S.157 MV Act | Transfer Of Vehicle Results In Deemed Transfer Of Its Insurance Policy Including All Obligations: Kerala High Court

The Kerala High Court on Thursday held that when transfer of a vehicle has been effected following the procedure in Motor Vehicles Act, 1988, the insurance policy taken out in respect of the vehicle is also deemed to have been transferred in favour of the transferee without any further process.Justice Ziyad Rahman A.A., in this light further found that, "Though sub-section of Section. Therefore, it is clear that, as far as the non compliance with Section 157 is concerned, it will have no consequence as regards the liability of the Insurance Company to indemnify the insured in respect of the claims arising from the victims of the motor vehicle accident", thereby finding that the accident in the instant case had occurred after the transfer of ownership was completed, thereby indicating that the deemed transfer of the policy had taken place before the accident. As regards the question as to whether the transfer would include the transfer of the obligations of the Insurance company towards a pillion rider, whose risk was not covered under statutory coverage under section 147 of the Act, as well, the Court found that it was only in the case of 'own damages', as seen in Complete Insulations Ltd v. New India Assurance Co. Ltd., that the deemed transfer under Section 157 of the Act could not be made applicable since the claim of own damage was only between the parties to the insurance contract - namely, the Insurance Company and the insured, and accordingly, there would not be any contractual liability for the insurance company. Accordingly, it was found by the Court that Section 157 would have to be interpreted in a manner such that, "the deemed transfer of the policy contemplated therein includes the transfer of all actionable claims under the provisions of the Motor Vehicles Act, which come within the jurisdiction of the Motor Accidents Claims Tribunal constituted under the said Act", while adding that the provision had to be interpreted widely to promote the object of the legislation.