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Precto Pipe Company And Another v. National Insurance Company Ltd. And Others
Factual and Procedural Background
On October 23, 1974 a collision occurred at Chowk Gowal Mandi, Amritsar, between a motorcycle and a truck. Both the motorcycle driver (Havaldar Maluk Singh) and the pillion rider (Subedar Milkha Singh) were seriously injured. They filed claims for compensation under section 110-A of the Motor Vehicles Act. The Tribunal found the accident was caused entirely by the rash and negligent driving of the truck (PUA 2701). The Tribunal awarded Rs. 8,000 to Havaldar Maluk Singh and Rs. 18,000 to Subedar Milkha Singh.
Liability for payment of the awarded amounts was fixed on the owner of the truck (identified in the opinion as Precto Pipe Company) and on the truck driver; the Tribunal specifically held that the respondent-insurance company was not liable to pay the awards. The present controversy (on appeal) concerns whether the respondent-insurance company is liable for the compensation awarded.
Legal Issues Presented
- Whether the letters (Exhibits R/2 dated July 9, 1974 and R/4 dated July 26, 1974) were in fact addressed and sent by the Precto Pipe Company to the respondent-insurance company seeking transfer of the insurance policy.
- Whether, by virtue of section 103-A of the Motor Vehicles Act (and the absence of an express refusal by the insurer), the certificate of insurance must be deemed transferred to the Precto Pipe Company, thereby rendering the respondent-insurance company liable for the compensation awarded.
- Whether the presumption under section 114(E) and (F) of the Evidence Act (relating to letters sent by registered post or under certificate of posting) applies to treat the letters as received by the insurer and thereby establish transfer of the insurance policy.
- Whether the insurance policy clause covering "any other person who holds the licence provided he is in the insured's employ and is driving on his order or permission" applies so as to make the insurer liable for the truck driver's acts at the time of the accident.
Arguments of the Parties
Arguments for the Truck Owner (counsel: Mr. L.M. Suri)
- The Precto Pipe Company had purchased the truck on June 17, 1974 and sent letters (Exhibits R/2 and R/4) to the respondent-insurance company requesting transfer of the existing policy (which ran January 24, 1974 to January 24, 1975) into their name.
- In the absence of any refusal by the insurer to transfer the policy, section 103-A of the Motor Vehicles Act operates to deem the certificate of insurance to have been transferred to the Precto Pipe Company; therefore the insurer must be held liable for the awarded compensation.
- Later, counsel also relied on a clause in the insurance policy (covering "any other person who holds the licence provided he is in the insured's employ and is driving on his order or permission") to contend that the insurer covered the driver of the truck and so must be liable.
Arguments for the Claimants (counsel: Mr. R.K. Chhiber)
- Supported the truck owner's contention that the letters sent under certificate of posting should give rise to a presumption of receipt by the insurer under sections 114(E) and (F) of the Evidence Act — i.e., a properly addressed, prepaid registered letter or letter sent under certificate of posting containing relevant documents must be deemed to have reached its destination.
- Relied on judicial observations in cases such as Achamma Thomds v. E.R. Fairman (A.I.R. 1970 Mysore 77), Abhovjan Tea Co. (P.) Ltd. v. The Agricultural Income-tax Officer Shillong (A.I.R. 1966 Assam 84), and Harihar Banerji v. Ramshashi Roy (A.I.R. 1918 P.C. 102) to support this presumption.
- Contended that the insurer's written statement did not plead non-receipt of intimation of change of ownership (and thus imputed non-compliance by the insurer with procedural rules of pleading under Order 6 Rule 2 and Order 8 Rules 2 and 5 of the Code of Civil Procedure).
Respondent-Insurance Company's Plea (as pleaded in written statement)
- The written statement specifically pleaded that the truck had never been insured by the Precto (or Pretco) Pipe Company but was insured in the name of Chamel/Charnel Singh; if Precto Pipe Company were proved to be the owner, the insurance company would not be liable.
- When the insurer's witness (Sh. K.K. Gupta, R.W.3) testified, he made a categorical statement that no notice had been given to or received by the respondent-insurance company regarding transfer of the truck to the Precto Pipe Company; this statement went unchallenged at the trial.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Achamma Thomds v. E.R. Fairman, A.I.R. 1970 Mysore 77 | Judicial observations to the effect that a registered letter or letter sent under certificate of posting, if properly addressed and prepaid and containing the relevant document, may be deemed to have duly reached its destination. | The case was cited by claimants to support a presumption of receipt of Exhibits R/2 and R/4. The Court observed that such a presumption can arise only after proof that a letter was in fact posted; because the posting itself was in dispute, the precedent could not be used to establish posting in this case. |
| Abhovjan Tea Co. (P.) Ltd. v. The Agricultural Income-tax Officer Shillong, A.I.R. 1966 Assam 84 | Similar authority cited for the presumption of delivery of registered/certificate-of-posting letters when properly addressed and prepaid. | Cited to support presumption of receipt; the Court held the presumption was inapplicable here because the fact of posting was itself doubted and not proved. |
| Harihar Banerji v. Ramshashi Roy, A.I.R. 1918 P.C. 102 | Another authority cited concerning presumption of delivery of postal communications. | The Court noted the citation but rejected reliance upon the presumption because the posting of the letters (a prerequisite for the presumption) had been seriously doubted by the Tribunal. |
| New India Assurance Company Limited v. Moti Ram | Authority discussing transfer of a truck and insurer liability where accident occurred after transfer of truck but before transfer of policy, and insurer was held liable when it was not shown that the driver was not driving with permission/direction of previous owner. | The opinion states that the New India case does not lend support to the present facts: unlike that case, here there was no material to show that the truck driver was driving under the direction or with the permission of the previous owner (Charnel/Chamel Singh). |
Court's Reasoning and Analysis
The Court examined the factual matrix and the sequence of pleadings and evidence. The truck had been purchased on June 17, 1974; an existing insurance policy in the name of Chamel/Charnel Singh ran from January 24, 1974 to January 24, 1975. The truck owner (Precto Pipe Company) produced two letters (Exhibits R/2 dated July 9, 1974 and R/4 dated July 26, 1974) and postal certificates (Exhibits R/3 and R/5) said to show that the company had requested transfer of the policy into its name.
The Court focused on the timing and manner in which these documents were placed before the Tribunal. The respondent-insurance company had, in its written statement, denied that the Precto Pipe Company had insured the truck and asserted that it was insured by Chamel/Charnel Singh; the insurer also pleaded it would not be liable if Precto were the owner. The Precto Pipe Company did not, in its subsequent return, mention any intimation having been sent to the insurer regarding change of ownership or transfer of the policy. The Court rejected the truck owner's explanation that the constrained format of the claim form precluded mentioning extraneous facts, holding that the prescribed form did not bar setting out additional facts in the claim application or written statement.
Critically, when the insurer's witness (R.W.3) testified, he stated categorically that no notice or intimation regarding transfer had been given to or received by the insurer; that statement was left unchallenged. Only subsequently did the Precto Pipe Company, through its manager Joginder Pal, place Exhibits R/2 and R/4 before the Tribunal for the first time. The Tribunal found those documents to be forged, false and fictitious. The Court concluded that the belated production, lack of prior mention in pleadings, absence of explanation for the delay, and the uncontradicted statement of the insurer's witness together justified serious doubt as to the genuineness of the letters; consequently the Tribunal was correct not to rely on them.
On the contention invoking section 103-A of the Motor Vehicles Act and the presumption under sections 114(E) & (F) of the Evidence Act, the Court explained that the presumption of delivery arising from postal rules depends upon a prior finding or proof that the letter was in fact posted. Here the act of posting was itself contested and not proved; thus section 114 could not be used to establish posting as a matter of fact. The Court also observed that strict technical rules of the Code of Civil Procedure do not rigidly apply to proceedings before the Motor Accidents Claims Tribunal, and that the insurer had in fact pleaded the negative (that Precto had not insured the truck).
Finally, regarding the policy clause relied upon by the truck owner (covering "any other person who holds the licence provided he is in the insured's employ and is driving on his order or permission"), the Court found no material to show that the truck driver was operating the vehicle under the direction or permission of the previous owner (Chamel/Charnel Singh). The New India Assurance authority was therefore inapplicable to the facts of this case.
Holding and Implications
APPEALS DISMISSED.
Direct effect on the parties:
- The Court upheld the Tribunal's finding that the respondent-insurance company was not liable to pay the compensation awarded to the claimants.
- Liability for the awards remains fastened upon the owner of the offending truck (Precto Pipe Company) and the driver, as determined by the Tribunal.
- The respondent-insurance company is entitled to its costs in both appeals; counsel's fee fixed at Rs. 300 (one set only).
The opinion does not identify any broader precedent being established; the decision is confined to the application of the evidence and facts in this case, and the Court expressly rejected the documentary claims and the invocation of postal presumptions where posting itself was not proved.
S.S Sodhi, J.:— The controversy here is with regard to the liability of the respondent-insurance company for the amount awarded as compensation to the claimants.
2. On October 23, 1974 in an accident between a motor-cycle and a truck at Chowk Gowal Mandi, Amritsar, both the driver as also the pillion rider of the motor-cycle were seriously injured. It is in respect of these injuries that both Havaldar Maluk Singh, the driver of the motor-cycle and Subedar Milkha Singh, the pillion rider thereof filed claims for compensation under section 110-A of the Motor Vehicles Act. It was the finding of the Tribunal that the accident took place entirely due to the rash and negligent driving of the driver of the truck PUA 2701. A sum of Rs. 8,000/- was awarded as compensation to Havaldar Maluk Singh and Rs. 18,000/- to Subedar Milkha Singh.
3. The liability for the payment of the amount awarded was fastened upon the owner of the offending truck namely Precto Pipe Company and the driver of the truck. It was specifically held that the respondent-insurance company was not liable for the amount awarded in this case.
4. The facts relevant to the controversy raised here are that the truck involved in the accident was originally owned by one Charnel Singh. This truck was purchased by the Precto Pipe Company on June 17, 1974. At that time, there was a valid polcy of insurance in respect of this truck in the name of Chamel Singh. This policy was for the period January 24, 1974 to January 24, 1975. There is on record a letter Ext. R/2 bearing the date July 9, 1974 addressed to the respondent-insurance company by the Precto Pipe Company requesting transfer of the policy of insurance in respect of the truck to their name as it had been purchased by them from Chamel Singh. Exhibit R/3 is said to be the certificate of posting in respect of this letter. Next is the letter Exhibit R/4 of July 26, 1974 again from the Pretco Pipe Company to the respondent insurance company reiterating their request for the transfer of the insurance policy. There is reference in this letter to the earlier letter of July 9, 1974. This letter too is said to have been sent under certificate of posting. Exhibit R/5 being the postal certificate in respect thereof. It was, on these facts, sought to be contended by Mr. L.M Suri, counsel for the present owner of the truck that in the absence of any refusal of the respondent-insurance company to the transfer of the policy of insurance, by virtue of section 103-A of the Motor Vehicles Act, the certificate of insurance must be deemed to have been transferred in the name of the Precto Pipe Company and consequently the respondent-insurance company must be held liable for the amount awarded.
5. Mr. R.K Chhiber, counsel for the claimants sought to buttress the stand of Mr. L.M Suri by pressing in aid the presumption under section 114(E) and (F) of the Evidence Act to contend thereby that as the letters exhibits R/2 and R/4 had been sent under certificate of posting it must be taken that they were duly received by the respondent insurance company. The argument being that if a registered letter or letter sent under certificate of posting is properly addressed, prepaid, and contains the relevant document, it must be deemed to have duly reached its destination. In support of this contention, he referred to the observations to this effect in Achamma Thomds v. E.R Fairman . A.I.R 1970 Mysore 77., The Abhovjan Tea Co. (P.) Ltd. v. The Agricultural Income-tax Officer Shillong . A.I.R 1966 Assam 84. and Harihar Banerji v. Ramshashi Roy . A.I.R 1918 P.C 102..
6. It was further the contention of Mr. R.K Chhiber, that the genuineness of the letters Exhibits R/2 and R/4 could not be doubted in the absence of any plea being raised by the insurance company in its written statement to the effect that no intimation regarding change of ownership of the truck had been received by it. For this reason non-compliance with the provisions of Order 6, rule 2 and Order 8, rules 2 and 5 of the Code of Civil Procedure was imputed to the respondent-insurance company.
7. The main question which arises for determination is whether, in fact Precto Pipe Company addressed and sent the letters exhibits R/2 and R/4 to the respondent insurance company as deposed by their Manager, Joginder Pal.
8. In dealing with this matter, it would be pertinent to note that in the claim application the name of the respondent insurance company was mentioned after it had been disclosed to the claimants by the Precto Pipe Company. In the written statement filed by the respondent insurance company thereafter, it was specifically pleaded that the Precto Pipe Company had never insured the truck with them and that it was insured by Chame Singh and in case Precto Pipe Company was proved to be the owner of the truck the replying respondent would not be liable. It was after this written statement had been filed that a return was filed on behalf of the Precto Pipe Company. It is significant to note that no plea was raised therein to controvert what had been stated in the written statement filed by the respondent-insurance company. There was no mention of any intimation having been sent to the respondent-insurance company regarding the transfer of the ownership on the truck or that the policy of insurance was deemed to have been transferred to the present owner of the truck. Mr. L.M Suri, counsel for the truck owner sought to account for this omission, on the plea that as the form for the filing of a claim application under section 110-A of the Motor Vehicles Act was one as prescribed by law, no facts not covered by any column could be mentioned either in the claim application or in the written statement filed with regard thereto. This explanation is wholly devoid of merit. The fact that a form has been prescribed is clearly no bar to any additional fact being set out either in the claim application or in the written statement. This, thus constitutes no acceptable or valid explanation to account for this glaring omission.
9. Further, the conduct of the truck owner also tells against them. As has been mentioned above the truck was purchased in June, 1974 and the policy of insurance in respect thereof in the name of its previous owner Chamel Singh was to expire in January, 1975. During this period the policy was never transferred in the name of Precto Pipe Company. No effort appears to have been made to pursue the matter and to get the policy of insurance put in the name of the Precto Pipe Company.
10. The other important aspect of this matter is that when Sh. K.K Gupta (R.W 3) of the respondent-insurance company came into the witness box, he made a categoric statement that no notice had been given to the respondent-insurance company or received by it regarding the transfer of the truck to the Precto Pipe Company. This statement, was allowed to go unchallenged. It was thereafter that Joginder Pal, the Manager, Precto Pipe Company came into the witness box and for the first time disclosed and placed on record the letters exhibits R/2 and R/4 said to have been written by the Precto Pipe Company to the respondent-insurance company seeking the transfer of the policy of insurance. The Tribunal had come to the finding that these documents were forged, false and fictitious. The circumstances as have been set out above do indeed point to the justification for this finding, as no explanation is forth coming to account for the non-mention of these documents until such a belated stage and that too in the manner mentioned above. A serious doubt is indeed raised with regard to their genuineness and it would, therefore, not be safe to rely upon them.
11. Turing to the point raised by Mr. R.K Chhiber based upon the provisions of the Code of Civil Procedure, it is well settled that the strict technical rules thereof do not apply to proceeding before the Motor Accidents Claims Tribunal and at any rate, there was no requirement on the part of the respondent-insurance company to plead its case in the negative. The plea which ought and should have been raised was in fact raised, namely that the Precto Pipe Company had not insured the truck with them.
12. As regards the presumption arising from the sending of letters in the post, this can obviously arise only after it is duly proved, that a letter was in fact posted. Here the very sending of the letters by Precto Pipe Company to the respondent-insurance company has been seriously doubted. The provisions of section 114 of the Evidence Act are clearly of no avail to seek to establish thereby the posting of a letter as a question of fact.
13. In the light of the facts and circumstances of this case, for the reasons set out above, the Tribunal rightly did not rely upon the letters exhibits R/2 and R/4 and was justified in holding that they were not worthy of acceptance.
14. Mr. L.M Suri, then turned to the provisions of the insurance policy exhibit R-1, in an effort to show that the policy in any case covered the driver of the truck and therefore, the respondent-insurance company was liable to pay the amount awarded in this case. The clause in the insurance policy upon which this argument was based reads as under:
“Any other person who holds the licence provided he is in the insured's employ and is driving on his order or permission.”
15. This again is a contention devoid of merit. There is no material on record here to suggest that the driver of the truck was at the time of the accident driving it under the direction or with the permission of the insured. The insured here being Charnel Singh, the previous owner of the truck. The judgment cited in support namely, New India Assurance Company Limited v. Moti Ram lends no support to the point canvassed. This was a case relating to the transfer, of a truck. The accident had taken place a year after its transfer, but before the policy of insurance had been transferred in the name of the new owner. The insurance company was held liable in respect of the accident on the ground that it had not been shown that the driver of the truck was not driving the truck at the time of the accident under the direction or with the permission of the previous owner. In other words, the policy of insurance covered the driver of the offending vehicle if he was shown to have been driving the vehicle under the direction or with the permission of the insured. This is not the case here.
16. There is, thus, no escape from the conclusion that the respondent-insurance company was not in any manner liable for the compensation awarded to the claimants in this case. In the result both the appeals are hereby dismissed. The respondent-insurance company shall be entitled to its costs in both these appeals. Counsel's fee Rs. 300/- (one set only.)
17. Appeals dismissed.
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