S.B. Majage, J.
1. The appellant-claimant was working as a cleaner in the lorry bearing No. CRA 2525, covered by insurance policy issued by respondent No. 2, insurance company. He met with an accident on account of rash and negligent driving of said lorry and sustained injuries in the course of employment under respondent No. 1, owner of said vehicle. So he claimed compensation from the respondents. After inquiry, the Commissioner has awarded compensation to the appellant-claimant but, having held that the insurance policy was not in force on the date of accident, dismissed the claim against the insurance company and directed the respondent No. 1, owner, alone to pay the compensation awarded. It is against the said order and award, the claimant is before this court.
2. It was vehemently argued for the claimant that since the policy was valid and in force from 7.1.2003 to 6.1.2004, the insurance company cannot avoid its liability to pay compensation even though the insurance policy was given effect from 3.11.2003 (i.e., after the accident) in favour of the respondent No. 1 due to transfer of the vehicle from previous owner, namely, Ishwar M. Hampanavar. In that connection, reliance has been placed on Section 157 of the Motor Vehicles Act and decision of the Apex Court in the case of G. Govindan v. New India Assurance Co. Ltd., 1999 ACJ 781 (SC), besides decisions of this court in the cases of National Insurance Co. Ltd. v. Lakshmi, 1997 ACJ 7 (Karnataka) and Mahabala v. Satyanarayana, 2004 ACJ 850 (Karnataka). On the other hand, the learned counsel for the insurance company relying on a decision of Orissa High Court in case of New India Assurance Co. Ltd. v. Narayan Dhar Swain, 1999(1) TAC 613, submitted that as cleaner cannot be a third party, Section 157 of the Act does not come to the help of the claimant-cleaner, as said provision is in Chapter XI relating to insurance of motor vehicles against third party risks and hence, the Commissioner was right in dismissing the claim against insurance company. Thus, he supported the impugned order but on different ground. Perused the records carefully.
3. The substantial question of law for consideration is:
'Whether the insurance company can avoid its liability when the insurance policy was valid as on the date of accident?'
4. Accident, sustaining injuries by the claimant in such accident, working of the claimant as a cleaner under the respondent No. 1 owner of the vehicle, insurance of the vehicle with respondent No. 2 insurance company, validity of such insurance for the period from 7.1.2003 to 6.1.2004 covering the date of accident, liability of the insurance company to pay compensation to the claimant in case the policy had been transferred earlier to or w.e.f. 30.10.2003 and transfer of ownership of the vehicle to the respondent No. 1 from Ishwar M. Hampanavar earlier to the date of accident, are not in dispute.
So and as Exh. R-1, insurance policy record produced by the respondent No. 2 insurance company itself shows that insurance policy was in force from 7.1.2003 to 6.1.2004, the finding of the Commissioner that the policy was not in force as on the date of accident taken place on 30.10.2003 cannot be sustained. It is for that reason, rightly, learned counsel for the insurance company had taken a different stand to defend the order of the Commissioner to avoid the liability of insurance company to pay compensation.
5. It is trite that under Section 157 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act'), when a vehicle is transferred to another but the policy is not transferred in the name of such person, i.e., transferee, the insurance policy is deemed to have been transferred to such transferee. This position is not in dispute and cannot be disputed also. But, what has been contended for the insurance company is that since Section 157 finds place in Chapter XI relating to insurance of motor vehicles against third party risks, claimant being a cleaner, cannot be said to be a third party and cannot have compensation from the insurance company and the said provision does not come to his aid when, admittedly, as on the date of accident, the insurance policy was not standing in the name of the respondent No. 1, under whom he was working.
6. It is true that Section 157 finds place in the Chapter relating to the insurance of motor vehicles against third party risks. But, as per the proviso to Section 147(1) of the Act, insurance policy issued covered the liability arising under Workmen's Compensation Act in respect of bodily injury to an employee carried in goods vehicle. Admittedly, the claimant was an employee under the respondent No. 1 owner of the vehicle, as on the date of accident.
7. The claimant has specifically contended that the respondent No. 1 is the owner of the vehicle and he was employed under the respondent No. 1 as on the date of accident. The respondent No. 1 has also specifically stated that he was the owner of the vehicle as on the date of accident and the insurance policy of the vehicle covered the risk and as such, he is not liable to pay compensation even if held that the claimant is entitled to compensation for the injuries sustained in the accident in the course of employment under him. However, the insurance company, respondent No. 2, has not denied the ownership of the respondent No. 1 over the vehicle as on the date of accident, though denied the employee and employer relationship between claimant and the respondent No. 1. Not even a suggestion was made for the insurance company much less bringing of evidence of any type to show that respondent No. 1 was not the owner of the vehicle as on the date of accident. In the above view, it could be said that the ownership of the respondent No. 1 over the vehicle as on the date of accident has remained unchallenged and admitted.
8. So what requires to be considered is, on account of transfer of the insurance policy in the name of respondent No. 1 w.e.f. 3.11.2003, i.e., after three days of the accident, whether the insurance company is liable to pay compensation or not?
9. In the case of Govindan, 1999 ACJ 781 (SC), the Supreme Court held thus:
'(11) This court in the said judgment held that the provisions under the new Act and the old Act are substantially the same in relation to liability in regard to third party. This court also recognised the view taken in the separate judgment in Madineni Kondaiah's case, 1986 ACJ 1 (AP), that the transferee-insured could not be said to be a third party qua the vehicle in question. In other words, a victim or the legal representatives of the victim cannot be denied the compensation by the insurer on the ground that the policy was not transferred in the name of the transferee.
(12) This court further held as follows:
'Now, under the old Act although the insurer could refuse to transfer the certificate of insurance in certain circumstances and transfer was not automatic as under the new Act, there was under the old law protection to third parties, that is, victims of the accident. The protection was available by virtue of Sections 94 and 95 of the old Act.'
(13) The same view was taken in New India Assurance Co. Ltd. v. Sheela Rani, 1999 ACJ 213(SC).'
10. Section 157(1) of the Act relating to transfer of certificate of insurance reads as under:
'157(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.'
Explanation to said section substituted by Act 54 of 1994 makes it clear that such deemed transfer shall include transfer of rights and liabilities of the certificate of insurance and policy of insurance.
11. According to said provision, when ownership of a motor vehicle is transferred, the certificate of insurance and policy of insurance shall be deemed to have been transferred to the transferee from the date of transfer of ownership of vehicle. As already noted, transfer of ownership of vehicle and its ownership with respondent No. 1 as on the date of accident is not in dispute. So, there was deemed transfer of certificate of insurance and policy of insurance from the date of transfer of vehicle to respondent No. 1 even earlier to the date of accident. As such and in view of the explanation referred to above, the deemed transfer of the insurance policy includes transfer of the rights and liabilities of the policy of insurance and consequently the insurance company cannot take shelter and say now that it is not liable to pay compensation as policy was transferred w.e.f. 3.11.2003.
12. Now reference can also be had to Section 147(5) of the Act, which says that:
'Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.'
This provision does not make any distinction between the person or classes of persons whose risk is covered by the policy of insurance. In other words, said provision and Section 157, though come under Chapter XI relating to insurance of motor vehicle against third party risks, do not make any distinction so far as the liability of the insurance company in connection with the risk of a victim covered by policy issued under the Act is concerned. So, simply because Sections 147 and 157 find place in Chapter XI relating to insurance of motor vehicle against third party risks, it cannot be said that appellant-claimant-employee under the respondent No. 1, owner of the vehicle-employer, who sustained bodily injury in the accident, is not a person or victim to be compensated by the insurance company.
13. Of course, the learned counsel for the respondent No. 2, insurance company has relied on a decision of Orissa High Court in the case of Narayan Dhar Swain, 1999(1) TAC 613, in support of his argument that the claimant is not a third party and as such, Section 157 of the Act does not come to the aid of the claimant. But, in the said case, neither Section 157(1) nor Section 147(5) of the Act was considered. So, said decision does not help the insurance company to deny the claim of the claimant.
14. It may be noted that in the case of National Insurance Co. Ltd. v. Lakshmi, 1997 ACJ 7(Karnataka), this court has held that non-compliance of Section 157(2) of the Act does not invalidate deemed transfer under Clause (1) of Section 157 of the Act. Reference can also be had to another decision of this court in the case of Mahabala, 2004 ACJ 850 (Karnataka), relied on for the claimant.
In conclusion, the insurance company is held answerable to the claim of appellant-claimant and the substantial question of law has been answered in negative, i.e., in favour of the claimant and against the insurance company.
In the result, the appeal is allowed, set aside that part of the impugned order by which respondent No. 2 insurance company is held not liable to pay the compensation and modified the impugned order holding that respondent No. 2 insurance company is liable to pay compensation to the claimant and ordered accordingly.
In the circumstances, no order as to costs is made.