LexG. GOVINDAN versus NEW INDIA ASSURANCE CO. LTD. AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
G. GOVINDAN
v.
NEW INDIA ASSURANCE CO. LTD. AND ORS.
,.
APRIL 8, 1999
B
[K. VENKATASWAMI AND A.P. MISHRA, JJ.]
Motor Vehicles Act, 1939-Section 103A, (Chapter Vlll)-Transfer of
vehicle-No intimation given to the insurer as required under Section 103A-
c
Effect of on such omission on insurance policy-Insurer accepting the premium
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for subsequent periods-Held, insurance policy remains effective in respect
of third-party risks but not in respect of the transferee's risks.
Motor Vehicles-Third party risks-Insurance of third party is mandatory
under the Act and hence cannot be overriden by any clause in the insurance
D
policy.
Interpretation of Statutes-Basic rule of interpretation-Object clause-
Views which facilitate the object of the legislature be given.
Appellant had purchased a bu_s from Respondent No. 4. However, the
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sale transaction was not intimated to the first respondent-insurer as required
under Section 103-A of the Motor Vehicles Act. 1939. The bus met with an
accident in which R-2 and R-3 being third parties, filed a claim for
compensation before the Motor Accidents Claims Tribunal. Tribunal found
that even after the date of the accident and knowing that respondent No. 4
had sold the bus to the appellant, the insurer received th~ premium for
F subsequent period. On appeal, the High Court discharged the liability of the
insurer from payment of compensation. Hence this appeal by the appellant-
transferee.
Allowing the appeal, this Court
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HELD: 1.1. The heading of Chapter VIII of the Motor Vehicle Act,
1939 read as "Insurance of Motor Vehicles against Third Party Risks". Its
provisions clearly indicate that the legislature made insurance of motor
vehicles compulsory against third-party (victims) risks. Since insurance
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against third-party risks in compulsory, once the insurer-Company had
~
...
undertaken liability to third parties incurred by the persons specified in the
H policy, the third parties' right to recover any amount under or by virtue of
476
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G. GOVINDAN v. NEW INDIA ASSURANCE CO.LTD.
477
the provisions of the Act is not affected by any condition in the policy.
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{485-B-CJ
Complete Insulation (P) Ltd. v. New India Assurance Co. Ltd., 119961
1SCC221; New India Assurance Co. Ltd. v. Sheela Rani, [1998) 6 SCC 599
and New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani & Ors.,
AIR (1964) SC 1736, relied on.
B
1.2. Both under the old Act and under the new Act, the legislature was
anxious to protect the third-party (victim) interest. What was implicit in the
provisions of the old Act is now made explicit, presumably in view of the
conflicting decisions on this aspect among the various High Courts.
[485-DI C
1.3. As between the conflicting views of the Full Bench of the Andhra
Pradesh High Court on the one hand and the Delhi and Karnataka High
Courts on the other, the Andhra Pradesh High Court's view is preferable as
it advances the object of the legislature to protect the third-party interest.
However, for this purpose, the third party here will not include a transferee D
whose transferar has not followed the procedure for transfer of policy.
(485-G-H; 486-A)
Madineni Kondaiah & Ors. etc. v. Yaseen Fatima, AIR (1986) A.P. 62
(FB), approved.
Anand Sarup Sharma v. P.P. Khurana & Ors. (1989) ACJ 577 and
National insurance Co. Ltd. v. Mallikarjun & Ors .. AIR (1990) Kant. 166,
overruled.
E
Northern India General Insurance Co. Ltd. v. Kanwarjit Singh, (1973)
ACJ 119; AIR (1973) All 357 and N. Kanakalashmi v. R. V. Subba Rao, F
(1972) 1 APLJ 249, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1816 of
1982.
From the Judgment and Order dated 30.7 .81 of the Madras High Court G
in A.A.O. No. 364 of 1979."
V. Sudeer for S. Srinivasan for the Appellant.
B.R. Sabharwal for the Respondents.
The Judgment of tee Court was delivered by
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478
SUPREME COURT REPORTS
[1999] 2 S.C.R.
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K. VENKA TASW AMI, J. An important question of law under the Motor
Vehicles Act, 1939 (hereinafter called 'the Act') has arisen for our consideration
in this appeal.
The question is whether the Insurance Policy iapses and consequently
the liability of the insurer ceases when the insured vehicle was transferred
B and no application/intimation as prescribed under section 103A of the Act
was made/given.
We find from the case law cited before us at the bar that there are
conflicting views among the High Courts on this issue. TExcerpt shown. Read the full judgment & AI analysis in Lexace.