FAO No.866 of 1992 & -1- X-Objections No.91-CII of 1992 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.866 of 1992 & X-Objections No.91-CII of 1992 DATE OF DECISION: January 24, 2011 NEW INDIA ASSURANCE CO. LTD. ...APPELLANT VERSUS KAUSHALYA DEVI AND OTHERS ...RESPONDENTS CORAM: HON'BLE MR. JUSTICE K.KANNAN. 1. Whether reporters of local papers may be allowed to see the judgement? No 2. To be referred to the reporters or not? No 3. Whether the judgement should be reported in the digest? Yes ---- PRESENT: MR. L.M. SURI, SR. ADVOCATE WITH MR. NEERAJ KHANNA, ADVOCATE FOR THE APPELLANT. MR. J.L. MALHOTRA, ADVOCATE FOR THE RESPONDENTS-X-OBJECTOR K.KANNAN, J.(ORAL) 1. The appeal is by the insurance company challenging the compensation awarded for `7,04,000/- principally on the grounds that the insured's vehicle has been transferred admittedly at the time of accident and the insurer had not been informed about the said transfer. The liability cannot, therefore, be attached for a claim by the third party when the contract of insurance was only between the insurer and the insured and consequently, the liability to indemnify was only for the insured and not for the transferee from an insured as the argument was that there is a procedure prescribed under the old Act through Section 103A of the Motor Vehicles Act, 1939 for notifying the transfer and to secure transfer of the policy and FAO No.866 of 1992 & -2- X-Objections No.91-CII of 1992 if the same was not done, the insurance cannot be made liable to indemnify the insured. The other contention was that the deceased was 52 years of age and while determining the compensation the Tribunal had taken the income at `60,000/-, made deduction of `16,000/-, took the contribution to the family at `44,000/- and adopted a multiplier of 16. The choice of multiplier according to the counsel is excessive and the award cannot be sustained. 2. As regards the first contention relating to the transfer of vehicle by the insured and the failure of the insured to notify the transfer, the consistent law of authorities has been that so far as third party is concerned, the insurance company cannot be permitted to plead exclusion of liability. The only exception is the third party cannot be a transferee himself and when the transferor has not followed the prescribed procedure for transfer of policy. This issue has been considered in G.Govindam vs. New India Assurance Company Ltd., reported as AIR 1999 Supreme Court 1398. The Hon'ble Supreme Court was actually dealing with the situation of controversy of third party liability of insurers even in the absence of transfer of policy of insurance. The Supreme Court held in G.Govindam's case (supra) that liability of insurer did not cease so far as the third party victim was concerned, even if the owner or purchaser did not give any intimation as required under the Act. I cannot, therefore, accept the contention raised on behalf of the insurer that the liability cannot be fastened in a case where the insured had been communicated the fact of transfer. 3. As regards the objection of the learned counsel regarding the quantum, the choice of multiplier has a definite bearing to the determination of quantum itself. The insurance company did not have the benefit to defend FAO No.866 of 1992 & -3- X-Objections No.91-CII of 1992 the case on all grounds which would include a ground on the issue of quantum as well. A procedure prescribed under Section 170 of the Motor Vehicles Act was also a procedure which was delineated under Section 110C (2)(A) of 1939 Act. The concept of just compensation that both the old and the new enactment provide for, definitely compels me to look into the issue whether the compensation awarded was a windfall or a lottery. The deceased was a income tax assessee being involved in the business of manufacturing welding equipments. He was also said to be involved as a partner in some other business which his sons were running. The Tribunal, however, rejected the plea of partnership with sons. The income tax returns themselves did not show his participation in any such partnership. He had a large family of his wife, 7 children and his parent. The total compensation awarded was `7,04,000/-. I do not want to reappraise the issue of compensation in an appeal filed by the insurer. I would have felt compelled to look at the issue if the appeal had been by the insured. I do not find the compensation so outrageously exaggerated to be subject for such an appraisal. 4. Learned senior counsel for the appellant points out that even at the time of admission of appeal the Tribunal had provided for a compensation of `5 lacs and directed the amount to be withdrawn. That amount in excess was to be withdrawn by furnishing of security. This interim direction, I would understand, to be relevant only for the purpose of withdrawal of the amount during the pendency and will not allow such a direction to govern the ultimate adjudication that I have undertaken. 5. The award is confirmed and the appeal is dismissed. FAO No.866 of 1992 & -4- X-Objections No.91-CII of 1992 X-Objection No.91-CII of 1992 6. The X-objections for enhancement cannot also survive for consideration, since I do not find any merit in the plea that the compensation would require to be enhanced. The X-objections are, therefore, dismissed. January 24, 2011 (K.KANNAN) Gulati JUDGE