The transfer of ownership of a vehicle during the period of cover is not a ground for avoiding liability under S.96(2) of the Motor Vehicles Act.

PADMINI JESUDURAI, J. :- The owner and driver respectively of a motor cycle against whom the Motor Accidents Claims Tribunal, had passed an award, confirmed by this Court in appeal, have preferred this Letters Patent Appeal.

2. Facts briefly are : On 6-3-1980 at 7.05 p. m. motor cycle bearing registration No.TMC 6883 which had formerly belonged to the third respondent herein and on the day of the accident had belonged to the first appellant, was driven in a rash and negligent manner by the second appellant and dashed against the first respondent-claimant and caused him serious injuries. The first respondent filed O. P. 525 of 1980 under Sec.110-A of the Motor Vehicles Act (hereinafter referred to as the Act) before the Motor Accidents Claims Tribunal, Madras, claiming a compensation of Rs. 25,000/-.

3. The appellants resisted the claim contending that the accident was not due to the rash and negligent driving of the second appellant, but was due to the negligence of the first respondent in suddenly crossing the road. The second respondent, the Insurance Co., resisted its liability contending that the vehicle belonged to the third respondent herein, with whom alone there was a valid policy of insurance and the vehicle having been transferred during the period of cover to the first appellant, the second respondent could not be called upon to indemnify the first appellant. On this counter, the third respondent was also made a party and he chose to remain ex parte.

4. The Tribunal, on the material placed before it, held that the accident was due to the rash and negligent driving of the vehicle by the second appellant and assessed the compensation at Rs. 6,500. Holding that because the vehicle had been transferred by the third respondent to the first appellant even before the date of the accident, neither the third respondent, the erstwhile owner, nor his insurer, the second respondent, could beheld liable. An award was passed against the appellants alone. C.M.A. 172 of 1982 filed by the appellants in this Court was dismissed. Hence this Letters Patent Appeal.

5. Thiru S. Subbiah, learned counsel for the appellants, urged the following two contentions in support of his prayer-

(1) The vehicle having been insured with the second respondent and the accident having taken place during the period of cover and the policy of insurance not having been terminated during the period of cover in any one of the modes contemplated in Sec. 96(2) of the Act, it is not open to the second respondent, the Insurer, to avoid the liability against third parties by taking a plea not available to it under Sec. 96(2) of the Act, contending that the policy had come to an end on the transfer of the vehicle from the third respondent to the first appellant.

(2) Both the tribunal as well as the learned Judge, erred in placing reliance on Ex. P. 6, the rough sketch of the scene prepared by P. W. 3, the Investigating Officer, based purely on the statements recorded by him under Sec. 161 Cr. P.C. which were not admissible in evidence. The finding that the accident was due to the rash and negligent driving of the second appellant was, therefore, unsustainable.

6. Thiru Madangopal Rao, learned counsel for the second respondent, countered the above contentions.

6A. Contention No.1 - The first contention of the learned counsel for the appellants is that this being a claim by a third party, it is not open to the insurer, the second respondent, to escape the liability accrued during the period of cover of the policy of insurance by putting forward any defence not contemplated in Sec. 96(2). According to the learned counsel, a policy of insurance against third party claims, could come to an end only in the manner provided under Sec. 96(2)(a) and (c) of the Act. The short question, therefore, is whether a plea that the policy of insurance has lapsed on the transfer of a vehicle, is a plea that could be put forward under Sec. 96(2) as against a third party claim.

7. Accor