The Himachal Pradesh High Court ruled that the lapse of a vehicle's temporary registration is not an infringement of third party insurance policy circumstances.
Therefore, the insurer cannot try to prevent liability to compensate the owner for allegations resulting after the period of temporary registration as a result of an accident induced by the car.
An insurer is allowed to prevent liability only if it violates the circumstances set out in section 149(2) of the Motor Vehicles Act 1988. Non-registration is not a condition set out in paragraph 149(2). Therefore, the Court held that the insurer will not be exonerated by the lapse of temporary registration.
"There is no such stipulation or condition therein (in the policy) that the insurer will not be liable toward third party risk for want of valid registration certificate of the vehicle...
Under Section 149 of the Motor Vehicles Act, in the case of National Insurance Company Ltd vs Kamal Kishore and others, there is no such defense accessible to the insurer for repudiation of the claim on the grounds of invalid / absence of registration certificate.
In reaching its conclusions, the Court also took into consideration the social welfare motives of mandatory third-party insurance.
Also referred were the Kerala High Court decisions in Joby Thomas and another vs. Annamma Augustine and another and Madras High Court in New India Insurance Company vs. Saraswati that reached the same conclusion.
There was also no link between the accident and the temporary registration lapse; the driver also had a valid driving license, the Court observed.