I. S. ISRANI, J. - (1.) THIS Special Appear under Sec. 18 of the Rajasthan High Court Ordinance has been filed against the judgment of learned Single Judge dated September 3, 1986 whereby the award passed by the Motor Accident Claims Tribunal, Jaipur, dated 18 2. 1982 in claim case No. 291/77 was modified.
(2.) BRIEF facts giving-rise to the present appeal are that a claim petition for compensation on account of death of Moti Lal husband of respondent No. 1 and father of respondent No. 2 due to accident that occurred on 10. 5. 1977 at Jaipur while the deceased was going on his Suvega auto-cycle, was filed. It is alleged that the accident took place on account of rash and negligent driving of Fiat Car, which was at the relevant time driven by respondent No. 5. During the course of proceedings before the Tribunal, Smt. Mooli Devi w/o Kanhaiya Lal respondent No. 3 mother of deceased applied that she may also be impleaded as an applicant. This prayer was granted and she was added as an applicant. Learned Tribunal gave an award in a sum of Rs. 73,000/-by way of compensation with 12% interest p. a. , in case the amount was not paid within 2 months. Three appeals against the said award were filed in this court, which were heard by the learned Single Judge and by the impugned order, the amount was enhanced to Rs. 1,23,000/- with 12% interest from the date of application and cost of the appeal with entire liability for payment on the appellant Insurance Company. The only question pressed by the learned counsel Shri B. P. Agrawal appearing for the appellant is regarding a substantial question of law involved in this appeal as to whether it is not open to the Insurance Company to defend the action against it arising out of a motor accident covered by the insurance policy of a motor vehicle in the name of insured owner who has transferred the vehicle prior to the date of accident on the ground that its contractual liability to indemnify the tranferee of the vehicle as he was left with no insurable interest from the date of the transfer effected in his favour in the insurance policy? It is submitted by the learned counsel that in the instant case the motor vehicle involved in the accident, Fiat Car No. RSM 9701 was insured with the appellant insurance company by the owner thereof, namely, respondent No. 6 Dwarka Prasad and that the period of insurance commenced from 16. 6. 76 and was to expire on 15. 6. 77. It was found as a fact that the said vehicle was sold by respondent No. 6 Dwarka Prasad to respondent No. 4 Smt. Santosh Rani on 18. 6. 76 just 2 days after the commencement of the policy and was even transferred in the record of Regional Transport Authority on 24. 6. 76. The accident took place on 10. 5. 77. It is contended by the learned counsel that compliance of the provisions of Sec. 103-A of the Motor Vehicle Act, 1939 (hereinafter called as "the Act") was not made by the transferer and the certificate of insurance was neither transferred to the name of transferee nor any fresh policy of insurance was taken out. This was challenged in the appeal before the learned Single Judge by the appellant company, but according to the learned counsel this matter was not considered because the learned Single Judge was of the opinion that the liability of the Insurance Company would subsist irrespective of the transfer since it was admitted that neither the policy was cancelled nor the premium for the period after the alleged transfer was refunded, more so because the learned single Judge was of the opinion that the above defence was not open to the Insurance Company appellant under the provisions of Sec. 96 (2) of the Act. It is, therefore, contended by the learned counsel that in the circumstances of the case the insurance policy in question stood lapsed before the date of accident on account of sale of the vehicle by the original owner respondent No, 6 to respondent No. 4 and as such the appellant company was not liable for any compensation and that inspite of the provisions of Sec. 96 (2) of the Act, the appellant company was entitled to raise this defence in opposing the claim of the appellant, it is also contended by the learned counsel that the appellant company could not comply with the provisions of Sec 103-A of the Act in view of the fact that the procedure prescribed in sub-sec. (1) of Sec. 103 - A was not followed by the respondent No. 6 as he did not apply in the prescribed form to the appellant company for transfer of the cetificate of insurance and policy described in the certificate in favour of the person to whom the motor-vehicle was proposed to be transferred. It is contended that the information given by the transferee respondent No. 4 to the Insurance Company regarding purchase of vehicle should not have been relied upon by the trial court and even otherwise the information should have been given by the transferor respondent No. 6 as laid down in Sec. 103 A of the Act and not by the respondent No. 4 as alleged of have been done in this case. It is therefore, urged that the appellant company cannot be held responsible for not following the procedure of sub-sections 2 and 3 of Sec. 103 - A of the Act. Our attention has been drawn to the case of United Fire and General Insurance Company Ltd. V/s Chenuamrna (1 ). in which it was held that a policy of insurance lapses when the vehicle covered by it is transferred without notifying the insurer in the prescribed form under Sec. 103 A of the Act. The insurance being contract of indemnity when the insurer is no longer owner of the vehicle, the contract fails and lapses. Such a contention is open to the insurer in a claim against the insurance company. In such a case the question of cancelling the policy does not arise as it comes only when there is supression of material facts or fraud practiced on the insurer. The case of Padma Devi Vs. Gurbux Singh (2) was a matter regarding transfer of vehicle, which was covered by the permit. In this case the registered owner contended that he had sold the vehicle prior to the accident. However, it was found by this court that the essential elements of sale as required under law were not proved. Therefore, the plea of sale was repelled. The truck in question was used as a transport vehicle and was covered with a permit granted to one Harcharan Lal & Sons. On the date of accident, this was on the road. The mere fact that Harcharan Lal & Sons had transferred the possession of vehicle to Brijendra Singh would not confer any title on the transferee as it had not been alleged or brought on record that the transfer was done after the permission of transport authority granting permission as is required under the provisions of the Act. However, in this case it was held by this court that Sec. 92 (2) of the Act has specified the defences that are open to the insurance company in a claim by 3rd party. The specification of defences is exhaustive and it is not open to an insurance company to raise any other defence. The only circumstances in which the company can take up the above defence is that the policy has been cancelled in accordance with the provisions of Section 96 (2) (a ).
(3.) THE case of Shanti Lal Mohan Lal Vs. Ahir Bawanji Malde (3) was a case in which the ownership of the vehicle was transferred on 2 3. 78, which met with an accident on 5. 3. 78. Neither any intimation of the transfer was given to the insurer nor its consent was obtained. THE change of ownership was notified to the insurer after the acccident and thereafter the policy became effective in favour of the transferee on 5. 5. 78. THE question arose whether the insurer is entitled to avoid liability against 3rd party risk on the plea that the insurer had sold the vehicle covered by the insurance policy before the date of accident without intimation to the insurer. It was held that there being no subsisting contract between the insurance company and the transferee the Insurance Company was not liable to indemnify the transferee and therefore, the claimants were not entitled to recover any compensation from the Insurance Company. It was contended by the claimants that the insurance policy is with respect to a particular vehicle and transfer of its ownership during the subsistence of the policy is matter of no relevance or consequence and the Insurance Company cannot get rid of its liability to a 3rd party on this ground. In support of this arguments, reliance was placed on New Asiatic Insurance Company Vs. Pessumal Dhanamal Aswani (4) and Haji Zakaria Vs. Nashir Cama (5 ). THE Allahabad High Court concurred with the case of Haji Zakaria and distinguished the case of New Asiatic Insurance Company and held that the Insurance Company was not liable to indemnify the transferee as there was no subsisting contract between the Insurance Company and the transferee. Learned counsel Shri G. C. Mathur appearing for the claimants-respondents, on the other hand, contends that whatever defences are available to the Insurance Company are by virtue of the provisions of Sec. 96 (2) of the Act. Apart from these provisions the Insurance Company cannot claim any further defences and in fact would not be entitled to put any defences in absence of Sec. 96 (2) of the Act. It is contended that if the interpretation as is sought to be put to the provisions of sub-sec. (2) of Sec. 96 of the Act is accepted, it will widely extend the scope of the defence allowed to the Insurance Company under the provisions of sub-sec. (2) of Sec. 96 of the Act. The legislature in its wisdom thought fit only to allow particular type of defences as enumerated under sub-sec. (2) of Sec. 96 of the Act and, therefore, the Insurance Company is not entitled to any other defences not enumerated in sub-sec. (2) of Sec. 96 of the Act. Our attention has been drawn to the case of British India General Insurance Company Ltd. vs. Capt. Itbar Singh (6), in which while discussing the scope of Sec. 96 (2) of the Act, it was held by the Apex Court that apart from the statute the insurer has no right to be made a party to the action by the injured person against the insured causing injury. Sub-section (2) of Sec 96 However gives him the right to be made a party to the action and to defend it. The right, therefore, is created by the statute and its scope necessarily depends on the provisions of the statute. The insurer while defending the action is not entitled to take any defence which is not specified in it. When the grounds of defence have been specified, they cannot be added to. The only menner of avoiding the liability provided for in sub-section (2) is through the defences mentioned therein. Therefore when sub-sec. (6) talks of avoiding liability in the manner provided in sub-sec. (2); it necessarily refers to these defences. It cannot be said that in enacting sub-sec. (2), the Legislature was contemplating only those defences which were based on the conditions of the policy. It was further observed that the court cannot add words in a section unless the section as it stands is meaning less or of doubtful meaning. The Apex Court, therefore, did not agree with the argument that the only word that has to be added is the word 'also' after the word 'ground'. It was held that the additions suggested will make the language used unhappy and further effect a complete change in the meaning of the word used in sub-section. ;