Section (1) will make it further clear that the "deemed transfer" referred M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 9 ## to above, shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. 14. It is true that Sub Section (2) of Section 157 obligates the transferee to make an application in the prescribed form to the insurer to make necessary changes in the certificate of insurance with regard to the factum of transfer. The insurance company, on receipt of such a request, is bound to make necessary changes in the certificate and the policy of insurance as regards to the transfer of insurance coverage. Thus, it is abundantly clear from a perusal of the provisions contained in Section 103(A) of the old Act and Section 157 of the present Act that the legislature wanted to obviate the statutory hurdles that may be faced by the transferor of a vehicle. 15. Obviously, the primary concern of the legislature has been to ensure that the victims of accident are not put to any unnecessary difficulties or hassles in getting compensation. Still, further the owners of vehicle are also saved from cumbersome procedure to be followed in the event of transfer, in as much as, the obligation under the old Act to give prior intimation to the M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 10 Insurance Company about the proposal for transfer has been done away with. The right vested with the Insurance Company to refuse to transfer has also been taken away under the new Act. Thus, evidently Section 157 of the 1988 Act has considerably reduced the rigour of the procedural wrangles in the old Act. 16. It is true that in Rikhi Ram (supra), the Apex Court gave liberty to the Insurance Company to recover the amount of compensation from the transferee-owners (appellants) in that case, keeping in view the provisions contained in Section 103(A) of the old Act. This view was apparently taken since the appellants had failed to comply with the statutory mandate contained in Section 103(A). 17. As has been noticed already, Section 103(A) did not contain any deeming provision as incorporated under Section 157 of the new Act, by which the moment a vehicle is transferred along with its certificate of insurance, it shall be deemed that the certificate of insurance and the policy described in the certificate has been transferred in favour of the person to whom the vehicle is transferred. More importantly, the deemed transfer shall M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 11 include “transfer of rights and liabilities of the said certificate of insurance and policy of insurance”. In that view of the matter, we have no hesitation to hold that Rikhi Ram (supra) will not come to the rescue of the Insurance Company in this case. 18. In our view, the failure of the appellant in this case to make an application to the Insurance Company to effect transfer of the insurance certificate as contemplated under Sub Section (2) will not be fatal. We are persuaded to take the above view, since Sub Section (1) and explanation thereunder make it abundantly clear that the certificate of insurance and the policy described in the certificate stood transferred in favour of the transferee, the moment possession of the vehicle was handed over to him on the strength of the agreement for sale. As has been noticed already, the transferee-owner had tacitly admitted that he was in actual control and possession of the vehicle on the date of the accident. 19. Learned counsel for the appellant has invited our attention to the decision in _**United India Insurance Company Ltd v. Santrodevi and others 2009 (1) SCC 558**_ and a decision of this court in _**United India Insurance Company Ltd**_ M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 12 _**v. Jaimy and others 1998 (1) KLJ 67**_ in support of his contention that the Tribunal was not at all justified in exonerating the insurer from the liability to indemnify the owner of the vehicle. We do not deem it necessary to refer to those decisions in detail at this stage. As has been noticed already, the appellants had stepped in to the shoes of the original owner, the moment he purchased the vehicle. There was a deemed transfer of the policy certificate in his favour. Such deemed transfer included transfer of rights and liabilities under the certificate of insurance and policy of insurance issued by the Company as postulated in the explanation under Sub Section (1) of Section 157. Therefore, in our view, the appellant is entitled to succeed. It is held that the Insurance Company is liable to indemnify the appellant in this appeal. ## M.A.C.A.No.1711 of 2006 20. As regards the claim for enhancement of compensation, it may at once be noticed that the specific case of the claimants before the Tribunal was that the deceased had been engaged in Real Estate Business and earning not less than M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 **==> picture [13 x 10] intentionally omitted <==** Rs.5,000/- per month. However the Tribunal reckoned his notional monthly income as Rs.1,500/-. In our view, the monthly income of the deceased can be safely reckoned as Rs.2,500/Similarly, the multiplier adopted by the Tribunal in our view is on the lower side. Deceased was 52 at the time of death. He left behind his wife aged 48 and five female children of whom four were students. The youngest was a minor. The tribunal has taken a multiplier of 12. Interest of justice will be met, if the multiplier is taken as 12. Thus calculated, the compensation payable under the head of loss of dependency would come to Rs.2,40,000/- after deducting 1/3[rd] towards personal expenses of the deceased. The Tribunal awarded only a sum of Rs.5,000/under the head of loss of consortium. In our view, Rs.15,000/shall be reasonable compensation under the above head. Still further, the Tribunal awarded Rs.15,000/- for loss of love and affection. In the peculiar facts and circumstances of the case, particularly keeping in view the fact that, the deceased left behind him his widow and five daughters, we are satisfied that the compensation payable under the above head has to be M.A.C.A. Nos. 1711 of 2006 & 1088 OF 2009 14 Rs.25,000/-. Thus the appellants / claimants shall be entitled to get additional compensation of Rs.1,28,000/-. They shall be entitled to get interest at the rate of 7.5%, instead of 6% awarded by the Tribunal from the date of petition till the date of realisation. The award is modified to the above extent. 21. In the result, the appeals are disposed of. Respondent No.4 in the claim petition viz M/s. Oriental Insurance Company Ltd, shall be liable to indemnify the transferee-owner of the offending vehicle. The insurer shall pay the entire amount of compensation to the claimants with 7.5% interest within one month from the date of receipt of a copy of this judgment. ## **A.K.BASHEER, JUDGE.** ## **P.Q.BARKATHALI, JUDGE.** dmb