K.KUNHIMUHAMMED v. THE MANAGER, NEW INDIA ASSURANCE COMPANY LTD.

WPC.NO.22227/2007 UAPPENDIXPETITIONER'S EXHIBITS:P1:COPY OF THE R.C.BOOK ISSUED BY THE R.T.O., ERNAKULAM.P2:COPY OF THE AGREEMENT OF SALE DATED 20/01/2006.P3:COPY OF THE AGREEMENT FOR SALE DATED 10/02/2006.P4:COPY OF THE AGREEMENT FOR SALE DATED 28/02/2006.P5:COPY OF THE INTIMATION ISSUED BY THE 2ND RESPONDENT DATED 30/03/06.P6:COPY OF THE F.I.R. DATED 16/032006 REGISTERED BY SUB INSPECTOR OF POLICE, MALAPPURAM.P7:COPY OF THE REFERENCE NOTICE NO.30/07 SUBMITTED BEFORE THE JUDICIAL FIRST CLASS MAGISTRATE COURT, MALAPPURAM.P8:COPY OF THE INSURANCE POLICY ISSUED BY THE 1ST RESPONDENT DATED 11/12/2005.P9:COPY OF THE INTIMATION DATED 16/05/2007 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.P10:COPY OF THE COMPLAINT DATED 4/06/2007 BEFORE THE GRIEVANCE CELL OF THE 1ST RESPONDENT.P11:COPY OF THE COMMUNICATION DATED 20/06/2007 ISSUED FROM THE GRIEVANCE CELL OF THE 1ST RESPONDENT.RESPONDENT'S EXHIBITS:N I L /TRUE COPY/P.A.TO JUDGE Kss S.SIRI JAGAN, J.==================W.P.(C).No. 22227 of 2007==================Dated this the 8th day of August, 2012 J U D G M E N TThe petitioner purchased a Toyota Qualis Vehicle bearingregistration No.KL-7-AC/974 on 28.2.2006, as per Ext.P4 saleagreement. The registered owner of the vehicle at the relevanttime was one Smt.Bindu Abraham. She sold it to one Sri.Sunil, byExt.P2 sale agreement. The said Sri.Sunil sold it to one AbdulLatheef, by Ext.P3 agreement. The said Sri.Abdul Latheef soldthe same to the petitioner by Ext.P4. Ext.P4 is dated 28.2.2006.At the time of purchase, there was an insurance policy in respectof the vehicle with Smt.Bindu Abraham as the insured for theperiod from 11.12.2005 to 10.12.2006. The petitioner onpurchase of the vehicle, by Ext.P4, applied to the concernedRegional Transport Officer for transfer of ownership of thevehicle in the registration certificate as well. But that applicationwas returned to the petitioner, since the same was notaccompanied by a clearance certificate from the concernedRegional Transport Office. While so, the vehicle was stolen on16.3.2006. The petitioner lodged an FIR with the police. But,ultimately the Police referred the matter, by Ext.P7, as anundetectable case. The petitioner appears to have reported the w.p.c.22227/07 - : 2 :-theft of the vehicle to the insurance company, who, by Ext.P9addressed to Smt.Bindu Abraham, told her that they are unableto entertain her claim for insurance amount since she hadalready transferred the vehicle. Thereafter, the petitioner filed acomplaint before the Grievance Cell of the Insurance Company,by Ext.P10. That was rejected by Ext.P11. It is under the abovecircumstances, the petitioner has filed this writ petition seekingthe following reliefs;“i)to call for the records relating to Exhibits P1 to P11 andto issue a writ of certiorari quashing Exts.P9 and P11.ii)to issue a writ of mandamus or any other writ ordirection directing the 1st respondent to allow the claimof the petitioner since as on the date of the theft thevehicle is covered by Ext.P8 valid insurance policyiii)to declare that Ext.P8 is applicable to the petitioner'svehicle and the petitioner is entitled to claim thecompensation governed by the terms and conditions ofthe policy.”2.The petitioner's contention is that by virtue of Section157 of the Motor Vehicles Act, the certificate of insurance of amotor vehicle is automatically transferred to the purchaser alongwith the policy of insurance relating to the vehicle. Therefore,the policy, which was current at the relevant time, although inthe name of the original owner, Smt.Bindu Abraham, getstransferred to the petitioner's name by operation of law andconsequently, the petitioner is entitled to claim the sum assured w.p.c.22227/07 - : 3 :-in respect of the insurance policy, is the contention raised.3.A counter affidavit has been filed by the 1strespondent taking the stand that Section 157 applies only tothird party risks and not to other claims in respect of the vehicles.The learned Standing Counsel for the insurance company heavilyrelies on the decision of the Supreme Court in CompleteInsulations (P) Ltd. v. New India Assurance Co. Ltd., (1996)1 SCC 221, in support of that contention. 4.In answer, the petitioner would contend that in a laterdecision of the Supreme Court, viz., United India InsuranceCo. Ltd., Simla v. Tilak Singh and Others, 2006 (4) SCC 404,the Supreme Court has held that the explanation to Section 157makes it clear that the deemed transfer under that Section shallinclude transfer of rights and liabilities of the said certificate ofinsurance and policy of insurance. Therefore, according to thepetitioner, all rights and liabilities in respect of the policy andcertificate of insurance, which was issued in favour of Smt.BinduAbraham, stand transferred in favour of the petitioner by virtueof Section 157.5.I have considered the rival contentions in detail.6.Section 157 reads thus: w.p.c.22227/07 - : 4 :-“157.Transfer of certificate of insurance:--(1) Wherea person in whose favour the certificate of insurance has beenissued in accordance with the provisions of this Chaptertransfers to another person the ownership of the motor vehiclein respect of which such insurance was taken together with thepolicy of insurance relating thereto, the certificate of insuranceand the policy described in the certificate shall be deemed tohave been transferred in favour of the person to whom themotor vehicle is transferred with effect from the date of itstransfer.Explanation .- For the removal of doubts, it is herebydeclared that such deemed transfer shall include transfer ofrights and liabilities of the said certificate of insurance andpolicy of insurance.(2)The transferee shall apply within fourteen daysfrom the date of transfer in the prescribed form to the insurerfor making necessary changes in regard to the fact of transferin the certificate of insurance and the policy described in thecertificate in his favour and the insurer shall make thenecessary changes in the certificate and the policy of insurancein regard to the transfer of insurance.”Section 157 is contained in Chapter XI of Motor Vehicles Act,which relates to insurance of motor vehicles against third partyrisks. In Complete Insulations' case (supra) the SupremeCourt has held that the insured is not entitled to compensationfrom insurer for damages to the vehicle transferred to him in theabsence of specific contract with the insurer covering risk ordamage to the vehicle and insurer's liability under the Actextends only to risk or damage to property of third party, sincethe deeming provision provides for transfer of third party risksonly. That decision is one in respect of a claim by a transfereeof a vehicle without actually getting the insurance policy and w.p.c.22227/07 - : 5 :-certificate of insurance transferred in his name, which issquarely applicable to the facts of this case. On the other hand,the decision in Tilak Singh's case (supra) is in respect of a thirdparty claim. It is settled law that a decision is an authority forwhat it actually decides. That decision relates to a claim inrespect of third party risk. In view of the fact that CompleteInsulations' case (supra) is on all fours with the facts of thiscase and Tilak Singh's case (supra) is in respect of third partyrisk only, I am bound by the decision in Complete Solutions'case (supra). This is all the more so since under sub section 2 ofSection 157, the petitioner was bound to apply within 40 daysfrom the date of transfer in the prescribed form to the insurancecompany for making necessary changes in respect of the transferin the certificate of insurance and the policy described in thecertificate, in his favour, which the petitioner has not cared todo. In the above circumstances, I do not find any merit in thecontentions of the petitioner and accordingly, this writ petitionis dismissed. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge w.p.c.22227/07 - : 6 :-