MD, K.S.R.T.C. Vs. New India Assurance Co. Ltd. & Anr.
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Head Note
Motor Vehicles Act,1988 - Section 2 (30) , Section 147 (1) , Section 157
Lease Agreement - Transfer of Vehicle - Liability of Insurer - KSRTC has taken bus under a lease agreement - As such KSRTC is treated as owner under Section 2(30) of the Act of 1988, the registered owner continues to remain liable as per terms and conditions of lease agreement lawfully entered into with KSRTC - Held that registered owner, insurer as well as KSRTC would be liable to make the payment of compensation jointly and severally to the claimants - KSRTC in terms of the lease agreement entered into with the registered owner would be entitled to recover the amount paid to the claimants from the owner as stipulated in the agreement or from the insurer.
Motor Vehicles Act,1988 - Section 2 (30) , Section 147 (1) , Section 157
Lease Agreement - Transfer of Vehicle - Liability of insurer - When provisions of Section 147 with Section 157 are read together there is deemed transfer of policy in case of transfer of vehicle - Hence, liability of insurer continues notwithstanding the contract of transfer of vehicle - Such contractual liability cannot be said to be excluded by virtue of second proviso to Section 147(1) of Act of 1988 - Hire purchase agreement, an agreement for lease or an agreement for hypothecation are covered under Section 2(30) of the Act of 1988 - A person in possession is considered to be an owner of the vehicle under such agreements - An agreement for lease on hire cannot be said to be contract envisaged for exclusion under contractual liability in second proviso to Section 147(1) of the Act of 1988.
Motor Vehicles Act,1988 - Section 2 (30) , Section 147 (1) , Section 157
Liability of Insurer - Transfer of Vehicle through Lease - KSRTC has taken bus under a lease agreement - It can also be treated as owner for the purposes of Section 2(30) of the Act of 1988 plying the buses under lease agreement - Insurance company admittedly has insured the vehicle and taken the requisite premium - Even if the intimation regarding lease agreement had not been giventhe insurer cannot escape the liability to indemnify as in the case of hiring of vehicle intimation is not required to be given - It is only in the case of complete transfer of the vehicle when change of registration particulars are required under Section 157 of the Act, an intimation has to be given by the transferee for effecting necessary changes in the policy - When the KSRTC has become the owner of the vehicle during the period it was on hire with it for the purpose of Section 2(30) of the Act by virtue of provisions contained in Section 157 of the Act, the insurance policy shall be deemed to be transferred - As such, insurer is liable to make indemnification and cannot escape the liability so incurred by the KSRTC.
Topic(s)-Liability of Insurer - Transfer of Vehicle through Lease - Insurer Liable