United India Fire & General Insurance Company Limited vs. Smt. Kanchanbai & Ors.

United India Fire And General ... vs Smt. Kanchanbai And Ors. on 25 June 1981 Madhya Pradesh High Court United India Fire And General ... vs Smt. Kanchanbai And Ors. on 25 June 1981 Equivalent citations: AIR 1981 MP 225 Author: P Muley Bench: P Muley JUDGMENT P.D. Muley J 1. This appeal filed by the Insurance Company under Section 110 D of the Motor Vehicles Act is directed against an award dated 30 8 1975 given by the Motor Accident Claims Tribunal Indore in Claim Case No. 773 awarding compensation of Rs. 15 500 with interest at 6 per cent per annum alone with costs in favour of respondents Nos. 1 2 and 3 who had initially claimed Rs 1 10 000 as total compensation 2. The facts giving rise to this appeal which are no lonser in dispute and also Droved are as under That respondent No. 4 Babulal was the owner of truck Number MPF 6083 the registration of which stood in his name. The said truck was insured by him with the appellant United India Fire and General Insurance Company Limited. On 14 3 73 the said truck MPFBalwant Singh v. Jhannubai: 1980 Ace CJ 377and 1979 Ace CJ 503:Insurance Co. Ltd. v. Gurcharan Singh) 1980 Ace CJ 189 :1967 Ace CJ 155Nanyang Insurance Company Ltd. v. Salbiah) 1976 Ace CJ 1:and 1971 Ace CJ 49(Orissa Co operative Ins. Society Ltd. v. Bhagaban Sahu 11. Shri R. C. Chhazed learned counsel for the respondent No. 6 contended that as there was not a complete sale of the truck on the day of the accident the respondent No. 4 had retained his control over the said truck and that he was acting and working on behalf of respondent No. 4 as his agent and it is only to facilitate the payment of instalments which were to be paid by him to respondent No. 4 that possession of the truck was with respondent No. 6 but the possession could not be said to be on the basis of concluded sale as even according to Ex. D 1 certain amount was yet to be paid by respondent No. 6 to respondent No. 4. He further submitted that it is not at all suggested to Babulal that on the date of the accident he had received the entire full consideration as agreed to in Ex. D 1 or that he had ceased to have any control over the said truck on the date of the accident Indian Kanoon United India Fire And General ... vs Smt. Kanchanbai And Ors. on 25 June 1981 12. After cerefully considering the arguments of the learned counsel for the parties and after some through the evidence adduced by the parties as also the case law cited I am of opinion that the contentions advanced on behalf of the appellant cannot be accepted. The evidence of D. W. 1 Babulal D. W. 2 Sunderlal and a bare reading of Ex. D 1 clearly indicates that there was no concluded sale of the truck but it was only an agreement to sell. It is no doubt true that for effecting such a sale transfer of the registration certificate under the Motor Vehicles Act is not necessary but along with the delivery of possession payment of full consideration as agreed to is necessary In the present case as has emerged from evidence on record on the date of the accident a pact of the sale consideration was yet to be paid by respondent No. 6 to respondent No. 4 and in these circumstances in my opinion Ex. D 1 being only an agreement to sell cannot be treated to be an absolute sale. It is therefore difficult to agree with the learned counsel for the appellant that on 21 12 72 when possession of the truck was handed over to respondent No. 6 there was a concluded sale and that respondent No. 4 had ceased to have any interest or control over the said truck with the result that the eon tract of insurance with Babulal respondent No. 4 had come to an end. The evidence of Babulal and Sunderlal further indicates that it was Babulal who after the accident approached the Insurance Company to defend the case that it was Babulal who defended the case by engaging the same counsel who also was the counsel for the appellant Insurance Company. All this further goes to show that Babulal still continued to be the owner of the said truck. Besides respondent No. 6 has not been examined as witness to prove that he had become the owner of the said truck on 21 12 72 itself and that even on the date of the accident he was the sole owner of the said truck. It is therefore clear that the property in the said truck still vested with Babulal respondent No. 4 and the truck was also being driven by respondent No. 6 with his permission respondent No. 5 Nathusingh being the driver. Therefore though the principles enunciated in the authorities cited on behalf of the appellant cannot be disputed still they are distinguishable on facts when applied to the facts of the present case 13. In the result this appeal fails and is dismissed with costs. The award is maintained. Counsel s fee according to schedule if certified Indian Kanoon 

Summary: Introduction: Every contract is an agreement but every agreement may not be a contract. For a sale to be completed it is essential that ownership is transferred and consideration is paid. In the case mentioned below, it distinguishes between agreement to sell and actual sale.  Facts:  Mr. Babulal (4th respondent) was the owner of the truck (MPF- 6083) insured his truck with the United India Fire &amp; General Insurance Company (hereinafter referred to as the appellant).  On 14th March 1973 Mr. Devilal died due to rash and negligent driving of a truck driven by Mr. Nathusingh. (5th respondent) Devilal was a 55 years old man, working in Malwa Mills, Indore for a monthly income of Rs.256. The family of the deceased namely widow (respondent 1), son (respondent 2), and daughter (respondent 3) filed a petition in the Tribunal claiming compensation of Rs.1,10,000 in total.  The Motor Accident Claims Tribunal Indore, after taking in view the evidence and arguments, awarded compensation of Rs.15,500 (in total) with interest at 6%p.a. alone with costs. Aggrieved by this the Insurance Company filed an appeal in the High Court under Section 110-D of the Motor Vehicles Act.  Issue:  Whether, agreement to sell be considered as a sale Whether Babulal (respondent 4) was the owner of the truck at the time of the accident.  Contentions raised:  The counsel for the appellant Mr. Sujan Jain contended that on 20th December 1972 Mr. Babulal had sold the said truck to M/s Magilal Suvalal Jain as per Ex.D-1 and so though the truck was insured with the appellant company, he could not be held liable for the same as the contract of insurance had already come to an end. He further stated Natusingh did not have a valid driving license and was not the employee of Mr. Babulal at the time of the accident and thereby challenged the findings of the Tribunal.  The counsel for respondents 1, 2, and 3 contended that Ex.D-1 is an agreement to sell and not a sale. Further, it was clearly indicated by Ex.D-1 that the entire price was not paid by respondent no.6 and as stated in the Ex.D-1 the registration would only be transferred after receiving the full consideration. Also, the Insurance Company was not informed about the sale of the truck and there is no evidence to prove that the contract of insurance had ended or the driver didn’t have a driving license.  Mr. R.C. Chhazed, counsel for respondent no.6 submitted that tge respondent was only acting as an agent of respondent no.4 as completion of sale did not take place and respondent no.4 had control over the truck even on the day of the accident.  Judgment:  The Court after taking into consideration the arguments put forth by both the parties stated that on the day of the accident the sale of the truck was not completed and Ex.D-1 clearly shows that it was not a sale but an agreement to sell.  Further, the evidence indicates that after the accident it was Babulal who approached the Insurance Company and asked them to defend the case, thereby proving to be the owner of the truck. The Court observed that as respondent no.6 turned ex-parte it became difficult to prove that he was the owner of the truck at the time of the accident. Based on the evidence and observations it’s clear that on the day of the accident Mr. Babulal was the owner of the truck and respondent no.6 drove the truck with his permission.  Conclusion:  The Court upheld the decision of the Tribunal and held that as the entire consideration was not made the sale remained incomplete thereby, vesting the ownership of the truck with Mr. Babulal on the day of the accident. Further, the Insurance Company was not absolved from its liability to pay compensation of Rs.15,500 to the family of the deceased.   Edited by: Purnima Ojha Reference:  United India Fire &amp; General Insurance Company Ltd v. Smt. Kanchanbai &amp; Ors