G. C. Jain, J. ( 1 ) A learned single Judge of this Court, agreeing with the decision of the Full Bench of the Andhra Pradesh High Court in Madinenikondaiah and others v. Yaseenfatima and others, AIR 1986 AP 62 , which was in. conflict with the Division Bench decision of this Court in Oriental Fire and General insurance Co. Ltd. v. Vimal Roy, AIR 1973 Delhi 115 has referred the following question of law for decision of the Full Bench:- "whether the third party liability of Insurance Company comes to an end on transfer of vehicle by the insured to someone else ?" ( 2 ) THE facts leading to the reference, briefly stated, are these. Shri A. N. Wadhwa (for short wadhwa ) was the owner of a two wheeler scooter registration No. DLO-7451. It was insured with M/s. Vangaurd Insurance Co. Ltd. (for short the Insurance Company ) for the period from 27-9-68 to 26-9-69. Wadhwa sold the scooter to P. P. Khurana (for short khurana ) on 27-11-68 and delivered the possession thereof. Final receipt was to be given after getting permission from the Ministry of Rehabilitation where he was employed. Permission was granted on 7-12-68 and final receipt indicating the sale of scooter with delivery of possession for Rs. 2200. 00 was issued on 15-12-68. The scooter was registered with the registering Authority in the name of Wadhwa. This continued, even after the sale. In other words, ownership in the name of Khurana was not transferred in the records of the registering Authority under the Motor Vehicles Act (for short the Act ) till the date of accident. It was so transferred after the accident. In lieu of the certificate of insurance No. 671183 for the period 27-9-68 to 26-9-69 in favour of Wadhwa, another certificate No. 710154 for the period 1-3-69 to 26-9-69 was issued by the Insurance Company in favour of Khurana. ( 3 ) ON 3-1-69 at about 9. 00 A. M. Anand Sarup Sharma, the appellant, it is stated, was going towards Nangal Rai from Gopi Nath Bazar on foot when Khurana driving this scooter came from behind and hit him resulting in fracture of shafts of tibia and fabula. ( 4 ) ON 1-3-69 Sharma brought a petition under Section IIO-A of the Act against Khurana, Wadhwa and the Insurance Company claiming a sum of Rs. 50,000. 00 as compensation. ( 4 ) ON 1-3-69 Sharma brought a petition under Section IIO-A of the Act against Khurana, Wadhwa and the Insurance Company claiming a sum of Rs. 50,000. 00 as compensation. The amount was claimed from Wadhwa and the Insurance Company on the ground that though Wadhwa had sold the scooter to Khurana he was still a registered owner and was, therefore, liable to pay compensation. Consequently his insurer was liable to satisfy the award. ( 5 ) THE Motor Accidents Claims Tribunal vide its judgment dated 27-10-75 recorded the following findings :- 1. Sharma was injured as a result of rash and negligent driving of the scooter by Khurana. 2. Wadhwa had transferred the scooter in question in favour of Khurana before the date of the accident ? 3. Wadhwa had no insurable interest in the scooter on the date of the accident. The Insurance Company, therefore, was not liable to pay any compensation. 4. The petition was not bad for want of notice ; and 5. The petitioner, Sharma, was entitled to recover Rs. 3850. 00 as compensation. ( 6 ) ON these findings he awarded a sum of Rs. 3850. 00 with costs and future interest if the amount was not paid within two months of the date ofthe award, against Khurana only. The application against Wadbwa and the Insurance Company was dismissed. ( 7 ) FEELING aggrieved Sharma filed an appeal praying for enhancement of the compensation and for awarding the compensation against all the respondents. ( 8 ) AT the time of arguments before the learned single Judge, learned counsel appearing for the appellant, relied on the Full Bench decision of Andhra Pradesh High Court in Kondaiah s case (supra), where it was held that the Insurance Company could not raise the defence that the policy bad lapsed because of the sale of vehicle and that the insurable interest continued, so far as third party risk was concerned, so long the obligation under statute as stipulated under Section 31 read with Section 94 of the Act were not fulfilled. Agreeing with the decision but observing that a contrary view had been taken up the Division Bench of this Court in Vimal Roy s case (supra), which was binding on him sitting singly, the learned single Judge referred the above mentioned question to the Full Bench. ( 9 ) THE scooter was a moveable property. Agreeing with the decision but observing that a contrary view had been taken up the Division Bench of this Court in Vimal Roy s case (supra), which was binding on him sitting singly, the learned single Judge referred the above mentioned question to the Full Bench. ( 9 ) THE scooter was a moveable property. Its sale was undisputedly governed by the Sale of Goods Act. "a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property and goods to the buyer for a price. . . . . . . . . . . . . . . . . Where under a contract of sale property in the goods is transferred from the seller to the buyer the contract is called a sale. " (Section 4 of the sale of Goods Act.) ( 10 ) IT is not disputed that the property in the scooter had passed from Wadbwa (seller) to Khurana (buyer) at least, on 15-12-68 when the final receipt was executed. The price had been paid. Possession had been delivered before this sale. The sale in all respect was, thus, complete on 15-12-68 i. e. before the date of accident. The property in the scooter had passed to the buyer. ( 11 ) IS there any provision in the Motor Vehicles Act, 1939 to postpone the transfer of the property from seller to the buyer, though the transfer is complete under the Sale of Goods Act, till some other even takes place ? ( 12 ) SECTION 2 (19) of the Act defines "owner" as under :- "owner" means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to motor vehicle which is the subject of a hire purchase agrement, the person in possession of the vehicle under that agreement". ( 13 ) THIS definition does not include a registered owner in its ambit. It does not indicate at all that a registered owner would continue owner of the vehicle even after he has sold it till it was registered in the name of the transferee. ( 13 ) THIS definition does not include a registered owner in its ambit. It does not indicate at all that a registered owner would continue owner of the vehicle even after he has sold it till it was registered in the name of the transferee. ( 14 ) THE contention of the learned counsel for the appellant is that the seller would remain owner till the time the ownership of the scooter was not transferred in the name of the buyer in the records of the registeringauthority. Seller would cease to be the owner only after the vehicle was registered in buyer s name. In support of his contention he relied on Sections 22 and 31 of the Acts. Section 22 and relevant portion of Section 31 reads :- "22. Necessity for registration (1) No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place for the purpose of carrying passengers or goods unless the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner. 31. 31. Transfer of ownership (1) Where the ownership of any motor vehicle registered under this Chapter is transferred :- (A) the transferor shall (I) within fourteen days of ihe transfer, report the fact of transfer to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; (II) within forty-five days of the transfer, forward to the registering authority referred to in sub/clause (i) :- (A) a no objection certificate obtained under Section 29-A; or (B) in a case where no such certificate has been obtained,- (I) a receipt obtained under Sub-section (2) of Section 29-A; or (II) a postal acknowledgement received by the transferor if he has sent an application in this behalf by registered post acknowledgment due to the registering authority referred to in Section 29-A, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted ; (B) the transferee shall within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he resides, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration. " ( 15 ) WE have carefully examined the above provisions. In our considered opinion these provisions do not have the effect of postponing the transfer of property from seller to the buyer till the transfe ror and transferee make the requisite report and the vehicle is registered in the name of the transferee. Section 22 simply imposes a statutory obligation. It prohibits the driving of any vehicle by any person unless the vehicle is registered. Non-compliance of these provisions does not have the effect of postponing the transfer of property in the vehicle from buyer to seller. To take a contrary view would result in absurd result. If a buyer, after purchase does not use the vehicle he is the owner. But if after one year he uses it he ceases to be the owner. It is not and cannot be the law. To take a contrary view would result in absurd result. If a buyer, after purchase does not use the vehicle he is the owner. But if after one year he uses it he ceases to be the owner. It is not and cannot be the law. ( 16 ) OPENING words of Section 31 "where the ownership of any motor vehicle registered under the Chapter is transferred make clear that transfer of ownership has to precede the reports reired to be made under Section 31. Section 31 does notprohibit the transfer of a motor vehicle till the reports are made. These provisions only cast an obligation on the transferor and the transferee to report to the registering authority concerned regarding the transfer of the vehicle after the transfer has already taken place. These provisions have nothing to do with the ownership of the vehicle as such. They merely provide for regulations of use of motor vehicles in public places. Their non-compliance attracts penalties. ( 17 ) IN Vimal Rai s case (supra) a Division Bench of this Court held as under:- "the penalty for contravention of the provisions of the Act or the rules made thereunder is contained in Section 112 and other provisions occurring in Chapter IX of the Act. It is, however, significant that there is in particular no provision of law stating that the registration of a motor vehicle is a condition precedent for any transfer of the vehicle or that in the absence of registration, the sale would be void or ineffective. On the other hand, an analysis of Section 31 of the Act shows that it presup- poses a valid and subsisting transfer by the registered owner of the vehicle to another person and the transferor is enjoined upon a duty within 14 days after the transfer to report the transfer to the authority and the transferee is, within 30 days required to report the transfer to the authority. The endorsement of the transfer in the records of the registering authority is, therefore, not a condition precedent to the transfer, nor does it deal with the legality or validity of the transfer which must be determined by other provisions of the law. The endorsement of the transfer in the records of the registering authority is, therefore, not a condition precedent to the transfer, nor does it deal with the legality or validity of the transfer which must be determined by other provisions of the law. Should any person, in disregard of the provisions of law, fail to intimate the transfer to the authority or drive the vehicle in a public place without a certificate of registration, he runs the risk of incurring the penaltis provided by the Act, but his title to the purchase of the vehicle undoubtedly remains unaffected, nor does the title remain in suspense during the grace period allowed for effecting endorse- ments of registration. ON perusal of the provisions of the Motor Vehicles Act, it cannot be denied that the registration certificate is a very important piece of evidence to show the ownership of the vehicle, particularly as the person making an application is required to produce the 32 vehicle before the authority for inspection and without a registration certificate, a person would normally find it useless to own the vehicle if he cannot drive it in any public place and so, in his own interests, the transferee will take steps to have the particulars of the transfer endorsed on the certificate of registra- tion. However, failure to do so, cannot be deemed to militate against the validity and legality of the passing of the title in the vehicle so transferred or to expose the innocent seller who may have done his all to complete the transfer to legal liabilities for acts and omissions in respect of the vehicle subsequent to the transfer. Moreover, the certificate of registration is not docu- ment of title ; it is issued to the owner of the vehicle, that is the person by whom the vehicle is kept and used and although provision is made for changes of ownership to be recorded in the book, the name appearing in it may not be of the legal owner of the vehicle ; the registration book is evidence of title and its absence at the time of sale should put a purchaser on enquiry. . . . . " ( 18 ) THIS decision was followed by a Division Bench of Madhya Pradesh High Court in Balwant Singh v. Jhannubai and Ors. , 1980 ACJ 126. . . . . " ( 18 ) THIS decision was followed by a Division Bench of Madhya Pradesh High Court in Balwant Singh v. Jhannubai and Ors. , 1980 ACJ 126. Same view was taken by the Orissa High Court in A. N. Choadhry v. Debahuti Pattnaik and Ors. , 1979 ACJ 455. Even the Full Bench ofandhra Pradesh High Court accepted this view in Kondaiah s case (supra ). In any case this question stands settled by the decision of the Supreme Court in Panna Lal v. Chand Mal and others, AIR 1980 SC 871 . It was held that Section 31 permits the transfer of ownership but the statute casts an obligation on the transferee to report to the registering authority concerned regarding the transfer. It is thus clear that transfer of ownership in the records of registering authority is not a condition precedent for sale. ( 19 ) WHAT is, then, the effect of the sale of the motor vehicle before the date of accident on the liability of the Insurance Company? Does the insurable interest survive even after the sale? ( 20 ) A contract of motor insurance is a contract whereby the insurer undertakes to indemnify the insured on the happening of an uncertain event, by the use of the motor vehicle subject matter of the insurance, which makes the insured legally liable to pay compensation. Like any other contract it is basically governed by the rules which form part of the general law of contract. It, also, is formed by the making of an offer by one party and communicating of the acceptance by the other. ( 21 ) THE insurance policy in this case was issued on 18th March, 1969. Insured was Amar Nath Wadhwa. The insurer was Vanguard Insurance Company Limited. The vehicle, subject matter of insurance, was a two wheeler scooter registration No. DLO-7451. The relevant portion of the clause relating to the liability of the third party reads :- "section II-LIABILITY TO THIRD PARTIES 1. Insured was Amar Nath Wadhwa. The insurer was Vanguard Insurance Company Limited. The vehicle, subject matter of insurance, was a two wheeler scooter registration No. DLO-7451. The relevant portion of the clause relating to the liability of the third party reads :- "section II-LIABILITY TO THIRD PARTIES 1. Subject to the Limfts of Liability the Company will indemnify the Insured in the event of accident caused by or arising out of the use of the Motor Cycle against all sums including claimant s costs and expenses which the Insured shall become legally liable to pay in respect of : (A) death of or bodily injury of any person but except so far as is necessary to meet the requirements of Section 95 of theMotor Vehicle Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the Insured and excluding liability to any person being conveyed in or on the Motor Cycle unless such person is being conveyed by reason of or in pursuance of a contract of employment. (B ). . . . . . . . . . . . . . . " ( 22 ) IT is clear from this clause that the Insurance Company undertook to indemnify the insured against al! sums which insured became legally liable to pay in respect of death or bodily injury to any person caused by or arising out of the use of Scooter in question. In other words the contract between the Insurance Company and the insured was to indemnity the insured in respect of third party liability. Without any doubt, it was a contract of personal indemnity. There is nothing in the insurance policy to indicate that the Insurance Company had undertaken to indemnify the person to whom the insured has sold the vehicle prior to the accident. The Insurance Company could not be compelled to indemnify a person with whom it had no contract and who was rather unknown to it. After the sale the insured was left with no insurable interest in the vehicle. Under the terms of the contract of insurance, therefore, the Insurance Company was not liable to indemnify the transferee. ( 23 ) HAS any liability been imposed on the Insurance Company by the statute, i. e. the Act ? After the sale the insured was left with no insurable interest in the vehicle. Under the terms of the contract of insurance, therefore, the Insurance Company was not liable to indemnify the transferee. ( 23 ) HAS any liability been imposed on the Insurance Company by the statute, i. e. the Act ? Section 94 of the Act, on which reliance has been placed by learned counsel for the appellant, simply prohibits the use of a motor vehicle by any person, except a passenger, unless it was insured as required in Chapter VIII which deals with insurance of motor vehicle against third party risk. These provisions, in our considered judgment, do not make the ex-owner, who was duly insured or the Insurance Company with whom the ex-owner was insured, liable. It simply imposes statutory obligation to get the vehicle insured before putting it into use. Non- compliance is punishable under Section 112 of the the Act . Non- compliance in any case is by the purchaser and not by the seller. These provisions do not make the insurer of the ex-owner liable to indemnify the purchaser, who had purchased the vehicle from the ex-owner. These pro- visions do not have the effect of modifying the contract of insurance by adding the buyer of the vehicle as an insured person. These provisions do not make the insurer of the ex-owner liable to indemnify the purchaser, who had purchased the vehicle from the ex-owner. These pro- visions do not have the effect of modifying the contract of insurance by adding the buyer of the vehicle as an insured person. ( 24 ) SECTION 96 (1) of the Act reads as under :- "duty of insurers to satisfy judgments against persons insured in respect of third party risks.- (1) 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 in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) 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 34 any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any such payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. " ( 25 ) UNDER these provisions the Insurance Company is liable to pay to the person entitled to the benefit of the decree the sum not exceeding the sum insured under the policy provided (1) a certificate of insurance has been issued in favour of the person by whom the policy has been effected and (ii) judgment in respect of liability covered in the policy has been obtained against the person insured. In short the statutory liability of the Insurance Company under Section 96 is only to meet the decree against the insured with whom it has entered into a contract. In other words the Insurance Company is liable to meet the decree or award, if the said decree or award is against the person insured by it. ( 26 ) A decree or award, in our opinion, can never be made against a person who has sold the vehicle prior to the date of accident. In other words the Insurance Company is liable to meet the decree or award, if the said decree or award is against the person insured by it. ( 26 ) A decree or award, in our opinion, can never be made against a person who has sold the vehicle prior to the date of accident. A driver is always liable if the death or bodily injury is caused due to his rash and negligent driving. This is also the rule that an employer, though guilty of no fault of himself, is liable for damage done by a fault or negligence of his servant acting in the course of his employment on the principle that an owner is vicariously liable for the rash and negligent act of his servant. The buyer cannot, by any stretch of arguments, be termed as the servant of the seller. The seller, therefore, cannot be held liable for the tortuous act of the purchaser or his servant, committed during the course of his (purchaser s) employment. The purchaser, in view of the provisions of Section 94 no doubt, is barred by statute from using the vehicle without getting it insured. The consequence of non-compliance of the statutory obligation can lead to two consequences, namely, (i) criminal liability and (ii) tortuous liability. However, the seller in no case would be liable either under the tort or under the statute. This non-compliance by the buyer would not make the seller liable for damages. The fact that he continues to be the registered owner would not make any difference so far as his liability to pay compensation under tort or statute is concerned. ( 27 ) SIMILARLY Section 103 A of the Act does not impose any liability on the insurer to indemnify the person who haspurchased the vehicle from the insured. It simply allows the insured to apply to the insurer for the transfer of the certificate of insurance in favour of the buyer. The insurer shall be deemed to have transferred the certificate in favour, of the buyer if it does not inform the buyer and the seller (insured) about its refusal to transfer the certificate of insurance within 15 days of receipt of the application. These conditions must be fulfilled to attract the proyisions of Section 103 A of the Act of deemed transfer of the certificate of insurance. These conditions must be fulfilled to attract the proyisions of Section 103 A of the Act of deemed transfer of the certificate of insurance. ( 28 ) IN Rogerson v. Scottish Automobile and General Insurance Co. Ltd. , (1931) All E. R. Rep. 606, a policy of motor insurance which covered claims against the assured for bodily injury further covered the legal liability of the assured in respect of the use by the assured of a car other than the insured car. The assured claimed indemnity against claims by an injured person by his new car. At the time of accident he had sold the car, subject matter of the insurance. It was held by the House of Lords that "the policy depended on the hypothesis that there was, in fact, an insured car, and, the assured srights in respect of the car described in the schedule to the policy, having ceased when he sold it, the subsequent use of the new car was not covered by the policy". ( 29 ) IN Peters v. General Accident and Life Assurance Corporation, Ltd. , (1937) 4 All ER 628 it was held. that "when the vendor sold the car, the insurance policy automaticall lapsed. " ( 30 ) BESIDED the Division Bench s decisioii of this Court Vimal Rai s case (supra) Punjab and Haryana High Court in Precto Pipe Company and another v. National Insurance Company Ltd. and others, 1984 ACJ 218 and Labh Singh v. Sunehri Deviand others, 1988 ACJ 170 ; Calcutta High Court in National Insurance Company Ltd. v. Labanya Roy and others, !985 ACJ 720; Orissa High Court in The South India Insurance Co. Ltd. v. Puma Chandra Misra and others, AIR 1973 Orissa 166; Full Bench of Gujarat. High Court in Shantilal Mohanlal and another v. Aher Buwanji Malde and others, AIR 1985 Gujarat 164 ; Madhya Pradesh High Court mbalwant Singh v. Jhamubai and others, 1980 ACJ 126 ; Madras High Court in Govind Singh and Others v. A. S. Kailasam and another, 1975 ACJ 215 ; Mysore High Court in B. P. Venkatappa Setty v. B. N. Lakshmiah and another, 1973 ACJ 306 Bombay High Court in Smt. Gulab Bai Damodar Tapse v. Peter K. Sunder and others, 1975 ACJ 100 and Rajastban High Court in M/s. Automobiles Transport (Rajasthan) Pvt. and another v. Dewalal and others, AIR 1977 Raj. 121 had taken the same view. ( 31 ) ACONTRARY view was taken by a learned Single Judge of the Madhya Pradesh High Court in Mohammad Ramzan v. Sharifanbai and others, 1982 ACJ 445. But it is clear from the judgment that the earlier decision of the Division Bench of the said High Court was not brought to the notice of the Court. A Full Bench of Andhra Pradesh High Court took contrary view in Kondaiah s case (supra) as noted earlier. Rajasthan High Court also took contrary view in Santosh Rani and another v. Sheela Rani and others, 1988 ACJ 229 and New India Assurance Co. Ltd. v. Avinash and others, 1988 ACJ 322 and Madhya Pradesh High Court in Sama and others v. Yusuf and others, 1988 ACJ 139 (DB) took a contrary view. For the reasons recorded above and in view of the decisions of the majority of the High Courts, with respects, we are unable to accept the view taken in these decisions. ( 32 ) THE policy effected by the Insurance Company in this case extended to cover also a driver who was driving on the insured s order or with his permission provided he held a driving licence. It was argued by the learned counsel for the appellant that the buyer was a person who was driving the scooter on seller s order or with his permission and, therefore, the claim against the Insurance Company was covered under the extended clause. The policy, in our view, insures the insured in respect of the use of a particular vehicle. The extending clause is an additional benefit conferred on the insured. It comes to an end the moment the vehicle is sold. Even otherwise the buyer cannot be held to be using the vehicle on the seller s order or with his permission. The moment the sale is complete the property in the vehicle is vested in the buyer. The seller was left with no right, title or interest in the vehicle. The vehicle becomes the out and out property of the buyer. The buyer, after the sale is complete, uses the vehicle by virtue of his own right and not by virtue of any permission of the seller. ( 33 ) IN Tattersall v. Drysdale. 1935 All ER Rep. The vehicle becomes the out and out property of the buyer. The buyer, after the sale is complete, uses the vehicle by virtue of his own right and not by virtue of any permission of the seller. ( 33 ) IN Tattersall v. Drysdale. 1935 All ER Rep. 112 the policy contained an extension clause, it covered the insured while he was tem-porarily using another car. During the continuance of the policy the insured sold the car the subject matter of insurance. It was held that the policy indemnified the insured 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. ( 34 ) LASTLY it was argued by learned counsel for the appellant that the plea, that the insured had sold the vehicle and had no insurable right and consequently the insurance company was not liable to pay the award amount, was not available to the Insurance Company. The Insurance Company, argued the learned counsel, could raise defences provided under Section 96 (2) only. This is not one of the defences and could not be raised. ( 35 ) SECTION 96 (2) of the Motor Vehicle Act, no doubt, provides that the insurer shall be entitled to defend the action on the grounds mentioned in Clause (a) to (c ). However, if we read the provisions contained in Section 96 as a whole there cannot be any doubt that the insurer means a person who has issued a certificate of insurance in favour of the person against whom the judgment or the award has been made. Section 96 imposes liability on the insurer who has agreed to indemnify the assured. It does not impose liability on any or every insurer. As discussed earlier, no decree or award can be made against the person who has transferred the vehicle before the accident in his capacity as ex-owner or because he continues to be the registered owner. These provisions, therefore, would not be attracted. ( 36 ) WHEN asked by us, learned counsel for the appellant frankly conceded that it was open to the Company to raise the plea that it had not issued the certificate of insurance or the policy or that the period for which policy was in force has since lapsed. These provisions, therefore, would not be attracted. ( 36 ) WHEN asked by us, learned counsel for the appellant frankly conceded that it was open to the Company to raise the plea that it had not issued the certificate of insurance or the policy or that the period for which policy was in force has since lapsed. The reason is obvious, the reason is that these were the basic pleas. Liability of the insurer is founded on the contract of insurance. The contract must be in favour of the person against whom an award or decree has been made. It must be in force on the date of accident. Unless there is a valid contract of insurance making the insurer liable, the question of limiting the right of insurer to the defences enumerated under Section 96 (2) would not arise. To attract the provisions contained in Section 96 (2) it will have to be first proved that the insurer against whom the amount is being claimed had insured the person liable under the decree or the award and that the said insurance certificate was subsisting. ( 37 ) IN British India General Insurance Co. Ltd. v. Captain Itbar Singh and others, AIR 1959 SC 1331 it was held that Sub-section (2) of Section 96 gives the insurer the right to be made a party to the suit and to defend it. Sub-section (2) clearly provides that such an insurer is not entitled to take any defence which is not specified in it. It can raise those defences which are provided in that section. However, Section 96 (2) in our opinion pro- ceeds on the premises that there is a valid subsisting insurance policy. The insurer in our view could raise a defence that the policy comes to an end on the transfer of the vehicle subject matter of insurance. ( 38 ) FOR the reasons recorded above our answer to the question referred to the Full Bench is that the change of ownership of a vehicle puts an end to the contract of the insurance policy. The third party liability of the insurance company comes to an end on the transfer of vehicle by the insured to another person. ( 39 ) REFERENCE is answered.