1. This is an appeal directed against the decision of the learned Subordinate judge. Ist Class, Jullundur, dismissing the application of the appellants under Section 20 of the Arbitration Act seeking to enforce the arbitration agreement
2. The facts giving rise to this appeal are that one Mehtab Singh owned a Motor Vehicle No. PNA 3995, which was registered to carry goods. This vehicle was sold by Mehtab Singh to Puran Singh. But curiously enough the insurance policy was taken for this vehicle on the 28th of February 1959, by Mehtab Singh for the period from 16th of February, 1959 to the 15th of February, 1960. This vehicle met with an accident on the 21st of June, 1959 and on the 12th of December, 1959 the present petition under Section 20 of the Arbitration Act was filed by Mehtab Singh and Puran Singh on the basis of Clause 8 in the policy, which provides for an arbitration in case of dispute. The defence set up by the Insurance Company was that Mehatab Singh had no insurable interest as he had sold out the truck before the policy was taken. It was also urged in defence that the trial Court had no jurisdiction, that Puran Singh, the transferee, had no locus standi to file the application and that the repudiation of Mehtab Singh's claim is not a difference arising under the policy on which rev ference to arbitration can be claimed. Following issues were framed:
'1. Whether this Court has territorial jurisdiction to try the present application?
2. Whether applicant No. 2 has locus standi So file this application?
3. Whether the Insurance Policy itself is void on account of the absence of insurable interest of the assured? If so, to what effect?
4. Whether the repudiation by the respondent of petitioner No. 1's claim is not a difference arising out of the Policy and hence no reference to arbitration can be made?'
Before the trial Court the objection as to jurisdiction was given up. On the other issues it was held that the transferee being not a party to the arbitration agreement could not enforce the same, that Mehtab Singh had no insurable interest and therefore he could make no claim on the basis of the insurance policy, and that as between Mehtab Singh and the Insurance Company there was no question of the dispute being referred to arbitration. On issue No. 4 a finding was returned in favour of the applicants. Dissatisfied with this decision the petitioners have come up in appeal to this Court.
3. The first contention advanced by the learned counsel for the petitioner-appellants is that Puran Singh being a transferee from Mehtab Singh is a party to the arbitration agreement. I am unable to agree with this contention. Section 24 of the Arbitration Act only talks of parties to an arbitration agreement. The question that requires determination is whether the transferee from a person, who is a party to an arbitration agreement, can be said to be a party to the agreement It was held in Des Raj v. Concord of India Insurance Co. Ltd., AIR 1951 Punj 114 that 'where a motor insurance contract contains a clause for reference of any dispute arising between the owner of the car end the Company out of the policy to arbitration, a third person claiming damages against the Company under the third party risk portion of the insurance contract, cannot enforce the arbitration Clause'. On the parity of reasoning it must be held that a transferee from a person, who is a party to the contract of insurance containing the arbitration clause, cannot be deemed to be a party to the arbitration agreement. Therefore the first contention of the learned counsel must be negatived.
4. The second contention advanced by the learned counsel is that the Insurance Company had knowledge that the vehicle had been transferred at the time when they issued the insurance policy to Mehtab Singh. Unfortunately there is no evidence on the record on which it can be held that the Insurance Company had any knowledge of the transfer of the 28th January, 1959 by Mehtab Singh in favour of Puran Singh. That being so, this contention also has no merit.
5. The third contention advanced by the learned counsel for the appellants is that in any case the petition of Mehtab Singh should have been allowed because he bad an insurable interest in the vehicle. This contention also must fail because the moment the vehicle was transferred by Mehtab Singh to Puran Singh no interest whatever was left in Mehtab Singh vis-a-vis the vehicle. A number of authorities were quoted by the learned counsel to indicate what is an insurable interest but none of these authorities is of any assistance because on the facts of this case it cannot be said that Mehtab Singh was left with any interest, what to speak of an insurable interest in the vehicle.
The learned counsel relied on Section 59 of the Motor Vehicles Act to show that Mehtab Singh still had subsisting interest in the vehicle. This section also has nothing to do with the transfer of ownership or possession. That merely relates to the transfer of a permit, and what it insured is not a permit but a motor vehicle. So far as the transfer of motor vehicle is concerned Section 31 deals with the matter and under Section 31 there is no limitation placed as to transfer. All that is required is that the transfer has to be notified otherwise certain penal consequences follow but that does not make the transfer invalid. That being so there is no merit in this contention either.
6. For the reasons given above this appeal fails and is dismissed. There will be no order as to costs.