Insurer Cannot Avoid Third Party Liability On The Ground Of Non-Registration Of Vehicle : Himachal Pradesh HC [Read Judgment]

The Himachal Pradesh High Court has held that lapse of temporary registration of a vehicle does not amount to a breach of conditions of the third party insurance policy.

Therefore, the insurer cannot seek to avoid liability to indemnify the owner in respect of claims arising out of accident caused by the vehicle after the period of temporary registration.

An insurer is entitled to avoid liability only if the conditions specified under Section 149(2) of the Motor Vehicles Act 1988 are breached. Non-registration is not a condition specified in Section 149(2). Therefore, the Court ruled that the lapse of temporary registration will not exonerate the insurer.

"There is no such stipulation or condition therein ( in the policy) that the insurer will not be liable toward third party risk for want of valid registration certificate of the vehicle...

Under Section 149 of the Motor Vehicles Act, there is no such defence available to the insurer for repudiation of the claim on the ground of invalid/absence of registration certificate", observed the judgment authored by Justice Jyotsana Rewal Dua in the case National Insurance Company Ltd vs Kamal Kishore and others.

The Court also took into account the social welfare motive of compulsory third party insurance while reaching its conclusions. 

The judgments of Kerala High Court in Joby Thomas and another vs Annamma Augustine and another and Madras High Court in New India Insurance Company vs Saraswati reaching same conclusion were also referred.

There was also no connection between the accident and the lapse of temporary registration; the driver had valid driving license too, noted the Court. 

Based on these, the Court concluded that "merely because vehicle is not registered under Chapter IV of the Motor Vehicles Act, the Insurance Company cannot escape its liability towards third party"

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