An insurance policy is not valid if the insured has no insurable interest in the property.

R.S. Garg, J.

1. This judgment shall also dispose of M.A. No. 102 of 1991. A motor car No. MPK 2125 was originally belonging to Pushpa Bhatnagar. Pushpa Bhatnagar transferred the vehicle to appellant No. 2 Asha Waswani on 30.5.1983. The insurance policy was taken on 2.6.1983 in the name of Pushpa Bhatnagar. It is said that Pushpa Bhatnagar after transfer, and appellant No. 1 Ashok Kumar informed the insurance company that Pushpa Bhatnagar had transferred the vehicle to Asha Waswani. Ashok Kumar stated that on 3.6.83, he had informed that after purchasing the vehicle from Pushpa Bhatnagar, the vehicle was got insured by him for the benefit of his wife in the name of Pushpa Bhatnagar as appellant No. 2 was not the registered owner. The said vehicle was involved in accident on 4.6.1983. Malkibai, wife of Mohan Lai, filed Claim Case No. 16 of 1983 against the present appellants and respondent No. 2. Similarly, Mohan Lai filed Claim Case No. 17 of 1983 against the aforesaid persons. As the claims were the result of the same accident, Case No. 17 of 1983 was consolidated with Case No. 16 of 1983. The defence of the present appellants was that as they were not the registered owners, they had to take the policy in the name of the registered owner and that the insurance would enure to their benefit. The insurance company in its defence submitted that the vehicle was already transferred on 30.5.1983 therefore any policy issued subsequent to the date of transfer in the name of the earlier owner would not enure to the benefit of the subsequent owner because on the date of the policy the earlier owner had no insurable interest. After hearing the parties and recording evidence, the learned trial court, holding that the accident was the result of rash and negligent act held that Mohan Lal was entitled to Rs. 25,000/- and Malkibai was entitled to Rs. 36,000/- as compensation. The trial court though awarded the claim but, however, further held that because of the transfer of the vehicle, the insurance policy would not provide any protection to the present appellants. These appeals were filed against the claimants and the insurance company. The matter between the appellants and the claimants was compromised and it was so recorded by the court, therefore, the question of rash and negligent act, compensation and disability suffered by the claimants is no more open. The dispute between the appellants and the insurance company is regarding the liability and indemnity.

2. Mr. Vishwakarma and Mr. Pathak, with their usual vehemence, contended that as the appellants were not registered owners, they could not have obtained the policy in their name, therefore, Rajkumar, husband of appellant No. 2, as advised by the Insurance Inspector (some) Chouhan, was asked to take the policy in the name of the registered owner. It is also contended that the insurance company after issuing the policy and even after receiving the intimation did not revoke or cancel the policy. Even after notice of the claim it did not cancel the policy under the provisions of Section 103-A of the Motor Vehicles Act. It is submitted by them that the insurance policy even if taken in the name of the earlier owner, the insurance company cannot avoid its liability. On the other hand, Mr. Naik, who was no less vehement, contended that the agreement of insurance is between the parties, i.e., the insured and the insurer. The insurer has certainly to fulfil the terms when it accepts the premium and undertakes to indemnify the insured. He submitted that while taking the insurance policy, the person taking the policy must have some insurable interest and if a person did not have any insurable interest, then the insurance policy would in fact be good for nothing. The said insured would not be entitled to any protection or a transferee from him would also not get any rights.

3. Section 103-A of the Act states that where a person in whose favour the certificate of insurance has been issued in