ORIGINAL JURISDICTION - Orissa High Court

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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 purchaser. The purchaser 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,
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. For the aforesaid reasons, we held that whenever a vehicle
which is covered by the insurance policy is transferred to a
transferee, the liability of insurer does not cease so far as the third
party/ victim is concerned, even if the owner or purchaser does not
give any intimation as required under the provisions of the Act.”
INDIAN LAW REPORTS, CUTTACK SERIES [2010]
19. Similarly, our High Court in Hindustan General Ins. Society Ltd. –
vrs.-Kausalya Rani Das and another (supra) has held:
“11. xx xx xx xx xx Chapter 8 of the Act, as its heading indicates,
makes provision for insurance of motor vehicles against third party
risks. In other words, the object of the provisions contained in this
Chapter is to ensure that third parties who suffer on account of user
of motor vehicles would be able to get damages for the injuries
sustained by them and their ability to get damages will not be
dependent on the financial condition of the owner or driver of the
vehicle. Under section 94 of the Act, a person is prohibited from
using, causing or allowing any other person to use a motor vehicle in
a public place except as a passenger unless there exists a policy of
insurance respecting user of that vehicle and the same complies with
the requirements of Chapter 8. The policy, therefore, must provide
insurance against any liability to third party incurred by the person
when using that vehicle. Under section 95, the requirements to be
complied with are ; firstly, the policy must specify the person or
classes of persons who are insured with respect to their liability to
third parties; secondly, the policy must specify the extent of liability
which must extend to the extent specified in sub-section (2)
thereunder and thirdly, the liability which be incurred by the specified
person or classes of persons in respect of death or bodily injury to
any person caused by or arising out of the use of the vehicle insured.