SAROJA Vs. GOPAL

JUDGEMENT

(1.) "whether on the transfer/sale of the vehicle, the policy of insurance issued already in favour of the transferor/seller, in the absence of intimation about such transfer, lapses and the insurance company cannot be fastened with liability "" The necessary facts for the disposal of the said reference are : On March 3, 1981, while travelling in a van bearing registration No. TMQ 257, four persons met with an accident, as the said van dashed against the stationary lorry. The Tribunal awarded compensation fastening liability on the first respondent owner. The Tribunal came to the conclusion following the decision of a Division Bench in Hema Ramaswami v. K. M. Valarance Panjani. The matter, on appeal, was heard in extenso. The Bench considered various aspects made by Mr. V. Radhakrishnan, learned counsel appearing for the appellants. In Dharman v. N. C. Srinivasan, 1990 AIR (Mad) 14, a Division Bench of this court had taken the view that on the transfer/sale of the vehicle during the period of cover, the policy had lapsed will not be available by way of defence to the insurance company. In the decision of the division Bench in Oriental Insurance Co. Ltd. v. Rajamani 1991 1 LW 635 a view had been taken to the effect that on the transfer/sale, the cover under the policy lapses and the transferee cannot take advantage of the policy in favour of the transferor/vendor. On these conflicting decisions, the matter had been referred to the Full Bench, as stated above.

(2.) WE have heard learned counsel appearing on either side and perused the materials on record and the case-law. It is seen that in section 157 of the Motor Vehicles Act, 1988, in sub-section (1) the Explanation was inserted on November 12, 1994, which says that, section 157 (1) involves two transfers, (i) the transfer of ownership of the vehicle in respect of which insurance is taken and (ii) the policy of insurance of policy relating thereto. It is also stated that once both the transfers take place the deeming provision operates in respect of insurance and policy described thereon.