The sale of an insured vehicle by the insured automatically lapses the insurance policy, and the insurance company is not liable to make good the claim of a third party claimant in the event of an accident.

( 1 ) (JUDGMENT of the Court delivered by Madhava Reddy J 1. This appeal is by the petitioners in O. P, 135/g5 on the file of the Motor Accidents Claims Tribunal (District Judge) East Godavari at Rajahmundry ).

( 2 ) THE 1st appellant is the wife of one Venkata Raju, the person who was knocked down by a lorry APK 2029, heavy Motor Vehicle on 23-4-1965 and died; Appellants 2 to 7 are his minor children. The 1st respondent is the registered owner of the lorry, the 2nd respondent is the purchaser from the 1st respondent s vendee. The 3rd respondent as an employee of the 2nd respondent was driving the lorry at the time of the fatal accident. The 4th respondent is the insurance Company with which the lorry was registered, and the 5th respondent is the first purchaser of the lorry in question. The petition O. P. 135/65 was filed against the respondents claiming a sum of Rs. 1,58,820/-as compensation. The 5th respondent remained exparte in the court below and he is not impleaded as a party herein the 1st respondent pleaded that he had sold away the lorry on 17-8-1952 to one Kodali Pattabhiramiah and delivered possession of the same to him and that he. ceased to have any interest or control over the lorry from that date. He pleaded that as the title therein passed to the said Pattabhiramiah long before the accident, he was not liable for the damages claimed by the appellants. The 2nd res. pondent pleaded that the title of the vehicle did not pass to him as the vehicle was still registered in the name of the 1st respondent. He also alleged that the accident was due to rash and negligent riding of the Motor Cycle by Venkata Raju, the deceased. He also stated that the appellants are not entitled to the huge amount claimed by them as damages. The 3rd respondent admitted that he was the driver of the lorry but denied that the accident was due to his rash and negligent driving. He also disowned all liability to pay any compensation, as according to him, it was Venkata Raju, the deceased who was responsible for the accident. The Insurance Company, the 4th respondent denied its liability to make good the claim on the ground that there was no privity of contract between the Insurance company and the 2nd respondent, the present owner of the vehicle. The Vehicle was insured by the I st respondent and the transfer of the vehicle by the 1st respondent in favour of the 2nd respondent operated as a cessation of the Insurance Policy. The Insurance Company had no notice of the transfer of vehicle in favour of the 2nd respondent. The Policy was not assigned in favour of the 2nd respondent at any time They also pleaded that the 3rd respondent was not holding a valid licence to drive a heavy motor vehicle and as such the company was absolved of all liability for the 3d party risk.

( 3 ) THE Tribunal held that the 2nd respondent was the owner of the vehicle on the date of the accident, that there was no assignment of the Insurance policy in his favour and that the accident was due to rash and negligent driving of the 3rd respondent and accordingly decreed the claim of the appellants only against respondents 2 and 3 but only to the extent of Rs. 25,000/- and dismissed the claim as against the other respondents. Only the petitioners have preferred this appeal urging that their claim should have been decreed even as against the 1st and 4th respondents viz. the Registered owner of the vehicle and the Insurance Company with which it was insured. The other respondents in the petition are not impleaded in this appeal.

( 4 ) IN this appeal the quantum of damages awarded by the Tribunal is not questioned. The appellants pray for a decree for the sum of Rs. 25. 000/- awarded by the Tribunal even as against the Registered owner and the Insurance Company. The two questions tnat arise for consideration are ; (1) Whether on the facts and circumstances of the ease, the registered owner, the 1st respondent herein is liable to meet the claim of the appellants ; and (2) Wh

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