The central legal point established in the judgment is that the transfer of vehicle ownership does not relieve the insurer from third party liability, as per Section 157 of the Motor Vehicles Act, 1988.

Mansoor Ahmad Mir, J.

1. Appellant-National Insurance Company has called in question the award, dated 7th March, 2007, made by the Motor Accident Claims Tribunal (II), Shimla, H.P. (for short "the Tribunal") in M.A.C. Petition No. 44-S/2 of 1996, titled as Smt. Santoshi Devi and Others vs. Sh. Sohan Lal Darfreik and Others, whereby compensation to the tune of Rs. 12,00,000/- with interest @ 7.5% per annum from the date of the petition came to be awarded in favour of the claimants (for short "the impugned award").

Brief facts:

2. The claimants invoked the jurisdiction of the Tribunal in the year 1996 for grant of compensation to the tune of Rs. 15,00,000/- as per the break-ups given in the claim petition on the ground that their sole bread earner became the victim of motor vehicular accident which was allegedly caused by the driver, namely Shri Jagdish Chand, while driving truck bearing registration No. HPS-4766, rashly and negligently on 14th April, 1996 near Balghar, Tehsil Theog.

3. The respondents appeared and resisted the claim petition on the grounds taken in the respective memo of objections. Issues were framed on 29th August, 2000. Thereafter an application under Order 1 Rule 10 of the Code of Civil Procedure (for short "CPC") was moved by the claimants for impleading the National Insurance Company Limited as respondent No. 5 in the array of respondents, which was allowed vide order, dated 22nd July, 2002. Additional issues came to be framed vide order, dated 21st February, 2003.

4. Parties have led evidence in support of their case. The Tribunal, after examining the pleadings, oral as well as documentary evidence, held that the claimants are entitled to compensation and accordingly granted the compensation vide the impugned award.

5. The claimants, the driver, the owner-insured and the other respondents in the claim petition, except the appellant herein, have not questioned the impugned award on any count, thus, has attained finality so far it relates to them.

6. Learned counsel for the appellant argued that the Tribunal has fallen in error in saddling the appellant-insurer with liability on the following three grounds:

(i) That the offending vehicle was not in the possession of the registered owner at the relevant point of time, i.e. on the date of accident, and he had committed breach.

(ii) That the deceased was a gratuitous passenger, so, the appellant-insurer was not to be asked to satisfy the award and then to effect recovery.

(iii) That the appellant-National Insurance Company came to be arrayed as party-respondent in the claim petition in the year 2002, but the interest has been awarded from the date of the claim petition i.e. from the year 1996, should have been awarded from the year 2002.

7. The appellant has not questioned the impugned award on any other ground.

8. I have gone through the pleadings and the issues framed. The appellant has averred that the registered owner has sold the offending vehicle, thus, the insurance agreement was not in force; the deceased was a gratuitous passenger and the owner has committed willful breach, thus, the appellant is not liable.

9. I, while dealing with the issue of the same and similar nature in FAO No. 7 of 2007 titled Ashok Kumar & Another vs. Smt. Kamla Devi & Others, decided on 5.9.2014, in terms of the Apex Court judgments, have held that transfer of a vehicle cannot absolve the insurer from third party liability. It is apt to reproduce paras 15 to 19 of the said judgment herein:

“15. Section 157 of the Act reads as under:

“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 trans