PRAKASH CHAND DAGA versus SAVETA SHARMA & ORS. on 14 December 2018

1. This appeal challenges the judgment and order dated 05.04.2018passed by the High Court of Punjab and Haryana at Chandigarh in FAONo.7010/2011.

2. The appellant, original owner of a Santro Car sold said vehicle A

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Ato Ms. Saveta Sharma, first respondent on 11.09.2009. According to theappellant, after receiving due consideration, the possession wastransferred to said first respondent. An accident occurred on 09.10.2009in which one Rakesh Kumar, second respondent, received injuries. In aclaim lodged by second respondent, the Motor Accident Claims Tribunalassessed the compensation at Rs.12.47 lakhs and directed as under:B

“32. In view of my findings on the various issues above, the claimpetition is allowed with costs and claimant is awarded totalcompensation of Rs.12,47,739/- (Rs. Twelve lacs Forty SevenThousand Seven Hundred Thirty Nine only), Rs.11,58,489/-compensation for medical expenses etc. + Rs.60,000/- asCcompensation for pain and sufferings + Rs.18,000/- ascompensation for loss of income + Rs.11,250/- as compensationfor temporary disability from respondent No.2 and 3 alone. Keepingin view prevalent interest rates, the claimant shall also be entitledto interest on the above awarded amount at the rate of 7.5% perDannum from the date of filing of petition till final realisation. Theliability of the respondent No.2 and 3 to pay the compensationshall be joint as well as several. Memo of costs be prepared andfile be consigned to records.”

3. Since the liability was fastened on the driver and first respondent,the aforesaid decision was challenged by them in the High Court byEfiling FAO No.7010/2011. The High Court found that despite the sale ofthe vehicle on 11.09.2009, no transfer of ownership, in accordance withSection 50 of the Motor Vehicles Act,1988 (‘the Act’ for short) waseffected and as such the appellant continued to be the owner in terms ofdefinition as incorporated in Section 2(30) of the Act. Relying on theFdecision of this Court in Naveen Kumar vs. Vijay Kumar and others[1]the High Court concluded as under.

“Applying the ratio of the above said judgment to the facts of thepresent case, the award stands modified to the above extent thatthe Insurance Company is liable to make the compensation to theGclaimant and the Insurance Company will have the recovery rightsto recover the same from the registered owner i.e. respondentNo.1 of the offending vehicle. Remaining conditions of disbursalof amount shall remain unaltered.”

4. Learned counsel appearing for the appellant submitted that theaccident had occurred within thirty days of the transfer when the statutoryperiod as prescribed under Section 50(1)(b) of the Act had not expiredand as such the liability could not be fastened on the present appellant.Though served, the transferee, namely, first respondent has chosen notto appear in the matter. We have gone through the record and consideredthe submissions advanced by the learned counsel for the appellant andthe Insurance Company.

5. It is true that in terms of Section 50 of the Act, the transfer ofa vehicle ought to be registered within 30 days of the sale. Section 50(1)of the Act obliges the transferor to report the fact of transfer within 14days of the transfer. In case the vehicle is sold outside State, the periodwithin which the transfer ought to be reported gets extended. On theother hand, the transferee is also obliged to report the transfer to theregistering authority within whose jurisdiction the transferee has theresidence or place of business where the vehicle is normally kept. Section50 thus prescribes timelines within which the transferor and the transfereeare required to report the factum of transfer. As per Sub-Section 3 ofsaid Section 50, if there be failure to report the fact of transfer, finecould be imposed and an action under Section 177 could thereafter betaken if there is failure to pay the amount of fine. These timelines andobligations are only to facilitate the reporting of the transfer. It is not asif that if an accident occurs within the period prescribed for reportingsaid transfer, the transferor is absolved of the liability.

6. Chapter XII of the Act deals with Claims Tribunals and as tohow applications for compensation are to be preferred and dealt with.While considering such claims, the Claims Tribunal, in case of an accidentis required to specify the amount which shall be paid by the insurer orowner or driver of the vehicle involved in the accident or whether suchamount be paid by all or any of them, as the case may be. It is wellsettled that for the purposes of fixing such liability the concept ofownership has to be understood in terms of specific definition of ‘owner’as defined in Section 2(30) of the Act.

7. In Pushpa alias Leela and Ors. Vs. Shakuntala and Ors.[2]the vehicle in question belonged to one Jitender Gupta who was itsregistered owner. He sold said vehicle to one Salig Ram on 02.02.1993and gave its possession to the transferee. Despite said sale, the change 2(2011)2 SCC 240

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Aof ownership was not entered in the Certificate of Registration. Theearlier insurance policy having expired, the transferee took out freshinsurance policy in the name of original owner Jitender Gupta. In anaccident that took place on 07.05.1994 two persons lost their lives. Theheirs and legal representatives lodged separate claims and an issue aroseas to who was liable as owner. The submissions that Jitender Gupta, theBregistered owner had no control over the vehicle and the possession andcontrol of the vehicle was in the hands of the transferee and as such noliability could be fastened on the transferor were rejected by this Court.It was observed in para 11 as under:

“11. It is undeniable that notwithstanding the sale of the vehicleCneither 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 civilDlaw he ceased to be its owner after its sale on 2.2.1993.”

8. In the decision in Naveen Kumar (supra) the legal positionwas adverted to and this Court observed as under:

“13. The consistent thread of reasoning which emerges from theabove decisions is that in view of the definition of the expressionE“owner” in Section 2(30), it is the person in whose name the motorvehicle stands registered who, for the purposes of the Act, wouldbe treated as the “owner”. However, where a person is a minor,the guardian of the minor would be treated as the owner. Wherea motor vehicle is subject to an agreement of hire purchase, leaseor hypothecation, the person in possession of the vehicle underFthat agreement is treated as the owner. In a situation such as thepresent where the registered owner has purported to transfer thevehicle but continues to be reflected in the records of theRegistering Authority as the owner of the vehicle, he would notstand absolved of liability. Parliament has consciously introducedGthe definition of the expression “owner” in Section 2(30), makinga departure from the provisions of Section 2(19) in the earlier1939 Act. The principle underlying the provisions of Section 2(30)is that the victim of a motor accident or, in the case of a death, thelegal heirs of the deceased victim should not be left in a state ofuncertainty. A claimant for compensation ought not to be burdenedHwith following a trail of successive transfers, which are not registered with the Registering Authority. To hold otherwise wouldbe to defeat the salutary object and purpose of the Act. Hence,the interpretation to be placed must facilitate the fulfilment of theobject of the law. In the present case, the first respondent wasthe “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. TheHigh Court has proceeded upon a misconstruction of the judgmentsof this Court in Reshma (2015)3 SCC 679 and Purnya Kala Devi(2014) 14 SCC 142.

14. The submission of the petitioner is that a failure to intimatethe transfer will only result in a fine under Section 50(3) but willnot invalidate the transfer of the vehicle. In T.V. Jose (2001)8SCC 748, this Court observed that there can be transfer of title bypayment of consideration and delivery of the car. But for thepurposes of the Act, the person whose name is reflected in therecords of the Registering Authority is the owner. The ownerwithin the meaning of Section 2(30) is liable to compensate. Themandate of the law must be fulfilled.”

9. The law is thus well settled and can be summarised:- “Even though in law there would be a transfer of ownership ofthe vehicle, that, by itself, would not absolve the party, in whosename the vehicle stands in RTO records, from liability to a thirdperson … … …Merely because the vehicle was transferred doesnot mean that such registered owner stands absolved of his liabilityto a third person. So long as his name continues in RTO records,he remains liable to a third person.” [3]

The High Court was therefore absolutely right in allowing theappeal. The challenge raised by the appellant must fail.

10. This appeal is dismissed. No costs.

Ankit Gyan

Appeal dismissed.

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