Allahabad: The Allahabad High Court has delivered a significant judgment, holding that an insurance company remains liable in a motor accident case even when the transfer of vehicle ownership has not been officially recorded with the transport authorities.
A Single Judge Bench comprising Justice Subhash Vidyarthi heard a petition filed by The New India Assurance Company Limited, challenging an order of the Permanent Lok Adalat, Lakhimpur Kheri.
The court noted that Section 157 of the Motor Vehicles Act provides that upon the transfer of vehicle ownership, the insurance certificate and policy are deemed transferred to the new owner from the date of transfer.
Justice Vidyarthi observed, “The deeming fiction provided by the statute means that even if the insurance policy is not transferred in fact, the insurance company would become liable under the policy to the transferee of the vehicle.”
Highlighting the legislative intent, the court stated, “The intention of the legislature is to make the insurance company liable immediately, despite the transfer not being recorded in the records of the transport office. The intention of the legislation is to include transferees liberally, not to exclude them strictly.”
The case involved a truck owner who had entered into an agreement to sell his vehicle but had not completed the transfer. When the truck was damaged in an accident, the insurance company rejected the claim, arguing that the owner lacked an insurable interest.
Rejecting this contention, Justice Vidyarthi emphasized, “In the absence of the ownership of the vehicle being transferred, the petitioner would continue to be liable under the contract of insurance entered between the appellant and the registered owner of the vehicle.”
The court dismissed the petition filed by the insurance company, finding no illegality in the Permanent Lok Adalat’s order allowing the vehicle owner’s claim.
In conclusion, the Allahabad High Court’s ruling clarifies that insurance companies cannot evade liability merely because a vehicle’s ownership transfer is not officially recorded, as long as the insured party retains registered ownership.
!["No Loudspeakers For Azan, No Fundamental Right To Create Noise," Says Allahabad HC To Two Mosques [Read Judgment]](/secure/uploads/2020/01/lj_4995_Allahabad_HC_AZAN.jpg)
