( 1 ) (JUDGMENT of the Court delivered by Madhava Reddy J 1. This appeal is by the petitioners in O. P, 135/g5 on the file of the Motor Accidents Claims Tribunal (District Judge) East Godavari at Rajahmundry ).

( 2 ) THE 1st appellant is the wife of one Venkata Raju, the person who was knocked down by a lorry APK 2029, heavy Motor Vehicle on 23-4-1965 and died; Appellants 2 to 7 are his minor children. The 1st respondent is the registered owner of the lorry, the 2nd respondent is the purchaser from the 1st respondent s vendee. The 3rd respondent as an employee of the 2nd respondent was driving the lorry at the time of the fatal accident. The 4th respondent is the insurance Company with which the lorry was registered, and the 5th respondent is the first purchaser of the lorry in question. The petition O. P. 135/65 was filed against the respondents claiming a sum of Rs. 1,58,820/-as compensation. The 5th respondent remained exparte in the court below and he is not impleaded as a party herein the 1st respondent pleaded that he had sold away the lorry on 17-8-1952 to one Kodali Pattabhiramiah and delivered possession of the same to him and that he. ceased to have any interest or control over the lorry from that date. He pleaded that as the title therein passed to the said Pattabhiramiah long before the accident, he was not liable for the damages claimed by the appellants. The 2nd res. pondent pleaded that the title of the vehicle did not pass to him as the vehicle was still registered in the name of the 1st respondent. He also alleged that the accident was due to rash and negligent riding of the Motor Cycle by Venkata Raju, the deceased. He also stated that the appellants are not entitled to the huge amount claimed by them as damages. The 3rd respondent admitted that he was the driver of the lorry but denied that the accident was due to his rash and negligent driving. He also disowned all liability to pay any compensation, as according to him, it was Venkata Raju, the deceased who was responsible for the accident. The Insurance Company, the 4th respondent denied its liability to make good the claim on the ground that there was no privity of contract between the Insurance company and the 2nd respondent, the present owner of the vehicle. The Vehicle was insured by the I st respondent and the transfer of the vehicle by the 1st respondent in favour of the 2nd respondent operated as a cessation of the Insurance Policy. The Insurance Company had no notice of the transfer of vehicle in favour of the 2nd respondent. The Policy was not assigned in favour of the 2nd respondent at any time They also pleaded that the 3rd respondent was not holding a valid licence to drive a heavy motor vehicle and as such the company was absolved of all liability for the 3d party risk.

( 3 ) THE Tribunal held that the 2nd respondent was the owner of the vehicle on the date of the accident, that there was no assignment of the Insurance policy in his favour and that the accident was due to rash and negligent driving of the 3rd respondent and accordingly decreed the claim of the appellants only against respondents 2 and 3 but only to the extent of Rs. 25,000/- and dismissed the claim as against the other respondents. Only the petitioners have preferred this appeal urging that their claim should have been decreed even as against the 1st and 4th respondents viz. the Registered owner of the vehicle and the Insurance Company with which it was insured. The other respondents in the petition are not impleaded in this appeal.

( 4 ) IN this appeal the quantum of damages awarded by the Tribunal is not questioned. The appellants pray for a decree for the sum of Rs. 25. 000/- awarded by the Tribunal even as against the Registered owner and the Insurance Company. The two questions tnat arise for consideration are ; (1) Whether on the facts and circumstances of the ease, the registered owner, the 1st respondent herein is liable to meet the claim of the appellants ; and (2) Whether on the facts and circumstances of the case, the insurance Company, the 4th respondent herein is also liable for the claim of the 3rd party viz , the appellants? point No. 1 ; The 1st respondent who is examined as R W. 2 states that he sold away the vehicle to Kodali Pattabhiramaiah and the said Kodali Pattabhiramayya sold it to the 2nd respondent ex B3 is the agreement of sale executed by Kodali Pattabhiramaih in favour of the :nd respondent R W 1 is Kodali Pattabhiramaih. He also supports the statement of the 1st respondent The registration certificate could not be endorsed in favour of the 2nd respondent because there was a hire purchase agreement with one marwadi. He states that neither he nor the 1st respondent had any title or interest or control over the said lorry. The Income tax assessment order, Ex. B1 dated 5-9-1960 would also show that R. W. I was the owner of the lorry during the assessment year 1959-60.

( 5 ) THE assessment order for the year 1965-66, Ex. B2 would show that he had parted with all interest in the lorry prior to 28-10-1964 by executing an agreement of sale in favour of the 2nd respondent. The 2nd respondent also filed a Memo Ex. B 4 dated 27-4-1965 in munsif Magistrate s Court Peddapuram, stating that he had purchased the lorry APK 2029 but that it was not registered in his name under the Motor Vehicle Act. After the accident, the lorry was seized and later released by the Court to the 2nd respondent on taking security for Rs. 20. 000 from him. All this evidence would clinchingly establish that on the date of the accident the 2nd respondent was the owner of the vehicle. It is however, true that the registration certificate still continued in the name of the 1st respon dent. Although the vehicle was sold away by him to Kodali Pattabhiramiah and he in turn sold it to the 2nd respondent, the registration certificate was not transferred in the name of the 2nd respondent. The reason given for that is the existence of a hire purchase agreement on the relevant date. When admittedly there was a sale of the vehicle by the 1st respondent in favour of the 2nd respondent the failure to enter his name in the registration certificate does not have the effect of retaining the title with the 1st respondent. The sale is not rendered invalid. The title and interest in respect of the vehicle and possession and control over the same passed on from the 1st respondent to K, Pattabhiramaiah and from him to the 2nd respondent by the sale. The only legal effect of the registration certificate still continuing in the name of the 1st respondent in view of S. 12 of the Andhra Pradesh Motor Vehicles taxation Act is that the 1st respondent would also be still liable for the payment of the tax due for the vehicle. But that does not mean that he still continued to be the owner of the Vehicle in law. By the receipt of the consideration, under the agreement of sale, Ex B and the handing over of the vehicle to the 2nd respondent, the ownership in the vehicle passed to the 2nd respondent. The 1st respondent who continued to be shown as the registered owner of the vehicle ceased to be the real owner thereof as a result of the sale of the vehicle effected by him. After sale of the Motor vehicle the vendor would not be liable for damages for the accident met by the vehicle merely because he continued to be shown in the Registration certifi. cate as the owner thereof. The accident in the present case occurred after the 2nd respondent became the owner. Admittedly the 3rd respondent was driving the vehicle. He was an employee of the 2nd respondent and not of the 1st respondent and the vicarious liability attaches only to the master for the rash and negligent act of his servant, the 3rd respondent. By continuing to he shown as the registered owner of the vehicle, no vicarious liability can attach to the 1st respondent when the 3rd respondent was not his employee. In our opinion, the 1st respondent was not therefore liable for any damages or the fatal accident caused by the act of the ird respondent. Point No. 2 The answer to the next question as to the liability of the Insurance Company to make good the claim would depend upon the terms of the Insurance policy and the true effect of Section 96 (l) of the Motor Vehicles Act. The Insurance Policy of which ex. B 8 is the true copy was taken by the 1st respondent and not the 2nd respondent. It is admitted by R. W 1 that even after the sale of the vehicle he was merely subscribing his signature for maintaining the Insurance poiicy because the registration certificate stood in his name and the permit for the vehicle also continued in his name.

( 6 ) IN the policy which was effective on the date of the accident, the 1st respondent was shown as the Insured and not the 2nd respondent but as already held on the date of the accident, he ceased to be the owner of the lorry. Under the policy taken by the I st respondent, the insurance Company merely undertook to cover the third party risk and meet the claim of the insured for the vehicle owned by him. The contract of insurance was only between the Insurance Company and the st respondent. There was no privity of contract between the 2nd respondent and the Insurance Company. In Tutersull v. Drysadale where a policy of Insurance underwritten by the defendant by which the plaintiff insured himself against the third party risks in respect of a specified motor carwas extended to cover him while he was temporarily using another car, and during the continuance of the policy the plaintiff sold the car, which was the subject of the insurance, it was held that, "the policy insured the plaintiff in respect of the ownership and user of the specified car, and when he divested himself of his interest in that car the extension clause ceased to have. effect peters v. General Accident and Life lnssurance Corporation Limited was a case in which the vendor of a motor car insured by the defendents handed over the insurance Policy with the car to the purchaser. The policy contained the usual clause extending the cover to any person driving with the consent or permission of the insured. The plaintiff, who had been injured by the car after the sale had been completed, obtained a judgment against the purchaser, and sought to recover the damages he had been awarded from the Insurance Company, it was held that when the vendor sold the car, the insurance policy automatically lapsed, that at the time of the accident the purchaser could not be said to be driving the car by the order or with the permission of the vendor, as the car was then the purchaser s own property and that the insured is not entitled to assign his policy to a third party An insurance Policy is a contract of personal indemnity and the insurers cannot be compelled to accept responsibility in respect of a third party who may be quite unknown to them. By section 96 (1) of the Motor Vehicles Act, the insured is made liable to pay to the person entitled to the benefit of any decree which may have been obtained against any person insured by the Policy. Section 96 (1) of the Act reads as follows : "96 (I ). If, after a certificate of insurance has been issued under sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment is respect of any such liability as it required to be covered by a policy under clause (b) of subsection (l) of Section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable the reunder, of the liability together with any amount payable in respect of costs, and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgment.

( 7 ) THE insurance Policy does not extend to the liability to pay the sum due under a decree obtained against any person other than the insured. There is nothing in the insurance Policy which extends the liability of the insurer to the transferee of the vehicle of the insured.

( 8 ) IN Bhoopthy v. Vijayulakshmi where a car owned by the insured in his name under a comprehensive policy covering third party risks was sold during the currency of the policy to another without the knowledge of the Insurance company and the Car knocked down the plaintiff and injured him while being driven by the purchaser, in a suit by the plaintiff against the insurer for damages the question arose whether the Insurance Company was liable to pay the Plaintiff s claim. It was held "that the Insurance company was not liable. S. 96 (1) of the Motor Vehicles Act itself proceeds on, the basis that there was a subsisting policy. In the absence of an express stipulation to the contrary in the policy the continued ownership of the car with the insured was basic to the subsistence of the policy. Once the subject matter of the policy was gone as when parted by the insured by sale or transfer, the policy automatically lapsed and there was nothing for the insurer to avoid it. We find ourselves in entire agreement with the above view. We accordingly hold that the Insurance Company was not liable to make good the claim of the plaintiff as the accident had occurred after the 1st respondent, the insured had parted with the ownership of the vehicle and the 2nd respondent, who was the purchaser was not insured with the company. Having regard to the conclusion reached by us on both the points, we must hold that the appellants are not entitled to a decree against the registered owner who was not the owner of the vehicle on the date of the accident and the insurance company who are the respondents herein. This appeal therefore fails and is accordingly dismissed. However, having regard to the facts and circumstances of the case, we make no order as to costs.