MALLAMMA (DEAD) BY L.RS.versusNATIONAL INSURANCE CO. LTD. & ORS.

                       [2014] 4 S.C.R. 804


A                MALLAMMA (DEAD) BY L.RS.
                               v.
           NATIONAL INSURANCE CO. LTD. & ORS.
               (Civil Appeal No. 1391 of 2009)
                        APRIL 07, 2014
B
           [P. SATHASIVAM, CJI, S.A. BOBDE AND
                     N. V. RAMANA, JJ.]

       MOTOR VEHICLES ACT, 1988:
c
       s. 157 - Deemed transfer of insurance policy - Death of
  driver of tractor in an accident - Ownership of tractor
  transferred during validity of insurance policy and accident
  took place during said period - Held: Deceased workman was
D in the course of employment of second respondent in whose
  name ownership of vehicle stood transferred and said vehicle
  was covered under a valid insurance policy -- High Court
  ought not have simply brushed aside the decision of
  Commissioner fastening joint liability on Insurance Company,
E in the light of deeming provision contained in s. 157 (1).

       The instant appeal arose out of the claim-application
  filed before the Workmen's Compensation Commissioner
  by the dependants of a driver who, while in the
  employment of respondent no. 2, died as a result of over
F turn of the tractor he was driving. The Commissioner
  allowed the claim petition. However, the High Court held
  that the original owner of the tractor was one "G", and
  excluded the liability of respondent no.1-lnsurance
  Company on the ground that the contention of deemed
G transfer of the insurance policy in favour of respondent
  no. 2 by virtue of s. 157 of the Motor Vehicles Act, 1988
  was not urged before the Commissioner.

       Allowing the appeal, the Court
H                             804
     MALLAMMA (DEAD) BY L.RS. v. NATIONAL                805
          INSURANCE CO. LTD. & ORS.
    HELD:                                                       A

     From the finding recorded by the Commissioner, it
can be discerned that on the date of accident, the
ownership of the tractor stood transferred to respondent
no. 2. Besides, the 'Schedule of Premium' shows that an         B
amount of Rs. 15/- has been paid as premium "for LL. to
persons employed in connection with the operation and/
or loading of vehicle (IMT 19)". Thus, this Court is of the
considered view that as on the date of accident the
deceased workman was in the course of employment of
second respondent in whose name the ownership of the            C
vehicle stood transferred and the said vehicle was
covered under a valid insurance policy, the High Court
ought not have simply brushed aside the decision of the
Commissioner fastening joint liability on the Insurance
Company in the light of the deeming provision contained         D
ins. 157 (1)of the M.V. Act. The judgment passed by the
High Court is set aside and that of the trial court restored.
[para 14, 15 and 16] [810-C-G]

   G. Govindan Vs. New India Assurance Co. Ltd. 1999 (2)        E
SCR 476 = (1999) 3 SCC 754 - referred to.
                    Case Law Reference:
    1999 (2) SCR 476         referred to          para 10
                                                                F
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1391 of 2009.

     From the Judgment and order dated 10.08.2005 of the
High Court of Karnataka Bangalore in MFA No. 3842 of 2003
0f'/CA).                                                        G

    V.N. Raghupathy for the Appellants.

    M.K. Dua, Kishore Rawat for the Respondents.

    The Judgment of the Court was delivered by                  H
    806     SUPREME COURT REPORTS                [2014] 4 S.C.R.


A      N.V. RAMANA, J. 1. This appeal by special leave is
  directed against the impugned judgment and order dated 10th
  August, 2005 passed by the High Court of Karnataka in M.F.A.
  No. 3842 of 2003 whereby the High Court partly allowed the
  appeal preferred by the Respondent No. 1-National Insurance
B Company discharging it from the liability of payment of
  compensation to the claimants- Appellants.

       2. The brief facts of the case leading to this appeal are
  that on 3rd April, 1997 at about 1.00 p.m., when Honniah @
C Dodda Thimmaiah was returning from the field driving a tractor
  with the sand load on the trailor, the tractor overturned and
  Honnaih @ Dodda Thimmaiah died owing to the injuries
  sustained in the accident. Appellants herein are the claimants-
  legal representatives of the deceased Honniah @ Dodda
  Thimmaiah. The tractor involved in the accident had the
D registration number KA 18/717-718 and the tractor was
  originally registered in the name of one Gangadhara
  (Respondent No. 3) and the s::im~ was insured w!th the
  Respondent No. 1 while the deceased was employed as a
  driver with the Respondent No. 2-Jeeva Rathna Setty.
E
       3. On 4th September, 1997, the legal representatives of
  the deceased, filed an application before the Commissioner
  for Workman's Compensation, Chickmagalur (hereinafter
  referred to as "the Commissioner") claiming compensation
F under the Workmen's Compensation Act.

       4. The Commissioner while issuing notices to the
  respondents called for filing of objections. if any. The
  respondents filed objections denying their liability to pay
  compensation. The National Insurance Company (Respondent
G No. 1) deposed before the Commissioner that as per its
  records on the date of accident, the vehicle was no doubt under
  the insurance policy but in the name of Gangadhara, not in the
  name of Jeeva Ratna Setty, hence there is no relation of
  employee-employer between the deceased and Gangadhara
H and therefore, it has no burden of liability to pay compensation
     MALLAMMA (DEAD) BY L.RS. v. NATIONAL                 807
  INSURANCE CO. LTD. & ORS. [N.V. RAMANA, J.]
to the claimants.                                                A

       5. After hearing parties and perusing the documents
brought on record, the Commissioner came to the conclusion
that the deceased was employed with Jeeva Rathna Setty,
hence there is an employee-employer relationship between the
                                                                  B
deceased and the Respondent No. 1 and the deceased had
died during the course of his employment. At the time of
accident, the age of the deceased was determined as 25 years
with a monthly earning capacity of Rs.2,000/- p.m. and thereby
the Commissioner fixed compensation at Rs.2, 16,910/-. As the C
Insurance Company did not deposit the amount, the
Commissioner awarded an interest @ 12% p.a. from 3rd April
1997 till the date on which he passed the order, i.e. 14th
February, 2003, which amounted to Rs.1,50,265/- and ordered
that the appellants are entitled to receive a total compensation
of Rs.3,67,275/- from the employer Jeeva Ratna Setty and the D
Insurance Company. Finally, by the Award dated 28th February,
2003, the Commissioner held that though the insurance policy
was in the name of Gangadhara, the ownership of the vehicle
on the date of accident was with the Jeevaratna Setty; it is
proved that during the validity period of the said insurance E
policy, the said vehicle was transferred from Gangadhara to
Jeevaratna Setty; as per Section 157(1) of the Motor Vehicles
Act, 1968 whenever a vehicle is transferred from one pe..Son
to another, the benefits of the insurance policy shall also be
transferred to the new owner; accordingly instant policy benefits F
will· also be automatically transferred from Gangadhara to
Jeevaratna Setty. Therefore, the National Insurance Company
shall be liable to pay the compensation and interest thereupon
to the claimants. Accordingly, the Commissioner fixed the
liability of paying compensation on the Insurance Company and G
Jeeva Ratna Setty individually and severally and directed them
to deposit the amount within a period of 30 days from the date
of the Award failing which they shall further be liable to pay
interest@ 9% p.a. for the delayed period. The Commissioner,
however, discharged Gangadhara (Respondent No. 3) and H
    808     SUPREME-COURT REPORTS                 [2014] 4 S.C.R.

A Laxmana Bhovi, (Respondent No. 4) from the case.

         6. Aggrieved by the said order of the learned
    Commissioner, the Insurance Company (Respondent No. 1)
    filed M.F.A. No. 3842 of 2003 before the High Court of
    Karnataka urging that no liability could have been fastened by
8
    the Commissioner on the Insurance Company.

        7. The High Court, by the impugned order, affirmed the
  findings of the Commissioner that (i) the deceased workman
  was actually employed with Jeeva Rathna Shetty, and therefore,
C there is a relation of employee-employer between them; (ii) the
  deceased workman having died as a result of an accident
  arising out of and in the course of employment, hence the
  claimants as legal representatives of the deceased are entitled
  to recover compensation, (iii) there was a valid insurance policy
D in force on the date of accident (iv) and the original owner of
  the tractor was Gangadhara. However, the High Court excluded
  the liability of the Insurance Company on the ground that the
  contention of deemed transfer of the insurance policy in favour
  of Jeeva Rathna Setty by virtue of Section 157 of M.V. Act was
E not actually urged before the Commissioner.

        8. Against the Judgment of the High Court relieving the
    Insurance Company from the liability of payment of
    compensation, the claimants are before this Court in this
    appeal.
F
        9. We have heard learned counsel for the parties and
    perused the material on record.

       10. Before us, learned counsel for the appellants relying
G upon Section 157 of the M.V. Act, contended that there is an
  admitted transfer of ownership of the vehicle as proved before
  the Commissioner. Once the ownership of the vehicle is
  admittedly proved to have been transferred to Jeeva Rathna
  Setty, the existing insurance policy in respect of the same
H vehicle will also be deemed to have been transferred to the
      MALLAMMA (DEAD) BY L.RS. v. NATION1\L                   809
   INSURANCE CO. LTD. & ORS. fN.V. RAMANA. J.]

  new owner and the policy will not lapse even if the intimation     A
  as required under Section 103 of the M.V. Act is not given to
  the insurer, hence the impugned order passed by the High
  Court is contrary to law. In support of this contention, learned
  counsel for the appellant has relied upon a judgment of this
, Court in G. Govindan Vs. New India Assurance Co. Ltd. (1999)       B
  3 sec 754.

      11. Learned counsel has also brought to our notice a
 relevant portion from the 'Schedule of Premium' of the insurance
 policy, a copy of which is available on record as Annexure P-       C
 1., which reads thus:

      B.    LIABILITY TO PUBLIC                       Rs. 120-00
            RISK Liability to Trailor                 Rs. 87-00

      Add: for L.L. to persons employed in            Rs. 15-00      D
           Connection with the operation and/
           or loading of vehicle (IMT 19)
      Add: for increased third party property         Rs. 75-00
            damage limits. Section 11-l(ii)
                                                                     E
            upto Rs. Unltd. IMT 70
            TOTAL PREMIUM (A +B)                     Rs. 1318-00

      12. On the other hand, learned counsel for the National
 Insurance Company, mainly contended that unless it is proved
                                                                     F
 by evidence that the vehicle has been transferred in the name
 of Jeeva Rathna Setty, the deeming provision of Section 157
 of the M.V. Act would not be applicable. In the absence of such
 evidence on record the High Court has rightly absolved the
 Insurance Company from the liability and the order passed by
 the High Court does not require any interference from this Court.   G

       13. The counsel for the Insurance Company of course
 contended that as per their records, on the date of accident,
 the vehicle was registered in the name of Gangadhara. Hence
 in the absence of a valid proof that the ownership of the vehicle   H
    810       SUPREME COURT REPORTS                 [2014] 4 S.C.R.


A   has been transferred in the name of Jeeva Ratna Setty, the
    benefits of insurance policy cannot be given to Jeeva Ratna
    Setty. However, the said contention is contrary to record. A
    specific finding by the Commissioner to this effect in his order
    dated 28th February, 2003 reads thus:
B
           "The 4th respondent had stated that on the date of the
           accident, this vehicle was in the name of Sh. Gangadhara.
           But the applicants have proved the said statement as false
           through documents and on the date of the accident, the
           vehicle was in the name of the Respondent No.1."
c
       14. In view of the above finding, it can be discerned that
  on the date of accident, the ownership of the tractor stood
  transferred from Gangadhara to Jeeva Ratna Setty. In addition
  to that, a perusal of the 'Schedule of Premium' extracted above
D shows that an amount of Rs.15-00 has been paid as premium
  "for L.L. to persons employed in connection with the operation
  and/or loading of vehicle (IMT 19)".

       15. In view of the above discussion we are of the
E considered view that as on the date of accident, the deceased
  workman was in the course of employment of Jeeva Rathna
  Setty in whose name the ownership of the vehicle stood
  transferred and the said vehicle was covered under a valid
  insurance policy, the High Court ought not have simply brushed
  aside the decision of the Commissioner fastening joint liability
F on the Insurance Company in the light of the deeming provision
  contained in Section 157 (1) of the M.V. Act.

       16. For the foregoing reasons, we allow this appeal, set
  aside the impugned judgment passed by the High Court and
G restore the judgment of the trial Court.

           17. There shall, however, be no order as to costs.

    R.P.                                            Appeal allowed.

H