Kerala High Court
N J Joseph vs National Insurance Company Ltd on 29 October, 2025
WP(C) NO. 19315 OF 2025 1 2025:KER:80541
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 29th DAY OF OCTOBER 2025 / 7TH KARTHIKA, 1947
WP(C) NO. 19315 OF 2025
PETITIONER:
N J JOSEPH, AGED 63 YEARS,
SON OF SRI. N.J JOHN. NELLIPILLI HOUSE,
KAKKANADI, MANNARKAD, PALAKKAD, PIN - 678582
BY ADVS. SRI.ANIL S.RAJ
SMT.K.N.RAJANI
SMT.RADHIKA RAJASEKHARAN P.
SMT.ANILA PETER
SMT.SIMI S. ALI
SMT.SARITHA K.S.
RESPONDENTS:
1 NATIONAL INSURANCE COMPANY LTD.,
REPRESENTED BY ITS MANAGER, DIVISIONAL OFFICE,
MYDDHILY MANDIRAM, JANTHA JUNCTION,
PALARIVATTOM P.O, PIN - 682025
2 THE INSURANCE OMBUDSMAN,
OFFICE OF THE INSURANCE OMBUDSMAN,
10TH FLOOR, LIC BUILDING, JEEVAN PRAKASH,
M.G ROAD, KOCHI, PIN - 682011
BY ADV SHRI.KIRAN PETER KURIAKOSE
SMT. SURYA BINOY, SR. GP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR HEARING
ON 21.08.2025, THE COURT ON 29.10.2025 DELIVERED THE
FOLLOWING:
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CR
JUDGMENT
The petitioner challenges the Ext.P4 order dated
22.08.2024 issued by the 1st respondent, National Insurance
Company Limited, repudiating his insurance claim, and the Ext.P7
Award dated 08.04.2025 passed by the 2 nd respondent, Insurance
Ombudsman, confirming the rejection of the claim.
2. The petitioner's son, late Mr. Aneesh Joseph, purchased
a two-wheeler bearing registration No. KL-07-CJ-3027, on
21.09.2023, which was originally owned by Mr. Rajeev D. Prabhu. He
submitted an online application to the Transport Department for
the transfer of ownership on the same day, as evidenced by Ext.P2.
The vehicle was insured with the 1st respondent, vide Ext. P1 policy
bearing No. 57160031226260003655, which covers the vehicle along
with a personal accident cover ('PAC' for short) for the
Owner/Driver for the period from 5.1.2023 to 4.1.2024. On
WP(C) NO. 19315 OF 2025 3 2025:KER:80541
27.09.2023, while driving the vehicle, Mr. Aneesh sustained fatal
injuries in an accident and succumbed to the same.
2.1. The petitioner, as legal heir, lodged a claim for
compensation of Rs.15,00,000/- (Rupees Fifteen Lakhs Only) under
Ext.P3 claim form. The 1st respondent, however, repudiated the
claim under Ext.P4 on two grounds: (i) that the claim was intimated
after a delay of 237 days, and (ii) that, as on the date of the accident,
the insured continued to be Mr. Rajeev D. Prabhu and there was no
privity of contract between the deceased and the insurer.
2.2. The petitioner asserts that the delay in intimation is
immaterial, since a claim under the policy can be validly preferred
within one year, and the accident is not in dispute. It is further
urged that once the vehicle was transferred on 21.09.2023, he
became entitled to the benefits of PAC. The issue, according to the
petitioner, is no more res integra, as this Court has held in Kunjila
v. Mary [2024 KHC 219] that once the vehicle is transferred, the
benefits of the subsisting policy follow the transferee-owner.
WP(C) NO. 19315 OF 2025 4 2025:KER:80541
2.3. On the 1st respondent's refusal, the petitioner issued
Ext.P5 lawyer's notice dated 2.09.2024 and thereafter preferred
Ext.P6 complaint dated 04.09.2024 before the Insurance
Ombudsman. The 2nd respondent, however, by Ext.P7 Award dated
08.04.2025, dismissed the complaint, holding that ownership of a
motor vehicle depends solely on the registration certificate and,
since the RC transfer was effected only on 29.09.2023, two days after
the accident, Aneesh Joseph could not be treated as the insured. The
petitioner contends that the Ombudsman's finding is perverse,
mechanical, and contrary to binding judicial precedents.
2.4. It is the further case of the petitioner that the
respondents, being public functionaries, were bound to act fairly
and reasonably, and the arbitrary denial of indemnity amounts to a
violation of Article 14 of the Constitution of India. Accordingly, the
petitioner seeks quashing of Exts.P4 and P7 and a direction to the 1 st
respondent to honour Ext.P3 claim and indemnify him for
Rs.15,00,000/-. The petitioner places reliance on Surendra Kumar
WP(C) NO. 19315 OF 2025 5 2025:KER:80541
Bhilawe v. New India Assurance Company Ltd. [2020 (18) SCC 224];
Ramkhiladi and Another v. United India Insurance Company and
Another [2020 (2) SCC 550] and Commissioner of Central Excise v.
M/s Sai Service Station Ltd., Edappally [2017 KHC 630].
3. The 1st respondent in the counter-affidavit contends that
the writ petition is misconceived and not maintainable, since the
repudiation of the claim and the Award of the Ombudsman are in
strict conformity with the statutory provisions and the terms of the
policy.
3.1. The insurer contends that though the deceased
purchased the vehicle on 21.09.2023, he did not become the
"owner" within the meaning of Section 2(30) of the Motor Vehicles
Act, 1988, until the registration certificate was transferred in his
name on 29.09.2023. It is submitted that under Section 2(30),
"owner" means a person in whose name a motor vehicle stands
registered, and where such person is a minor, the guardian of such
WP(C) NO. 19315 OF 2025 6 2025:KER:80541
minor, and in relation to a motor vehicle which is the subject of a
hire-purchase agreement, or an agreement of lease or an agreement
of hypothecation, the person in possession of the vehicle under that
agreement. This marks a conscious departure from the definition
in Section 2(19) of the 1939 Act which defines owner as the person
in possession of the vehicle. Hence, mere possession or an
agreement of sale does not constitute ownership until registration
is effected. According to the insurer, the provisions of the Sale of
Goods Act, 1930, cannot override this statutory definition, and
transfer of a motor vehicle is valid only upon compliance with the
requirements of the Motor Vehicles Act.
3.2. It is further submitted that compulsory personal
accident cover is available only to the "owner-driver" as defined
under General Regulation 36-A of the Indian Motor Tariff. The said
provision requires that the registered owner of the insured vehicle,
holding an effective driving license, alone is entitled to such cover.
It is argued that the expression "owner-driver" cannot be read
WP(C) NO. 19315 OF 2025 7 2025:KER:80541
disjunctively as "owner or driver". A driver who is not the
registered owner will not be entitled to the benefit of compulsory
PA cover.
3.3. The respondents also rely on General Regulation 17 of
the Indian Motor Tariff, which mandates that upon transfer of
ownership, the transferee must seek transfer of the policy in his
name by surrender of the old certificate of insurance and payment
of the prescribed fee. Only upon the issue of a fresh certificate in
the name of the transferee can he claim rights under the policy. No
such transfer was effected in this case.
3.4. The insurer highlights that the conditions stipulated
for availing personal accident cover were not satisfied by the
petitioner's son. The three mandatory conditions are:
(a) the owner-driver must be the registered owner of the vehicle
insured herein;
(b) the owner-driver must be the insured named in the policy; and
WP(C) NO. 19315 OF 2025 8 2025:KER:80541
(c) the owner-driver must hold an effective driving license in
accordance with the provisions of Rule 3 of the Central Motor
Vehicles Rules 1989 at the time of the accident.
3.5. Since these conditions were not fulfilled, the
petitioner's son was not entitled to coverage under Ext.P1. It is
further contended that the insurance contract is personal in nature,
and in the present case, the premium towards the personal accident
cover was paid by the previous owner. There was thus no privity of
contract between the deceased and the insurer.
3.6. The insurer also points out that the policy schedule
specified a nominee, namely, Smt. Divya R. Prabhu, the wife of the
previous owner, who alone would be entitled to claim personal
accident benefits in the event of the death of the insured. The
petitioner has no locus standi to maintain the claim.
3.7. It is contended that the repudiation is justified and in
accordance with law. The petitioner is not without remedy, since he
may avail compensation under Section 166 of the Motor Vehicles
WP(C) NO. 19315 OF 2025 9 2025:KER:80541
Act, but not under the personal accident cover of Ext.P1. Reliance is
placed on Kuttappan K.R. and Another v. Anandakkuttan and Others
[2022 KHC OnLine 2671] and Vidhu Krishna @ Vidya R. Vijayan v.
Harikrishnan [2025 KHC OnLine 10323].
4. Heard Sri. Anil S Raj, learned counsel for the petitioner,
Sri. Kiran Peter Kuriakose, the learned Standing Counsel appearing
for the 1st respondent, and Smt. Surya Binoy, the learned Senior
Government Pleader.
5. It is a common case, evidenced by Exhibit P2 E-receipt,
that the application for transfer of ownership was submitted on the
very same day on which the vehicle was purchased, namely, on
21.09.2023. The fact that the said application was subsequently
allowed and that the certificate of registration was issued on
29.09.2023 clearly indicates that the application was one liable to be
allowed as there were no defects, discrepancies, or deficiencies in
the particulars furnished therein. The enquiry undertaken by the
WP(C) NO. 19315 OF 2025 10 2025:KER:80541
Motor Vehicles Department in such matters is only to verify the
correctness of the particulars and entries furnished by the
applicant, and when the application is ultimately allowed, it
necessarily implies that all particulars were found in order. In such
circumstances, the transfer application must be treated as having
been allowed with effect from the date of its filing, applying the
Doctrine of Relation Back/date-back.
6. The said doctrine, as explained in Black's Law
Dictionary, denotes that "an act done at a later time is, under certain
circumstances, treated as though it occurred at an earlier time." The
underlying principle is that once the later act validates the earlier
step, the effect in law dates back to the initial act, to ensure
substantive justice and avoid technical defeat of rights.
7. Applying the same principle to the present case, once
the transfer of ownership was found valid and was approved by the
Registering Authority, the effect of such approval must relate back
WP(C) NO. 19315 OF 2025 11 2025:KER:80541
to the date of the original application, i.e., 21.09.2023. The issuance
of the registration certificate on 29.09.2023 only evidences the
factum of transfer already completed and cannot be construed as
conferring ownership prospectively. The deceased could not have
filed the transfer application before the date of purchase, and
hence, the delay between application and issuance of the certificate
is purely procedural.
8. Moreover, even from a practical standpoint, the
insurance endorsement on the registration certificate dated
29.09.2023 could not have been issued in the name of the deceased
unless the authority recognised him as the lawful owner of the
vehicle. Thus, by both legal and factual reasoning, the transfer of
ownership must be held to have taken effect from 21.09.2023, the
date of application, and all consequential rights and liabilities
flowing therefrom must be reckoned with reference to that date.
9. There is no provision of law making registration a sine
WP(C) NO. 19315 OF 2025 12 2025:KER:80541
qua non for transfer of ownership, nor does the absence of
registration render the transfer void or ineffective. The certificate
of registration is not a document of title but merely evidence of the
ostensible owner for statutory purposes, such as payment of tax or
obtaining insurance. Endorsement of transfer on the certificate is
not a condition precedent for a valid sale, and its absence does not
invalidate the transaction. A change of registry under Section 50 of
the Motor Vehicles Act, 1988, is not a condition precedent to
ownership transfer; non-compliance with the duty to intimate, does
not nullify an otherwise valid transfer. Section 50 itself presupposes
a completed transfer before intimation to the registering authority,
and registration under the Act is not an ingredient of ownership.
This position is further fortified by Rule 55 of the Central Motor
Vehicles Rules, 1989.
10. Having so found as regards ownership, it follows that
the transfer of the insurance policy occurs simultaneously with the
transfer of ownership of the vehicle. The vehicle, being movable
WP(C) NO. 19315 OF 2025 13 2025:KER:80541
property capable of transfer by sale or gift, is governed by the
provisions of the Sale of Goods Act, 1930 (Chapters II and III) or the
Transfer of Property Act, 1882 (Chapter VII). Under these
provisions, the essence of ownership transfer lies in the transfer of
property in the goods, which is determined by the terms of the
contract, the intention of the parties, and/or delivery. As the
subject matter of the insurance contract is the vehicle itself, once
ownership is transferred, the indemnity under the policy
necessarily follows the vehicle. The insurer cannot claim that the
transferee forfeits indemnity merely for want of formal policy
transfer, since the insurance attaches to the vehicle and, by
implication, to its new owner. [See: P.K. Panda v. Premalata
Choudhary [AIR 1980 Ori 102]; South India Insurance Company v.
Lakshmi and Others [1971 ACJ 122] (Madras High Court); Phul Bus
Service (Regd.), Rampura v. Financial Commissioner, Taxation,
Punjab and Others [1968 ACJ 57] and Tarachand Shrawanji
Shambharkar v. Prashant, National Insurance Co. Ltd
WP(C) NO. 19315 OF 2025 14 2025:KER:80541
[MANU/MH/0228/2014] (Bom HC)].
11. The further contention of the petitioner is that the
insurance of the vehicle continued to subsist and stood
automatically transferred to the transferee from the date, placing
reliance on Section 157(1) of the Motor Vehicles Act, 1988.
12. Section 157 of the Motor Vehicles Act reads as follows:
"157. 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.
Explanation.--For the removal of doubts, it is hereby
WP(C) NO. 19315 OF 2025 15 2025:KER:80541
clarified 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."
13. The statutory scheme under Section 157 of the Motor
Vehicles Act, 1988, makes it abundantly clear that once the
ownership of a motor vehicle stands transferred, the certificate of
insurance and the policy described therein are deemed, by
operation of law, to be transferred in favour of the transferee with
effect from the date of transfer itself. The transferee, by virtue of
such ownership, acquires an immediate insurable interest in
respect of the vehicle and all the benefits that flow from the
subsisting policy.
WP(C) NO. 19315 OF 2025 16 2025:KER:80541
14. It is true that Section 157 of the Motor Vehicles Act,
1988, as interpreted by the Supreme Court in Complete Insulations
(P) Ltd. v. New India Assurance Co. Ltd., [(1996) 1 SCC 221], and
reaffirmed in Balwant Singh And Sons v. National Insurance
Company Limited and Another [(2020) 11 SCC 745], confines the
deeming fiction of transfer to the statutory third-party risks
contemplated under Chapter XI of the Act. The Court in those cases
held that the fiction under Section 157 operates only to ensure
continuity of third-party coverage and does not extend, by itself, to
other forms of insurance such as own-damage or personal accident
cover, which are purely contractual in nature and depend upon an
agreement between the insurer and the transferee. The rationale
behind such a limitation was that Chapter XI, as enacted, concerns
itself exclusively with compulsory third-party insurance and does
not mandate any other cover.
15. However, the Indian Motor Tariff Regulations have
been incorporated through IRDAI Circulars No.
WP(C) NO. 19315 OF 2025 17 2025:KER:80541
IRDAI/NL/CIR/MOTP/158/09/2018 and IRDAI/NL/CIR/MOTP/200/12/
2018, which deal with the provision and enhancement of the
Compulsory Personal Accident cover for owner-drivers under all
motor insurance policies. General Regulation 36 (GR.36A) of the
Indian Motor Tariff states as follows:
"Compulsory Personal Accident Cover shall be applicable under both
Liability Only and Package policies. The owner of insured vehicle holding
an 'effective' driving license is termed as Owner-Driver for the purposes of
this section. Cover is provided to the Owner-Driver whilst driving the
vehicle including mounting into/dismounting from or travelling in the
insured vehicle as a co-driver.
16. In Bindhu Varghese and Ors. v. The Divisional Manager,
New India Assurance Company Ltd. [MANU/KE/2416/2025], it was
held that the compulsory personal accident cover was introduced
by the Insurance Regulatory and Development Authority of India
(IRDAI) as a statutory and social security measure, made mandatory
for every vehicle owner at the time of obtaining or renewing an
WP(C) NO. 19315 OF 2025 18 2025:KER:80541
insurance policy. Virtually, the owner of the vehicle had no option
but to take a policy that included personal accident cover, for which
a separate premium was also payable.
17. The regulatory intervention of the Insurance
Regulatory and Development Authority of India, in every motor
policy, now compulsorily carries personal accident cover for the
owner-driver, transforming what was once a matter of contract
being elevated into a statutory, non-derogable and social security
measure. The personal accident cover, therefore, travels along with
the policy under Section 157 in the same manner as third-party
protection under Sections 146 and 147 of the Motor Vehicles Act,
and its character as a statutory entitlement cannot be diluted by
technical or procedural objections.
18. Where an accident resulting in the death of the
transferee occurs within the 14-day statutory period/window
prescribed for endorsement of the policy in its favour, the
requirement of endorsement cannot be set up as a bar, for the law
WP(C) NO. 19315 OF 2025 19 2025:KER:80541
does not compel the performance of an impossibility. The doctrine
of lex non cogit ad impossibilia squarely applies, ensuring that the
insurable interest already vested in the transferee does not perish
with his inability to complete the formality rendered impossible by
his untimely death. That insurable interest survives for the benefit
of his estate and legal heirs, who stand entitled to enforce the
statutory cover.
19. It is pertinent to note that the factum of change of
ownership is not something that affects the liability of the insurer,
in view of the fact that the insurer had already collected the
premium. Once the premium is collected, the insurer assumes the
risks in relation to the subject matter of the policy, as contemplated
under section 64-VB of the Insurance Act, 1938. It is a settled
proposition that the insurer's liability can be lawfully avoided only
upon proof of breach of the terms and conditions of the policy. In
the present case, no such breach is either pleaded or established.
20. When it comes to the question of transfer of vehicle, it
WP(C) NO. 19315 OF 2025 20 2025:KER:80541
is to be noted that such a transfer as such is not a fact that amounts
to breach of policy, but only when such transfer is not intimated to
the insurer within the time specified in the policy, it amounts to
breach of policy. In this case, the policy contemplates a period of 14
days for the party to intimate the transfer. The accident occurred,
and the transferee died before the expiry of the said period. In this
regard, it is also relevant that the deceased applied for the transfer
of the vehicle on the same date on which the sale was effected as
well. Therefore, so long as the period fixed for such intimation has
not expired as on the date of the accident, there cannot be any
breach of conditions, as any other view would be compelling
performance of an impossibility.
21. In these circumstances, repudiation of liability on the
sole ground of non-endorsement within the 14-day window would
not merely defeat the statutory deeming provision of Section 157,
but would also strike at the very foundation of the social security
character of the compulsory personal accident cover. The law does
WP(C) NO. 19315 OF 2025 21 2025:KER:80541
not permit substantive statutory rights to be nullified by procedural
formalities, and the defence advanced by the insurer must,
therefore, fail.
22. For the foregoing reasons, Ext.P4 communication
issued by the 1st respondent and Ext.P7 award passed by the 2 nd
respondent are hereby quashed. In consequence of the above
declaration, the 1st respondent is directed to forthwith allow Ext.P3
claim and extend to the petitioner all consequential benefits
flowing therefrom, within one month from the date of receipt of a
copy of this judgment.
The writ petition is allowed as above.
Sd/-
MOHAMMED NIAS C.P.
JUDGE
DMR/-
WP(C) NO. 19315 OF 2025 22 2025:KER:80541
APPENDIX OF WP(C) 19315/2025
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF THE INSURANCE POLICY NO.
57160031226260003655 DATED 5.1.2023
ISSUED BY THE 1ST RESPONDENT.
Exhibit P2 TRUE COPY OF THE E-RECEIPT DATED
21.9.2023 EVIDENCING PAYMENT OF FEE OF
RS.230/- BY LATE MR. ANEESH TO
TRANSPORT DEPARTMENT, GOVERNMENT OF
KERALA FOR TRANSFER OF VEHICLE TO HIS
NAME.
Exhibit P3 TRUE COPY OF THE CLAIM FORM SUBMITTED
BY THE PETITIONER TO THE 1ST
RESPONDENT.
Exhibit P4 TRUE COPY OF THE LETTER DATED
22.8.2024 ISSUED BY THE 1ST RESPONDENT
TO THE PETITIONER.
Exhibit P5 TRUE COPY OF THE LAWYER'S NOTICE DATED
2.9.2024 ISSUED ON BEHALF OF THE
PETITIONER TO THE 1ST RESPONDENT.
Exhibit P6 TRUE COPY OF THE COMPLAINT DATED
4.9.2024 BUT SUBMITTED ON 5.11.2024 BY
THE PETITIONER TO THE 2ND RESPONDENT.
Exhibit P7 TRUE COPY OF THE AWARD NO:
IO/KOC/A/G1/0007/2025-2026 DATED
8.4.2025 PASSED BY THE 2ND RESPONDENT.
Exhibit P8 TRUE COPY OF THE COVERING LETTER NO:
IO/KOC/A/G1/0007/2025-2026 DATED
8.4.2025 ACCOMPANYING EXHIBIT P7.
APPLICATION TO RTO TRUE COPY OF THE APPLICATION DATED
27.07.2025 BEFORE THE INFORMATION
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OFFICER, REGIONAL TRANSPORT OFFICE,
KAKKANAD.
INFORMATION RECIEVED TRUECOPY OF THE INFORMATION RECEIVED
FROM RTO FROM THE THE INFORMATION OFFICER,
REGIONAL TRANSPORT OFFICE, KAKKANAD
DATED 31.07.2025.
RESPONDENTS'EXHIBITS
Exhibit R1(a) INSURANCE POLICY NO.
57160031226260003655 ALONG WITH THE
TERMS AND CONDITIONS
// TRUE COPY //
P.A. TO JUDGE
