Partly allowed

Bapu Nivrutti Devkate. v. Parwatibai Bibhishan Jadhav and Ors.

Bombay HC6 Sept 2001FA/1077/1985

Case brief

AI extract

What is this about?

This appeal and cross-objection concerned compensation for a death caused by a truck accident. The court held the appellant was the owner, the insurer was liable despite policy defects and lack of intimation, affirmed negligence, and enhanced compensation from Rs.36,000 to Rs.50,000.

What did the court decide?

Compensation enhanced to Rs. 50,000 with 9% interest; balance payable by insurer; insurer entitled to recover from appellant and legal heirs of insured.

Bapu Nivrutti Devkate. Vs Parwatibai Bibhishan Jadhav… — Motor Accident Claims | Bombay HC (1993)

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SD

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 CIVIL APPELLATE JURISDICTION

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 FIRST APPEAL NO.1077 OF 1985
 WITH

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 CROSS OBJECTION (ST.) NO.3856 OF 1986

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 Bapu Nivrutti Devkate ...Appellant
 V/s.
 Parvatibai Bibhishan Jadhav & Ors. ...Respondents

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 Mr.A.M. Kulkarni, Advocate, for the Appellant.

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 Mr.S.D. Thokade, Advocate, for Respondent Nos.1 and 2.

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 Mr.S.M. Vidyarthi, Advocate, for Respondent No.4.

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 Mr.P.M. Mengane, Advocate, for Respondent Nos.5 to 7.

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CORAM : ABHAY S. OKA, J.

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DATE : 10TH APRIL, 2008.

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ORAL JUDGMENT :

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 1. The submissions of the learned Counsel

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 appearing for the parties were heard on 28th February,
 2008. The Appeal was kept for dictation of Judgment
 on 27th March, 2008. On account of paucity of time,
 Judgment could not be dictated and, therefore now the
 Appeal is kept today for dictation of Judgment.

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 2. The appellant has taken an exception to the
 Judgment and Award dated 28th February, 1985 passed by
 the learned Member of the Motor Accident Claims
 Tribunal at Solapur. It will be necessary to briefly

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 refer to the facts of the case.

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 3. The 1st and 2nd respondents filed an
 application under Section 110-A of the Motor Vehicles
 Act, 1939 claiming compensation on account of death of
 one Bibhishan Sonba Jadhav. The 1st respondent is the
 widow of the deceased and the 2nd respondent is the
 daughter of the deceased who was a minor at the time
 of filing of the claim petition. The deceased was
 employed as a line-helper with the Maharashtra State
 Electricity Board and was earning Rs.450/- per month.
 The accident occurred on 11th April, 1979. On that
 fateful day, in the afternoon, he was proceeding on
 his bicycle by Shelgaon-Vairag Road. At that time a
 truck bearing No.MHF-8707 gave a dash to the deceased.
 The deceased was knocked down from his bicycle. The
 claim for compensation was made in the sum of
 Rs.1,07,060/-.

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 4. In the claim petition the appellant was
 impleaded as the purchaser of the said truck. A case
 was made out by the appellant (opponent No.1 in the
 claim petition) in his written statement that the
 driver of the truck was driving the truck by correct
 side at a moderate speed. It is alleged that the
 deceased was plying his bicycle on the wrong side of

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 the road and the accident occurred due to negligence
 of the deceased. The driver of the truck namely the
 3rd respondent in the Appeal also filed his written
 statement. It is his case that he was driving the
 truck in a normal speed and the entire negligence was
 on the part of the deceased. According to him the
 deceased and his friend were proceeding towards Vairag
 by two different bicycles. There was a bullock-cart
 in front of them. The truck was behind the said
 deceased and his friend. It is stated that on
 sighting the bullock-cart he reduced the speed of the
 truck and sounded horn. At that stage the deceased
 and his friend overtook the bullock-cart. It is
 alleged that the deceased after overtaking the
 bullock-cart instead of taking the bicycle to left
 side, turned his bicycle towards right. As he was
 carrying load, he could not balance the bicycle
 properly. He stated that the deceased was frightened
 as he lost his balance and the load carried by him
 fell down on the road. It is alleged that the 3rd
 respondent took the truck towards his right side and
 stopped. Thereafter he noticed that the deceased was
 lying on the tar road with bleeding injury to his
 head. It is stated that the 3rd respondent took the
 deceased to the hospital.

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 5. The 4th respondent-insurance company was
 impleaded as the insurer of the truck. The insurance
 company filed a written statement contending that the
 insured transferred the truck to the appellant without
 any intimation to the said company. It is alleged
 that there was a breach of conditions of the policy of
 insurance as the driver was not the employee of the
 insured and did not possess a driving licence. It was
 stated that the limit of the liability under the
 insurance policy was Rs.50,000/-. It was contended
 that the policy was in the name of one S.M. Kumbhar
 who was already dead and therefore the said respondent
 No.4 was not liable.

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 6. A written statement was filed by the 5th
 respondent. In the written statement he stated that
 the truck was owned by his father Shivappa who under a
 will made a bequest of the said truck to the 5th
 respondent. The said Shivappa died on 21st February,
 1978. Thereafter on 3rd October, 1978, the 5th
 respondent sold the truck to the appellant. It is
 stated that the 5th respondent thereafter applied to
 the Regional Transport Office, Pune for change of
 name. On 25th October, 1979, an entry of the the
 truck was made in the name of the 5th respondent. The
 5th respondent submitted that on the day of the

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 accident, the appellant was the owner of the truck and
 therefore only the appellant was liable to pay
 compensation.

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 7. The learned Member of the Tribunal framed
 various issues. The first issue was regarding the
 negligence. The learned Judge held that the accident
 occurred due to rash and negligent driving on the part
 of the 3rd respondent. The learned Member of the
 Tribunal observed that on 3rd October, 1978, the
 appellant had obtained possession of the truck. It
 was observed that the appellant also took the custody
 of the registration book and insurance policy on 3rd
 October, 1978. He also renewed the insurance policy
 in the name of Mr.S.M. Kumbhar from 31st October,
 1978 till 30th October, 1979 by paying the premium.
 The learned Member of the Tribunal observed that the
 next policy from 31st October, 1979 was for a year
 which was similarly got renewed by the appellant. The
 learned Member of the Tribunal held that since 3rd
 October, 1978, the appellant was running the truck as
 the owner thereof and that was possessing the
 registration and insurance documents of the truck.
 The learned Member of the Tribunal observed that not
 only that the appellant entered into possession but
 did considerable business of transport with the truck.

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 It was held that prior to the date of the accident he
 had satisfied and fully repaid the bank loan. The
 learned Member of the Tribunal referred to the
 decision of this Court in the case of Smt.Gulab Bai
 V/s. Peter [1975 SCJ 100]. Thereafter the learned
 Member of the Tribunal proceeded to observe that it
 was not the case of the 4th opponent i.e. the 5th
 respondent herein that he had informed the insurer
 i.e. the 4th respondent herein of the change in
 ownership. He observed that there was no question of
 assent on the part of the insurer to the transfer of
 the vehicle unlike in the Bombay decision. The
 learned Member of the Tribunal held that the insurer
 of the vehicle was not liable to pay the compensation.
 After computing the compensation payable, a sum of
 Rs.36,000/- with proportionate costs and interest at
 the rate of 6% p.a. was granted by the Tribunal to
 the respondent Nos.1 and 2. The compensation was made
 payable by the appellant and the 3rd respondent
 herein.

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 8. The Advocate for the appellant challenged the
 finding of the Tribunal on the issue of negligence.
 He submitted that the learned Member has committed an
 error by holding that the appellant was liable to pay
 compensation in his capacity as the owner. It was

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 submitted that mere possession of the vehicle does not
 confer any title on the transferee. He submitted that
 on the date of the accident, the appellant was neither
 a registered owner nor even an ostensible owner of the
 motor truck. Therefore, the appellant was not liable
 to pay the compensation on account of death caused in
 accident. He submitted that the Tribunal ought to
 have held that the person who was the registered owner
 of the vehicle at the time of accident should be taken
 as the owner of the vehicle. In respect of the
 transfer, it is submitted that on the date of the
 accident i.e. on 11th April, 1979, the motor vehicle
 stood registered in the name of the deceased husband
 of respondent No.7. The last submission made by the
 learned Counsel for the appellant is that in any event
 the insurer of the vehicle ought to have been held
 liable for payment of compensation. The learned
 Advocate for the appellant has taken me through the
 notes of evidence and various decisions of this Court
 and other High Courts. He also submitted that the
 compensation granted is on the higher side.

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 9. The learned Counsel appearing for respondent
 Nos.1 and 2 supported the finding on the issue of
 negligence by inviting attention of this Court to the
 evidence of the witnesses. He submitted that the

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 compensation awarded is on the lower side. He
 submitted that compensation of Rs.1,00,000/- ought to
 have been granted. He submitted that interest ought
 to have been awarded at the rate of 12% p.a. He
 submitted that the Cross-Objection deserves to be
 allowed.

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 10. Reliance is placed by the Counsel appearing
 for the insurer of the truck on certain decisions. He
 submitted that the insured had never informed the
 insurer of the transfer of the truck and therefore,
 the insurer was not liable. He submitted that the
 policy of insurance was in the name of the dead person
 (S.M. Kumbhar) and therefore, it was null and void.
 He submitted that no interference was called for.

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 11. Broadly, three questions arise in the Appeal;
 (i) whether the appellant was the owner of the truck
 on the date of the accident? (ii) whether the insurer
 (the 4th respondent) was liable to pay compensation?
 (iii) whether the finding of the Tribunal on the issue
 of negligence is correct? (iv) whether the quantum of
 compensation awarded is just and reasonable?

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 12. Before adverting to the submissions made by
 the learned Counsel appearing for the parties it will

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 be necessary to refer to the evidence adduced by the
 parties. Firstly a reference will have to be made to
 the evidence of the appellant. He stated that the
 accident took place on 11th April, 1979 in which the
 truck was involved. According to him the original
 opponent No.4 (respondent No.5) was the owner at the
 time of the accident. The case made out by the
 appellant is that he purchased the truck on 8th
 February, 1980 and that he insured the truck on the
 same day. He stated that the employer of the deceased
 had deposited a sum of Rs.10,000/- in the Civil Court
 for making payment to the 1st respondent (1st
 claimant). He was cross examined by the Advocates
 appearing for the parties. In the cross-examination
 he stated that the talks regarding purchase of the
 vehicle in question took place in October, 1978. He
 stated that he agreed to purchase the truck for
 Rs.57,000/-. He stated that he paid a sum of
 Rs.37,000/- to the 5th respondent on that day. He
 stated that the truck was hypothecated in favour of
 the Bank of India for the sum of Rs.20,000/-. He
 admitted that prior to the date of the accident, he
 had paid the entire amount payable to the bank. He
 stated that on 25th October, 1979, the registration of
 the vehicle was changed in the name of respondent
 No.5. He stated that on 8th February, 1980 he himself

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 applied to the R.T.O., Solapur and got the vehicle
 registered in the name of his son Dayashankar. He
 stated that from 3rd October, 1979 he was running the
 truck as owner thereof.

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 13. He was cross-examined by the Advocate for the
 1st and 2nd respondents. He stated that on 3rd
 October, 1978 when he took possession of the truck, he
 also obtained the registration book and insurance
 policy. On 31st October, 1978, the insurance policy
 was renewed. The other evidence is of the driver of
 the truck. It will be necessary to refer to the
 evidence of the driver of the truck at a later stage.

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 14. It will be necessary to refer to certain
 documents produced on record. At Exhibit-98 there is
 a true copy of the policy produced by the 4th
 respondent-insurance company which was valid from 31st
 October, 1978 to 30th October, 1979. In the said
 policy the name of the insured is mentioned as S.M.
 Kumbhar (Shivappa M. Kumbhar). Thus the insured
 shown in the policy of the insurance is the said S.M.
 Kumbhar who was admittedly not alive on the day on
 which the policy was issued. Therefore a submission
 has been made by the learned Counsel appearing for the
 insurance company that the policy stood in the name of

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 a dead person and therefore the said policy was not
 valid.

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 15. It will be necessary to refer to the
 deposition of the appellant (the opponent No.1).
 Though in examination-in-chief he came out with the
 case that he purchased the truck involved in the
 accident on 8th February, 1980, in the

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 cross-examination he has disclosed following facts:-

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 (a). The negotiations for purchase of the
 truck took place between the appellant and the
 original opponent No.4 i.e. respondent No.5
 herein on 3rd October, 1978.

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 (b). He agreed to purchase the truck for
 the price of Rs.57,000/- and on 3rd October,
 1978, the truck was placed in his possession
 against payment of sum of Rs.37,000/- made by
 him to the 5th respondent.

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 (c). The truck at the relevant time was
 hypothecated in favour of Bank of India and
 the amount payable to Bank of India was
 Rs.20,000/-. It was agreed that the appellant
 will pay instalment of Rs.2,000/- per month to

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 the said Bank.

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 (d). 4 days prior to the date of accident,
 the appellant paid the last instalment to the
 Bank and cleared all its dues.

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 (e). On 25th October, 1979, the truck which
 was earlier standing in the name of Shivappa,
 the father of the 5th respondent, was
 transferred in the name of the 5th respondent.

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 (f). On 8th February, 1980, an application
 was made to the R.T.O., Solapur and the truck
 was transferred in the name of son of the
 appellant.

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 16. In the cross-examination the appellant
 categorically admitted that since 3rd October, 1978,
 he was running the truck as the owner thereof. In
 response to questions asked by the Advocate for the
 original claimants, the appellant reiterated that on
 3rd October, 1978 when he took possession of the
 truck, he also took custody of the registration book
 and the insurance policy. He stated that on 31st
 October, 1978 the policy was renewed. He stated that
 he paid the amount of premium to the 5th respondent

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 who in turn got the policy renewed in the name of his
 father. He stated that the policy was renewed from
 31st October, 1979 in similar manner. The cover note
 as well as policy were handed over to the appellant by
 the 5th respondent. Thus he admitted that on 31st
 October, 1978 and 31st October, 1979 he paid the
 premium payable under the insurance policy. The
 deposition of the original opponent No.2-driver i.e.
 the 3rd respondent herein discloses that he was in the
 employment of the appellant on the date of the
 accident as a driver of the said truck.

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 17. The learned Counsel appearing for the
 appellant relied upon a decision of the learned Single
 Judge of this Court in the case of Jaysingrao Dadu
 Patil and Anr. V/s. Kutubuddin Ismail Soudagar &
 Ors. [1997 (1) Mh.L.J. 737]. He placed reliance on
 what has been held by the learned Single Judge in
 paragraph No.11 of the said decision. Paragraph No.11
 of the said decision reads thus:-

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 "11. The agreement entered into
 between the present appellants and
 respondent No.3 on 17-4-1980 leaves no
 manner of doubt that the sale of the
 tractor in question was conditional on
 payment of instalments of Rs.2,000/-
 per month by the present appellants to
 the State Bank of India. There is no
 dispute that said payment of

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 Rs.2,000/- per month till discharge of
 entire loan together with interest was
 not made by the present appellants.
 When the sale of the tractor in
 question was conditional sale
 depending upon due discharge of
 obligation under the terms of the
 agreement, the property in the said
 tractor cannot be said to have passed
 on to the present appellants at the
 time when the agreement was made on
 17-4-1980. Section 20 of the Sale of
 Goods Act provides that where there is
 unconditional contract for the sale of
 specific goods, the property in the
 goods passes to the buyer when the
 contract is made and it is immaterial
 whether at that time payment of the
 price of delivery of goods, or both,
 is postponed. However, section 20 of
 the Sale of Goods Act cannot be
 invoked nor can it be attracted when
 the agreement for sale is conditional.
 In other words section 20 has
 application only where the contract
 for the sale of goods is
 unconditional."

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 18. Before discussing the said decision of the
 learned Single Judge, at this stage, it will be
 necessary to refer to a decision of the Apex Court in
 the case of Vasantha Viswanathan & Ors. V/s. V.K.
 Elayalwar & Ors. [(2001) 8 SCC 133]. In the said
 decision the Apex Court dealt with the issue of
 transfer of ownership of motor vehicle. The Apex
 Court held that section 31 of the Motor Vehicles Act,
 1939 does not effect a transfer but the same only
 prescribes a procedure for entering the factum of
 transfer in the registration certificate which is an

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 act posterior to the actual transfer. The Apex Court
 held that the transfer of the motor vehicle would be
 governed by provisions of section 19 of the Sale of
 Goods Act, 1930. In paragraph No.10 of the decision,
 the Apex Court held thus:-

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 "10. Section 31 of the Motor Vehicles
 Act, 1939 lays down that where the
 ownership of any motor vehicle
 registered under the Motor Vehicles
 Act is transferred, the transferor and
 transferee both are required to report
 the fact of transfer to the
 registering authority so that
 particulars of transfer of ownership
 may be entered in the certificate of
 registration. The transfer is not
effected under Section 31 of the Motor
Vehicles Act, 1939, but the same
simply prescribes procedure for
entering the factum of transfer in the
registration certificate, which is an
act posterior to the transfer. The
transfer of vehicles in question would
be governed by the provisions of
Section 19 of the Sale of Goods Act
according to which property in the
vehicle would pass to Defendant 1 at
such time as the parties to the
contract intend it to be transferred.
Thus the passing of property in the
goods would be dependent upon the
intention of the parties, as evidenced
from the contract. From the contract,
 Exhibits A-1 and A-2, it would appear
 that the parties intended that after
 the registration formalities were
 completed, price of the vehicles
 covered by the permits would be
 ascertained and thereafter the same
 would be paid by the Defendant 1,
 entitling him to take possession of
 the vehicles. Thus the parties
 intended that property in the vehicles
 shall pass only after possession of

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 the vehicles was delivered to the
 Defendant 1 after completion of all
 the aforesaid formalities. In the
 present case, after registration
 formalities were completed, the value
 of the vehicles covered by the permits
 was not ascertained, much less paid,
 rather, on the other hand, possession
 was forcibly taken by the Defendant 1.
 Therefore, property in the vehicles
 did not pass to the Defendant 1 as
 required under Section 19 of the Sale
 of Goods Act. AS the Defendant 1 had
 illegally taken possession of the
 vehicles which he was not entitled to
 ply, it has been rightly held by the
 High Court that the plaintiff would be
 entitled to profits earned by the
 Defendant 1 and Defendants 4 to 7 from
 plying of the vehicles." (Emphasis
 added).

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 19. Thus what has been held by the Apex Court is
 in a transfer of vehicle is governed by the provisions
 of section 19 of the said Act of 1930 and accordingly,
 the property in the vehicle will pass to the
 transferee at such time as the parties to the contract
 intended it to be transferred. Thus, passing of the
 property in the vehicle would depend upon the
 intention of the parties as evidenced from the
 contract.

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 20. The learned Single Judge of this Court in the
 case of Jaysingrao Dadu Patil (supra) dealt with
 sections 19 and 20 of the said Act of 1930. Section
 20 of the said Act of 1930 provides that where there

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 is an unconditional contract for sale of specific
 goods in a deliverable stage, the property in the
 goods passes to the buyer when the contract is made
 and it is immaterial whether at that time payment of
 the price or the time of delivery of the goods or both
 is postponed. In the case before the learned Single
 Judge there was an agreement entered into between the
 parties on 17th April, 1980 which left no manner of
 doubt that the sale of the tractor in question was
 conditional on payment of instalment of Rs.2,000/- per
 month by the appellants before the learned Single
 Judge to the State Bank of India. The said amount was
 payable to the Bank till discharge of the entire loan
 together with interest. The learned Single Judge, as
 is apparent from the paragraph No.11 of the said
 decision, was dealing with the case where the sale of
 the tractor in question was a conditional sale
 depending upon the due discharge of obligations under
 the terms of the agreement. Therefore, the learned
 Single Judge after considering the facts of the case
 before him came to the conclusion that the property in
 the tractor could not have passed on to the transferee
 on the date of execution of the agreement.

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 21. In the present case the appellant has not at
 all come out with the case of existence of a

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 conditional agreement. On the contrary in paragraph 3
 of the cross-examination, he stated that from the date
 of the oral agreement i.e. from 3rd October, 1978, he
 was running the truck as owner thereof. If intention
 of the parties was that the sale will be conditional
 upon the appellant fulfilling the requirement of
 payment of instalments to the bank, the appellant
 would not have come out with the case that he was
 running the truck as owner thereof since 3rd October,
 1978.

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 22. Therefore, this is not a case where the
 agreement arrived at between the parties on 3rd
 October, 1978 was a conditional agreement. In fact,
 from the aforesaid statements made by the appellant,
 it is obvious that the property in the truck was
 intended to be passed to the appellant when the
 contract was made on 3rd October, 1978 from which date
 the appellant admittedly started using the truck as

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 the owner thereof. In any case, in the
 cross-examination, the appellant has stated that all
 the instalments payable to the Bank of India were paid
 by him four days prior to the date of the accident.
 Therefore, it is very difficult to accept the case of

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 the appellant that on the date of the accident, the
 property in the truck had not passed in his favour.

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 In fact, on the date of the accident, the appellant
 was the owner of the truck. The procedural formality
 of transfer of the truck in the records of the R.T.O.
 was completed on 8th February, 1980. The first
 question is accordingly answered.

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 23. For dealing with the second question, it will
 be necessary to refer to the decision of the Apex
 Court in the case of Rikhi Ram & Anr. V/s. Sukhrani
 & Ors. [(2003) 3 SCC 97]. The question which arose
 for consideration of the Apex Court was where neither
 the insured nor the purchaser gave any intimation
 about the transfer of the vehicle to the insurance
 company, whether the insurance company was liable to
 pay compensation to a third party. The Apex Court
 considered the scheme of sections 94 and 95 of the
 said Act of 1939 and observed that as per the scheme
 of Act, an insurance company can cover three risks
 i.e. the risk of owner of the vehicle, the risk of
 the vehicle and the risk of the third party. The Apex
 Court observed that considering the provisions of
 sections 146 and 147 of the Motor Vehicles Act, 1988,
 the liability of the owner to have compulsory
 insurance is only in regard to the third party. In
 sofar as question of liability is concerned, in
 paragraph Nos.6 and 7 the Apex Court held thus:-

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 "6. On an analysis of Sections 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 contract and
 the 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 with the
 provisions of the Act. However, so
 far as third-party injured or victim
 is concerned, he can enforce liability
 undertaken by the insurer.

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 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 the insurer does not
cease so far as the third party/victim
is concerned, even if the owner or
purchaser does not give any intimation
as required under the provisions of
the Act." (Emphasis added)

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 . The case before the Apex Court arose out of a
 claim petition under Section 110-A of the said Act of
 1939. In the claim petition the Tribunal found that
 there was a transfer of the offending vehicle without
 intimation to the insurance company. The Tribunal
 held that in absence of an intimation, the owners were
 liable to pay compensation and the insurer was not
 liable. After laying down the law as aforesaid, the
 Appeal was allowed and the insurer was directed to pay
 the compensation to the victim with liberty to the

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 insurer to recover the said amount either from the
 insured or from the transferee of the vehicle.

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 24. As pointed out earlier, the original claimants
 i.e. the respondent Nos.1 and 2 herein have filed
 Cross Objection (St.) No.3856 of 1986. Apart from
 seeking enhancement in compensation, the challenge in
 the Cross Objection is that the Tribunal has committed
 an error by not holding the insurer liable.
 Considering the law on this aspect laid down by the
 Apex Court, this was a case where the Tribunal ought
 to have directed the insurer of the vehicle to pay the
 compensation amount to the claimants and to recover
 the same thereafter from the present appellant and the
 legal representatives of the insured. However before
 the said direction is issued, there is another aspect
 which will have to be gone into i.e. whether the
 policy was valid as it was issued in the name of a
 dead person. The submission of the learned Counsel
 appearing for the insurer was that essentially a
 policy of insurance is a contract between the parties
 and therefore if one of the parties to the contract is
 dead, by no stretch of imagination the contract can be
 held to be legal and valid. The said submission was
 countered by the Advocate for the appellant by relying
 upon a decision of Division Bench of the Madhya

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 Pradesh High Court in the case of Nani Bai & Ors.
 V/s. Ishaque Khan & Ors. [1995 ACJ 292]. The case
 before the Division Bench arose out of Awards made in
 claim petitions under section 110-A of the Motor
 Vehicles Act, 1939. The submission before the
 Division Bench was that the policy was issued in the
 name of dead-insured. It was also contended that it
 was a case of misrepresentation or concealment of
 facts by the legal representatives of the
 deceased-insured of the fact that the insured was
 already dead. While dealing with the said
 contentions, the Division Bench of the Madhya Pradesh
 High Court held that there was nothing in the policy
 to show that the policy was purely personal. In
 paragraph No.13, the Division Bench held thus:-

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 "13. There is nothing in the policy
 issued in the name of Kartar Singh
 stating that it is purely personal to
 him. On the other hand, on plain
 reading of the condition of the policy
 it is clear that the coverage is that
 of the motor bus and not the insured.
 Section 94 of the Motor Vehicles Act
 insists for the compulsory insurance
 against the third party risk and
 prohibits user of vehicle in a public
 place unless there is a policy of
 insurance. The words "unless there is
 in force in relation to the use of the
 vehicle of that person ... a policy
 of insurance" go to show that it is
 the vehicle that is required to be
 insured and not the person or the
 owner of the vehicle and in such a

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¶95

 situation the insurance company cannot
 escape its liability."

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 . The Division Bench quoted the passage in the
 Judgment of the three Bench delivered by Lord Denning
 M.R. in the case of Launchbury v. Morgans [(1971) 2
 QB 245] which reads thus:-

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 "A motor vehicle is a powerful engine
 of death and destruction. It is
 capable of doing much damage to
 persons and to property unless it is
 driven with due care and attention.
 As the number of cars increases and as
 their speeds get faster, so the danger
 grows. More and more people are
 killed. More and more are injured.
 More and more property is damaged.
 The sufferers ought not to be left
 without redress. So Parliament and
 Judges have done their best to see
 that they are compensated for their
 loss."

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 25. After considering the benevolent objects of

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 the legislation, the Division Bench held thus:-

¶100

 "16. In our considered opinion,
 therefore, despite the fact that
 Kartar Singh was dead at the time of
 accident and the premium was paid by
 his legal heirs, the insurance company
 is liable to pay compensation to the
 heirs of the deceased and to the
 injured in the accident. If they are
 aggrieved by the concealment of fact
 or misrepresentation or fraud, if any,
 they can make a grievance before the
 appropriate forum separately, but they
 cannot escape their liability of

¶101

 : 24 :

¶102

 payment of compensation by raising
 this bogey of agreement being void."

¶103

 26. I respectfully agree with the law laid down by
 the Division Bench of the Madhya Pradesh High Court.
 The submission of the learned Counsel appearing for
 the insurer could have been accepted if the policy of
 insurance was purely a matter of contract. Moreover,
 the liability of an insurer towards the third parties
 is a liability created by a Statute i.e. the Motor
 Vehicles Act, 1939 or Motor Vehicles Act, 1988. It is
 not only a contractual liability. The liability of
 the insurer to the third parties arises out of an
 obligation created by the Statute. Therefore, the
 said submission of the insurer cannot be acceded to as
 the deceased was a third party.

¶104

 27. In sofar as issue regarding negligence is
 concerned, the Tribunal has referred to the oral and
 documentary evidence. The Tribunal has referred to
 the scene of accident panchanama at Exhibit-92 which
 shows that at the spot of the accident, there was a 11
 ft. wide tar road with 8 ft. wide kaccha road on
 either side. The panchanama records that on the
 eastern side of the road, there were wheel marks on
 kaccha street to the extent of length of 30 ft. Apart
 from the panchanama, there is a report at Exhibit-99

¶105

 : 25 :

¶106

 of a mechanic regarding the condition of the truck on
 the date of the accident. The report discloses that
 there was no mechanical defect in the vehicle on the
 date of the accident.

¶107

 28. It will be necessary to refer to the oral
 evidence. The witness No.2 examined by the claimants
 is one Arjun Tulshiram Bhosale. The witness stated
 that at the relevant time, he was also plying a
 bicycle. At that time the deceased was proceeding
 towards Vairag by his bicycle. He stated that both of
 them were proceeding from the left side of the road.
 He stated that a truck came from the rear side and
 gave a dash to the deceased. The truck went ahead and
 went into a ditch on the right hand side of the road
 and thereafter came to a halt. In the
 cross-examination of the said witness, he denied the
 correctness of the suggestion that there was a
 bullock-cart in front of him. He denied the
 suggestion that the driver of the truck sounded the
 horn while trying to overtake the bullock-cart. He
 denied the suggestion that he alongwith the deceased
 had already crossed the bullock-cart when the truck
 came close to them or that the deceased was in the
 middle of the road at the time of impact. He denied
 that the deceased was carrying a load on his bicycle.

¶108

 : 26 :

¶109

 He denied the suggestion that due to the heavy load,
 the deceased could not turn to the left side.

¶110

 29. It will be necessary to refer to the evidence
 of the 3rd respondent-driver of the truck. In
 paragraph No.3 of his deposition he has stated thus:-

¶111

 "3. It was about 12 noon. I was
 driving the truck at a speed of about
 30 to 35 k.m.p.h. Two bicyclists were
 going to Vairag. A bullock-card was
 also proceedings towards Vairag, about
 3 k.m. away from the village. The
 bicyclists were behind the
 bullock-card. I sounded the horn of
 the truck. I slowed it. The
 bicyclists overtook the bullock-card
 in the Vairag. Before passing the
 bullock-cart I against sounded my
 horn. One of the bicyclists went to
 the left side of the road. The other
 bicyclist had something heavy on the
 carrier of his bicycle. He was on his
 right side of the road with his hands
 trembling. In order to save him I
 took the truck to my right side of the
 road into a ditch. I did not dash
 against the bicyclist at all. In his
 hesitation in taking a particular
 direction the bicyclist fell down. I
 go down the truck. I went near the
 fallen bicyclist. He has been injured
 in his head. I put him in my truck
 and also took his bicycle into my
 truck and took him to Vairag.

¶112

 30. In the cross-examination he denied the
 suggestion that after overtaking the bullock-cart he
 suddenly took the truck to its left side. He denied
 the suggestion that as he was taking the truck to his

¶113

 : 27 :

¶114

 left side after overtaking the bullock-cart, he gave a
 dash to the bicycle. He stated that the police had
 charge sheeted him and thereafter he was acquitted.
 The learned Member of the Tribunal has considered and
 appreciated the evidence of both the said witnesses.
 The learned Member after referring to the condition of
 the truck and the bicycle found that the hind portion
 of the bicycle and its right side paddle was damaged.
 After noticing the damage as reflected from panchnama,
 the learned Member of the Tribunal observed that the
 nature of the damage caused to the bicycle does not
 support the theory that the bicycle fell down as the
 deceased was carrying heavy load on the bicycle. The
 learned Member of the Tribunal observed that the 3rd
 respondent had not taken the care which any ordinary
 prudent driver ought to have taken when he had seen
 the bullock-cart and the bicycle ahead of it. There
 is hardly any independent evidence on record to show
 that it was the deceased who suddenly turned his
 bicycle towards his right and that is the cause of the
 accident. After having considered the evidence of the
 aforesaid two witnesses, it is very difficult to
 disturb the finding of the Tribunal on the issue of
 negligence against the respondent No.3.

¶115

 31. Now coming to the quantum of compensation, the

¶116

 : 28 :

¶117

 Tribunal has referred to the evidence of the 1st
 respondent. The Tribunal referred to the school
 leaving certificate of the deceased which disclosed
 that the date of birth of the deceased was 16th
 August, 1947. Thus the age of the deceased at the
 time of the accident was 31 years and 8 months.
 Certificate of the employer at Exhibit-104 showed that
 the deceased was getting total monthly emoluments at

¶118

 Rs.415.25 including all allowances. After making
 deduction towards C.P.F. subscription and
 professional tax, a sum of Rs.352.25 p.m. was
 payable. The learned Member of the Tribunal has taken
 dependency at the rate of Rs.200/- per month.
 However, while calculating the yearly dependency, he
 has taken the said amount at Rs.3,000/- which comes to
 Rs.250/- per month. By taking the yearly dependency
 at Rs.3,000/-, multiplier of 12 has been applied by
 the Tribunal. Accordingly, compensation has been
 fixed at Rs.36,000/-.

¶119

 32. The certificate issued by the employer of the
 deceased at Exhibit-104 has been admitted in evidence
 without any objection. The said certificate shows
 that the last drawn pay of the deceased was Rs.415.25.
 Even if 1/3rd amount is deducted from the said amount,
 the monthly dependency will be slightly more than

¶120

 : 29 :

¶121

 Rs.280/-. Therefore, no fault can be found with the
 Tribunal if yearly dependency has been taken at
 Rs.3,000/-. Since the age of the deceased on the date
 of the accident was less than 32 years, in fact,
 multiplier of 13 ought to have been applied.
 Therefore, a sum of Rs.39,000/- (Rs.3,000/- x 13) will
 be payable. The Tribunal was under an erroneous
 impression that as no deduction was being made on
 account of lumpsum payment, it was not necessary to
 grant usual amount on account of loss of consortium,
 funeral expenses etc. The accident has taken place in
 the year 1979 and the claim petition is of 1981. In
 my view, a sum of Rs.11,000/- will have to be awarded
 on the said count. Thus the total compensation
 payable will be Rs.50,000/-. The Tribunal has awarded
 interest only at the rate of 6% p.a. Considering the
 fact that the claim was of the year 1981 and was
 decided in the year 1985, interest ought to have been
 awarded at the rate of 12% p.a. However, subsequently
 the rates of interest have considerably gone down and
 therefore I am fixing the rate of interest at 9% p.a.

¶122

 33. It is not clear from the record as to whether
 any amount has been paid by the appellant and the 3rd
 respondent in compliance with the impugned Award. If
 any amount is deposited by the appellant in this

¶123

 : 30 :

¶124

 Court, the same will have to be transferred to the
 concerned Tribunal. Even the interest accrued on the
 said amount, if any, shall be transferred to the
 concerned Tribunal. The said amount as well as
 amount, if any, deposited by the appellant with the
 Tribunal will be permitted to be withdrawn by the 1st
 and 2nd respondents in equal shares. If any amount
 has been invested as per the impugned Award, it is not
 necessary to continue the investment as the 2nd
 respondent must have attained majority. Accordingly,
 the amount invested with the interest accrued thereon
 shall be disbursed to the original claimants thereon.

¶125

 34. The balance amount of compensation payable to
 the 1st and 2nd respondents after taking into account
 the amount, if any, as aforesaid deposited by the
 appellant with interest accrued thereon shall be paid
 by the insurer of the truck within a period of four
 months from today. The appellant was the owner of the
 vehicle and the respondent No.5 claimed to be the
 legal representative of the deceased-insured on the
 basis of the will of the insured. Therefore, as held
 by the Apex Court in the case of Rikhi Ram (supra),
 after the said amount is paid by the insurer, it will
 be open for the insurer to recover the said amount
 jointly and severally from the appellant and the 5th

¶126

 : 31 :

¶127

 respondent by executing the same Award. The Appeal
 and Cross Objection are, therefore, disposed of by
 passing following order:-

¶128

 "O R D E R"

¶129

 (a). The compensation payable to the
 original claimants will be Rs.50,000/- with
 interest thereon at the rate of 9% p.a. from
 the date of filing of the claim petition till
 payment thereof. The claimants will be also
 entitled to recover proportionate costs of the
 claim petition.

¶130

 (b). The amount, if any, deposited by the
 appellant in this Court together with
 interest, if any, accrued thereon shall be
 transferred to the concerned Tribunal. The
 said amount as well as the amount, if any,
 deposited by the appellant with the Tribunal
 with interest accrued thereon shall be
 disbursed to the claimants in equal shares.

¶131

 (c). After making payment of the aforesaid
 amounts to the claimants, the balance amount
 payable as per the modified Award shall be

¶132

 : 32 :

¶133

 payable by the 4th respondent-the Oriental
 Fire and General Insurance Company Limited.
 The balance amount shall be paid by the said
 respondent within a period of four months from
 the date of receipt of the writ of this
 Judgment by the Tribunal.

¶134

 (d). After depositing the amount, the 4th
 respondent shall be entitled to recover the
 said amount from the appellant and the
 respondent No.5. The liability of the said
 parties to pay the amount to the insurance
 company will be joint and several. It is made
 clear that amount can be recovered by the
 insurer by executing the modified Award and it
 will not be necessary for insurer to file
 separate proceedings.

¶135

 (e). The Appeal and Cross Objection are
 partly allowed in above terms.

¶136

 (f). There will be no orders as to costs in
 the Appeal as well as in the Cross Objection.

¶137

[ABHAY S. OKA, J.]

Bapu Nivrutti Devkate. v. Parwatibai Bibhishan Jadhav and Ors.

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Bapu Nivrutti Devkate. v. Parwatibai Bibhishan Jadhav and Ors.

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