An insurance company is liable to pay compensation to an injured third party even if the vehicle involved in the accident was transferred to a new owner prior to the accident, provided that the accident occurred before the transfer was registered with the authorities.

1. - This appeal has been filed by the Insurance Company against the award passed by the Motor Accident Claims Tribunal, Gangapur City, in case No. 31/1972. For the purposes of this appeal, it will suffice to state that an accident took place on November 21, 1971. It is stated that while the respondent No. 1 Koshalesh Sharma was standing on the road on his correct side alongwith some other persons, a bus bearing No. RSL 337, which was coming from Karoli, came and struck him and caused injuries to respondent No. 1 on account of which his leg had to be imputed and he also received severe injuries in the right leg. In the claim petition, the claimant respondent No. 1 claimed a sum of Rs. 2,50,000/- for the loss of his leg, pain and mental agony, but the Tribunal awarded a sum of Rs. 55,000/- only as compensation. The appellant Insurance Company was made liable only to the extent of Rs. 50,000/- and interest thereon.

2. The contention of Shri. G.K. Bhartiya, learned Counsel for the appellant is that the bus No. RSL 337 was registered in the name of Ram Sahai Kanahiya Lai. This vehicle, according to learned Counsel was sold in the year 1962 to one Ramdayal. At the time of accident Ram Singh was driving the vehicle under the instructions from Ramdayal. It is further submitted by learned Counsel that since the insurance policy was in the name of Ramsahai Kanahiyalal, but the owner of the bus was Ramdayal and driver Ram Singh was also driving under his instructions, therefore, there is no privet of contract between Ramdayal and the Insurance Company. Hence, no award could have been given against the appellant company. The Tribunal gave a finding that since Ramdayal was the owner of the vehicle at the time when accident took place, therefore, Ramsahai and Kanahiyalal in whose name the policy of insurance was issued is not liable for payment of any compensation. However, the Tribunal held that the appellant Insurance Company was liable to pay compensation as stated above. The contention of Shri. Bhartiya is that since insurer Ramsahai-Kanahiyalal have not been made liable for payment of compensation, therefore, the appellant Insurance Company on the basis of privity of contract cannot be held liable for payment of any compensation as Ram Dayal did not obtain any policy forinsuring the vehicle involved in the accident. It is further contended by Shri. Bhartiya that the vehicle involved in accident was transferred from the name of Ramsahai-Kanahiyalal to the name of Ramdayal on February 24, 1972. On this court also Ramdayal became registered owner and the Insurance Company cannot be held to be liable for payment of any compensation as awarded by the Tribunal.

3. The contention of Shri. Mathur, learned Counsel for the respondent is that Ex. A-3, the certificate of registration shows that the vehicle was transferred to the name of Ramdayal on the date mentioned above. It is, therefore, contended by the learned Counsel that the accident took place on November 21, 1971 but the vehicle was transferred to the name of Ramdayal on 24th February, 1972, therefore, at the time of accident Ramsahai-Kanahiyalal were the registered owners of the vehicle and, therefore, are liable for payment of compensation to the claimants. It is further contended by learned Counsel that in this situation not only the registered owners Ramsahai-Kanahiyala but also the owner and the subsequent-owner of the vehicle Ramdayal both are liable for payment of compensation. It is also contended by learned Counsel that according to Ramdayal himself the vehicle was purchased by him as earlier as in the year 1962 and he himself after accident on Superdginama, declared himself to be owner and took the possession of the vehicle from the concerned court.

4. I have heard both the learned Counsel and also perused the award and other documents on record. In the case of New India Assurance Company Limited v. Sheela Rani and Ors. 1988 ACJ 206 , a Division Bench of this Court has