Trade certificate insurance and vehicle ownership: insurer liability continues until delivery, and title does not pass before completed sale.

A dealer holding a vehicle under a trade certificate remained required to keep it insured until delivery, and the insurer could not avoid liability merely because the vehicle carried temporary registration at the time of the accident. Applying the Motor Vehicles Act and the Central Motor Vehicles Rules, the court treated the trade-certificate policy as valid while the vehicle stayed in the dealer's possession and had not been delivered to the purchaser. On ownership, the Sale of Goods Act was applied to hold that title had not passed to the proposed purchaser because the sale was incomplete and delivery and acceptance were not concluded.

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Issues: Whether the insurer could avoid liability on the ground that the vehicle carried temporary registration at the time of accident while the dealer had obtained insurance on the basis of a trade certificate, and whether the proposed purchaser had become the owner before the accident.

Analysis: The vehicle was in the dealer's possession when the accident occurred. The statutory scheme distinguishes between temporary registration and a trade certificate, and a dealer in possession of a vehicle is expected to keep it insured until delivery. The court applied the Motor Vehicles Act and the Central Motor Vehicles Rules to hold that the insurer could not deny coverage merely because the vehicle bore temporary registration, so long as the trade certificate policy was in force and the vehicle had not been delivered to the purchaser. On ownership, the court applied the Sale of Goods Act and held that property had not passed to the proposed purchaser because the sale was not complete and the necessary steps for delivery and acceptance had not been concluded.

Conclusion: The insurer remained liable, the dealer's policy cover was valid, and the proposed purchaser had not become the owner before the accident.

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