Lakhwinder Singh v. Tarsem Singh & Ors.

The factual details The appeal is against the petition dismissing the claim petition for damages caused to the car of the appellant bearing registration No. PB-10-BC-6611 in the motor vehicular accident. His car was said to have taken by another person by name, Yadwinder Singh and met with an accident in a collision with the insured's Canter. Yadwinder Singh, who was driving the car, was reported to have died on the spot. The petition was filed by the claimant contending that he had purchased the car from M/s Transworld Enterprises, Ludhiana. Admittedly, the FAO No.1170 of 2009 (O&M) - 2 - vehicle had been registered in the name of M/s Transworld and the vehicle had been sold to the appellant by actual delivery and on an affidavit by the registered owner, signed and attested on 24.01.2007, the vehicle had been transferred. The Tribunal rejected the claim on the ground that the owner defined under Section 2(30) would mean such a person in whose name the vehicle stood and Section 50 provided for a procedure to be followed for registering the vehicle from the Transworld to the transferee and the same having not been done, the appellant who was not a registered owner could not enforce the claim against the

Insurance Company. The Tribunal referred to a judgment of this Court in Vipin Kumar Sharma Versus Jagwant Kaur and others-2007 ACJ 1249, which dealt with the claim against the registered owner where it was contended that he had transferred the vehicle, although the registration continued in his name. This Court held that the registered owner will continue to be treated as the owner and enforcement of a claim would be tenable. II. Contentions by the appellant

In appeal by the claimant, the contention is that the transfer of ownership in the goods takes place under Section 19 of the Sale of Goods Act and Section 50 of the Motor Vehicles Act itself merely provides for a procedure for effecting a transfer of registration. It does not mandate that a transfer could take place only in the manner that Section 50 of the MV Act contemplates. There does exist a difference between transfer of a vehicle and transfer of registration of a vehicle. Section 50 prescribes a procedure for effecting of transfer of a FAO No.1170 of 2009 (O&M) - 3 - registration of a vehicle and does not itself constitute a transfer. Transfer of goods takes place always by delivery and by passing of consideration. This distinction was dealt with by the Hon'ble Supreme Court in Vasantha Viswanathan and others Versus V.K.Elayalwar and others- 2001(8) SCC 133. This position is also noted by this Court recently in a judgment in Munni Ram Versus Fakir Chand and another-AIR 2010 Punjab and Haryana 50. III. Difference between a 3 representative of the deceased and a 3 rd party-claimant, who is injured or rd party, who is a transferee

If the case were to be instituted at the instance of a third party against a transferee and the insurer, the insurer may not be able to plead the fact of transfer had not been informed; that registered owner continues to be the transferor and, therefore, the insurer will not be liable. This situation cannot obtain to the insurer by virtue of the fact that there is a compulsory requirement of insurance for a third party and, therefore, a person, who purchases the vehicle by delivery and involves the vehicle in accident, could still make the insurer liable. This position has been made clear through a new provision under the Motor Vehicles Act of 1988, by expressly enacting that by a transfer of a vehicle, the certificate of insurance will be deemed to be transferred. The effect of this provision under Section 157 and even the situation that obtained prior to the enactment of Section 157 through the MV Act of 1939, vis-a- vis the insurer's liability was dealt with by the Hon'ble Supreme Court in G.Govindan Versus New India Assurance Company Limited-1999(2) PLR 274.

The raison d’être for this is not far to seek. An insurer that becomes liable to a third party undertakes the liability by the fact that the owner is required by the provisions of Section 146-147 to make compulsory insurance for third parties risks. A third party's entitlement is secured under statute. A transferee's right is not so protected by any of the provisions of the Motor Vehicles Act itself. A transferee who makes a claim for damage to his own property literally seeks to enforce a term of contract of insurance. By a transfer of the vehicle, a contract of insurance with the insured is not simultaneously transferred. The deemed transfer of policy is only for the purpose of employment of a claim by a 3rd party claimant. The right to enforce an obligation under the policy against an insurer could arise for the transferee, in the absence of statutory provision, only by obtaining a transfer of the policy itself. This transfer of policy is contemplated in Section 157(2) which prescribes a procedure to apply within 14 days in a prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance. While the failure to obtain such a transfer may not affect a third party claimant, it will have an immediate bearing to the right of the transferee himself. FAO No.1170 of 2009 (O&M) - 6 -

Enforcement of claims by third parties and by a transferee stand on different footing and this distinction must be clearly cast in mind. It is not the same thing as denying to a transferee a right to be indemnified if a third party claim operates. There, the fact of deemed transfer that makes the insurer liable will protect the transferee also. On the other hand, if the claim proceeds from the transferee, he cannot make the insurer liable unless the contract of insurance itself had been transferred. This is irrespective of the fact that the ownership of the vehicle may have been transferred by mere delivery even without recourse to following procedure under Section 50 of the Motor Vehicles Act, that appertains to transfer of registration of the vehicle. We have already examined the difference between the transfer of the vehicle and transfer of registration of the vehicle. V.