Petitioner was the opposite party before the District Forum. Respondent/complainant purchased a pre-owned vehicle bearing registration No.DL 03 CV/6409 from M/s Friends Globe Travels on 27.6.2005. Respondent got the vehicle insured twice in the name of the original owner i.e. M/s Friends Globe Travels, New Delhi. R.C. was transferred in the name of the -2- respondent on 7.5.2007. Vehicle met with an accident on 17.1.2007 during the currency of the policy. Respondent lodged a claim for Rs.19 Lakhs, which was repudiated by the petitioner on the ground that there was no privity of contract between the petitioner and the respondent. Being aggrieved respondent filed the complaint seeking reimbursement of Rs.19 Lakhs alongwith interest. Petitioner on being served entered appearance and filed its written statement. It was averred in the reply that the respondent had failed to inform the petitioner about the change of the ownership of the vehicle. That by issuing third party cheque, the respondent did not get any claim on the policy. The respondent did not have any insurable interest at the time of either taking of the policy or at the time of the accident. The existing policy can be changed in the name of the purchaser on production of the relevant document showing the ownership any by remitting Rs.50/- within 14 days after transfer as per regulation No.17 of Indian Motor Tariff prescribed by the tariff -3- advisory committee. The contract of insurance is governed by the regulations of tariff advisory committee and the said contract cannot be treated as a statutory contract for governing the liability. That there was no deficiency in rendering the service as claim had been rightly repudiated. District Forum allowed the complaint and directed the petitioner to pay a sum of Rs.14,29,200/- to the respondent with interest @ 12% p.a. from the date of repudiation till realization. Rs.2,000/- were awarded by way of cost. Petitioner being aggrieved filed an appeal before the State Commission. State Commission came to the conclusion that since the respondent had got the vehicle insured in the name of the original owner at the instance of the agent of the petitioner, the petitioner was not justified in repudiating the entire claim. The petitioner should at least settle the claim on non-standard basis. The appeal was allowed. Order of the District Forum was set aside and the case was remitted back to the District Forum to decide it afresh with the following directions: -4- “It is also in evidence that the opposite parties had surveyed the vehicle. The survey report has not been produced. Ext. C 1 is the report of the Commissioner appointed at the instance of the complainant. We find that it would be appropriate to remit the case to the Forum so as the opposite party may produce the survey report of the Surveyor and the Forum will consider the report of the Surveyor and Ext. C 1 report of the Commissioner and arrive at the amount the complainant is entitled to i.e. 75% of the quantum of damages.” Learned counsel appearing for the petitioner contends that the respondent did not have any privity of contract with the petitioner and, therefore, the petitioner was not liable to compensate the respondent for the loss suffered. It was mandatory for the transferee to intimate the insurance company about the transfer within 14 days from the date of transfer of registration certificate; that since no such intimation was given, the policy in question was not endorsed in the name of the respondent transferee, respondent; that the Insurance Company was not liable to pay the claim and accordingly, -5- petitioner was justified in repudiating the claim. It was mandatory and statutory requirement that the transferee to inform the insurance company about the transfer of the vehicle and it is only after the policy is transferred in the name of the transferee that he can maintain a claim against the insurance company. The foras below have failed to appreciate the principles of insurance and mandatory provisions of IRDA Regulation and settled the law laid down by the Supreme Court of India. Learned counsel appearing for the respondent relied upon the finding recorded by the fora below. Counsel for the parties have been heard. Respondent purchased the vehicle from M/s Friends Globe Travels on 27.6.2005. Accident took place on 15.1.2007. Registration certificate was transferred in the name of the respondent on 7.5.2005. It is about 1 ½ years subsequent to the date of purchase that the RC was transferred in the name of respondent. It is not disputed before us that the respondent did not inform the petitioner insurance company about the purchase of the vehicle either prior or subsequent to accident. -6- Under GR-17, the transferee has to apply for transfer of the insurance policy in his name within 14 days of the transfer of the R.C. in his name. In the case of 3rd party, the transfer of interest is automatic. However, in the case of own damage, the transferee has to apply for transfer of the policy in his own name. GR-10 issued by the Tariff Advisory Committee applicable for the period 1.4.90 to 30.6.2002 reads as under: “10. Transfers On transfer of a vehicle the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. If the transferee is not entitled to the benefit of the bonus or subjected to malus already shown on the policy, the recovery of the differences between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy. However, on expiry and/or termination of the existing Policy the transferee will be eligible for Bonus or subjected to malus as per his own entitlement” A bare perusal of GR-10 would show that on sale of the vehicle, the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. GR-10 -7- was replaced by GR 17 w.e.f. 1.7.2002 and the same reads as under: “On transfer of ownership, the Liability Only cover, either under a Liability Only Policy or under a Package Policy, is deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer. The transferee shall apply within fourteen days from the date of transfer in writing under recorded delivery to the insurer who has insured the vehicle, with the details of the registration of the vehicle, the date of transfer of the vehicle, the previous owner of the vehicle and the number and date of the insurance policy so that the insurer may make the necessary changes in his record and issue fresh Certificate of Insurance.” Since the vehicle had been purchased by the petitioner on 27.6.2005 after coming into force of G.R. 17, as per provisions of GR 17, on transfer of ownership, transferee is required to apply in writing for transfer of the policy within 14 days from the date of transfer under recorded delivery to the insurer who had insured the vehicle, with the details of registration vehicle, date of transfer of the vehicle, previous owner of the vehicle and the number of the policy so that the insurer may make -8- necessary changes in the record and issue fresh certificate of insurance. Unless the aforesaid procedure of transfer of vehicle is followed and complied, the transferee has no insurable interest. It would be seen that on receipt of the information from the transferee the Insurance Company is required to make changes in its record and issue a fresh Certificate of Insurance. In the present case, admittedly as pointed out earlier the transferee, i.e., respondent did not get the vehicle transferred in his name and intimate the Insurance Company about the transfer of the vehicle within 14 days of the registration in his name to enable the petitioner to make necessary changes in its record and issue a fresh Certificate of Insurance. The transferee did not get any novation of contract of insurance in respect of the person or property and therefore, respondent did not have any insurable interest on the date on which the vehicle met with an accident. Section 157 of the Motor Vehicles Act is applicable to third party rights only and -9- not to own damage case. This Section of the Act reads as under. “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. 1 [Explanation.-For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.] (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.” This provision came up for interpretation before the Supreme Court of India in the case of Complete Insulation Pvt. Ltd. vs. New India Assurance Co. Ltd. - (1996) 1 SCC 221 wherein It was held: -10- “Thus, the requirements of that chapter are in relation to third party risks only and hence the fiction of Section 157 of the New Act must be limited thereto. The certificate of insurance to be issued in the prescribed form (See Form 51 prescribed under Rule 141 of the Central Motor Vehicles Rules, 1989) must, therefore, relate to third party risks. Since the provisions under the New Act and the Old Act in this behalf are substantially the same in relation to liability in regard to third parties, the National Consumer Disputes Redressal Commission was right in the view it took based on the decision in Kondaih’s case because the transferee-insured could not be said to be a third party qua the vehicle in question. It is only in respect of third party risks that Section 157 of the New Act provides that the certificate of insurance together with the policy of insurance described therein "shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred". If the policy of insurance covers other risks as well, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI of the New Act and in the realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle. In the present case since there was no such -11- agreement and since the insurer had not transferred the policy of insurance in relation thereto to the transferee, the insurer was not liable to make good the damage to the vehicle. The view taken by the National Commission is therefore correct.” Similarly, in Rikhi Ram & Anr. vs. Sukhrania & Ors. - (2003) 3 SCC 97, the Supreme Court while interpreting the provisions of Section 157 held that although with the transfer of vehicle the Insurance Company remains liable towards third party claims but the transferee cannot get any personal benefit under the policy unless there is compliance of the provisions of the Act. It was further held that the Insurance Company would remain liable to third parties, but it would be open to the Insurance Company to recover the said amount either from the insured or from the transferee of the vehicle. It was observed: “6. On an analysis of Sections 94 and 95, we further find that there are two third parties when a vehicle is transferred by the owner to a purchase. The purchase is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract, -12- cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer. 7. ……………………. 8. For the aforesaid reasons, the appeal, is allowed. We set aside the order and judgment under challenge. It is hereby directed that the insurer shall pay compensation to the victims within eight weeks along with the interest @ 11% p.a. from the date of incident and it will be open to the insurer to recover the said amount either from the insured or from the transferee of the vehicle. However, there shall be no order as to the costs.” In view of the provisions of the Motor Vehicles Act and the Tariff Regulations and the decisions of the Supreme Court, if the transferee fails to inform the Insurance Company about transfer of the Registration Certificate in his name and the policy is not transferred in the name of the transferee, then the Insurance Company cannot be held liable to pay the claim in -13- the case of own damage of vehicle. Petitioner Insurance Company was justified in repudiating the claim. For the reasons stated above, we set aside the orders passed by the fora below and the complaint is ordered to be dismissed. Accordingly, the Revision Petition is allowed and the parties are left to bear their own costs. | 
