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T.V. Shatrugan v. Riyaz

Madras HC9 Jul 2025CRP/74/2025

Case brief

AI extract

What is this about?

Madras HC CRP allowed; removal of party from MCOP under Order 1 Rule 10 CPC; Section 157 Motor Vehicles Act 1988 deemed transfer of certificate and policy of insurance; transferor/seller not proper and necessary party after transfer of registration; insurer's plea of transferee's non-intimation preserved; transferee impleaded M.P.No.3 of 2023; Reliance General Insurance; II Small Causes Court Motor Accidents Claims Tribunal Chennai order dated 21.10.2024 set aside; Article 227; 1998 SCC Online All 817 (Allahabad HC DB) referred.

What did the court decide?

Both Civil Revision Petitions allowed; the trial Court's order in M.P.No.2 of 2023 in MCOP.No.4268 & 4269 of 2022 set aside; connected miscellaneous petitions closed; no costs. ¶43

T.V. Shatrugan Vs Riyaz — Motor Accident Claims | Madras HC (2025)

What the court decided

AI extract

Outcome

Both Civil Revision Petitions allowed; the trial Court's order in M.P.No.2 of 2023 in MCOP.No.4268 & 4269 of 2022 set aside; connected miscellaneous petitions closed; no costs.

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Issue for consideration

Whether the revision petitioner, the transferor/original owner of the vehicle involved in the accident, is a proper and necessary party to M.C.O.P.Nos.4268 & 4269 of 2022 merely because the certificate of insurance continued to stand in his name after sale and transfer of registration, and whether the Tribunal rightly dismissed his application under Order 1 Rule 10 CPC to be removed as a misjoinder of party.

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Court's answer

The trial Court dismissed the removal application describing the petitioner as a proper and necessary party only because the Insurance Certificate stood in his name; that course was adopted without following the mandate of Section 157 of the Motor Vehicles Act and the law is otherwise.

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Ratio / Principle

The order of the trial Court in M.P.No.2 of 2023 in MCOP.No.4268 & 4269 of 2022 on the file of the IInd Small Causes Court (Motor Accidents Claims Tribunal) at Chennai is unsustainable and is accordingly set aside.

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Key takeaways

The second respondent insurer is left at liberty to put forth all its contentions that it is not liable on account of the transferee not informing the Insurance Company about the purchase.ratio¶39
No prejudice would be caused to the Insurance Company, as the transferee has already been impleaded in both the MCOP proceedings in M.P.No.3 of 2023.obiter¶39

Detailed headnote1 paragraphs

Madras High Court (P.B. Balaji, J.), 09.07.2025 - CRP.Nos.74 & 1710 of 2025 under Article 227, Constitution of India: The revision petitioner, original owner of a vehicle involved in an accident, had sold it to Kailash Mehra on 18.08.2016 and the Registration Certificate stood transferred to the buyer; yet the II Small Causes Court (Motor Accidents Claims Tribunal), Chennai dismissed his Order 1 Rule 10 CPC applications to be struck off as misjoinder in M.C.O.P.Nos.4268 & 4269 of 2022, treating him as a proper and necessary party only because the insurance certificate remained in his name. Holding that the trial Court failed to follow the mandate of Section 157, Motor Vehicles Act, 1988 (deemed transfer of the certificate and policy of insurance with the vehicle), the High Court set the tribunal's order aside, leaving the insurer free to contend non-liability for want of intimation by the transferee, who had already been impleaded in M.P.No.3 of 2023, so that no prejudice was caused to it. Counsel relied on 1998 SCC Online All 817 (Allahabad HC, DB) but the Court did not adjudicate that line, observing those issues need not be gone into at the stage of revision. CRPs allowed without costs.

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CRP.Nos.74 & 1710 of 2025

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 09.07.2025

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CORAM

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THE HONOURABLE MR. JUSTICE P.B.BALAJI

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CRP.Nos.74 and 1710 of 2025 and CMP.Nos.9892 & 4150 of 2025

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T.V.Shatrugan ... Petitioner Vs. Riyaz ... 1st Respondent in CRP.No.74 of 2025 Idhayakumar ... 1st Respondent in CRP.No.1710 of 2025

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Reliance General Insurance Co.Ltd., Reliance House, No.6, 6th Floor, Haddows Road, Chennai - 600 006. ... 2nd Respondent in both CRP's

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Prayer in CRP.No.74 of 2025 : Civil Revision Petition filed under Article 227 of the Constitution of India to direct the IInd Small Causes Court Motor Accidents Claims Tribunal at Chennai to strike off the petitioner as a misjoinder of party in the M.C.O.P.No.4268 of 2022.

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Prayer in CRP.No.1710 of 2025 : Civil Revision Petition filed under Article 227 of the Constitution of India to set aside the order dated 21.10.2024 in M.P.No.2 of 2023 in M.C.O.P.No.4269 of 2022 on the file of the IInd Small Causes Court (Motor Accidents Claims Tribunal) at Chennai.

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(in both CRP's)

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Page 1 of 7

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https://www.mhc.tn.gov.in/judis

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CRP.Nos.74 & 1710 of 2025

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For Petitioner : Mr.Ajay Francis Inigo Loyola For Respondents : R1 - No appearance M/s.Srividya Standing Counsel for R2

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COMMON ORDER

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These Civil Revision Petitions are filed against the dismissal of application under Order 1 Rule 10 of CPC, to remove the revision petitioner from arraying as party in M.C.O.P.Nos.4268 & 4269 of 2022.

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The case of the revision petitioner is that the vehicle in question

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was sold to one Kailash Mehra on 18th August, 2016. The Registration Certificate of the vehicle concerned which was involved in the accident has also been duly transferred in the name of the said buyer Kailash Mehra, which is evident from the Registration Certificate that has been produced even before the Tribunal.

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The only contention of the Insurance Company is that even though the registration of the vehicle has been transferred, the policy continues to remain in the name of the revision petitioner and therefore, the revision petitioner has to necessarily participate in the proceedings. The trial

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Page 2 of 7

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https://www.mhc.tn.gov.in/judis

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CRP.Nos.74 & 1710 of 2025

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Court accepting the stand of the Insurance Company, has dismissed the application.

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4. Learned Counsel for the petitioner would invite the attention of

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this Court to the provisions of Section 157 of the Motor Vehicles Act, 1988 and the same is extracted hereunder for easy reference:

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"157. Transfer of Certificate of insurance :(1) Where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter, transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, 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.

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Explanation-For the removal of doubts, it is hereby clarified that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.

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(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour, and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance."

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Page 3 of 7

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https://www.mhc.tn.gov.in/judis

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CRP.Nos.74 & 1710 of 2025

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Relying on the above said provision, the learned Counsel would contend that, the moment the Certificate of Registration of the vehicle stands transferred, there is also a deemed transfer of Certificate of Insurance as well. Explanation (2) to Section 157 also only mandates the transferee to comply with transfer of the insurance certificate in his / her name within a period of 14 days. Therefore, there is no liability cast on the transferor and in view of the deemed transfer in terms of Section 157, the Certificate of Insurance automatically needs to be transferred in the the name of the transferee. Merely because the transferee has not approached the Insurance Company within the said 14 days seeking transfer, the same cannot cause any prejudice to the transferor, who has already sold the vehicle, well before the accident and also the Certificate of Registration had also been transferred in the name of the transferee.

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Learned Counsel for the petitioner would also place reliance on the Division Bench Judgment of Allahabad High Court reported in 1998 SCC Online All 817, wherein the Hon'ble Division Bench of Allahabad High Court referring to provisions of Section 157 held that if the Insurance Policy was not transferred in the name of the transferee, even then the insurer would Page 4 of 7

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https://www.mhc.tn.gov.in/judis

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CRP.Nos.74 & 1710 of 2025

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be liable and the insurer cannot deny liability.

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Needless to state that these issues need not be gone into at this stage of revision, as the petitioner only wanted to go out of the MCOP proceedings on the ground that the vehicle has already been sold. The trial Court without following the mandate of Section 157 of the Motor Vehicles Act, dismissed the application stating that the petitioner is a proper and necessary party, only because the Insurance Certificate stands in his name. Unfortunately, the law is otherwise.

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Therefore, the order of the trial Court in M.P.No.2 of 2023 in MCOP.No.4268 & 4269 of 2022 on the file of the IInd Small Causes Court (Motor Accidents Claims Tribunal) at Chennai is unsustainable and accordingly, set aside. The second respondent is at liberty to putforth all his contentions with regard to their being not liable on account of the transferee not informing the Insurance Company about their purchase. It is also brought to my notice that the transferee has also been impleaded in both the MCOP proceedings in M.P.No.3 of 2023 and therefore, no prejudice would be caused to the Insurance Company as well.

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Page 5 of 7

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https://www.mhc.tn.gov.in/judis

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CRP.Nos.74 & 1710 of 2025

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In the result, the Civil Revision Petitions are allowed. No costs.

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Consequently, connected miscellaneous petitions are closed.

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09.07.2025