THE NEW INDIA ASSURANCE CO. LTD. versus SMT. SHEELA RANI AND ORS.

Citation: [1998] SUPP. 1 S.C.R. 591 · Decided: 15-09-1998 · Supreme Court of India · Bench: K. VENKATASWAMI · Disposal: Dismissed
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Judgment (excerpt)

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THE .NEW INDIA ASSURANCE CO. LTD. 
v. 
SMT. SHEELA RANI AND ORS. 
SEPTEMBER 15, 1998 
(K. VENKATASWAMI AND A.P. MISRA, .LI.) 
Motor Vehicles Act, 193<}-Section 103-A-Lapse of policy-Intimation 
of tramfer of vehicle given to Insurance Company but not in the presc1ibed 
f 01111 as required under Section· 103-A-No reply given by Insurance Company 
A 
B 
to this Intimation-Held, in absence of reply the ce1tificate of policy shall C 
deem to have been transfe1red in favour of the transferee as per Section 103-A 
of the Act and policy would not lapse. 
A Fiat Car was sold by the sixth respondent to the fourth respondent 
aud the said transfer was accepted on 26.6.1976 by the transport .l!-uthority. 
This car was insured with the appellants for the p~riod 16.6.1976 to D 
5.6.1977. Thereafter, the fourth respondent intimated to the appellants 
about the transfer of the vehicle in his favour though not in the prescribed 
form as required under Section 103-A of the Act and sought transfer of 
the policy. But no reply was given· to this by the appellants and sub-
sec1uently the car met with an accident on 10.5.1977 in which the husband E 
of the first respondent died. 
A Claim Petition was tiled before the Motor Accident Claims 
Tribunal, Jaipur for compensation. The appellants denied its liability on 
the ground that the policy had lapsed. The Tribunal rejected the conten-
tion of the appellants. Thereafter, Single Judge of the High Court relying 
F · 
on the principles laid down in Maidineni Kondaiah 's case also rejected the 
contentions of the appellants. TI1e Division Bench affirmed the view taken 
by the Single Judge. 
In this appeal challenging the order, the appellants contended that G 
because the intimation of the transfer of vehicle by the respondent was not 
in accordance with the prescribed form as required under Section 103-A . 
of the Act, the insurance policy lapsed and therefore, the appellants are 
not liable. 
Dismissing the appeal, the Court 
591 
592 
SUPREME COURT REPORTS [1998) SUPP. I S.C.R. 
A 
HELD: 1. In absence of reply by the appellants, to the intimation 
B 
given by the respondent about the transfer of the vehicle in his favour 
seeking transfer of the policy, though not strictly in the prescribed form 
as required under Section 103-A of the Act, the Certificate of Policy shall 
deemed to have been transferred in favour of the transferee as per Section 
103-A of the Act and the policy would not lapse. [598-G-H-A] 
Madineni Kondaiah & 01:r. v. Yaseen Fatima & Ors., AIR (1986) A.P. 
62, approved. 
Complete Insulations (P) Ltd. v. New India Assurance Co. Ltd., [1996) 
c 1 sec 221, held applicable. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5525 of 
1995. 
From the Judgment and Order dated 8.4.87 of the Rajasthan High 
D Court in D.B.S.C.A. No. 29 of 1987. 
S.C. Paul for Ms. Indra Sawhney for the Appellant. 
Indra Ma'kwana for the Respondent No.l. 
E 
B.S. Chahar for Ashok Mathur for the Respondent Nos. 4-6. 
The Judgment of the Court was delivered by 
VENKATASWAMI, J. This appeal arises out of a judgment dated 
p 8.4.87 of the Division Bench of the Rajasthan High Court in D.B. Civil 
Special Appeal No.29 of 1987. 
Brief facts leading to the filing of this appeal are given below : 
The sixth respondent herein was the owner of a Fiat Car bearing 
G Registration No. RSM-9701. The said Car was insured with the appellant-
lnsurance Company for the period 16.6.76 to 5.6.77. It appears that the 
sixth respondent sold the said car to the fourth respondent on 18.6. 76. This 
transfer was accepted on 24.6.76 by the Regional Transport Author~ty, 
Jaipur. The said Car met with an accident on 10.5.77 in which one Moti 
H Lal Jain, husband of the first respondent, died. 
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NEW INDIA ASSURANCE CO. LTD. v. SMT. SHEELA RANI IVENKATASWAMI..l.l 
593 
A Claim Petition was filed before the Motor Accident Claims Tribunal, A 
Jaipur, in M.A.C. No. 291/77 by the first and second respondents, widow and 
minor son of the deceased, respectively. The third respondent, mother of the 
deceased, was shown as respondent later on transposed as claimant in the 
Claim Petition. We are not concerned with the quantum of compensation in 
this appeal as the sole issue raised by the appellant Insurance Company was 
B 
with reference to its liability. In other words, according to the appellant, the 
transfer of the car by the sixth respondent to fourth respondent was not 
informed to it by the sixth respondent-(lransferor)
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