LexM/S. COMPLETE INSULATIONS (P) LTD. versus NEW INDIA ASSURANCE COMPANY LTD.
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A MIS. COMPLETE INSULATIONS (P) LTD. v. NEW INDIA ASSURANCE COMPANY LTD. NOVEMBER 21, 1995 B [A.M. AHMADI, CJ, S.C. AGRAWAL AND SUJATA V. MANOHAR, JJ.] > • Motor Vehicles Act, 1988-Chapter XI-Insurance of motor vehicles c against Third Pmty Risks-Liability in regard to third parties-Transfer of certificate of insurance and policy of insurance-Deemed to have been made where vehicle along with insurance policy is trans/ e1Ted by owner to another person-If policy covers other risks-There must be an agreement between insurer and trans/ eree. D The respondent issued a comprehensive insurance policy for a Maruti Car in favour of the owner. The premium for the insurance was paid by the appellant company in whose favour the car was transferred. The registration of the car was transferred to the appellant on 15.6.1989. On 26.6.1989, the appellant intimated the transfer of registration and E asked for transfer of the insurance policy. A reminder was sent on 24.7.1989. The respondent did not reply to the two letters. On 17.9.1989 the car met with a serious accident in which the Managing Director of the I- appellant Company suffered serious injuries and his sister died. On 11.10.1989 the appellant asked for the assessment of the damage as the car was a total loss. The respondent did not respond. The appellant got a F notice issued to which the respondent replied that the appellant had no insurable interest in the car. The appellant filed a complaint before the Consumer Disputes Redressal Commission which directed the respondent to pay Rs. 83,000 i.e. the insured value of the vehicle, as the vehicle was a total loss, alongwith costs and interest. G On appeal the national Consumer Disputes Redressal Commission set aside the order of the State Commission, dismissed the complaint and granted cost of the appeal. The Commission held that under section 157 of the Motor Vehicle Act, 1988, a certificate of insurance is deemed to have been transferred in favour of the person to whom the vehicle is transferred H but the said provision applies only in relation to third party risk and did 500 ( COMPLETE INSULATIONS (P) LTD. v. NEW INDIA ASSURANCE CO. LTD. 501 not apply to a policy covering risk of damage to the vehicle or person of A the insured. The question raised for consideration was whether on these facts, without the insurance policy being transferred in the name of the appellant, it was entitled to be indemnified by the insurer. Dismissing the appeal, this Court HELD : 1.1. Section 157 of the Motor Vehicle Act, 1988, introduces a deeming provision whereby the transfer of the certificate of insurance and the policy of insurance are deemed to have been made where the vehicle alongwith the insurance policy is transferred by the owner to another person. This provision has withdrawn the insurer's right of refusal C w1 :h was granted under the old Act. [506-B-C] 1.2. The New Act of 1988 came into force with effect from July 1989. Since the vehicle in question was sold on 15.6.1989 and the letter of intima- tion of transfer and request to transfer the certificate of insurance and the policy described therein was sent on 26.6.1989 the Old Act applied. Admit- D tedly the request was not refused under section 103 A of the Old Act till the New Act came into force. Thereafter, on 24.7.1989 the Insurance Company was once again requested to effect the transfer of the Certificate of In- surance as well as the policy but to no avail. By that date the New Act had come into force. Actually the application dated 26.6.1989 was pending when E the New Act had come into force. That application had to be processed under section 157 of the New Act and hence the Certificate as well as the policy must be deemed to have been transferred in the name of the trans- feree. "Even if the Old Act applied to pending cases, the certificate and policy must be deemed to have been transferred since no refusal was com- municated by the Insurance Company to the transferor or the transferee. F Therefore, in either case the transfer of the Certificate of Insurance and policy described therein must be taken as complete in view of the language of section 103A of the Old Act and section 157 of the New Act. [508-B-E] 1.3. The entire chapter XI of the New Act concerns third party risks G only. Insurance is compulsory only in respect of third party risks since section 146 prohibits the use of a motor vehicle in a
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