High Court of KeralaSingle Judge2011-01-20Appeal disposed of by setting aside the award a...

National Insurance Company Ltd. v. Vottu Raja and others

Case / Petition Number:MACA.No. 1623 of 2010

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: M.N. Krishnan
Judgment Date: 2011-01-20
Court Decision / Holding: Therefore, the award under challenge is set aside and the matter remitted back to the Tribunal with a specific direction to consider all the points discussed in the previous paragraphs of the judgment. For the said purpose, parties are permitted to produce both documentary as well as oral evidence in support of their respective contentions and then the matter be disposed of in accordance with law. Parties are directed to appear before the Tribunal on 28.2.2011. If any amount is in court deposit, let it remain in deposit and disburse it in accordance with the final decision. The Tribunal has to also consider the impact of the decision reported in Pushpa v. Shakuntla (AIR 2005 Himachal Pradesh 4).
Final Disposition: Appeal disposed of by setting aside the award and remanding to Tribunal with directions to decide in accordance with law.

Parties to the Case

Appellants / Petitioners

National Insurance Company Ltd.

Respondents

Vottu Raja
Abraham @ Regi
Shaji B. Nair
Renjith
Malanadu Motor Sales & Service Pvt. Ltd.

Legal Representation & Advocates

Counsels for Petitioners

• Sri Lal George

Counsels for Respondents

• Baby Thomas
• Gigimon Isaac

Case Synopsis & Summary

This is an appeal under MACA No. 1623 of 2010 from a Motor Accidents Claims Tribunal, Pala, challenging an award of Rs. 91,050 in OP(MV) No. 531/2008 to a claimant injured in a road accident. The insurer contends that Section 157(1) of the Motor Vehicles Act contemplates a deemed transfer of the insurance policy only during the currency of the policy and cannot cover post-sale transfers; if the vehicle had been transferred and possession given to another, a policy in the original owner’s name would be suspect and may be invalid for driving liability. The tribunal had found the 1st respondent as owner based on Ext.B3; the decision noted that mere non-transfer of registration does not necessarily invalidate the insurance arrangement. The court observes that Section 2(30) of the MV Act also contemplates possession as ownership for certain purposes, and raises the need for a definite finding on who was in possession at the date of the accident. The judgment refers to Ashraf v. Fathima (2004) and Pushpa v. Shakuntla (AIR 2005 HP 4) as guiding authorities, but indicates the need for total reconsideration and remittal to the Tribunal with opportunity for documentary and oral evidence. The court remands for a fresh determination in light of these considerations, directing the Tribunal to proceed accordingly and to consider the cited authorities.”

Provisions of Law Cited

Section 157(1) of the Motor Vehicles ActSection 2(30) of the Motor Vehicles ActSales of Goods ActContract Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The insurer argues that Section 157(1) of the Motor Vehicles Act contemplates deemed transfer of the policy only during the currency of the policy and cannot extend to cover subsequent transfers after sale. A sale with possession handed over, followed by a policy in the name of the original owner, may indicate suppression of material facts and vitiate the policy under the Contract Act, thereby limiting liability of the insurer. It contends that without definite ownership in possession at the time of the accident, liability is not correctly apportioned and the tribunal’s finding that the 1st respondent was the owner requires reconsideration in light of statutory provisions and transfer dynamics.

Contentions of Respondents

The respondents urge that the tribunal correctly identified the 1st respondent’s ownership/possession; they argue that mere non-transfer of registration does not invalidate the policy, especially where transfers occurred through sale and possession. They contend that the legal questions raised by the insurer require careful evaluation of ownership in possession at the time of the accident and that the policy may still be valid notwithstanding post-sale transfers. They emphasise the need to re-examine the applicability of Section 157(1) in the context of multiple transfers and potential suppression of facts, and rely on Ashraf v. Fathima to support if needed.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Ashraf v. Fathima	2004(2) KLT 598	Mentioned Only	Cited as a potential precedent to guide applicability; the court does not adopt or distinguish its holdings here, but notes its relevance to the issue.
Pushpa v. Shakuntla	AIR 2005 HP 4	Mentioned Only	Cited to consider the impact of that decision in remand proceedings; not expressly followed or distinguished in the present judgment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE M.N.KRISHNAN THURSDAY, THE 20TH JANUARY 2011 / 30TH POUSHA 1932** **MACA.No. 1623 of 2010() -----------------------** **(OPMV.531/2008 of MOTOR ACCIDENT CLAIMS TRIBUNAL, PALA) ....................** ## **APPELLANT(S): 3RD RESPONDENT IN OP (MV) NO.531/08** **-------------------------------------------------** **NATIONAL INSURANCE COMPANY LTD, CHERUPUSHPAM BUILDINGS, PALAI, REPRESENTED BY ITS MANAGER, REGIONAL OFFICE, M.G.ROAD, ERNAKULAM.** **BY ADV. SRI.LAL GEORGE** **RESPONDENTS/CLAIMANT & RESPONDENTS 1, 2 4 & 5** **------------------------------------------------------------------------------** **1. VOTTU RAJA, S/O.NAGA THEVAR, THUKKAYAMMAN KOVILINU SAMEEPAM THAMASOM WARD NO.1, DOOR NO.52, C KAMBAM MUNICIPALITY, UTHAMAPURAM, KOMBAI ROAD, THENI DIST., TAMIL NADU AT 626 531 PRESENT RESIDING AT ADIMACKAL HOUSE, VELLIYEPPALLY KARA, MEENACHIL VILLAGE.** **2. ABRAHAM @ REGI, S/O.PHILIPOSE, CHERUVAZHAKUNNEL HOUSE, VAKKAPUZHA BHAGOM, VAKKAPUZHA KARA, CHERTHALA VILLAGE. 686 575.** **3. SHAJI B.NAIR, S/O.BALACHANDRAN NAIR K.S, KIZHAKEVAKAVAYALIL HOUSE, EDAMATTOM PALA 686 575.** **4. RENJITH, S/O.NARAYANAN NAIR, KARUKAPALLIL HOUSE, CHERUVALLI VILLAGE, KANJIRAPPALLY TALUK. 686 508.** **5. MALANADU MOTOR SALES & SERVICE PVT.LTD., CHELLAKADU KARA, PAZHAVANGADY VILLAGE, RANNY TALUK - 689 672.** **R3 ADV. SRI.BABY THOMAS SRI.GIGIMON ISSAC** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 20/01/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **MACA.No. 1623 of 2010()** ## **----------------------------------** **ORDER ON IA NO.2242/10 IN MACA NO.1623/10** ## **DISMISSED** ## **20.1.2011** **Sd/- M.N.KRISHNAN , JUDGE** ## **/ TRUE COPY /** **P.A. TO JUDGE** **vk** ## **M.N. KRISHNAN,J.** ........................................... M.A.C.A.NO.1623 OF 2010 ............................................. Dated this the 20[th] day of January, 2011. ## **J U D G M E N T** This is an appeal preferred against the award of the Claims Tribunal, Pala in OP(MV)No.531/2008. The claimant sustained injuries in a road accident and the Tribunal has awarded him a compensation of `91,050/= and directed the insurance company to deposit the amount and get it reimbursed from the 1[st ] respondent. It is against that decision, the insurance company has come up in appeal. 2. Heard the learned counsel for the insurance company as well as the 3[rd] respondent (registered owner). The contention of the insurance company is that though Section 157(1) of the Motor Vehicles Act provides deemed transfer of the certificate of insurance, it would only relate to the period mentioned in the policy and it cannot be stretched further and liability cannot be cast on the insurance company. It is further contended that if a sale had already taken place and possession has been given to another person : 2 : M.A.C.A.NO.1623 OF 2010 taking a policy in the name of the original registered owner is by suppressing material facts and therefore the said policy is vitiated by the provisions of the Contract Act. Therefore the insurance company would contend that it is not liable. 3. The facts of this case would show that the 4[th] respondent in the claim petition was given the vehicle by the 2[nd] respondent in the claim petition as early as in 2002 and this 4[th] respondent had executed an agreement in favour of the 5[th] respondent in the claim petition transferring the vehicle in favour of the 5[th] respondent. The Tribunal would observe that by virtue of Ext.B3 the vehicle after the accident had been released in favour of the first respondent. On that basis alone the Tribunal had arrived at a decision that the 1[st] respondent is the owner of the vehicle. So far as transfer or sale of the vehicle is concerned, since it is a sale coming under the provisions of the Sales of Goods Act, handing over of possession on receipt of consideration would amount to divestiture of title and change of registration is a subsequent event that has to take place after the same. So, mere non transfer of the rank in the registration : 3 : M.A.C.A.NO.1623 OF 2010 certificate does not amount to invalidate the same. One cannot understand from the award in what capacity it has been fixed that 1[st] respondent is the owner. The court has to enter into a definite finding on the facts of the case that who was the owner in possession of the vehicle on the date of the accident. I am conscious of the fact that Section 2(30) of the Motor Vehicles Act envisages the situation where a person in possession can also considered to be the owner of the vehicle. So a definite finding in that regard has to be arrived and thereafter the legal question raised by the insurance company has also to be considered. The legal question raised is that by virtue of the provisions under Section 157(1) of the Motor Vehicles Act deemed transfer of the policy is available only during the currency of the policy. Here sale is effected by the second respondent in the claim petition in favour of the 4[th] respondent therein in the year 2002. Subsequently it is alleged that the vehicle had been transferred in favour of the 5[th] respondent. So it is only after 2 or 3 transfers, even if it is proved, the 1[st] respondent becomes the owner in possession of the vehicle. Whether in : 4 : ## M.A.C.A.NO.1623 OF 2010 such a situation a policy taken in the name of the original registered owner amounts to suppression of material facts is a question that has to be decided. Further it has also to be stated that if all those propositions have to be answered in favour of the persons relating to liability of a registered owner, then what will be the direction to be given will depend upon applicability of the decision of this Court reported in **Ashraf v. Fathima** (2004(2) KLT 598). So the matter requires total reconsideration. 4. Therefore, the award under challenge is set aside and the matter is remitted back to the Tribunal with a specific direction to consider all the points discussed in the previous paragraphs of the judgment. For the said purpose, parties are permitted to produce both documentary as well as oral evidence in support of their respective contentions and then the matter be disposed of in accordance with law. Parties are directed to appear before the Tribunal on 28.2.2011. If any amount is in court deposit, let it remain in deposit and disburse it in accordance with the final decision. The Tribunal has to also consider the impact of : 5 : M.A.C.A.NO.1623 OF 2010 the decision reported in **Pushpa v. Shakuntla** (AIR 2005 Himachal Pradesh 4). Disposed of accordingly. **M.N. KRISHNAN, JUDGE.** ## **cl** : 6 : M.A.C.A.NO.1623 OF 2010