Nirmal Singh, J.
1. Briefly stated, the facts are that on 23.8.2002 Sukhdev Singh, deceased was going on duty on his scooter bearing No. PB- 13D-5888 from I.T.I. Chowk, Barnala to Sherpur. CII Satwinder Singh was following him on his scooter bearing No. RGK-251. When at about 8.00 p.m. Sukhdev Singh and Satwinder Singh, on different Scooters were at some distance from Malwa Cotton Mills, Barnala, near Gaushala on Rajkot Barnala Road, a truck bearing No.RJ-31G-5888 came from the side of Sanghera. The truck was being driven by Diwan Singh at a very high speed, rashly and negligently, without its lights on and blowing any horn. The said truck struck against the scooter of Sukhdev Singh. The accident had occurred as Diwan Singh brought the truck on wrong side while driving it rashly and negligently. After the accident, the driver of the truck, Diwan Singh fled away from the spot with the truck. The accident was witnessed by C.II Satwinder Singh and Gurcharan Singh, who was standing in front of his house. Satwinder Singh had telephoned to Police Station Kotwali, Barnala, from the house of Gurcharan Singh. However, when Sukhdev Singh was being shifted to Civil Hospital, Barnala, he succumbed to his injuries near Dhanaula Railway crossing.
2. The legal heirs of Sukhdev Singh filed claim petition before the Motor Accident Claims Tribunal, Barnala (hereinafter referred to as 'the Tribunal') under Section 166 of the Motor Vehicles Act, 1988 (for short, 'the Act') claiming compensation on account of death of Sukhdev Singh. The learned Tribunal, after appreciating the evidence on re- cord and hearing the learned counsel for the parties, awarded a compensation of Rs. 4,74,400/- in favour of the claimants, Sharanjit Kaur and Rajinder Singh with interest @ 9% per annum from the date of filing of the petition till its realisation, holding the Insurance Company (respondent No. 3 before the Tribunal and appellant) to be liable to pay the same vide award dated 3.5.2004, against which the present appeal has been filed by the appellant-Insurance Company.
3. Shri M.B.Singh, learned counsel for the appellant, submitted that the learned-Tri- bunal has not appreciated the evidence on record in its right perspective. He submitted that at the time of alleged accident, Manjit Singh respondent No. 6 was the owner of the offending vehicle and he had not insured the offending vehicle with the appellant-Insurance Company and, thus, there was no privity of contract between the appellant and owner of the truck. Therefore, the appellant is not liable to make payment of the compensation. He also pointed out that the vehicle was owned by Mukhtiar Singh. Mukhtiar Singh had got the vehicle insured. Later on, he transferred the same in favour of Rakesh Kumar. Rakesh Kumar further transferred the truck in question in favour of Manjit Singh. However, Mukhtiar Singh, transferor and Rakesh Kumar, transferee, have not given any intimation with regard to the transfer as required under Section 157(2) of the Act. He further submitted that the vehicle was further transferred in favour of Manjit Singh, respondent No. 6 by Rakesh Kumar. However, he has also not given any intimation for the transfer of the vehicle in his name to the appellant. He also submitted that till the insurer gives the intimation with regard to the transfer of vehicle, the Insurance Company is not to indemnify the liability. However, the learned Tribunal has erroneously held the appellant liable to pay the compensation to the claimants.
4. After hearing learned counsel for the appellant and perusing the record, we are of the considered opinion that there is no illegality or infirmity in the impugned award passed by the learned Tribunal.
5. When a vehicle duly insured meets with an accident, the insurer can raise the following defence under Section 149 of the Act:-
'149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-
(1) xx xxx xxx xxx xxx
(2) XX XXX XXX XXX XXX
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-
(i) a condition excluding the use of the vehicle;-
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed or by any person who has been dis-qualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.'
6. A perusal of the above Section shows that Insurance Company has to confine its defence, as mentioned in Section 149(2) of the Act or any other ground, to that which has been specifically mentioned in the Insurance policy. No other ground is available to the insurer. In the above grounds of defence, it has not been mentioned that if a vehicle, duly insured, is transferred in the name of other person, then the insurance policy would automatically lapse, rather the legislature, in its wisdom has incorporated Section 157 of the Act for transfer of the certificate of insurance from the deemed date of registration. Section 157 reads as under:-
'157. Transfer of certificate of insurance.- (1) where a person in whose favour the certificate of insurance has been issued in accordance with the provision 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.
(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 from 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.'
7. In our opinion, the above Section does not provide that if the transferee fails to apply on the prescribed form to the insurer for the transfer of the certificate of insurance, then whether the policy would become invalid or lapse. Rather, Section 157(1) of the Act provides that where a person in whose favour the certificate of insurance has been issued in accordance with the provision 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. By Act No. 54 of 1994 an explanation has also been added, which came into force with effect from 14.11.1994. In this explanation, it is declared that such deemed, transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.
8. By the operation of a deeming provision in sub-section (1) of Section 157 of the Act, there is an automatic transfer of the certificate of insurance and the policy taken by the owner of the vehicle shall cover the transfer thereof. If the transferee fails to move an application for transfer of vehicle within 14 days, it does not mean that the insurance policy of the vehicle will become invalid, rather the reading of Section makes clear the intention of legislature that when a vehicle is transferred by the owner, the policy will also be deemed to be transferred as it is the vehicle which is insured and not the owner. Mere failure on the part of transferee to intimate the Insurance Company with regard to the transfer within the prescribed period of 14 days, will not exonerate the Insurance Company from its liability. Therefore, there is no legal infirmity or irregularity in the impugned award passed by the learned Tribunal.
Consequently, the appeal is dismissed.