Transfer of ownership of an insured vehicle without the knowledge or consent of the insurance company results in the lapse of the insurance policy, absolving the insurance company from liability for any accidents occurring after the transfer.

B. K. PATRA, J.

( 1 ) A taxi bearing registration No. ORS 5336 belonging to one Golam Bari and being driven by the latter's driver met with an accident at about 4. 15 a. m. on 16-31968 while it was proceeding from Jharsuguda to Sambalpur. At the time of the accident, there were two passengers in the car --one Kanakalata Misra a lady aged about 52 years and her son Puma Chandra Misra. As a result of the accident, both the passengers were injured the lady having sustained very severe injuries. They were admitted in the Burla Medical College Hospital where the lady died at about 12 noon. It was alleged that the driver was driving the vehicle in a rash and negligent manner and dashed it against an electric Post. Respondents 1' and 2 the legal heirs of the deceased. Kanakalata thereafter filed an application under section 110 of the Motor Vehicles Act, 1939 (hereinafter referred to as the Act)claiming compensation of Rupees 42,200/- on account of the death of their mother kankalata. Gulam Bari respondent No. 3 who was the owner of the motor vehicle was impleaded as opposite party No. 1. The South India Insurance company. Limited (hereinafter referred to as the Company) with which the taxi in question was insured was impleaded as opposite party No. 2. Gulam Bari did not contest the claim and remained ex parte. The Company entered appearance and filed written statement disclaiming liability on the ground that the Motor Vehicle had been insured with it in the name of Messrs. M. L. Choudhury and Sons of No. 74-A padmapukur Road. Calcutta who was the registered owner of the vehicle when the insurance was effected, that M/s. M. L. Choudhury and Sons transferred the vehicle to opposite party No. 1 without any intimation being given to the company and that with the transfer of the vehicle the policy lapsed thereby exonerating the company of all liability. At the time the insurance was effected in respect of the car a policy was issued to be valid for the period from 22-6-67 to 21-6-68. The correctness of the quantum of damages claimed in the petition was questioned.

( 2 ) THE learned District Judge found that the vehicle in question originally belonged to M/s. M. L. Choudhury and Sons who got the same insured with the Company on 22-6-67 and obtained a policy valid for a year from that date that the vehicle was subsequently transferred by Ms. M. L. Choudhhury to Gulam Bari in whose name the vehicle was registered by the Regional Transport Authority on 9-2-1968 and consequently Gulam Bari was the owner of the vehicle at the time the accident took place. But relying on a decision of the Calcutta High Court in Bir Singh v. Sm. Hashi Rashi Banerjee (AIR 1956 Cal 555), the learned Judge held; that it should be presumed that the Regional Transport Authority was satisfied when it registered the vehicle in the name of Gulam Bari that there was a subsisting policy in respect of the vehicle and that therefore the company must be held to be liable to cover the third party risk. The learned Judge thereafter discussed the evidence regarding the quantum of damages claimed and reduced it to Rs. 10,800/- and directed that this amount be paid by opposite party No. 1 Gulam Bari to the petitioners. As In view of the finding of the learned District Judge obviously having regard to the provisions of Sub-section (1) of Section 96 of the Act that the company is liable to satisfy the claim, it is the company which has filed this appeal impleading as respondents the two claimants and Gulam Bari the owner of the vehicle. The claimants have not filed any appeal questioning the correctness of the amount of compensation granted by the District Judge.

( 3 ) THE substantial point urged in support of the appeal is that in view of the admitted Position that sometime before the accident took place the car had been sold by the insured M/s. M. L. Choudhury and Sons to a third party the policy of insurance had lapsed thereby absolving the company of all liability. A copy of