Motor vehicle ownership and policy breach rules: insurer remained liable where transfer was incomplete and unlicensed driving was unproved.

A mere agreement to sell a motor vehicle did not transfer ownership because the contractual conditions for sale and transfer remained unfulfilled; the insured therefore continued as owner and the insurer remained liable under the policy. The insurer could not avoid indemnity on the basis of an unlicensed driver because it had to plead and prove a wilful breach of the policy condition, and no such proof was shown. Cross-objections filed by the claimants in the insurer's appeal were held incompetent. The award in favour of the claimants was sustained and the insurer's challenge failed.

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Issues: (i) whether Ext. R4 effected a transfer of ownership of the motor vehicle so as to absolve the insurer of liability under the policy; (ii) whether the insurer could avoid liability on the ground that the vehicle was driven by an unlicensed driver and, if so, on whom the burden of proving that exclusionary fact lay; (iii) whether the claimants' cross-objections in the insurer's appeal were maintainable.

Issue (i): whether Ext. R4 effected a transfer of ownership of the motor vehicle so as to absolve the insurer of liability under the policy.

Analysis: The document was only an agreement to sell and not a completed sale. The parties had stipulated that the balance price had to be paid and the necessary transfer documents executed before ownership would pass. Under the law governing sale of movable property, property in specific goods passes only when the parties so intend, and where conditions remain unfulfilled the transfer is not complete. The registration certificate does not confer title; actual transfer of property governs ownership.

Conclusion: Ownership had not passed to the alleged transferee, and the insured continued to be the owner on the date of the accident; the insurer remained liable under the policy.

Issue (ii): whether the insurer could avoid liability on the ground that the vehicle was driven by an unlicensed driver and, if so, on whom the burden of proving that exclusionary fact lay.

Analysis: A breach of policy condition must be a wilful breach by the insured, and the insurer seeking exemption from liability must prove the facts establishing that exclusion. There was no pleading or evidence proving that the driver lacked a valid licence. In the absence of proof of the exclusionary fact, the insurer could not escape indemnity.

Conclusion: The insurer failed to prove a wilful breach of the policy condition, and the plea of exclusion from liability was rejected.

Issue (iii): whether the claimants' cross-objections in the insurer's appeal were maintainable.

Analysis: The claimants were not entitled to maintain cross-objections in an appeal by a mere indemnifier.

Conclusion: The cross-objections were incompetent.

Final Conclusion: The award in favour of the claimants was sustained, the insurer's challenge failed, and the connected cross-objections were rejected.

Ratio Decidendi: In an insurance claim arising from motor accident liability, the insurer who seeks to avoid indemnification must prove the exclusionary fact and, where ownership of the vehicle is contested, title does not pass under a mere agreement to sell until the contractual conditions for transfer are fulfilled; the registration certificate is not by itself conclusive of ownership.

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