On 18th June 2020, the Supreme Court of India comprising of Justice R. Banumathi and Justice Indira Banerjee, expounds in the case of Surendra Kumar Bhilawe vs. The New India Assurance Company Limited, that the definition of ‘owner’ in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari.
Factual Background of the Case
The Appellant was the owner of Truck, the said lorry, which was loaded with Ammonia Nitrate at Raipur, commenced its journey for Dhanbad, where the Ammonia Nitrate was to be unloaded. The lorry was driven by Driver. While the said truck was on its journey from Raipur to Dhanbad, it met with an accident in Jharkhand.
It is stated that while negotiating the said truck, near a culvert, to save a cow, which had come on its way, the driver lost control, as a result of which the said truck turned turtle and fell into a river by the side of the road and was extensively damaged. The Ammonia Nitrate, carried in the truck was also washed away.
The accident was reported to the Police Station, the Appellant lodged a claim with the Insurer, The independent Surveyor and Loss Assessor appointed by the Insurer, conducted a spot survey and submitted his report. The Insurer, thereafter, appointed Investigator to conduct the final survey. The Investigator submitted a report assessing the loss recoverable from the insurer at Rs.4,93,500/- after deduction 4 of salvage value.
Instead of reimbursing the loss, the Insurer issued a show cause to the Appellant requiring the Appellant to show cause why the claim of the Appellant should not be repudiated, on the allegation that, he had already sold the said truck to the said Mohammad Iliyas Ansari. Whereas the, Appellant continued to be the registered owner of the said truck, on the date of the accident.
District Forum
The District Forum directed the Insurer to pay Rs.4,93,500/- to the Appellant within a month along with interest @ 6% per annum from the date of filing of the complaint, till the date of payment and further directed the Insurer to pay the Appellant a sum of Rs.5,000/- towards compensation for mental agony and Rs.2,000/- towards the cost of litigation.
State Commission
The Insurer appealed to the State Commission. The appeal was dismissed by the State Commission.
National Commission
The Insurer challenged the order before the National Commission by filing the Revision Petition.
The National Commission has allowed the Revision Petition, set aside the orders of the District Forum and the State Commission respectively, and dismissed the complaint of the Appellant.
The National Commission held:- “A perusal of the sale agreement executed by the complainant with Shri Mohd. Iliyas Ansari would show that the complainant handed over the possession of the aforesaid vehicle to Shri Ansari on payment of Rs.1,40,000/- Since the vehicle had been got financed from ICICI Bank the remaining payment was to be made by the purchaser directly to the said bank. The document also shows that a sum of Rs.1,40,000/- was received by the complainant from Shri Ansari. Thus, it stands duly proved that not only had the complainant received the sale consideration agreed with Shri Ansari he had also delivered the possession of the vehicle to him.
Supreme Court Observations and decision
Supreme Court observed that “It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws.”
Supreme Court further observed that the ‘No Objection” from ICICI Bank, and compliance with the statutory provisions of the Motor Vehicles Act, 1988, and the Rules frames. Sections 19 and 20 of the Sale of Goods Act are not attracted.
Court held that the, “In view of the definition of ‘owner’ in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari.
Court further ruled that the judgment and order of the National Commission are unsustainable.
The impugned order of the National Commission under appeal is set aside and the order of the District Forum is restored.
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