As per Sub Section (1), Section 157 of the Motor Vehicles Act, if the ownership of the vehicle is transferred to another person, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer. Sub Section (2) of Section 157 of the Motor Vehicles Act also states that the transferee should intimate the transfer of ownership to the insurance company to facilitate the insurance company to make necessary changes in the certificate of insurance and in the policy. However, Section 157 of the Motor Vehicles Act does not exonerate the insurance company from its liability to pay compensation, in case of failure on the part of the owner of vehicle for non-fulfilment of the requirement contemplated under Section 157 of the Motor Vehicles Act. By operation of Section 157(1) of the Motor Vehicles Act, the certificate of insurance and the policy described in the insurance stands automatically transferred to the name of the transferee, the 3rd respondent herein. Therefore, the insurance company is liable to pay compensation to the claimants. The insurance company further cannot have recourse to recover the compensation amount from the owners of the vehicle merely because they did not comply with the requirements contained in Section 157 of the Motor Vehicles Act. In the facts and circumstances, the appeal is liable to be dismissed.
