B. C. PATEL, J. ( 1 ) (PER B. C. Patel, J) united India Insurance Co. Ltd. (hereinafter referred to as Insurance Company) being aggrieved by a decision of learned Single Judge dated 28. 12. 83 in F. A. Nos. 1317/79 to 1322/79 and F. A. No. 308/80 allowing the appeals partly, holding Insurance Company, respondent No. 3 in appeals, the appellant i. e. original opponent No. 2 and the driver, original opponent No. 1 (before the Tribunal) jointly and severally responsible for the amount awarded by the Motor Accident Claim Tribunal at Rajkot in MACP Nos. 163/77, 166/77, 177/77 to 180/77 and 51/79 dated 30. 6. 79, has preferred these appeals. ( 2 ) THE claim petitions were filed before the Motor Accident Claim Tribunal arising out of a common cause and therefore instead of referring different petitions it will be just and proper to narrate the facts, which emerge from the record of one of the applications. On 15. 5. 77 at about 9:30 a. m. the original claimants travelling in a truck No. GTA - 1648, contended in the applications that on account of rash and negligent driving of the driver of the vehicle in question, the truck turtled and fell in a ditch, as a result of which the applicants sustained injuries for which they were treated at Civil Hospital, Junagadh. For the damages claim petitions were submitted before the Motor Accident Claims Tribunal, Rajkot. ( 3 ) AT the initial stage only the driver of the vehicle was a party respondent. The claimants did not join the owner of the vehicle or the Insurance Company at the initial stage. However, the Tribunal vide order dated 1. 12. 78, permitted the claimants to join respondent No. 2 in his individual capacity and as the owner of the vehicle. Thus vide Ex. 9 Mohanlal Nandiram original opponent No. 2 - the appellant in all the appeals before the learned Single Judge was permitted to be joined not as an heir of deceased Nandiram Parumal but in his individual capacity and application Ex. 8 to join Nandiram Parumal came to be rejected by a common order dated 1. 12. 78. Nandiram expired on 1. 4. 1977. The accident occurred on 15. 5. 1977. ( 4 ) ON appreciation of the evidence, the Tribunal dismissed the claim against opponent No. 3, Insurance Company. 8 to join Nandiram Parumal came to be rejected by a common order dated 1. 12. 78. Nandiram expired on 1. 4. 1977. The accident occurred on 15. 5. 1977. ( 4 ) ON appreciation of the evidence, the Tribunal dismissed the claim against opponent No. 3, Insurance Company. The appellant in the present appeals and opponent nos. 1 and 2 were held jointly and severally liable for the amount awarded including interest and costs, by the learned Single Judge. ( 5 ) THE Tribunal ordered to join respondent No. 2 not as heir of the deceased Nandiram but in his individual capacity and held that the respondent No. 2 cannot avail the benefit of insurance policy as heir of Nandiram. The Tribunal also held that in view of clause 3 of section 2 of the policy the Insurance Company cannot be held liable. The said section II - liability to third parties which is relevant reads as under:-"3. The terms and subject to the limitations of the indemnity which is granted by this section to the insured company will indemnify who is driving the motor vehicle on the insureds order or with his permission provided that such driver :- ( 6 ) AS per the policy the name of the person insured was Nandiram Parumal and not respondent No. 2 Mohanmal Nandiram. Nandiram Parumal expired before about 45 days from the date of the accident and respondent No. 1 certainly was not driving the vehicle at the relevant time on the insureds order or with his permission. The learned single Judge pointed out that the respondent No. 2 was rightly joined in his individual capacity. The question of impleading the heirs of Nandiram did not arise. The submission made before the learned Single Judge was that the Insurance Company could not have been exonerated as it did not produce the Permit under which the vehicle was plying. Further contention was also raised that deceased Nandiram was a registered owner of the vehicle and as respondent No. 2 has not been impleaded as heir of said Nandiram but only impleaded in his individual capacity as a person with whom the contract of carrying persons was entered into he could not have been held responsible. The learned Single Judge was in complete concurrence with the finding recorded in Para 19 of the award of the Tribunal. The learned Single Judge was in complete concurrence with the finding recorded in Para 19 of the award of the Tribunal. The learned Single Judge expressed the view that the question of heirs of deceased Nandiram did not arise as respondent No. 2 was joined in his individual capacity. Thus it is clear that heirs of deceased were not joined as respondents before the Tribunal. The learned Single Judge thereafter considered the contention raised by the appellant in First Appeal that whether the Tribunal was right in exonerating the Insurance Company or not. The Learned Single Judge considered the decision reported in the case of HAZI ZAKARIA vs. NAUSHEER reported in AIR 1976 AP 171 (1976 ACJ 320) and held that the heirs being entitled to the benefit of the policy, insurer is liable to indemnify. Andhra Pradesh High Court took the view as under:-"further on the death of the insured his car passes to his heirs as his property. On principal then insurance therefore is also property and consequently that policy with rights thereunder devolves on the heirs by operation of law. It follows that the heirs on the death of the insured become entitled to the benefits of policy still in force. "on behalf of the claimants it is submitted that on this ground also, the liability arising out of the use of vehicle in such a case is to be borne by the insurer. ( 7 ) MR. NANAVATY, Learned counsel appearing for the Insurance Company submitted that despite the finding recorded by the Tribunal in the award as well as in the order on application Ex. 9 to the effect that respondent No. 2 was brought on record in his individual capacity, the learned Single Judge has erred in allowing the appeals, particularly after holding that question of heirs of deceased Nanduram did not arise as respondent No. 2 was joined in his individual capacity. It appears that because of his entering into agreement with others for hiring of the vehicle he was joined as an owner of the vehicle. At the initial stage notice Ex. 74 addressed to respondent No. 2 clearly reveals that respondent No. 2 was engaged in business as a transport contractor and he was the owner of the vehicle bearing registration No. GTA 1648. At the initial stage notice Ex. 74 addressed to respondent No. 2 clearly reveals that respondent No. 2 was engaged in business as a transport contractor and he was the owner of the vehicle bearing registration No. GTA 1648. In paragraphs 1 and 2 of the said notice, we find that the amount of damages was claimed from respondent No. 2 as an owner of said Public Carrier. No doubt in Para 8 the author of the notice, which has been issued on behalf of the claimants requested to give further details about the insurance, registration of the vehicle and details of the owner/s of a vehicle involved in the accident. From the order passed by the Tribunal it is very clear that the respondent No. 2 was joined as an owner and in his individual capacity. It is also clear that he was not joined as an heir of the deceased and therefore the reasoning recorded by Andhra Pradesh High Court in the aforesaid decision certainly would not help the claimants on facts. ( 8 ) MR. Patel, learned advocate relying on the decision in the case of KELLY vs. CORNHILL INSURANCE CO. LTD. reported in 1964 (1) ALL. E. R 321 submitted that even after the death of insured, if there is an accident, insurer should be held liable. In that case, the policy insured any person driving the car with the permission of the insured. Insured died on June 2, 1959 while the accident took place on February 4, 1960 when the insureds son was driving the car in England. The relevant part of the policy reads as under :-"accidental damage to any property (including animals) not belonging to the insured or held in trust by him or under his control or charge, caused by the insured car. ""in terms of and subject to the limitations of and for the purposes of this section, this policy insures :- (1 ). any person driving the insured car on the order of or with the permission of the insured and who has not been refused any motor vehicle insurance or continuance thereof by any insurer. "in that case, the son who was driving the vehicle could not prove that he was driving the vehicle in view of the permission granted by the deceased. it appears that the matter was remanded to prove that averment. "in that case, the son who was driving the vehicle could not prove that he was driving the vehicle in view of the permission granted by the deceased. it appears that the matter was remanded to prove that averment. What is important to note, as observed by Mr. Justice Guest in that judgment is as under:-"it was at one stage in the case contended that the policy lapsed on the death of the insured. It was, however, conceded by the respondents before your Lordships that for certain limited purposes the policy subsisted after death. For example, Sections D and E of the policy cover the insureds car against fire and burglary, and the policy would enure to the deceaseds representative during the current term for these purposes. The personal representatives of the insured or the insured owner are also covered for liability incurred by the insured person before his death. " ( 9 ) IT is required to be noted that respondent No. 1 who was driver of the vehicle was not employed by deceased Nandiram and in fact it is a positive case of the claimants that they approached respondent No. 2 for making arrangements of carrying passengers and thus it was for respondent No. 2 to arrange for the driver. Desa Teja who is examined as a witness on behalf of the claimants positively stated in his evidence that for engaging a truck he approached respondent No. 2. The rate of Rs. 450. 00 for a trip was fixed. He also stated that even prior to the accident in question he used to engage the truck of Mohanbhai i. e. respondent No. 2 for the purpose of his business of carrying limestone. He has further stated in para 3 that at the time of accident owner of the truck was Mohanlal Nandiram. It is submitted by Mr. Nanavaty that in view of this evidence it may be stated that respondent No. 1 was not a driver engaged by the person who was insured and respondent No. 2 was not insured by the insurance Company and therefore the Insurance Company cannot be held liable. In our view the respondent No. 2 did not enter into the witness box and from the record it clearly transpires that the registered owner was deceased Nandiram. In our view the respondent No. 2 did not enter into the witness box and from the record it clearly transpires that the registered owner was deceased Nandiram. In the absence of any evidence or pleading that respondent No. 1 was employed by deceased and was permitted by the deceased to ply the vehicle for indefinite period and that permission was never withdrawn, the decision relied upon by Mr. Patel in the case of KELLY (supra) cannot help him. The respondent No. 2 was holding out to be the owner of the vehicle. He has not clarified his status qua the vehicle and in view of the fact that he was not insured by the Insurance Company, the Insurance Company cannot be held liable. ( 10 ) IT is further submitted by Mr. Nanavati that policy is issued in view of contract between the Insurance company and the insured. Chapter VIII of Motor Vehicles Act, 1939 refers to insurance against third parties. We have perused sections 94, 95, 96, 102, 103, 103-A and 61 with regard to the Permit falling in a different chapter of the Motor Vehicles Act 1939 (hereinafter referred to as the Act ). Mr. Nanavaty submitted that in the instant case the Insurance Company insured Nandiram Parumal and therefore if the liability of Nandiram arises under the provisions contained in the Act, the insurance company would be answerable. His submission is that on the death of said Nandiram the contract entered into between the parties came to an end and after the death the policy lapsed. ( 11 ) MR. PATEL, learned advocate appearing for the claimants submitted that no doubt the policy of insurance is the result of the contract between the insurer and the insured and the insurer has agreed to indemnify the insured against the liability. He submitted that the case is required to be considered from a different angle altogether. The case of transfer of a vehicle will stand on a different footing then the case of the property i. e. vehicle passing on to the heirs of the deceased. He did not dispute, in view of settled legal position the proposition that in case of transfer of a motor vehicle, after the sale of such a vehicle, the insurance policy lapses and he firmly stated that in such a case the liability of the insurer ceases unless there is an agreement. He did not dispute, in view of settled legal position the proposition that in case of transfer of a motor vehicle, after the sale of such a vehicle, the insurance policy lapses and he firmly stated that in such a case the liability of the insurer ceases unless there is an agreement. He submitted that in view of the decision reported in the case of Hazi Zakaria (Supra) (page 171 of AIR ) it can be said that the policy was showing coverage of the car and not of the insured. The heirs of the deceased would be entitled to be indemnified by the insurer. Alongwith the policy with rights therein devolves on the heirs by operation of law. The Division Bench of the Andhra Pradesh High Court held that:-"it follows that the heirs on the death of the insured become entitled to the benefits of the policy still in force. On this ground also the liability arising out of the use of car in such a case has to be borne by the insured when there is nothing in the policy to prevent his heirs to succeed to the car and the rights in the policy. " ( 12 ) MR. PATEL relied on this decision and emphasized on this part of the judgement and submitted that respondent No. 2 was heir of the deceased Nandiram, who was insured by the Insurance Company and respondent No. 2 being heir of the deceased should be protected more particularly when the policy was in force. To call upon the insurer to indemnify the insured there must be a policy in force at the time of accident whereby the insurer has agreed to indemnify the insured. It is well settled that change of ownership of a vehicle puts an end to the policy of insurance even if the original policy holder continues to be shown as the registered owner of the vehicle concerned in the policy. Change of ownership may not be due to sale of a vehicle only. There are other modes by which ownership of a property can be passed on to others. ( 13 ) IN case of death of insured, property passes either by will or succession and the person who acquires by either of the mode becomes the owner and certainly he can not be said to be a person insured by the insurer. There are other modes by which ownership of a property can be passed on to others. ( 13 ) IN case of death of insured, property passes either by will or succession and the person who acquires by either of the mode becomes the owner and certainly he can not be said to be a person insured by the insurer. Provisions contained in Chapter VIII of the Act were interpreted by the Full Bench of this High Court in case of SHANTILAL vs. AHIR BHAVANJI reported in 1985 (1) GLR 465 , in disagreement with the views expressed by Andhra Pradesh High Court in the case of Hazi Zakaria (Supra ). There is no other alternative but to say that heir is not automatically substituted in place of deceased as a person insured in the certificate of insurance unless policy so provides. ( 14 ) THE submission made by the learned advocate for claimants is required to be rejected on the grounds that; (A ). the respondent No. 2 was not joined as heir of the deceased but was joined in his individual capacity and; (B ). Provisions contained in the Act abundantly makes it clear that the policy of insurance is a result of a contract between the insurer and the insured. ( 15 ) IT is under the policy the insurer is obliged to indemnify the insured against the liability incurred by him. In view of the language employed in Chapter VIII of the Act contract is between the insurer and insured and the person in whose favour the policy is issued is to be indemnified and not the others. Insurer is liable to indemnify the insured and none else. A mere look at provisions of Chapter VIII and particularly Section 96 of the Act casts duty on the insurer to satisfy the judgements which are against the person insured under the policy. ( 16 ) IN case of Shantilal (Supra) Full Bench of this Court after considering the provisions contained in Sections 94, 95 and 96 of the Act held that:-"still, however, it is the person in whose name the policy is issued is indemnified and not the vehicle. This is the position under general law and we do not find anything in Sections 94, 95 and 96 which would make insurer liable to indemnify some one other than the insured. This is the position under general law and we do not find anything in Sections 94, 95 and 96 which would make insurer liable to indemnify some one other than the insured. Section 96 which costs a legal duty on the insurer to satisfy judgements restricts it to those judgment which are obtained against persons insured by the policy. " ( 17 ) THE decision in the case of Hazi Zakaria (Supra) was relied on by Mr. Patel for claimants was considered by the Full Bench of this High Court in the case of Shantilal (Supra ). The Full Bench further observed:-"however we will like to observe that we do not agree with the views expressed by the Andhra Pradesh High Court that in view of section 95, 96 and 97 of the Act the coverage is that of the car and not the insured and therefore, the liability of the insurer would not cease with the death of the insured if the policy of insurance is not over on the date of the accident. " ( 18 ) SECTION 94, 95 and 96 if read together it becomes clear that the owner of the vehicle is to be insured. Coverage is that of insured and not that of a vehicle. Sec. 96 will come into picture if there is a certificate of insurance existing on the date of cause of action. Section 103 refers to the certificate of insurance which reads as under:-"103. Effect of certificate of insurance - When an insurer has issued a certificate of insurance in respect of a contract of insurance between the insurer and the insured person, then- ( 19 ) THUS it is very clear that it is because of a contractual obligation the liability of the Insurance Company to indemnify the person insured arises. If the person insured is held liable, then certainly the insurance company is liable to indemnify the insured person. In the instant case the insured person having expired 45 days before the accident the respondent No. 2 was plying the vehicle of his own and was holding out as an owner of the vehicle insurer cannot be held liable. ( 20 ) POLICY protects the insured owner. Either in case of a special statutory provision or by novation, amount may be claimed from the insurer but not otherwise. ( 20 ) POLICY protects the insured owner. Either in case of a special statutory provision or by novation, amount may be claimed from the insurer but not otherwise. Insurer issuing a policy on the basis of a personal contract, personal indemnity cannot be assigned. However, with the consent of all the parties concerned, a new contract can be substituted for one that was already made. In view of such a contract, the purchaser of a vehicle from the owner of it may become a policy holder after purchasing a vehicle. After the death of a policy holder of a vehicle, person who inherited or acquired that vehicle has to get his name substituted under the agreement with the insurer if any, or has to get the policy afresh. . ( 21 ) UNDER the Insurance Act, 1938, there is no provision for assignment and transfer of a policy save and except policy of life insurance. Under section 38 of the Insurance Act, 1938, the transfer or assignment will be operative against insurer only after a notice in writing to that effect is served on the insurer with a copy of endorsement or instrument. There is nothing like automatic assignment of contractual rights upon the death of one of the contracting party. On account of contractual obligation if insurers liability to indemnify the insured arises while the contract was subsisting, the suit instituted by/against the heir/s in case of death of the insured to indemnify the insured (deceased) will not amount to assignment or transfer of a policy, as the cause of action arose during the lifetime of the deceased insured when the contract was subsisting. If the suit was filed for a cause of action that arose before death of the insured and during the subsistence of a policy then after the death of the insured heirs will step in after the death of the insured. It is only because at the time when the cause of action arose there was a subsisting contract between the insurer and the insured. If the cause of action arose after the death of the insured when there was no subsisting contract insurer cannot be held liable. It is only because at the time when the cause of action arose there was a subsisting contract between the insurer and the insured. If the cause of action arose after the death of the insured when there was no subsisting contract insurer cannot be held liable. It is well recognized that on the death of a contracting party all causes of action subsisting against or vested in him shall survive against or as the case may be, for the benefit of his estate. In view of what we have expressed, policy with rights thereunder does not devolve on the heir in the absence of provisions of law or contract to that effect. Policy is an instrument on the basis of which either insured or his heir can take action. However, on account of death as policy lapsed and before death under that policy no right accrued in favour of the insured, nothing devolves on heirs. As stated earlier, by mutual agreement there can be a substitution of the policy holder in case of occurring an event that may be referred in policy during the continuance of the policy. ( 22 ) IN the instant case, policy states that "when insurer consents to a transfer of interest in the policy during which the interest was in the transferor shall not accrue to the benefit of the transferee". Thus, if insurer, transferor and transferee agree, prospective interest in policy shall stand transferred. ( 23 ) THE Division Bench of this court in the case of UNITED INSURANCE CO. LTD VS. MANJULABEN PARSHOTTAMDAS PATEL AND OTHERS REPORTED IN 1997 0 ACJ 740 held that even after the death of the insured the policy was renewed in his name the contract of the insurance came to an end and was no longer enforceable at law. It was sought to be argued before the Division Bench in that case that the insurance company was informed about the death of the insured by the agent however the Division Bench found that there was no cogent evidence to show that the insurance company was informed about the death of Joitabhai (deceased owner) and policy came to be issued. It was sought to be argued before the Division Bench in that case that the insurance company was informed about the death of the insured by the agent however the Division Bench found that there was no cogent evidence to show that the insurance company was informed about the death of Joitabhai (deceased owner) and policy came to be issued. The Court pointed out that "the question as of liability of the insurance company and when from the evidence on record it cannot be established that the Insurance company was aware of the death of Joitabhai, the insurance company cannot be held liable simply because the policy continued in the name of the dead person. Therefore, on that ground also the Insurance company is not liable and the claimants are not entitled to get compensation from the Insurance Company. The Act of renewal of policy in the name of Joitabhai cannot come in the way of company in taking legal contention that the contract came to an end and was no longer enforceable at law. " ( 24 ) THUS from what is stated it is very clear that the policy will lapse on the death of the insured. In the instant case what is required to be noted that respondent No. 2 was aware about the death of Nandiram and he did not bother to take suitable action. ( 25 ) IT is under this circumstances we are required to say that the order passed by the learned single Judge fastening the liability of the insurance company should be quashed as set aside. [ ( 26 ) LORD Guest in a separate opinion in the case of KELLY (supra) pointed out rival submissions that either the permission granted terminated at death or that it continued till the end of the currency of the policy. His Lordship further observed that "i can see real practical difficulties if the permission is terminated at the moment of death. His Lordship further observed that "i can see real practical difficulties if the permission is terminated at the moment of death. Although the question is not raised in this case and I express no opinion on it, I am inclined to think that on the analogy of mandate the permittees authority to act would be continued after the death until notification of the permitters death reached the permittee and until the completion of journey on which the permittee was engaged at the time of death (see Bells principles of the law of Scotland (10th edi) Sect. 228 ). But no such question arises in the present case. " ( 27 ) WE find that section 157 of the Act permits transfer of certificate of insurance in a case of transfer of ownership of a motor vehicle to another person in respect of which such insurance was taken together with the policy of insurance relating thereto. Sub-clause (2) of section 157 provides that 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. Thus, it clearly appears that in case of transfer of ownership, the policy remains in operation for a period of 14 days However, this section will not apply in case of death of an insured because in such a situation there is no question of transfer of ownership of the motor vehicle in favour of another person. By explanation inserted in section 157, it is stated that such deemed transfer shall include transfer of rights and liability of the said certificate of insurance and policy of insurance. However, as stated earlier, on death of the owner of the vehicle, in the absence of a Will to the contrary, the vehicle shall pass on to the heirs. By explanation inserted in section 157, it is stated that such deemed transfer shall include transfer of rights and liability of the said certificate of insurance and policy of insurance. However, as stated earlier, on death of the owner of the vehicle, in the absence of a Will to the contrary, the vehicle shall pass on to the heirs. It is under these circumstances it is necessary that as the Insurance Company has recovered the amount of premium, it must see that loopholes are not kept open and it must plug the loopholes by making a provision so that the legal heir soon after the death of the person i. e. the owner of the vehicle who was insured, is not deprived of using the vehicle. In the policy itself, the Insurance Company can incorporate a clause to the effect that on the death of the Insured person, the policy will not lapse for a particular number of days, say fifteen/thirty days, within which necessary steps shall be taken by the person to whom the vehicle passes to either transfer the policy or obtain a new policy. It is hoped that the Insurance Company will comply with this direction within a period of four months from today. The Insurance Company shall report to this Court the action taken in this regard on 11. 3. 1999. ( 28 ) HAVING dealt much on the legal aspect of the issue, we would now like to revert to the factual aspect of this case. The insured Nandiram Parumal expired before only about 45 days from the date of the accident. The incident has taken place in 1977. More than two decades have since passed. It does not appeal to our judicial conscience to direct the respondent No. 2 or respondent No. 1, who comes from a rustic background, to make the payment. In the absence of a clear provision in the Act or a clause in the policy to safeguard the interest of the legal heirs of the insured in case of the death of the insured, without treating this case as a precedent, we are of the view that the Insurance Company must be directed to honour the awards, and we direct the Insurance Company to honour the awards we repeat, without treating these cases as a precedent. ( 29 ) THIS appeal stands disposed of with the aforesaid directions. ( 29 ) THIS appeal stands disposed of with the aforesaid directions. Registry shall notify these matters on 11. 3. 1999 only with a view to enable the Insurance Company to report compliance with the directions in this judgment. ] .