FIRDAUSversusORIENTAL INSURANCE CO. LTD. & ORS.

                           [2017] 6 S.C.R. 462


A                              FIRDAUS
                                    v.
              ORIENTAL INSURANCE CO. LTD. & ORS.
                     (Civil Appeal No. 9310 of 2017)
B                            JULY 14,2017
             [A. K. SIKRI AND ASHOK BHUSHAN, JJ.)
           Compensation:
          Fatal motor accident - Claim for compensation by the
C relatives of the deceased - Before Workmen Compensation
  Commissioner - Pleading that the deceased was employee of
  defendant Nos. 1,2 and 4 - Plea of defendant No.I that he was the
  owner of the vehicle (which the deceased was driving) and had
  sold the same to defendant No.4 - Award of compensation -
D Challenged by defendant No.3-lnsurance Company - High Court
  remanded the matter to Compensation Commissioner to determine
  inter se relationship between defendant No.I and the deceased as
  employer and employee - On appeal, held: There is no dispute that
  defendant No. I was the owner of the vehicle and the insurance
  policy was in his name - No material was placed to prove that the
E vehicle stood in the name of defendant No.4 - High Court having
  not returned any finding that vehicle was transferred to defendant
  No.4, ought not to have set aside the award - However, liability of
  the insurance company is not affected even if the vehicle gets
  transferred to the name of another party in view of s. 157 of Motor
  Vehicles Act, 1988 - Compensation Commissioner rightly fastened
F
  the liability on the Insurance Company - Motor Vehicles Act, 1988
  - s. 157.
           Allowing the appeal, the Court
            HELD: 1. There is no dispute that defendant No.1 was
G   the owner of the vehicle who got it insured with the Insurance
    Company. The Workmen Compensation Commissioner observed
    that defendant No.1 failed to produce the Registration Certificate
    of the vehicle and since the name of defendant No.l was in the
    insurance policy as owner of the vehicle, which points out that
    the vehicle was in the name of defendant No.1 till,date. Before
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                                 462
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   FIRDAUS v. ORIENTAL INSURANCE CO. LTD, & ORS.                     463


the High Court also, no material has been placed on the record A
which proved that vehicle stood in the name of defendant No.4.
The Workmen Compensation Commissioner had come to the
conclusion that defendant No.1 still continues to be the owner of
the vehicle and defendant No.4 has only been looking after the
vehicle. The High Court having not returned any finding that B
vehicle was transferred to defendant No.4, ought not to have set
aside the award of the Workmen Compensation Commissioner.
The reliance on the mere submission of the claimant that his son
was an employee of defendant No.4 has no significance. The
claimant was not the person who had knowledge of ownership Of
the truck except what he was told by his deceased son. When the c
Registration Certificate of the vehicle was not produced by
defendant No.1, the High Court ought to have drawn the adverse
inference which was drawn by Workmen Compensation
Commissioner against defendant No.1 regarding the ownership
of the vehicle. [Para 12] [467-C-F]
                                                                    D
        2.1 Even if it is assumed that vehicle was transferred from
defendant No.1 to defendant No.4, there will be no consequence
with regard to liability of the Insurance Company to pay
compensation. Even if vehicle stand transferred to the name of
another person, the liability of insurer to pay compensation to
                                                                    E
third party shall not cease. [Para 13] [467-G; 468-A-B]
      Rikhi Ram and Another v. Sukhrania (Smt) and Others
      (2003) 3 sec 97 : [2003] 1 SCR 872 - relied on.
       2.2 Secfion 157 sub-section (1) contains the deeming
provision that "the certificate of insurance and the policy          F
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 this transfer." [Para 15]
(470-D]
        2.3 Thus, in either of the eventuality, i.e. whether         G
defendant No.1 was the owner of the vehicle on the date of the
accident, or defendant No.4 was the owner of the vehicle, the
liability of Insurance Company continues and Workmen
Compensation Commissioner has rightly fastened the liability on
the Insurance Company. The remand made by the High Court to          H
464            SUPREME COURT REPORTS                        [2017] 6 S.C.R.


A     find out as to whether the deceased was an employee of defendant
      No.1 or not, was unnecessary. [Para 16] (471-A-B]
                             Case Law Reference
          [2003] 1 SCR 872           relied on                 Para9

B
             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9310
      of 2017.
              From the Judgment and Order dated 12.12.2014 of the High
      Court of Judicature at Allahabad in First Appeal From Order No. 233 7
C     of2005.
              Syed Mehdi Imam, Uzmi Jamil Husain, Mohd. Parvez Dabas,
      Shakil Ahmed Syed, Advs. for the Appellant.
             Ajay Singh, Dr. Nafis A. Siddiqui, Amit Anand Tiwari,
D     Ms. Vishakha, Advs. for the Respondents.
              The Judgment of the Court was delivered by
              ASHOK BHUSHAN, J. I. Leave granted.
              2. This appeal has been filed against the judgment of the High
      Court of Judicature at Allahabad, dated 12.12.2014 in First Appeal from
 E    Order No.2337 of2005 filed by the respondent- Oriental Insurance Co.
      Ltd., challenging the award passed by the Workmen Compensation
      Commissioner, awarding a sum ofRs.4,27,148/- (Rupees Four Lakhs
      Twenty Seven Thousand One Hundred and Forty Eight Only) along
      with interest of 12% per annum to claimants. The brief facts of the case
 F    are:
               3. On 01'' September, 2003, Parvez Khan, the husband of
      appellant was driving the vehicle No.HR-2 G 1875 while going to Rampur
      from Hapur. The vehicle was hit by a truck bearing No.UP 22 C-9714
      coming from the opposite side and due to the accident, Parvez Khan
 G    died on the spot. Abdul Khalid, the father of deceased filed a claim for
      compensation before the Commissioner, Workmen Compensation,
      claiming an amount ofRs.4,50,000/-(Rupees Four Lakhs Fifty Thousand
      Only) with 12% interest and also demanded 50% of that as penalty.
      Respondent nos.2 and 3 to the appeal were impleaded as defendant
      nos. I and 2. The Oriental Insurance Co. Ltd. was impleaded as third
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   FIRDAUS v. ORIENTAL INSURANCE CO. LTD. & ORS.                           465
                [ASHOK BHUSHAN, J.]

defendant whereas Mohd. Anis was impleaded as fourth respondent- A
defendant. It was pleaded in the claim that Parvez Khan was an emproyee
under the employment of defendant no. I, 2 and 4, who was getting
Rs.4,000/- (Rupees Four Thousand Only) as salary per month. All the
defendants filed their counter affidavits. The case of defendant no. I
was that the vehicle No.HR-2 G 1875 was owned by defendant no. I
                                                                        B
which he had sold out to defendant no.4.
        4. It was accepted that the vehicle was insured with Oriental
Insurance Co. Ltd. forthe period from 06.11.2002 to 05.11.2003; thus at
the time of accident the vehicle was insured with the Oriental Insurance
Co. Ltd.
                                                                           c
        5. The Workmen Compensation Commissioner allowed the
claim, awarding a sum ofRs.4,27,148/- (Rupees Four Lakhs Twenty
Seven Thousand One Hundred and Forty Eight Only) as compensation
along with 12% interest per annum, aggrieved against which, the Oriental
Insurance Co. Ltd. filed the first appeal in the High Court.
                                                                           D
          6. The High court vide its judgment dated 12.12.2014 has set
aside the award of the Workmen Compensation Commissioner and
remanded the matter for fresh decision. The rl\ason for remand has
been mentioned by the High court in paragraph 6 of the judgment which
is to the following effect:
                                                                           E
            "Since the claimant himself admitted that his son was
         employee of Mohd. Anis, therefore, it is proved that he was not
         the employee of defendant no. I Mis Santosh Dental Hospital.
         In these circumstances, whether the Insurance Company, who
         has insured vehicle with the ownership of defendant no. I, was
         liable for payment of compensation, on this aspect nothing has F
         been considered and the entire case has been considered only
         on the aspect that vehicle has been registered in the name of
         defendant no. I and, therefore, Insurance Company is liable to
         pay compensation. The inter se relationship of employer and
         employee with defendant no. I and deceased has not been G
         considered and there is no discussion on this issue and whether
         in these circumstances the Insurance Company was liable to
         pay compensation, is another issue which has not been
         considered."

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466              SUPREME COURT REPORTS                         [2017] 6 S.C.R.


A             7. The wife of the claimant, who was one of the respondent in
      the High court, has come up in appeal against the judgment of the High
      court.
                8. We have heard the counsel for the parties and perused the
      record.
B                9. Learned counsel for the appellant contends that there being
      no dispute that vehicle was insured with the Oriental Insurance Co. Ltd.·
      on the date of accident, the Workmen Compensation Commissioner has
      rightly awarded the compensation against the Oriental Insurance Co.
      Ltd. It is submitted that no proof was filed by defendant no. I- Mis Santosh
c     Dental Hospital (respondent No.2 herein) who had got the vehicle insured
      that he has transferred the vehicle to defendant no.4, but even if it is
      assumed that vehicle was transferred to defendant no.4, there shall be
      no effect on the liability of Oriental Insurance Co. Ltd. to pay the
      compensation. The learned counsel for the appellant has also placed
      reliance on the judgment of this Court in Rikhi Ram And Another vs.
D     Sukhrania (Smt) And Others 2003 (3) SCC 97.
                10. Learned counsel for the Oriental Insurance Co. Ltd. On the
      other hand, has refuted the submission of the appellant and contended
      that the High court has rightly remanded the matter for determining the
      liability of Oriental Insurance Co. Ltd., since it is not proved that Mohd.
E     Anis was an employee of defendant no. I, who got the vehicle insured.
      From the facts on the record, the following are admitted:
                   (a) The vehicle was insured by Oriental Insurance Co. Ltd.
                   for the period from 06.11.2002 to 05.11.2003 i.e. on the date
                   of accident on 01.09 .2003, the vehicle was insured.
 F
                   (b) The defendant no. I was registered owner of the vehicle
                   who claimed that vehicle has been transferred by him to
                   defendant no.4.
                   (c) Parvez Khan died on 01.09.2003 as result of injuries
                   inflicted from the accident. Parvez Khan was 26 years of
G
                   age and was receiving a salary ofRs.4,000/- (Rupees Four
                   Thousand Only) per month.
              1l. The High court in its judgment has relied on the submission
      of claimant-Abdul Khalid where he has stated that his son was an
      employee of Mohd. Anis, as driver of truck owned by defendant no.4.
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   FIRDAUS        v. ORIENTAL INSURANCE CO. LTD. & ORS.                        467
                       [ASHOK BHUSHAN, J.]

The High court referring to the above statement held that it is not proved     A
that Parvez Khan was an employee of defendant no. I i.e. Mis Santosh
Dental Hospital. Hence, what is the liability of Oriental Insurance Co.
Ltd., who insured the vehicle in the ownership ofM/s Santosh Dental
Hospital, needs to be examined by the Workmen Compensatio·n
Commissioner. Hence, the case was remanded.
                                                                               B
          12. The Workmen Compensation Commissioner in its judgment
has noted that case of defendant no. I as disclosed in the counter affidavit
that he has sold out his vehicle to defendant no.4. There is no dispute
that defendant no. I was the owner of the vehicle who got it insured with
the Oriental Insurance Co. Ltd. The Workmen Compensation
Commissioner has also observed that defendant no. I failed to produce
                                                                               c
the Registration Certificate of the vehicle and since the name of defendant
no. I is in the insurance policy as owner of the vehicle, which points out
that the vehicle is in the name of defendant no. I till date. Before the
High Court also, no material has been placed on the record which proved
that vehicle stood in the name of defendant no.4. The Workmen                  D
Compensation Commissioner had come to the conclusion that defendant
no.I still continues to be the owner of the vehicle and defendant No.4
has only been looking after the vehicle. The High court having not returned
any finding that vehicle was transferred to defendant no.4, ought not to
have set aside the award of the Workmen Compensation Commissioner.
                                                                               E
The reliance on the mere submission of the claimant that his son was an
employee of Mohd. Anis - defendant no.4 has no significance. Abdul
Khalid the claimant was not the person who has knowledge of ownership
of the truck except what he was told by his deceased son. When the
Registration Certificate of the vehicle was not produced by defendant
no. I the High court ought to have drawn the adverse inference which           F
was drawn by Workmen Compensation Commissioner against defendant
no. I regarding the ownership of the vehicle.
         13. Even if it is assumed for the sake of arguments that vehicle
was transferred from defendant no. I to defendant no.4, there will be no
consequence with regard to liability of Oriental Insurance Co. Ltd. to         G
pay compensation. The issue has been answered in Rikhi Ram Case
(Supra) also. The vehicle involved in the accident in the aforesaid case
was insured by another owner, namely M/s Bhagwan Rai Amrit Lal,
which was purchased by two other persons subsequently. No intimation
of transfer was given to Oriental Insurance Co. Ltd. The question arose
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468           SUPREME COURT REPORTS                          (2017] 6 S.C.R.


A in the above case, as to whether in absence of intimation of transfer to
  the Insurer the liability to pay the compensation to the third party shall
  cease. This Court held that even if vehicle stand transferred to the name
  of another person, the liability of insurer to pay compensation to third
  party shall not cease. The relevant discussion on the issue is contained
B in paragraphs 3 to 7 of the judgment, which is quoted as below:
           (3) This Court in G Govindan v. New India Assurance Co. Ltd.
           and Ors. has settled the controversy as regards liability of insurer
           to pay compensation to third party in the absence of any intimation
           of transfer of the vehicle to the transferee. It was held therein
           that since insurance against third party is compulsory, and once
 c .       the insurance company had undertaken liability to third party
           incurred by the persons specified in the policy, the third party's
           right to recover any amount is not affected by virtue of the
           provisions of the Act or by any condition in the policy. We are of
           the view tha~ said decision concludes the controversy in the present
D          appeal. However, we would like to give further reasons that the
           liability ofan insurer does not come to an end even ifthe owner of
           the vehicle does not give any intimation of transfer to the insurance
           company. Chapter VIII of the Act has been enacted following
           several English statutes. In England, Prior to 1930, there was no
           law of compulsory insurance in respect of third party rights.
 E         Whenever an accident took place the victim or the injured used to
           take legal proceedings against an erring motorist for recovery of
           damages. But many a times, it was found that the owner of an
           offending vehicle was not always in a position to pay compensation
           or damages to the injured or to the dependants of the deceased
 F         and in that event the claimants could not get the damages. To
           meet such a situation, various legislations were enacted in England.
           For the first time, Third Parties (Rights Against Insurers) Act,
            1930 was_ enacted, the provisions of which find place in Section
           97 of the Act which gave to third party right to sue directly against
           the insurer. Subsequently, the Road Traffic Act, 1930 was enacted
 G         which provided for compulsory insurance of motor vehicles. The
           provisions of the said Act was engrafted in Section 95 of the Act.
           Under Section 38 of English Act, 1930, certain conditions of
            insurance policy were made ineffective so far as the third parties
            were concerned. The object behind the aforesaid legislation. was
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FIRDAUS v. ORIENTAL INSURANCE CO. LTD. & ORS.                            469
             [ASHOK BHUSHAN, J.]

 that third party right should not suffer on account of failure to       A
 comply with those terms of the insurance policy. Section 94 of the
 Act gives protection to third party in respect of death or bodily
 injury or damage to the property while using the vehicle in public
 place and, therefore, the insurance of vehicle had been made
 compulsory under Section 94 read with Section 95 of the Act.
                                                                         B
   4. A perusal of Sections 94 and 95 would further show that the
 said provisions do not make compulsory insurance to the vehicle
 or to the owners. Thus, it is manifest that compulsory insurance is
 for the benefit of third parties. The scheme of the Act shows that
 an insurance policy can cover three kinds of risk, i.e. owner of
 the vehicle; property (vehicle) and third party. The liability of the   C
 owner to have compulsory insurance is only in regard to the third
 party and not to the property. Section 95(5) of the Act runs as
 follows:
     "95. (5) Notwithstanding anything elsewhere contained in any
 law, a person issuing a policy of insurance under this section shall    D
 be liable to indemnify the person or classes of person specified in
 the policy in respect of any liability which the policy purports to
 cover in the case of that person or those classes of person."
 5. The aforesaid provision shows that it was intended to cover
 two legal objectives. Firstly, that no one who was not a party to a     E
 contract would bring an action on a contract; and secondly, that.a
 person who has no interest in the subject matter of an insurance
 can claim the benefit of an insurance. Thus, once the vehicle is
 insured, 'the owner as well as any other person can use the ve-
 hicle with the consent of the owner. Section 94 does not provide        F
 that any person who will use the vehicle shall insure the vehicle in
 respect of his separate use.
 6. On an analysis of Section 94 and 95, we further find that there
 are two third parties when a vehicle is transferred by the owner
 to a purchaser. The purchaser is one of the third parties to the        G
 contract and other third party is for whose benefit the vehicle
 was insured. So far, the transferee who is the third party in the
 contract, cannot get any personal benefit under the policy unless
 there is a compliance of the provisions of the Act. However, so

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470            SUPREME COURT REPORTS                         [2017] 6 S.C.R.


A           far as third party injured or victim is concerned, he can enforce
          ' liability undertaken by the insurer.
            7. For the aforesaid reasons, we hold that whenever a vehicle
            which is covered by the insurance policy is transferred to a
            transferee, the liability of insurer does not cease so far as the
.B          third party/victim is concerned, even if the owner or purchaser
            does not give any intimation as required under the provisions of
            the Act.
              14. In Rikhi Ram Case (Supra), although this Court considered
      the provisions of Motor Vehicles Act, 1939, but the Motor Vehicles Act,
C     1988 also contains the similar provisions under Section 146, 14 7 and 157
      of the Act. Hence, the ratio of judgment in Rikhi Ram case is fully
      applicable in the facts of the present case also.
               15. Section 157 of the Motor Vehicles Act, 1988 clinches the
      issue. Section 157 sub-section( I) contains the deeming provision that
D     "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 this
      transfer." Sub-section(!), Section 157 which is relevant is quoted as
      below:

 E                 "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 certificate of
 F              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
 G              declared that such deemed transfer shall include transfer of
                rights and liabilities of the said certificate of insurance and
                policy of insurance]."
             16. In view of the above, it is not necessary for us to give any
      concluded finding regarding ownership of the vehicle No.HR 2 G 1875
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    FIRDAUS v. ORIENTAL INSURANCE CO. LTD. & ORS.                            471
                 [ASHOK BHUSHAN, J.]

on the date of accident for the purpose of this case. In either of the       A
eventuality, i.e. whether defendant no. I was the owner of the vehicle on
the date of the accident, or defendant no.4 was the owner of the vehicle,
the liability of Oriental Insurance Co. Ltd. continues and Workmen
compensation Commissioner has rightly fastened the liability on the
Insurance Company. The remand made by the High court to find out as          B
to whether Parvez Khan was an employee of the defendant no. I or not,
was unnecessary.
          17. We are thus of the opinion that the High court committed an
error in setting aside the order ofWorkmen Compensation Commi&sioner.
In the result, the appeal is allovred, the judgment and order of the High
court dated 12.12.2014 is set aside, and that ofWorkmen Compensation         C
Commissioner awarding compensation of sum ofRs.4,27, 148/-(Rupees
Four Lakhs Twenty Seven Thousand One Hundred and Forty Eight Only)
with interest @ 12 % per annum from the date of accident is restored.
        18. The Workmen Compensation Commissioner shall take steps
for ensuring payment of the compensation to the claimants.                   D


.Kalpana K.Tripathy                                        Appeal allowed.