Isham Singh Vs Chairman, Permanent Lok Adalat, Public Utility Services, Kurukshetra and Another

Instant petition has been file d inter alia for issuance of a wr i t in the natur e of certiorari for setting aside a ward dated 19.02.2021, Anne x ure P-13, p a ssed by Permanent Lok A dalat (Public Utility Services), Kuruksh e tra (for short “Lok Adalat”) and for issuance of a writ of mandam u s directing insurance compa n y-respondent No.2 to make the payment o f claim of the insured car, which has been damaged in an accid e nt.

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Sheetal 2025.08.26 10:21 I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

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CWP-8587-2021 -2-

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Genesis of the dispute is p u rchase of a Swift Dzire car by the petitioner bearing registration No.HR-10V-1005 from Santokh Singh on 25.01.20 1 9. Petitioner applied for transf e rring the registration certificat e on 30.01.20 1 9, Annexure P-1, on deposit o f requisite charges. This car w as insured w ith respondent No.2 under poli c y, Annexure P-2, which was v a lid from 06.06.2018 from 05.06.2019. T h e car met with an accident on 11.02.20 1 9 and a DDR was recorded o n 14.02.2019, Annexure P-4. On intimatio n , insurance company deputed a surveyor, M/s Dynamic Associate, who ass e ssed the cost for repair at Rs.7,54,265.57/-, Annexure P -5. Petitione r lodged the claim, but insuranc e company repudiated it vide l e tter dated 28.03.2019, Annexure P-6. Peti t ioner filed an application d a ted 17.05.20 1 9, Annexure P-11, under S ection 22-C of Legal Serv i ces Authoriti e s Act, 1987, (for short “Act o f 1987”), which was contested by responde n t No.2 vide reply, Annexure P -12. Lok Adalat framed term s of settlement, which were not accepted b y the insurance company and v ide impugne d award, Annexure P-13, claim w as dismissed. 3. Counsel for the petitioner c o ntends that insurance company has erred in r epudiating claim on the groun d that insurance policy is not in the name of t h e petitioner. He submits that u p on sale of vehicle, previous ow n er, Santokh Singh, had given an affidavit , Annexure P-5, in favour of the petitione r , which was duly supplied to t h e insurance company, but they did not accept in absence of the registration. H e contends that registration of the vehicle w as transferred in the name of the petitioner and a fresh registra t ion certificat e has been issued on 28.03.201 9 , which has been ignored by L ok Sheetal2025.08.26 10:21 Adalat w h ile passing the impugned awar d , which deserves to be set aside . I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

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CWP-8587-2021 -3-

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Per contra, counsel for re s pondent No.2 has contested the petition a nd has made a reference to G e neral Regulation (GR)-17 of I n dia Motor T a riff to contend that petitione r was required to send a wri t ten intimatio n to the insurance company w ithin a period of 14 days of the purchase of the vehicle so that a fresh po l icy of insurance could be issue d in his name. By making a reference to the w ritten statement filed on behal f of responde n t No.2, it has been contended that as no intimation was recei v ed by the in s urance company, there is no pr i vity of contract between petiti o ner and resp o ndent No.2 on the date of acc i dent. Supporting the award pa s sed by Lok A dalat, he has placed reliance upon a Full Bench judgmen t of Andhra P radesh High Court in Madineni Kondaiah and others Vs. Yaseen

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Fatima and others 1986 (1) ACC 501.

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I have heard counsel for the parties and considered t h eir submissi o ns besides examining the pap e r-book as well as the docum e nts placed o n the record.

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There is no dispute abou t the factual position. A veh i cle purchase d by petitioner on 25.01.2019 m et with an accident on 11.02.2 0 19 and inti m ation of the occurrence was g i ven to the insurance company on 14.02.20 1 9. A surveyor appointed by th e insurance company, who asse s sed the loss o f the vehicle vide report dat e d 29.03.2019. The question to be determin e d is whether petitioner was un d er a duty to inform the insurance company about the purchase of the ve h icle and get a fresh certificat e of insurance issued in his name and whethe r the petitioner was to apply for the transfer of insurance policy after the issu a nce of fresh registration certifi c ate Sheetal 2025.08.26 10:21 by the re g istering authority. I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

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CWP-8587-2021 -4-

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GR-17 of India Motor Tarif f deals with the transfer of insurance

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policy in t he case of sale of vehicles and i t stipulates as under:-

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"GR.17. Transfers

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On transfer of o wnership, the Liability Only co v er, either under a Liabili t y Only policy or under a Pack a ge policy, is deemed to h ave been transferred in favou r of the person to whom t h e motor vehicle is transferred w ith effect from the date o f transfer.

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The transferee shall apply within fourteen d ays from the date of tr a nsfer in writing under recor d ed delivery to the insure r who has insured the vehicle, w ith the details of the reg i stration of the vehicle, the dat e of transfer of the vehicl e, the previous owner of the veh i cle and the number and d ate of the insurance policy so t hat the insurer may ma k e the necessary changes in his record and issue fresh Certificate of Insurance.

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In case of Pac k age Policies, transfer of the " O wn Damage" section of t h e policy in favour of the transfe r ee, shall be made by the i nsurer only on receipt of a spe c ific request from the tra n sferee along with consent of the transferor. If the trans f eree is not entitled to the benef i t of the No Claim Bonus (NCB) shown on the policy, o r is entitled to a lesser pe r centage of NCB than that exis t ing in the policy, recov e ry of the difference between the transferee's entitleme n t, if any, and that shown on the policy shall be made b efore effecting the transfer.

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A fresh Propo s al Form duly completed is to be obtained from the tra n sferee in respect of both Liab i lity Only and Package Po l icies.

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Transfer of Package Policy in the name of the transferee can be d one only on getting accept a ble evidence of sale and a fresh proposal form duly filled a nd

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Sheetal 2025.08.26 10:21 I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

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CWP-8587-2021 -5-

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signed. The old Certif i cate of Insurance for the vehicl e , is required to be surren d ered and a fee of Rs.50/- is t o be collected for issue of f resh Certificate in the name o f the transferee. If for a ny reason, the old Certificate of Insurance cannot be s u rrendered, a proper declaratio n to that effect is to be tak e n from the transferee before a n ew Certificate of Insuran c e is issued."

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An analysis of the above r e produced regulation shows th a t a “liability o nly cover” is deemed to be aut o matically transferred from the d ate of sale o f the vehicle to the transferee. On the other hand, for transfe r of “own da m age section” of an insurance p o licy, request has to be made by the transfere e alongwith consent of the trans f eror. A fresh proposal form ha s to be submi t ted with proof of sale and there is no deemed transfer in such c a se. An oblig a tion has been cast on the tra n sferee to make an application for transfer of policy in his name on deposit o f requisite charges within a pe r iod of 14 day s of the transfer, failing which, i t has been provided that he will not be liable f or payment of claim towards a n y untoward incident. 9. Interpreting the provisions o f the Motor Vehicles Act, 1 9 88, Full Ben c h of Andhra Pradesh High C o urt in Madineni Kondaiah’s case (supra) h a s held as under:-

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“50. The regist r ation of the vehicle in the nam e of the transferee is not n e cessary to pass title in the vehicle. Payment of price an d delivery of the vehicle makes the transaction complete and the title will pass to the purchaser. When the p olicy of insurance obtained by the original owner of the vehicle is composite one cove r ing the risks for his pers o n, property (vehicle) and the t h ird party claim, on passing of title the transferee ca n not enforce his claim in r e spect of any loss or damage to his

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Sheetal 2025.08.26 10:21 I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

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CWP-8587-2021 -6-

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person and vehicle u n less there is a novation. So far the third party risk is co n cerned the proprietary interes t in the vehicle is not necessary and the public liab i lity continues till the tr a nsferor discharges the statu t ory obligation under Sections 29A and 31 read with Sec t ion 94 of the Act. Till h e complies with the require m ent of Section 31 of the A c t the public liability will not c e ase and that constitutes t he insurable interest to keep the policy alive in resp e ct of the third party risks are concerned. It must be deemed that the transferor allo w ed the purchaser to use t he vehicle in a public place in the said transitional p e riod and accordingly till the compliance of Sectio n 31, the liability of the transf e ror subsists and the polic y is in operation so far it relate s to the third party risks. We answer the second ques t ion accordingly.”

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The judgment of the Andhr a Pradesh High Court approve d by the Supr e me Court in G.Govindan Vs. New India Insurance Company Limited (1999) 3 SCC 754 .

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Adverting to the facts of the present case, it is evident that after purchase of the vehicle, petitioner applie d for its transfer with the registe r ing authority, but did not inform the insurance company. The vehicle met w ith an accid e nt on 11.02.2019 and intimati o n of occurrence was given to the insurance company on 14.02.2019. Petiti o ner has not been able to show a ny documen t that he ever applied to the i nsurance company for transfe r of vehicle i n his name in terms of GR-17 r e produced above. In the absenc e of any such a request for transfer of the ins u rance policy in his name, petiti o ner cannot c l aim benefit under the policy as there is no privity of cont r act Sheetal2025.08.26 10:21 between t he petitioner and the insurance company. On the date of accid e nt, I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

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the insur a nce policy continued to be in t h e name of the original owner a nd the insur a nce company is absolved from the liability thereunder. Altho u gh, registrati o n certificate was transferred i n the name of the petitioner on 28.03.20 1 9 and this transfer relates back t o the date of purchase, but it w o uld not exten d any benefit to him. There is n o error in the reasoning recorde d by Lok Adalat and award, Annexure P-13, d o es not suffer from any infirmit y . 12. Writ petition is devoid of m e rit and is dismissed no order a s to

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costs.

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06.08.20 2 5 (SUVIR SEHGAL) sheetal JUDGE

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WhetherSpeaking/reasoned	Yes /No
Whether Reportable	Yes /No

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Sheetal 2025.08.26 10:21 I attest to the accuracy and authenticity of this order/judgment High Court, Chandigarh

Isham Singh v. Chairman, Permanent Lok Adalat, Public Utility Services, Kurukshetra and Another

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Isham Singh v. Chairman, Permanent Lok Adalat, Public Utility Services, Kurukshetra and Another

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