Summary
An auction purchaser’s vehicle-theft claim could not be rejected merely because the registration certificate and named insured still reflected the former owner. The bank had informed the insurer of the sale and release of its lien; the purchaser paid the premium and the issued policy identified it as well. The contractual theft cover differed from statutory third-party liability rules. The Court awarded the auction purchase price with interest.
Issues
- Whether pending transfer of registration defeated theft cover issued after the insurer knew of the auction purchase.
- Whether third-party liability precedents controlled this contractual claim.
Provisions considered
- Section 157, Motor Vehicles Act, 1988The statutory deemed transfer concerns third-party insurance; own-vehicle risks instead depend on the agreement between insurer and transferee. (¶¶ 16–20, 24)
Held
- A registered owner’s continuing liability towards accident victims protects third parties from uncertainty over unrecorded transfers. Those precedents do not decide an auction purchaser’s claim against its insurer for theft of the purchased vehicle. (¶ 21–24)
- The purchaser paid the full auction consideration and received possession; the bank notified the insurer that its lien had ended. The insurer then accepted the purchaser’s proposal and premium and issued a policy identifying it, beyond a mere postal-address reference. (¶¶ 11, 25–27)
- This was more than silent retention of a premium without acceptance. Issuance of the policy with knowledge of transfer established the relevant contractual position, while the former owner had no subsisting interest or competing claim. The purchaser offered an indemnity against any such claim. (¶ 24–26)
- Repudiation on the stated ownership and insurable-interest grounds was unsustainable. As theft closely followed the auction, the awarded amount was the auction price of Rs.2,42,000 rather than the higher insured value. (¶ 28)
Result
Appeal allowed; theft claim awarded at Rs.2,42,000 with 9% annual interest from the date the claim was lodged until payment. No costs.