NAVEEN KUMAR V. VIJAY KUMAR AND ORS. versus VIJAY KUMAR AND ORS. on 6 February 2018

[2018] 2 S.C.R. 572

SUPREME COURT REPORTS

[2018] 2 S.C.R.

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NAVEEN KUMAR

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VIJAY KUMAR AND ORS.

(Civil Appeal No. 1427 of 2018)

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FEBRUARY 06, 2018

[DIPAK MISRA, CJI, A. M. KHANWILKAR ANDDR. D. Y. CHANDRACHUD, JJ.]

Motor Vehicles Act, 1988 – s.2(30) – ‘Owner’ – Motor vehicledriven in reverse gear hit two persons – One died on the spot, whileCthe other received multiple injuries – Vehicle involved in theaccident was registered in the name of First respondent – However,before Motor Accident Claims Tribunal successive transfers of thevehicle was put forth as a defence to the claim – Tribunal held theFirst respondent liable along with the driver of the vehicle as theDregistration certificate of the offending vehicle continued to be inhis name – Appeal by First respondent before High Court, allowed– Held: The person in whose name a motor vehicle standsregistered is the owner of the vehicle for the purposes of the Act –Thus, in the present case where the registered owner purportedlytransferred the vehicle but continued to be reflected in the recordsEas the owner of the vehicle, he would not stand absolved ofliability– Principle underlying the provisions of s.2(30) is that thevictim of a motor accident or, in the case of a death, the legal heirsof the deceased victim should not be left in a state of uncertainty– Aclaimant for compensation ought not to be burdened with followinga trail of successive transfers, which are not registered with theFregistering authority– In the present case, admittedly the vehiclewas uninsured – Liability to pay compensation stands fastened uponthe First respondent– Judgment of High Court is set aside– MotorVehicles Act,1939– s.2(19)– Interpretation of Statutes.

A motor vehicle driven by one ‘R’ in the reverse gear hitGone ‘JD’ and her nephew ‘N’. ‘N’ was run over by the rear wheelof the car and died on the spot while, ‘JD’ received multipleinjuries. The vehicle involved in the accident was registered inthe name of the First respondent. However, before the MotorAccident Claims Tribunal, the First respondent claimed that heHhad sold the vehicle to the Second respondent, who stated that

he had sold it to the Third respondent, who in turn claimed tohave sold the vehicle to the appellant. The appellant claimed thathe had sold the vehicle to one ‘MS’. The Tribunal held the Firstrespondent liable along with the driver of the vehicle. In appeal,High Court foisted the liability to pay compensation on theappellant. Hence, the present appeal.

Allowing the appeal, the Court

HELD : 1.1 The person in whose name a motor vehiclestands registered is the owner of the vehicle for the purposes ofthe Motor Vehicles Act, 1988. The use of the expression ‘means’is a clear indication of the position that it is the registered ownerwho Parliament has regarded as the owner of the vehicle.Evidently, Parliament while enacting the Motor Vehicles Act, 1988made a specific change by recasting the earlier definition.Section 2(19) of the earlier Motor Vehicles Act, 1939 stipulatedthat where a person in possession of a motor vehicle is a minor,the guardian of the minor would be the owner and where themotor vehicle was subject to a hire purchase agreement, theperson in possession of the vehicle under the agreement wouldbe the owner. The Act of 1988 has provided in the first part ofSection 2(30) that the owner would be the person in whose namethe motor vehicle stands registered. Where such a person is aminor the guardian of the minor would be the owner. In relationto a motor vehicle which is the subject of an agreement of hirepurchase, lease or hypothecation, the person in possession ofthe vehicle under that agreement would be the owner. The latterpart of the definition is in the nature of an exception whichapplies where the motor vehicle is the subject of a hire purchaseagreement or of an agreement of lease or hypothecation.[Para 6][578-F-H; 579-A-B]

1.2 In a situation such as the present where the registeredowner has purported to transfer the vehicle but continued to bereflected in the records of the registering authority as the ownerof the vehicle, he would not stand absolved of liability.Parliament has consciously introduced the definition of theexpression ‘owner’ in Section 2(30), making a departure fromthe provisions of Section 2(19) in the earlier Act of 1939. Theprinciple underlying the provisions of Section 2(30) is that the A

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Avictim of a motor accident or, in the case of a death, the legalheirs of the deceased victim should not be left in a state ofuncertainty. A claimant for compensation ought not to beburdened with following a trail of successive transfers, which arenot registered with the registering authority. To hold otherwisewould be to defeat the salutary object and purpose of the Act.BHence, the interpretation to be placed must facilitate the fulfilmentof the object of the law. In the present case, the First respondentwas the ‘owner’ of the vehicle involved in the accident within themeaning of Section 2(30). The liability to pay compensation standsfastened upon him. Admittedly, the vehicle was uninsured.C[Paras 12, 13][585-E-H; 586-C-D]HDFC Bank Limited v Reshma (2015) 3 SCC 679;Purnya Kala Devi v State of Assam (2014) 14 SCC 142– distinguished.

Pushpa alias Leela v Shakuntala (2011) 2 SCC 240 :D[2011] 1 SCR 334 – relied on.

Mohan Benefit (P) Ltd. v. Kachraji Raymalji (1997) 9SCC 103; Rajasthan SRTC v. Kailash Nath Kothari(1997) 7 SCC 481 : [1997] 3 Suppl. SCR 724;National Insurance Co. Ltd. v. Deepa Devi (2008) 1SCC 414 : [2007] 13 SCR 134 ; Mukesh K. Tripathi v.ELIC (2004) 8 SCC 387 : [2004] 4 Suppl. SCR 127 ;Ramesh Mehta v. Sanwal Chand Singhvi (2004) 5 SCC409 : [2004] 1 Suppl. SCR 418 ; State of Maharashtrav. Indian Medical Assn. (2002) 1 SCC 589 : [2001] 5Suppl. SCR 474 ; Pandey & Co. Builders (P) Ltd. v.FState of Bihar (2007) 1 SCC 467 : [2006] 8 Suppl. SCR997 ; Rajasthan SRTC v. Kailash Nath Kothari (1997)7 SCC 481 : [1997] 3 Suppl.SCR 724 ; NationalInsurance Co. Ltd. v. Durdadahya Kumar Samal (1988)2 TAC 25 (Ori) ; Bhavnagar Municipality v. BachubhaiArjanbhai 1995 SCC OnLine Guj 167 ; GodavariGFinance Co. v. Degala Satyanarayanamma (2008) 5SCC 107 : [2008] 6 SCR 231 ; T.V. Jose (Dr.) v. ChackoP.M. (2001) 8 SCC 748 : [2001] 3 Suppl. SCR 366 ;U.P. SRTC v. Kulsum (2011) 8 SCC 142 : [2011] 15SCR 618 ; P. P. Mohammed v. K. Rajappan (2008) 17HSCC 624 – referred to.

Case Law Reference

[2011] 1 SCR 334[2001] 3 Suppl. SCR 366(2008) 17 SCC 624(2014) 14 SCC 142(2015) 3 SCC 679(1997) 9 SCC 103[1997] 3 Suppl. SCR 724[2007] 13 SCR 134[2004] 4 Suppl. SCR 127[ 2004] 1 Suppl. SCR 418[2001] 5 Suppl. SCR 474[2006] 8 Suppl. SCR 997[1997] 3 Suppl. SCR 724(1988) 2 TAC 25 (Ori)[2008] 6 SCR 231[2011] 15 SCR 618

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1427of 2018.

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From the Judgment and Order dated 25.01.2016 of the High Courtof Punjab & Haryana at Chandigarh in FAO No. 5310 of 2013 (O&M).

Rishi Malhotra, Adv. for the Appellant.

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Sudhir Nandrajog, Sr. Adv., Abhishek Vikas, Paritosh Budhiraja,Vimal Dubey, Ms. Surbhi Maheshwari, Ashwani Ahuja, Uday PratapSingh, Abhishek Vikas, Fanish Jain, Dr. (Mrs.) Vipin Gupta, NandaniGupta, Krishna Kumar, Dharmendra Kumar Sinha, Sabyasachi Bhaduri,Pallav Mongia, Advs. for the Respondents.

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AThe Judgment of the Court was delivered by

DR. D. Y. CHANDRACHUD, J. 1. An accident took place atabout 7:30 pm on 27 May 2009 when Smt.Jai Devi and her nephewNitin were walking down a street in their village. A motor vehicle drivenby Rakesh in the reverse gear hit them. Nitin was run over by the rearBwheel of the car and died on the spot. Smt.Jai Devi received multipleinjuries. Two claim petitions were filed before the Motor Accident ClaimsTribunal (‘the Tribunal’).One of them was by Smt. Jai Devi. The secondwas by Somvir and Smt.Saroj, the parents of Nitin. The vehicle involvedin the accident (a Maruti-800 bearing Registration DL-3CC-3684) wasregistered in the name of Vijay Kumar, the First respondent. AccordingCto the First respondent, he had sold the vehicle to the Second respondenton 12 July 2007 prior to the accident and had handed over possession ofthe vehicle together with relevant documents including the registrationcertificate, and forms 29 and 30 for transfer of the vehicle. The Secondrespondent stated before the Tribunal that he sold the vehicle to theDThird respondent on 18 September 2008. The Third respondent in turnclaimed before the Tribunal to have sold the vehicle to the petitioner.The petitioner, in the course of his written statement claimed that he hadsold the vehicle to Meer Singh. The succession of transfers was putforth as a defence to the claim.E2. By its award dated 6 October 2012, the Tribunal granted E2. By its award dated 6 October 2012, the Tribunal grantedcompensation in the amount of Rs 10,000/- to Smt. Jai Devi and ofRs.3,75,000/- on account of the death of Nitin, to his parents. TheTribunal noted that the registration certificate of the offending vehiclecontinued to be in the name of the First respondent. The Tribunal heldthe First respondent jointly and severally liable together with the driverFof the vehicle. The vehicle was uninsured on the date of the accident.

3. The award of the Tribunal was challenged by the Firstrespondent in appeal before the High Court of Punjab and Haryana. Alearned Single Judge of the High Court allowed the appeal on 25January 2016 on the ground that there was no justification for theGTribunal to pass an award against the registered owner when there wasevidence that he had transferred the vehicle and the last admitted ownerwas the appellant herein. In the view of the High Court, the Tribunalought to have passed an award only against the appellant as the owner.In coming to this conclusion the High Court relied upon two decisions of H

this Court : HDFC Bank Limited v Reshma[1]and Purnya Kala Deviv State of Assam[2].

4. On behalf of the appellant, it has been submitted that the HighCourt has proceeded on a manifestly erroneous construction of the legalposition. It has been urged that Section 2(30) of the Motor Vehicles Act,1988 indicates that the person in whose name a motor vehicle is registeredis the owner and the only two exceptions to that principle are wheresuch a person is a minor or where the subject vehicle is under a hirepurchase agreement. The decision of this Court in Purnya Kala Devi(supra), it has been submitted, related to a situation where the offendingvehicle had been requisitioned by a state government. Similarly, thedecision in Reshma (supra) dealt with a situation where the vehicle hadbeen financed against a hypothecation agreement. It was in thisbackground that this Court held that the person in possession of thevehicle under a hypothecation agreement was to be treated as the owner.Having regard to the definition contained in Section 2(30), it was urgedthat the High Court was in error in foisting the liability on the appellantwho is not the registered owner of the vehicle. Learned counsel appearingon behalf of the appellant submitted that in Pushpa alias Leela vShakuntala[3], the position has been clarified by holding that wherenotwithstanding the sale of a vehicle, neither the transferor nor thetransferee have taken any step for change in the name of owner in thecertificate of registration, the person in whose name the registrationstands must be deemed to continue as the owner of the vehicle for thepurposes of the Act.

5. On the other hand, learned counsel appearing on behalf of theFirst respondent supported the judgment of the Tribunal by submittingthat the appellant as the person in physical possession and control of thevehicle was liable. Learned counsel appearing on behalf of the Firstrespondent also relied on the decisions of this Court in Purnya KalaDevi and Reshma. Learned counsel submits:

(i) “The sale of a vehicle also results in a presumable change ofphysical possession and control of the vehicle from thevendor to the vehicle. The registered owner at the best canbe regarded as an ostensible owner of the vehicle but not the 1(2015) 3 SCC 679

2(2014) 14 SCC 142

3(2011) 2 SCC 240

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Areal owner after the sale of the vehicle, even if his name isthere on the Registration Certificate of the vehicle;

(ii) The definition of owner in the Section 2(30) of the Act, is nota complete code and the exceptions contained therein arenot exhaustive; B

(iii) The Court/Tribunal should apply the test whether theregistered owner has, through legitimate means, fullyrelinquished his possession and control over the vehicle ornot. If the answer is in the affirmative, he cannot be madeliable and the person who is in physical possession andCcontrol of the vehicle should be made liable; and

(iv) Section 50 casts the onus of changing the name in theregistration certificate, on both the transferor as well as thetransferee, and hence the transferor (the registered owner)cannot be made liable, and the transferee who has controlover the use of vehicle should be made liable.”D

6. The expression ‘owner’ is defined in Section 2(30) of the Act,1988, thus:

“2(30) “owner” means a person in whose name a motor vehiclestands registered, and where such person is a minor, the guardianEof such minor, and in relation to a motor vehicle which is thesubject of a hire-purchase agreement, or an agreement of leaseor an agreement of hypothecation, the person in possession of thevehicle under that agreement.”

The person in whose name a motor vehicle stands registered isFthe owner of the vehicle for the purposes of the Act. The use of theexpression ‘means’ is a clear indication of the position that it is theregistered owner who Parliament has regarded as the owner of thevehicle. In the earlier Act of 1939, the expression ‘owner’ was definedin Section 2(19) as follows:

G“11…2. (19) ‘owner’ means, where the person in possession ofa motor vehicle is a minor, the guardian of such minor, and inrelation to a motor vehicle which is the subject of a hire-purchaseagreement, the person in possession of the vehicle under thatagreement.”

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Evidently, Parliament while enacting the Motor Vehicles Act, 1988made a specific change by recasting the earlier definition. Section 2(19)of the earlier Act stipulated that where a person in possession of a motorvehicle is a minor the guardian of the minor would be the owner andwhere the motor vehicle was subject to a hire purchase agreement, theperson in possession of the vehicle under the agreement would be theowner. The Act of 1988 has provided in the first part of Section 2(30)that the owner would be the person in whose name the motor vehiclestands registered. Where such a person is a minor the guardian of theminor would be the owner. In relation to a motor vehicle which is thesubject of an agreement of hire purchase, lease or hypothecation, theperson in possession of the vehicle under thatagreement would be theowner. The latter part of the definition is in the nature of an exceptionwhich applies where the motor vehicle is the subject of a hire purchaseagreement or of an agreement of lease or hypothecation. Otherwisethe definition stipulates that for the purposes of the Act, the person inwhose name the motor vehicle stands registered is treated as the owner.

7. Section 50 deals with the procedure for transfer of ownership,and provides as follows:

“50. Transfer of ownership.—(1) Where the ownership of anymotor vehicle registered under this Chapter is transferred ,—

(a) the transferor shall,—

(i) in the case of a vehicle registered within the same State,within fourteen days of the transfer, report the fact of transfer,in such form with such documents and in such manner, asmay be prescribed by the Central Government to theregistering authority within whose jurisdiction the transfer isto be effected and shall simultaneously send a copy of thesaid report to the transferee; and

(ii) in the case of a vehicle registered outside the State, withinforty-five days of the transfer, forward to the registering au-thority referred to in sub-clause (i)—

(A) the no objection certificate obtained under section 48; or (B) in a case where no such certificate has been obtained,—

(I) the receipt obtained under sub-section (2) of section 48;or A

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(II) the postal acknowledgement received by the transferred if hehas sent an application in this behalf by registered postacknowledgement due to the registering authority referred to insection 48, together with a declaration that he has not received anycommunication from such authority refusing to grant suchcertificate or requiring him to comply with any direction subject towhich such certificate may be granted;

(b) the transferee shall, within thirty days of the transfer, reportthe transfer to the registering authority within whose jurisdictionhe has the residence or place of business where the vehicle isnormally kept, as the case may be, and shall forward thecertificate of registration to that registering authority together withthe prescribed fee and a copy of the report received by him fromthe transferor in order that particulars of the transfer ofownership may be entered in the certificate of registration.

(2) Where—

(a) the person in whose name a motor vehicle stands registereddies, or (b) a motor vehicle has been purchased or acquired at a publicauction conducted by, or on behalf of, Government, the person succeeding to the possession of the vehicle or, as thecase may be, who has purchased or acquired the motor vehicle,shall make an application for the purpose of transferring theownership of the vehicle in his name, to the registering authorityin whose jurisdiction he has the residence or place of businesswhere the vehicle is normally kept, as the case may be, in suchmanner, accompanied with such fee, and within such period asmay be prescribed by the Central Government.

(3) If the transferor or the transferee fails to report to theregistering authority the fact of transfer within the periodspecified in clause (a) or clause (b) of sub-section (1), as the casemay be, or if the person who is required to make an applicationunder sub-section (2) (hereafter in this section referred to as theother person) fails to make such application within the periodprescribed, the registering authority may, having regard to the circumstances of the case, require the transferor or thetransferee, or the other person, as the case may be, to pay, in lieuof any action that may be taken against him under section 177such amount not exceeding one hundred rupees as may beprescribed under sub-section (5):

Provided that action under section 177 shall be taken against thetransferor or the transferee or the other person, as the case maybe, where he fails to pay the said amount.

(4) Where a person has paid the amount under sub-section (3), noaction shall be taken against him under section 177.

(5) For the purposes of sub-section (3), a State Government mayprescribe different amounts having regard to the period of delayon the part of the transferor or the transferee in reporting the factof transfer of ownership of the motor vehicle or of the otherperson in making the application under sub-section (2). 32

(6) On receipt of a report under sub-section (1), or an applicationunder sub-section (2), the registering authority may cause thetransfer of ownership to be entered in the certificate ofregistration.

(7) A registering authority making any such entry shallcommunicate the transfer of ownership to the transferor and tothe original registering authority, if it is not the original registeringauthority.”

8. The decision of the Bench of two judges of this Court in Pushpaalias Leela (supra) was in a case where the offending vehicle wasregistered in the name of J who had sold it to S on 2 February 1993 andhad given possession to the transferee. On the date of the transfer thetruck was covered by a valid policy of insurance. Despite the sale ofthe vehicle the change of ownership was not reflected in the certificateof registration. The policy of insurance expired on 24 February 1993.Subsequently S took out an insurance policy in the name of theregistered owner and it was valid and subsisting when the accident tookplace on 7 May 1994. The Tribunal held that no liability to paycompensation attached to J since he had ceased to be the owner of thevehicle after its sale on 2 February 1993.S alone was held to be liable forthe payment of compensation to the claimants. On these facts the Benchof two judges of this Court held as follows:

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A“11. It is undeniable that notwithstanding the sale of the vehicleneither the transferor Jitender Gupta nor the transferee Salig Ramtook any step for the change of the name of the owner in thecertificate of registration of the vehicle. In view of this omissionJitender Gupta must be deemed to continue as the owner of thevehicle for the purposes of the Act, even though under the civilBlaw he ceased to be its owner after its sale on 2-2-1993.” (Id atpage 244)

In the course of its decision, the two judge Bench referred to theearlier decision in Dr T V Jose v Chacko P M[4], which had arisenunder the Motor Vehicles Act 1939. In that context, this Court had heldCthus:

“12…There can be transfer of title by payment of considerationand delivery of the car. The evidence on record shows thatownership of the car had been transferred. However, the appellantstill continued to remain liable to third parties as his name continuedDin the records of RTO as the owner. The appellant could notescape that liability by merely joining Mr Roy Thomas in theseappeals.” (Id at page 244)

The decision in Dr T V Jose was followed in P P Mohammed vK Rajappan[5].Noticing that the decision in Dr T V Jose was renderedEunder the Motor Vehicles Act, 1939, the Court in Pushpa held that theratio of the decision “shall apply with equal force to the facts of thecases arising under the 1988 Act” in view of the provisions of Section2(30) and Section 50. Consequently, the view of this Court was that theperson whose name continues in the record of the registering authorityFas the owner of the vehicle is equally liable together with the insurer.

9. The decision of a three judge Bench of this court in PurnyaKala Devi (supra) involved a situation where the registered owner of avehicle involved in an accident denied his liability to compensate thelegal heirs of the deceased victim on the ground that the state governmentGhad requisitioned the vehicle. On the date of the accident, the vehiclestood requisitioned under the Assam Requisition and Control of VehiclesAct, 1968. The state failed to establish that the vehicle was releasedfrom requisition after service of a notice in writing to the owner, to takedelivery, as required by Section 5(1) of the state Act. Under the Assam 4(2001) 8 SCC 748H5(2008) 17 SCC 624

Act, it was only upon the service of a notice to that effect that no labilityfor compensation would lie with the requisitioning authority. The HighCourt absolved the state government on the basis of the definition of theexpression ‘owner’ in Section 2(30) of the Motor Vehicles Act, 1988.Reversing the judgment, this Court held thus :

“16..the High Court, without adverting to Section 5 of the AssamAct, merely on the basis of the definition of “owner” as containedin Section 2(30) of the 1988 Act, mulcted the award payable bythe owner of the vehicle. The High Court failed to appreciate thatat the relevant time the offending vehicle was under therequisition of Respondent 1 State of Assam under the provisionsof the Assam Act. Therefore, Respondent 1 was squarelycovered under the definition of “owner” as contained in Section2(30) of the 1988 Act. The High Court failed to appreciate theunderlying legislative intention in including in the definition of“owner” a person in possession of a vehicle either under anagreement of lease or agreement of hypothecation or under ahire-purchase agreement to the effect that a person in controland possession of the vehicle should be construed as the “owner”and not alone the registered owner. The High Court further failedto appreciate the legislative intention that the registered owner ofthe vehicle should not be held liable if the vehicle was not in hispossession and control. The High Court also failed to appreciatethat Section 146 of the 1988 Act requires that no person shall useor cause or allow any other person to use a motor vehicle in apublic place without an insurance policy meeting the requirementsof Chapter XI of the 1988 Act and the State Government hasviolated the statutory provisions of the 1988 Act. The Tribunalalso erred in accepting the allegation of Respondent 2 that thevehicle was released on the date of the accident at 10.30 a.m.and the accident occurred at 10.30 a.m. without any evidenceeven though in the claim petition, it was stated that the accidenthad occurred at 10.15 a.m.”(Id at page 147)

10. The above observations would indicate that a combination ofcircumstances cumulatively weighed with this Court. Significantly, forthe purposes of the present discussion, what emerges from the abovejudgment is the circumstance that the motor vehicle was on the date ofthe accident requisitioned by the state government. Requisitioning by its A

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Avery nature is involuntary insofar as the person whose property isrequisitioned is concerned. This Court observed that it is the person incontrol and possession of a vehicle which is under an agreement oflease, hypothecation or hire purchase who is construed as the ownerand not the registered owner. The same analogy was drawn to hold thatwhere the vehicle had been requisitioned, it was the state and not theBregistered owner who had possession and control and would hence beheld liable to compensate. Purnya Kala Devi does not hold that aperson who transfers the vehicle to another but continues to be theregistered owner under Section 2(30) in the records of the registeringauthority is absolved of liability. The situation which arose before theCcourt in that case must be borne in mind because it was in the context ofa compulsory act of requisitioning by the state that this Court held, byanalogy of reasoning, that the registered owner was not liable.

11. The subsequent decision of a Bench of three judges of thisCourt in HDFC Bank Limited v Reshma (supra)involved anDagreement of hypothecation. The Tribunal held the financier of thevehicle to jointly and severally liable together with the owner on theground that it was under an obligation to ensure that the borrower hadnot neglected to get the vehicle insured. The High Court had dismissedthe appeal filed by the Bank against the order of the Tribunal holding itliable together with the owner. In the appeal before this Court, JusticeEDipak Misra (as the learned Chief Justice then was) adverted during thecourse of the judgment to the principles laid down by this Court inseveral earlier decisions, including of this Court[6].

6 Mohan Benefit (P) Ltd. v. Kachraji Raymalji, (1997) 9 SCC 103 : 1997 SCC (Cri) 610;Rajasthan SRTC v. Kailash Nath Kothari, (1997) 7 SCC 481 ; National Insurance Co.FLtd. v. Deepa Devi, (2008) 1 SCC 414 : (2008) 1 SCC (Civ) 270 : (2008) 1 SCC (Cri)209; Mukesh K. Tripathi v. LIC : (2004) 8 SCC 387 : 2004 SCC (L&S) 1128, RameshMehta v. Sanwal Chand Singhvi (2004) 5 SCC 409, State of Maharashtra v. IndianMedical Assn. (2002) 1 SCC 589 : 5 SCEC 217, Pandey & Co. Builders (P) Ltd. v. Stateof Bihar (2007) 1 SCC 467 and placed reliance on Kailash Nath Kothari [RajasthanSRTC v. Kailash Nath Kothari, (1997) 7 SCC 481, National Insurance Co. Ltd. v.GDurdadahya Kumar Samal : (1988) 1 ACC 204 : (1988) 2 TAC 25 (Ori) and BhavnagarMunicipality v. Bachubhai Arjanbhai : 1995 SCC OnLine Guj 167 : AIR 1996 Guj 51;Godavari Finance Co. v. Degala Satyanarayanamma, (2008) 5 SCC 107 : (2008) 2 SCC(Cri) 531; Pushpa v. Shakuntala, (2011) 2 SCC 240 : (2011) 1 SCC (Civ) 399 : (2011)1 SCC (Cri) 682; T.V. Jose [(2001) 8 SCC 748 : 2002 SCC (Cri) 94] , SCC p. 51, para10; U.P. SRTC v. Kulsum, (2011) 8 SCC 142 : (2011) 4 SCC (Civ) 66 : (2011) 3 SCC(Cri) 376; Purnya Kala Devi v. State of Assam, (2014) 14 SCC 142 : (2015) 1 SCC (Cri)H304 : (2015) 1 SCC (Civ) 251.”

Noticing that the case before the court involved a hypothecationagreement, this Court held:

“22. In the present case, as the facts have been unfurled, theappellant Bank had financed the owner for purchase of thevehicle and the owner had entered into a hypothecationagreement with the Bank. The borrower had the initial obligationto insure the vehicle, but without insurance he plied the vehicle onthe road and the accident took place. Had the vehicle beeninsured, the insurance company would have been liable and notthe owner. There is no cavil over the fact that the vehicle was thesubject of an agreement of hypothecation and was in possessionand control of Respondent 2.”(id at page 693)

Since the Second respondent was in control and possession of thevehicle this Court held that the High Court was in error in fastening theliability on the financier. The failure of the Second respondent to effectfull payment for obtaining an insurance cover was neither known to thefinancier nor was there any collusion on its part. Consequently, the HighCourt was held to be in error in fastening liability on the financier.

12. The consistent thread of reasoning which emerges from theabove decisions is that in view of the definition of the expression ‘owner’in Section 2(30), it is the person in whose name the motor vehicle standsregistered who, for the purposes of the Act, would be treated as the‘owner’. However, where a person is a minor, the guardian of the minorwould be treated as the owner. Where a motor vehicle is subject to anagreement of hire purchase, lease or hypothecation, the person inpossession of the vehicle under that agreement is treated as the owner.In a situation such as the present where the registered owner haspurported to transfer the vehicle but continues to be reflected in therecords of the registering authority as the owner of the vehicle, he wouldnot stand absolved of liability. Parliament has consciously introduced thedefinition of the expression ‘owner’ in Section 2(30), making adeparture from the provisions of Section 2(19) in the earlier Act of 1939.The principle underlying the provisions of Section 2(30) is that the victimof a motor accident or, in the case of a death, the legal heirs of thedeceased victim should not be left in a state of uncertainty. A claimantfor compensation ought not to be burdened with following a trail ofsuccessive transfers, which are not registered with the registering A

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Aauthority. To hold otherwise would be to defeat the salutary object andpurpose of the Act. Hence, the interpretation to be placed must facilitatethe fulfilment of the object of the law. In the present case, the Firstrespondent was the ‘owner’ of the vehicle involved in the accident withinthe meaning of Section 2(30). The liability to pay compensation standsfastened upon him. Admittedly, the vehicle was uninsured. The HighBCourt has proceeded upon a misconstruction of the judgments of thisCourt in Reshma and Purnya Kala Devi.

13. The submission of the Petitioner is that a failure to intimatethe transfer will only result in a fine under Section 50(3) but will notinvalidate the transfer of the vehicle. In Dr T V Jose, this CourtCobserved that there can be transfer of title by payment of considerationand delivery of the car. But for the purposes of the Act, the personwhose name is reflected in the records of the registering authority is theowner. The owner within the meaning of Section 2(30) is liable tocompensate. The mandate of the law must be fulfilled.

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14. For the above reasons we allow the appeal and direct that theliability to compensate the claimants in terms of the judgment of theTribunal will stand fastened upon the First respondent. The judgment ofthe High Court is set aside. In the circumstances of the case, there shallbe no order as to costs.

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Appeal allowed.

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