Page 25 - Insurance Times June 2019

The Provision of Temporary Registration
According to Section 43(1) of MV Act 1988 , "an owner of
a motor vehicle may apply to any registering authority or
other prescribed authority to have the vehicle temporarily
registered in the prescribed manner and for the issued in
the prescribed manner of a temporary certificate of
registration and a temporary registration mark". Section
43(2) mentions very categorically that this temporary
registration shall be valid only for a period not exceeding
one month, and shall not be renewable.

However, a leeway is provided in case of a commercial
vehicle - in case of a motor vehicle registered under
temporary registration, is a chassis to which a body has not
been attached. If the process involved in the attachment of
the body exceeds the stipulated period of one month for
any unforeseen circumstances not within the control of the If we look at the fundamentals of insurance and implied
owner, the restricted period of one month may be extended conditions of an insurance contract, we observe that the
on payment of prescribed fees. parties insured by contract of insurance must have insurable
interest in the subject matter. The sale invoice is an evidence
It may be noted here that no temporary registration is that the insured has insurable interest in the subject matter
allowed by law where the prospective customers live in the of insurance i.e. the motor vehicle. Once the vehicle is sold,
area within the authority of the Registering Authority. the proprietary of the vehicle automatically gets transferred
Temporary Registration is allowed for customers staying in to the new purchaser.
the area other than the registering authority (away from
dealers). The second requirement maintains that the subject matter
insured by the policy must exist at the time the insurance
Privileges enjoyed by Dealers- is taken. It is not difficult to establish as the pecuniary
interest in the physical vehicle exists once the vehicle is
Section 33 CMV Rules, 1989, in keeping with section 39,
purchased.
allows certain privileges to dealers in possession of motor
vehicles. They are exempted from registration of various
The third and the most important requirement that the
vehicles that they possess by obtaining a trade certificate
description of the subject matter shown on the policy must
from the registering authority having jurisdiction in the area
be concrete and sufficient to identify by the same beyond
in which the dealer has his place of business.
any reasonable doubt. The engine no, chassis no, make and
model engraved in the vehicle and also mentioned in the
They need to apply for trade certificates separately for
sale invoice are good enough to identify the vehicle to be
separate class of vehicles. A trade certificate issued or
insured from the rest of its genre without reasonable
renewed under rule 35 remains in force for a period of twelve
doubts.
months from the date of issue or renewal and remains
effective throughout India. Section 42 CMV Rules, 1989,
An insurer can insure a vehicle by way above tests alone and
categorically mentions that no holder of a trade certificate
does not require a certificate of Registration for
shall deliver a motor vehicle to a purchaser without
underwriting a policy. Once the registration book is issued,
registration, whether temporary or permanent. In other
the registration number is incorporated in the policy by way
word, it means that all vehicles need to be registered and
of an endorsement.
delivered only after all legal formalities have taken place.
Let us look at two distinct scenarios: -
The second question that needs to be addressed - whether
an insurer can issue of certificate of insurance without the A brand new car purchased from a show room meets with
issuance of Certificate of Registration. In simple words on an accident - it has just got out from the showroom with
what basis can it issue a policy. insurance but without registration.
The Insurance Times, June 2019 25