The main legal point established in the judgment is that the liability of the insurer does not cease in the event of a transfer of the vehicle without the transfer of the insurance policy, and the insurer has the right of recovery from the insured or the transferee.

K.SREEDHAR RAO, J.:- Substantial question of law :-

In the event of transfer of vehicle without transfer of RC and insurance policy, whether the insurer is liable to pay the compensation to the workmen of the transferee under S.147 of the M.V. Act?

2. The R-l and R-2 are the parents of the deceased-Naveen Kumar who was working as a Cleaner in the goods tempo bearing registration No.KA 11 8145. The said vehicle belongs to one Yeshodamma who is the R. C. holder and the policy holder. The claimants say that the vehicle was purchased by one Srinivasa from RC holder without transfer of R. C. and the insurance. The said Srinivasa was ownercum-driver of the tempo at the time of the accident. The deceased, was working as cleaner in the tempo at the time of the accident. Srinivasa and Naveen Kumar, both of them died in the accident which occurred on 12-6-2000.

2A. The third respondent is on record as the L. R. of deceased-Srinivasa who was the owner of the vehicle (transferee from the RC holder- Yeshodamma). The W. C. Commissioner awarded the compensation to R1 and R-2 and directed the insurer to pay the compensation. The insurer is in appeal.

3. The relevant provisions of Section 147 and 157 of the M.V. Act are extracted hereunder :-

"147. Requirements of policies and limits of liability.

(1) .....

(a) ......

(b) ......

(b) (i)

PROVIDED that a policy shall not be required ;-

(i) to cover liability in respect of the death arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee -

(a) to (c) .....

(ii) to cover any contractual liability."

"Section 157 : Transfer of certificate of Insurance :-

(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.

(Explanation: For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy

of insurance).

(2) The transferee shall apply within fourteen days from the date of transfer in the d prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate or insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance."

4. Sri A.M. Venkatesh, learned counsel for the appellant strenuously argued that the liability of the insurer will arise under W.C. Act in respect of an employee of the insured'.

The R. C. holder- Yeshodamma is the insured. The deceased is not a employee of the insured. Therefore, the insurer is not liable to pay the compensation. It is further argued that under S.157, the policy has to be transferred within 14 days from the date of transfer of the vehicle.

The claimants have not adduced any evidence to prove the date of transfer of vehicle and the compliance of the requirements under S.157 of the M. V. Act. Therefore, the deceased Srinivasa who was the owner of the vehicle at the relevant point of time, is not the insured and no policy was issued in his favour, therefore, the insurer is not liable to pay the compensation to the employees of the owner of the vehicle who is not the insured and in whose favour the policy is not issued.

5. The Supreme Court in the

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