Judgment :- This appeal is filed by the owner of the vehicle challenging the judgment and award passed in M.V.C. No. 142/03 dated:9.10.07 by MACT, at Chennarayapatna. 2. The relevant facts of the case for the purpose of consideration of the issue which arises in this appeal are that on 12.11.2000 at about 7.45 a.m., a minor boy of 14 years by name Irfan was walking in front of Lakshmi Engineering Works on B.M. Road, at that time, a tempo trax bearing No. KA-17-2224 belonging to the appellant herein was driven in a rash and negligent manner and dashed against him, as a result, he sustained grievous injuries. He was shifted to General Hospital at Chennarayapatna and thereafter to Victoria Hospital, Bangalore, where he was treated. Contending that he had suffered permanent disability on account of the accidental injuries, he filed the claim petition seeking compensation on various heads. 3. On receipt of notice from the tribunal, the appellant-owner of the vehicle and the insurance company field their separate written statements denying the liability to satisfy the award by contending that the allegations made in the claim petition were false. 4. On the basis of said rival pleadings, the tribunal framed the following issues for its consideration:- 1. Whether the petitioners prove that accident in question was occurred due to rash and negligent driving of the Tempo Trax bearing Reg.No. KA-17-2224 by the 1 respondent? 2. Whether the petitioners prove that their son Irfan succumbed to the injuries sustained in the said accident? 3. Whether the 1 respondent proves that he had paid Rs.50,000/-to the petitioners on 12.11.2000 and he is entitled for the refund of the same with interest? If so from whom? 4. Whether the petitioners are entitle for compensation? If yes, what amount and from whom? 5. What order or Award? 5. In support of his case, respondent Nos.1 & 2 herein examined PWs-1 to 4 and got marked Exs-P1 to P5, while the appellant herein was examined as RW-1 and another person as RW-2, on behalf of the first respondent insurance company and Exs-R1 to R17 were got marked. On the basis of the said material, issue Nos.1 & 2 were answered in the affirmative and compensation of Rs.2,19,000/-was awarded with interest at the rate of 6% p.a. from the date of claim petition till realisation. On the basis of the said material, issue Nos.1 & 2 were answered in the affirmative and compensation of Rs.2,19,000/-was awarded with interest at the rate of 6% p.a. from the date of claim petition till realisation. However, on the question of liability, after perusal of Ex-R17 insurance policy, the liability was fastened on the insurance company reserving liberty to the insurance company to recover from the appellant -the owner of the vehicle. Being aggrieved by the said order regarding recovery, the owner of the vehicle has preferred this appeal. 6. At this stage, it would be of relevance to note that originally Ex-R17 insurance policy was in the name of one G.N. Nagendrappa and it covered the risk for the period from 13.4.2000 to 12.4.2001. The accident in question occurred on 12.11.2000. It is also borne out from the record that the name of the appellant herein was entered in the registration certificate on 14.7.2000 i.e., prior to the accident. However, according to the tribunal, since compliance under Section 157(2) of the M.V. Act was absent, the direction for payment of compensation by the insurance company with liberty to recover the same from the appellant herein was granted by the tribunal. Being aggrieved by the said direction and liberty granted to the insurance company, the owner of the vehicle has preferred this appeal. 7. I have heard Sri Venkatesh R. Bhagat, learned counsel for the appellant and Sri. S.V. Hedge Mulkhand, learned counsel for the first respondent -insurance company, while respondent Nos.2 & 3 are served. 8. It is submitted on behalf of the appellant that in view of Section 157 of the Motor Vehicles Act, there is a deemed transfer of the certificate of insurance of the policy on the date of transfer of vehicle itself. The same is explicit by virtue of the explanation to Section 157(1) of the Act and under the circumstances, any liability which arises on deemed transfer would have to be satisfied by the insurance company even in the absence of there being any compliance by the transferee under Section 157 of the Act. In support of his contention, he has relied upon the decisions of the Hon'ble Supreme Court in the case of M/s.Complete Insulations (P) Ltd., Vs New India Assurance Co. In support of his contention, he has relied upon the decisions of the Hon'ble Supreme Court in the case of M/s.Complete Insulations (P) Ltd., Vs New India Assurance Co. Ltd., reported in ILR 1996 Kar 799 and in the case of G. Govindan Vs New India Assurance Co., Ltd. and Others reported in AIR 1999 SCC 1398. Placing reliance on the said decisions, he submits that the tribunal could not have given a direction or a liberty to the insurance company to recover the compensation from the appellant. 9. Per-contra, it is submitted on behalf of the first respondent insurance company that the provisions contained in Section 157(2) of the Act are mandatory in nature. The same is apparent by the use of word "shall" and under the circumstances in the absence of compliance of Section 157(2) of the Act by the appellant herein who is the transferee of the vehicle, the liability which was initially fastened on the insurance company by the tribunal ought to have been ultimately fastened on the appellant herein and under the circumstances, the judgment and award does not call for any interference in this appeal. 10. Having regard to the above contentions, the only point that arises for my consideration is as to whether the judgment and award passed by the tribunal with regard to the liberty being reserved to the insurance company to recover from the appellant herein is just and proper. 11. From the materials on record, it is not in dispute that the original owner of the vehicle was not arrayed as party in the claim petition. The purchaser of the vehicle concerned i.e., tempo trax bearing No. KA-17-2224 was arrayed as respondent No.1 before the tribunal i.e., the appellant and the insurance company which has issued the policy in respect of the said vehicle for the period 12.4.2000 to 11.4.2001 was arrayed as respondent No.2. 12. It is also not in dispute that the appellant herein had not taken steps under Section 157(2) of the Act for getting his name entered in the policy and even before the same could be done by the appellant, the accident occurred on 12.11.2000. It however is to be noted that on 14.7.2000 itself, the name of the appellant herein was entered in the registration certificate. It however is to be noted that on 14.7.2000 itself, the name of the appellant herein was entered in the registration certificate. Under the circumstances, the question that has to be answered is as to whether the tribunal was justified in reserving liberty to the insurance company to recover from the appellant herein. 13. In this context it is of relevance to refer to Section 157 of the Motor Vehicles Act which reads as follows: "Section 157: Transfer of certificate of insurance -(1) where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer. (Explanation: For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.) (2) 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." 14. Sub-Section 1 of Section 157 states that when there is a transfer of ownership of motor vehicle in respect of which there is certificate of insurance, the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle was transferred with effect from the date of its transfer. The explanation is provided for the removal of doubts to declare that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. The explanation is provided for the removal of doubts to declare that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. Therefore, on a reading of sub-section 1 along with explanation it is clear that by virtue of the deeming provision, the certificate of insurance and policy of insurance is transferred simultaneously with the transfer of the vehicle from the name of the transferor to the name of the transferee. The object and purpose of this provision is to ensure that there is compliance with Section 146 of the Act, which says that no person can use or allow any other person to use motor vehicle in a public place unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter XI of the Act. Under the circumstances, the insurance company has no option but to become liable and also responsible for the transferee so as to indemnify him if the policy is otherwise valid in all other respects. 15. It is also to be noted that Section 157 is also in Chapter XI of the Act, which speaks about the insurance of motor vehicles against third party risks. Further in the absence of contract of indemnity between the insurance company and the insured, the insurance company is not under an obligation to satisfy the award under which it is liable to pay compensation to third party victims, as there is no privity of contract between the victims and the insurance company as such, but for the policy of insurance and the contract between the insurance company and the insured, the insurance company would not step into the picture for the purpose of satisfying any award. 16. As far as sub-section 2 of Section 157 is concerned, an obligation is caused on the transferee within fourteen days from the date of transfer, to get necessary changes made in the certificate of insurance and the policy with regard to the transfer of insurance. 16. As far as sub-section 2 of Section 157 is concerned, an obligation is caused on the transferee within fourteen days from the date of transfer, to get necessary changes made in the certificate of insurance and the policy with regard to the transfer of insurance. Though sub-section 2 of Section 157 uses the word 'shall', in my view the same would have to be read as a directory requirement in so far as third party claimants are concerned and would be mandatory requirement in so far as own damage claims are concerned or otherwise, in the absence of any changes being made within fourteen days from the date of transfer by the transferee, it would have to be held that the insurance company cannot be made liable in respect of third parties and, such an interpretation would negate the object and purpose of sub-section 1 and explanation thereto to Section 157. In view of the clear mandate provided under sub-section 1 to Section 157 that the transfer of the policy is a sinequanon and simultaneous with the transfer of the vehicle, sub-section 2 of Section 157 cannot be interpreted to over-ride sub-section 1 of Section 157 which has a deeming provision and which has been enunciated therein for the purpose of protection of rights of third parties. 17. 17. In this context it would be of relevance to refer to Section 103-A of Motor Vehicles Act 1939, which has been substituted by the 1988 Act, which reads as follows: "Section 103-A: (1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter proposes to transfer to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, he may apply in the prescribed form to the insurer for the transfer of the certificate of insurance and the policy described in the certificate in favour of the person to whom the motor vehicle is proposed to be transferred and if within fifteen days of the receipt of such application by the insurer, the insurer has not intimated the insured and such other person his refusal to transfer the certificate and the policy to the other person, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer. (2) The insurer to whom any application has been made under sub-section (1) may refuse to transfer to the other person the certificate of insurance and the policy described in that certificate if he considers it necessary so to do, having regard to- .(a) the pervious conduct of the other person, - .(i) as a driver of motor vehicles; or .(ii) as a holder of the policy of insurance in respect of any motor vehicle; or .(b) any conditions which may have been imposed in relation to any such policy held by the applicant; or .(c) the rejection of any proposal made by such other person for the issue of a policy of insurance in respect of any motor vehicle owned or possessed by him. .(3) Where the insurer has refused to transfer, in favour of the person to whom the motor vehicle has been transferred, the certificate of insurance and the policy described in that certificate, he shall refund to such transferee the amount, if any, which, under the terms of the policy, he would have had to refund to the insured for the unexpired term of such policy." 18. Under Section 103-A of the Motor Vehicles Act, 1939 an option was given to the insurance company or the insurer to refuse to transfer a certificate and policy of insurance whenever there was a transfer of the vehicle and only when within fifteen days of the receipt of an application by the insurer, if there was no intimation by the insurer, then it was deemed that the policy was transferred in favour of the person to whom the motor vehicle was transferred with effect from the date of transfer i.e., in favour of the purchaser. Such an option with the insurance company however, has been taken away under Section 157 of the new Act and a deeming provision is incorporated to state that from the date of transfer of the vehicle, the policy also stands transferred. In other words under the 1988 Act, the policy also passes with the passing of title in the vehicle. 19. The Hon'ble Supreme Court in the case of M/s. Complete Insulation (P) Ltd., Vs. New India Assurance Co. Ltd., considered both the above provisions and stated that under Section 157 of the new Act, the transfer of certificate of insurance along with the insurance policy described therein is automatic along with the transfer of the motor vehicle to the purchaser, as the said provision has withdrawn the insurer's right of refusal which was granted under the old Act. In the said Judgment after considering Section 157 along with Section 145 and 147 read with Section 146 held that the said provisions are in Chapter XI of the new Act which concern third party risks only. It is therefore, obvious that insurance is compulsory only in respect of third party risks since Section 146 prohibits the use of a motor vehicle in a public place unless there is in relation thereto a policy of insurance complying with the requirements of Chapter XI. Thus the requirements of that Chapter are in relation to third party risks only and hence the fiction of Section 157 of the New Act must be limited thereto. Thus the requirements of that Chapter are in relation to third party risks only and hence the fiction of Section 157 of the New Act must be limited thereto. If the policy of insurance covers other risks as well, e.g., damage caused to the vehicle of the insured himself, that would be a matter falling outside Chapter XI of the New Act and in the realm of contract for which there must be an agreement between the insurer and the transferee, the former undertaking to cover the risk or damage to the vehicle. Since the said decision was in the context of own damage claim, the Supreme Court held that since there was no agreement and since the insurer had not transferred the policy of insurance to the transferee, the insurer was not liable to make good the damage to the vehicle and it affirmed the view of the National Commission. 20. The ratio of the said judgment makes it apparent that in so far as third party claim are concerned, the fiction that is enunciated in sub-section 1 of Section 157 has to be taken to its logical conclusion in which event the transfer of the vehicle along with the transfer of the policy is co-extensive with the liability of the insurance company in relation to the insured. Under the circumstances, it is the duty of the insurance company to satisfy the award which is statutory also under sub-section 5 of Section 95 of the old Act, which is equivalent to Section 147(5) of the new Act is in the context of third party claims. 21. In the case of G. Govindan Vs. New India Assurance Company Limited and Others reported in AIR 1999 SC 1398 in the context of the policy not being transferred in the name of the transferee of the vehicle under the 1939 Act and in the context of Section 147 and 157 of the new Act it was held that both under the old Act and the new Act, the legislature was anxious to protect the third party interest. What was implicit in the provisions of the old Act is now made explicit. What was implicit in the provisions of the old Act is now made explicit. The said decision refers to the earlier decision of the Supreme Court in the case of M/s. Complete Insulations Private Limited and also make a reference to the Full Bench Decision of the Andhra Pradesh High Court in the case of Madineni Kondaiah Vs. Yaseen Fathima reported in AIR 1986 AP 62 . It is of significance to note that in the said decision of the Hon'ble Supreme Court the contrary view taken by this court in the case of National Insurance Company Limited Vs. Mallikarjun reported in AIR 1990 Karnataka 166 by a Full Bench was over-ruled. In Mallikarjun's case a Full Bench of this court had held that the insurer is entitled to avoid the liability against third party risks on the plea that the insured had sold the vehicle covered by insurance policy before the date of accident without intimation by the owner. Of course, the said decision was rendered in the context of Section 95 & 96 of the old Act, but a reference was also made to Section 157 of the new Act. However, in the decisions of the Hon'ble Supreme Court the protection of third party interest is a common factor both under the Old Act as well as under the new Act and in view of the provision of Section 157 under the new Act, the Supreme Court over ruled the Karnataka decision. 22. On a consideration of the above decisions, what is apparent is the change in the position of law in the matter of the liability of the insurance company in the context of transfer of a vehicle and by virtue of the explicit deeming provision under sub-section 1 of Section 157 would be sufficient to hold that in the absence of privity of contract between the third party victims and the insurance company and by virtue of the contract of indemnity between the insurance company and the insured, the judgment and award passed by the Tribunal in favour of third party would have to be satisfied by the insurance company. 23. However, the matter cannot rest at that considering the fact that the learned counsel for the insurance company has brought to my notice two decisions of the Supreme Court and this court. In the case of Ricky Ram & another Vs. 23. However, the matter cannot rest at that considering the fact that the learned counsel for the insurance company has brought to my notice two decisions of the Supreme Court and this court. In the case of Ricky Ram & another Vs. Sukhrania and Others reported in 2003 ACJ 534 in which, according to him the liability of the insurance company was not held to be absolute, as it was stated that the insurance company had the liberty to recover the amount paid by it to the third party. The Supreme Court, while considering the issue under Section 95 and 103-A of the 1939 Act and after referring to G.Govindan's case, held that under Section 94 and 95 of the said Act, the transferee cannot get any personal benefit under the policy unless there in compliance of the provisions of the Act. However, so far as third party claims are concerned, he can enforce liability undertaken by the insurer. Hence even in Ricky Ram's case, it was held that whenever a vehicle which is covered by the insurance policy is transferred to the transferee, the liability of the insurer does not cease so far as third party victims are concerned. However, while directing the insurer to pay the compensation, liberty was reserved to the insurer to recover the said amount either from the insured (previous owner) or from the transferee of the vehicle. 1. 24. Following the said decision reported in 2008 ACJ 1681 (United India Insurance Company Limited Vs. M.N. Ravikumar and Others) the Division Bench of this court after re-iterating that the contract of insurance is a contract of indemnity and also the deeming effect under Section 157 of the Act where there is automatic transfer of policy along with the vehicle whether or not there is intimation to the insurer under Section 157 of the Act, however, by referring to Ricky Ram's case held that insurer had right to recover from the insured or from the transferee and the contention of the insurance company that it was not liable to pay compensation at all was held to be untenable. 25. 25. In view of this direction and liberty given for recovery from the insured by the insurance company, learned counsel for the respondent / insurance company submits that in the instant case also a similar direction has been given by the Tribunal, which does not call for any interference in this appeal. However, what has to be noticed is that Ricky Ram's case was a decision rendered under the old Act but Ravikumar's case is a decision rendered under the new Act since the accident occurred on 12.6.2000. Under the circumstances the pronouncement of the Supreme Court under Section 157 of the new Act would have to be taken into consideration by the Division Bench rather than the pronouncement of the Supreme Court under the Old Act of 1939, since the differences between the same have been brought out supra. However, what remains is the observations of the Supreme Court that both under the old Act as well as under the New Act, the wisdom of the Parliament to protect third party interest is common. 26. If in that view of the matter a deeming provision is incorporated in to Section 157 of the new Act, in my considered view, the said fiction would have to be taken into its logical conclusion, keeping in mind the principles of law on fiction. Under the circumstances, the liability of the insurance company would have to be held to be coextensive with the liability of the insurance company under the contract of indemnity viz-a-viz the transferee of the vehicle. 27. In view of the pronouncements of the Hon'ble Supreme Court the new Act with respect, I hold that the observations of the Division Bench in 2008 ACJ 1681 which in line with the Apex Court, decision under the old Act are not in consonance with the pronouncement of the Supreme Court in ILR 1996 Karnataka 799 and AIR 1999 SC 1398 in G.Govindan's case. Under the circumstances I have no hesitation to follow the dicta of the Supreme Court while giving my reasons as to why observations of the Division Bench in 2008 ACJ 1681 cannot be a binding precedent. 28. Under the circumstances I have no hesitation to follow the dicta of the Supreme Court while giving my reasons as to why observations of the Division Bench in 2008 ACJ 1681 cannot be a binding precedent. 28. As far as the compliance of the provisions under sub-section 2 of Section 157 of the Act by transferee of a vehicle is concerned, a Division Bench of the Allahabad High Court in 2008 ACT 2068 has held that the provision under sub-section 2 of Section 157 is a mere formality in so far as third party claims are concerned. It is so because of the deeming provision under sub-section 1 of Section 157. In this context in 2004 ACJ 850 (Mahabala Vs. Sathyanarayana and Others) learned single Judge of this court has held that where the vehicle was transferred prior to the date of incident and no intimation of transfer of vehicle is given to the insurance company and there is no compliance with sub-section 2 of Section 157 of the Act even in such an event, the insurance company cannot be absolved from its liability to pay compensation to a third party. 29. It would be of relevance to note that under sub-section 2 of Section 157, 14 days time from the date of transfer of the vehicle has been given to the transferee to get the necessary changes made in the certificate of insurance as well as the policy of insurance. If within the said period of 14 days, an accident is to occur in that event also the insurance company would be liable to satisfy the award in so far as third parties are concerned and thereby indemnify the transferee by virtue of the fact that the transfer of insurance policy and certificate of insurance is simultaneous with the transfer of the vehicle. 30. Therefore, the conclusion is that sub-section 2 of Section 157 cannot over-ride the salutary provision of sub-section 1 of Section 157 or negate the object and purpose with which the fiction has been incorporated of sub-section 1 of Section 157. 30. Therefore, the conclusion is that sub-section 2 of Section 157 cannot over-ride the salutary provision of sub-section 1 of Section 157 or negate the object and purpose with which the fiction has been incorporated of sub-section 1 of Section 157. Considering the fact that the nature of the contract between the insurance company and the insured is one of indemnity and keeping in mind the fiction in sub-section 1 of Section 157 of the Act, it has to be held that the insurance company is duty bound to satisfy the award in so far as third party claims are concerned and thereby be obliged to indemnify the insured. The said obligations are co-extensive, one cannot be performed without the other obligation also being complied with by the insurance company. 31. Hence it is held that even in the absence of non-compliance with sub-section 2 of Section 157 with the Act by the transferee in so far as third party claims are concerned, the insurance company cannot be absolved of its liability not only in so far as the victims are concerned, the insurance company cannot be absolved of its liability not only in so far as the victims are concerned, but also as far as the insured, for the said compliance by the transferee sub-section 2 of Section 157, though may be held to be mandatory, in the context of other claims, but in the context of third party claimants would have to be held to be only a formality. 32. In the instant case the accident occurred on 12.11.2000. The entry of the transferee name in the registration certificate was made even prior to the said date, i.e., on 14.7.2000. Obviously, sale was made by the owner of the vehicle in favour of the appellant herein prior to the date of accident. Under the circumstances the transfer of the policy was simultaneous with the transfer of the vehicle. For the reasons assigned above, the insurance company has to satisfy the award and thereby fulfill its obligation to the appellant herein who is the insured under the contract of indemnity. 33. For the reasons stated above, that portion of the Judgment of the Tribunal, reserving liberty to the insurance company to recover from the appellant herein would have to be set aside and the appeal is accordingly allowed in part. 33. For the reasons stated above, that portion of the Judgment of the Tribunal, reserving liberty to the insurance company to recover from the appellant herein would have to be set aside and the appeal is accordingly allowed in part. The amount in deposit before this court is directed to be refunded to the appellant. No costs.