High Court of KeralaDivision Bench2008-01-29Appeals allowed to the above extent.

Thomas Philip v. Mohan David and Others

Case / Petition Number:MFA Nos. 928 of 2000; 478 of 2001; 1105 of 2001

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: J.B. Koshy
K. Hema
Judgment Date: 2008-01-29
Court Decision / Holding: Appeals allowed to the extent stated. The 3rd respondent (National Insurance Company) is held liable to deposit the amount due to the third party; the rate of interest is adjusted from 9% to 12% from the date of the accident until the date of deposit.
Final Disposition: Appeals allowed to the above extent.

Parties to the Case

Appellants / Petitioners

Thomas Philip

Respondents

Mohan David
C.K. Joseph
Jose
National Insurance Company Ltd.
M/S. Plaza Hire Purchase Co. Ltd.
Xavier Thomas

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Varghese C. KuriaKose

Counsels for Respondents

• Sri. Pirappancode V.S. Sudhir
• Sri. Saju John
• Sri. Joe Kalliath
• Sri. Mathew John
• Sri. Baby Thomas

Case Synopsis & Summary

Thomas Philip, the appellant, challenges a Motor Accident Claims Tribunal award related to injuries from a bus accident. The Tribunal concluded the bus was negligently driven by the insured driver and that the vehicle was financed under a hire-purchase agreement, with the finance company as the real owner. Although the RC book initially listed the first purchaser, the vehicle had been transferred to the appellant before the accident; the transfer was not immediately reflected in RC endorsements. Insurance coverage was arranged in the name of the hirer (the appellant after transfer), while the real owner remained the hire-purchase financier. The accident occurred before the RC endorsements were made, and the Tribunal exonerated the insurer on the grounds that the policy was in the name of another party. The High Court held that transfer of ownership for insurance purposes occurs upon possession/delivery, not necessarily on RC-book registration, and relied on Supreme Court precedents to confirm that insurance remains valid if the vehicle is insured at the relevant time. It held the insurer liable to deposit the third-party amount, applying decisions that after transfer of ownership the insurer may still be liable if the vehicle was insured then. It also noted that cancellation of policy after the accident does not negate coverage when the insured date is relevant. The Court amended the rate of interest from 9% to 12% from the date of accident to the date of deposit, and allowed the appeals to the extent stated.

Legal Doctrines & Maxims

Transfer of vehicle complete on possession/delivery (not RC registration date)
Third party liability is statutory liability
Insurer's liability may persist after transfer if insured at relevant time

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that under the hire-purchase arrangement, the real owner remains the finance company, but the vehicle was transferred to the appellant before the accident and insurance was taken in the appellant's name; the RC endorsements were not yet completed. The High Court should recognize that transfer of ownership for insurance purposes occurs on delivery, not RC registration, and that the vehicle was insured at the relevant time, making the insurer liable for third-party claims. The insurer cannot rely on the lack of insurable interest or on delayed RC updates to escape liability; supporting authorities approve insurer’s liability post-transfer when insured at the relevant time.

Contentions of Respondents

The respondents argue that the transfer and insurable interest were not properly established; the policy was not in the transferee’s name at the time of the accident, raising questions about insurable interest and coverage. They contend the tribunal’s exoneration of the insurer was based on the policyholder’s identity, and that the RC record and registration issues could affect liability. They rely on technical distinctions of ownership and policy transfer as grounds to deny liability, seeking to limit the insurer’s responsibility.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
Vasantha Viswananthan v. V.K. Elayalwar and others	AIR 2001 SC 3367	Positive	Transfer of vehicle is complete when possession/delivery is effected as per contract; date of transfer is not necessarily the RC registration date.
Rikhi Ram and another v. Smt. Sukhrania and others	AIR 2003 SC 1446	Positive	Insurer liable to pay compensation even after transfer if vehicle is insured at the relevant time.
G. Govindan v. New India Assurance Co. Ltd.	AIR 1999 SC 1398	Positive	Legal representatives cannot be denied compensation on the ground that policy was not in transferee’s name.
New India Assurance Co. Ltd. v. Rula and others	AIR 2000 SC 1082	Positive	Cancellation of policy after accident is not a ground to deny insurance if insured on the relevant date.

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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 J.B.KOSHY** **& THE HONOURABLE MRS. JUSTICE K.HEMA** ## **TUESDAY, THE 29TH JANUARY 2008 / 9TH MAGHA 1929** **MFA.No. 928 of 2000(C)** **---------------------------------** ## **O.P.(MV).NO.2051/1995 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, MUVATTUPUZHA** **....................** ## **APPELLANT/ ADDL.4TH RESPONDENT:** **---------------------------------------------------------** **THOMAS PHILIP, AGED 42, S/O. THOMAS POTHEN, KURIYADITHARA HOUSE, PARIYARAM.P.O, KOTTAYAM.** ## **BY ADV. SRI.VARGHESE C.KURIAKOSE.** ## **RESPONDENTS/ PETITIONER AND RESPONDENTS 1,2,3, 5 AND 6:** **----------------------------------------------------------------------------------------------** **1. MOHAN DAVID, AGED 38, S/O. DAVID, MANNIL KOONJIKKAL HOUSE, VAKAYAR, KONNI.** **2. C.K. JOSEPH, CHETTICHERIL HOUSE, GANDHI NAGAR.P.O., KOTTAYAM.** **3. JOSE, S/O. JOSEPH, NELLIKKAL HOUSE, KONGANDOORKARA, AYARKUNNAM VILLAGE.** **4. NATIONAL INSURANCE COMPANY LTD., CHANGANASSERY, REPRESENTED BY MTPCO, VETTIKKATTIL BUILDINGS, COCHIN-16.** **5. M/S. PLAZA HIRE PURCHASE CO. LTD., KOTTAYAM.** **M.F.A. NO. 928/2000:** **6. XAVIER THOMAS, THENKUMPILLIL HOUSE, KURUPAMTHARA, MANJOOR.** **BY ADV. SRI.PIRAPPANCODE V.S.SUDHIR - R6, SRI.SAJU JOHN - R2, SRI.JOE KALLIATH - R4, SRI.MATHEW JOHN - R5, SRI.BABY THOMAS.** **THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 29/01/2008 ALONG WITH M.F.A NOS.1105/2001 & 478/2001, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **ORDER ON C.M.P. NO. 9648/2001 IN M.F.A. NO. 928/2000** ## **DISMISSED** **29/01/2008.** **SD/- J.B.KOSHY, JUDGE, SD/- K. HEMA, JUDGE.** **//TRUE COPY//** **prv.** ## **J.B.KOSHY & K.HEMA, JJ. ------------------------------M.F.A.NOS.928 OF 2000, 478 & 1105 OF 2001 () ----------------------------------Dated this the 29[th] day of January, 2008** ## **J U D G M E N T** ## **KOSHY,J.** In all these cases claims were filed contending that the claimants were injured due to the negligent driving of the 2[nd] respondent (3[rd] respondent in the appeal) driver of the bus which was insured by the 3[rd] respondent National Insurance company. Tribunal found that accident occurred due to the negligent driving of the bus insured by the Insurance company. It was also found that the bus was under hire purchase agreement with 5[th] respondent. It has come out in evidence that it is that finance company which takes insurance coverage for the vehicle on the name of the hirer. Originally vehicle was purchased in the name of the 1[st] respondent. Thereafter the vehicle was transferred to 4[th] respondent (appellant in this case). Before the date of accident, that is, on 10.4.1994, M.F.A.NOS.928 OF 2000, 478 & 1105 OF 2001 () 2 registration was not changed making appellant as the hirer and registered owner. But real owner was the hire purchase company which advance the money and that remains to be the real owner till the instalment is closed. It was taking the insurance policy. The vehicle was transferred only on 4.3.1994 by the 4[th] respondent and insurance was also taken in the name of the appellant and on the next month, that is, on 10.4.1994, the accident occurred before the endorsements were make in the R.C.Book. But Insurance company insure the vehicle in the name of real hirer (transferee). Even though 4[th] respondent contended that he again transferred to 6[th] respondent, that was not accepted by the tribunal. There is no evidence to show that it was transferred to 6[th] respondent. 6[th] respondent is neither the owner nor the hirer of the vehicle and third party can proceed against the real owner. Third party liability is a statutory liability. At the time of the accident, vehicle was validly insured by the 3[rd] respondent Insurance company. Tribunal has exonerated Insurance company because here as the name of the insured was mentioned as M.F.A.NOS.928 OF 2000, 478 & 1105 OF 2001 () 3 C.K.Joseph, 1[st] respondent but the real owner cum driver was the 4[th] respondent (appellant) in whose name insurance was taken. But his name was not shown in the R.C.Book as the owner. Hence appellant has no insurable interest, and therefore, there is no valid insurance policy. But the fact that finance company has taken the insurance and company continued to be the real owner though owner at the time of accident is the hirer appellant. Transfer of the vehicle to the appellant before the accident is admitted. Transfer is complete as soon as delivery is effected after payment of money. In the facts and circumstances of the case also before the date of the accident it was transferred but there was some delay in alleging the R.C.particulars. After transfer of the vehicle to the appellant insurance was taken in the name of the appellant. It cannot be stated that appellant had no insurable interest. In this connection we refer to the decision of the Supreme Court in _**Vasantha Viswananthan v. V.K.Elayalwar and others (AIR 2001 SC 3367)**_ wherein it was held that transfer of the vehicle is complete when possession is given and delivery is M.F.A.NOS.928 OF 2000, 478 & 1105 OF 2001 () 4 effected as per contract and date of registration is not the date of transfer. Therefore, there was valid insurance coverage at the time of accident. In the above circumstances, we are of the view that Insurance company is liable to deposit the amount due to third party which is a statutory liability as the vehicle was insured. Supreme Court in _**Rikhi ram and another v. Smt. Sukhrania and others (AIR 2003 SC 1446)**_ held that after transfer of ownership of the vehicle by the insured also, Insurance company is liable to pay compensation if the vehicle is insured at the relevant time. In _**G. Govindan v. New India Assurance Co. Ltd. (AIR 1999 SC 1398)**_ Supreme Court held that legal representatives of the victim cannot be denied the compensation by the insurer on the ground that the policy was not transferred in the name of the transferee. When claim was raised by Ext.B3 letter dated 8.12.1994, the insurance policy was cancelled. But subsequent cancellation of the policy is not a ground for denying the insurance as it is not disputed that on the relevant date, the vehicle was duly insured by the third respondent. Cancellation of policy was M.F.A.NOS.928 OF 2000, 478 & 1105 OF 2001 () 5 made after the accident only when claim was raised _**(See New India Assurance Co. Ltd. v. Rula and others (AIR 2000**_ _**SC 1082)**_ . Delay in change of the name of the hirer in the registration book is not the cause of the accident. In the above circumstances, we are of the opinion that the 3[rd] respondent Insurance company (R4 in appeal) is liable to pay compensation but we note that tribunal has awarded 12% interest on the compensation amount. We are of the opinion that considering the rate of interest on the date of passing of the award, that is, December 1999, interest is modified from 9% to 12% from the date of accident till the date of deposit. Appeals are allowed to the above extent. ## **J.B.KOSHY, JUDGE** **K.HEMA, JUDGE** prp ## **J.B.KOSHY & K.HEMA, JJ.** **--------------------------------------------------------** **M.F.A.NOS.928 OF 2000, 478 & 1105 OF 2001 ()** **---------------------------------------------------------** **J U D G M E N T ---------------------------------------------------------** **29[th] January, 2008**