Ramesh Chander vs Ganesh Bahadur Kami & Ors.
2011 Latest Caselaw 5006 Del

                                        REPORTED
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    MAC.APP. 255/2008


RAMESH CHANDER                                      ..... Appellant
                              Through:   Mr. Harvinder Singh with
                                         Ms. Vidhi Gupta, Advocates

                     versus


GANESH BAHADUR KAMI & ORS              ..... Respondents
                Through: Mr. Ramesh Kumar, Advocate
                          for the Insurance Company


%                             Date of Decision : October 12, 2011

CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
   to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?

                              JUDGMENT

: REVA KHETRAPAL, J.

1. This appeal is directed against the judgment and award of the

Motor Accidents Claims Tribunal, Delhi dated 15.11.2007 as modifed

by order dated 18.01.2008 passed in Suit No.267/2007 titled as

"Ganesh Bahadur Kami & Anr. vs. Raj Pal & Ors.".

2. Concisely, the facts are that on 27.09.2004, the respondents

No.1 and 2 filed a Claim Petition under Section 166 read with Section

140 of the Motor Vehicles Act, 1988, claiming compensation for the

untimely demise of one Shri Nar Bahadur Kami, on 20.10.1996, in a

road accident allegedly caused on account of the rash and negligent

driving of a TSR bearing No.DL-1R 5965 driven by the respondent

No.3 wherein the appellant was impleaded as owner of the vehicle,

and it was asserted that at the time of the accident the TSR was being

driven by the respondent No.3-driver under the instructions,

supervision and employment of the appellant.

3. In response to the notice of the institution of the petition, the

appellant filed his written statement, denying any liability to pay the

claimed amount to the respondents No.1 and 2, and submitting therein

that he was not the registered owner of the aforesaid TSR on the date

of the accident, nor he was in control of the vehicle, nor was the

driver of the TSR under his employment or control. Soon thereafter,

an application was filed by the respondents No.1 and 2/claimants

under Order I Rule 10 read with Section 151 CPC, for impleading one

Ramhit, son of Sukhari Ram as the owner of the vehicle on the

ground that this fact was not known to them earlier. The said

application was allowed by the Claims Tribunal and the owner

Ramhit was impleaded as the party-respondent in the Claim Petition.

On 09.05.2006, however, he [(Ramhit) (who is the respondent No.4

herein] was proceeded ex parte and issues were framed.

Significantly, no issue was framed by the learned Tribunal on the

question as to whether the appellant on the date of the accident was in

possession and control of the vehicle in order to be treated as an

owner thereof.

4. The learned Tribunal thereafter proceeded to conduct an

enquiry and after recording its findings on the basis of evidence

adduced, passed its award on 15.11.2007, granting a sum of

` 3,54,000/- as compensation to the respondents No.1 and 2

(claimants), which was subsequently modified to ` 2,45,000/- by the

learned Tribunal by its order dated 18.01.2008, on a review

application filed by the appellant under Section 114 read with Section

151 of the Code of Civil Procedure for reduction of the awarded

amount by deducting an appropriate sum towards the personal

expenses of the deceased. As regards the liability to pay

compensation, the learned Tribunal held that the appellant to be

jointly and severally liable to pay compensation to the claimants

along with the respondents No.3 and 4 on the basis of its finding that

even though the vehicle was formally transferred in the name of the

appellant on a subsequent date, the appellant was in actual physical

control of the vehicle on the date of the accident.

5. Aggrieved from the aforesaid finding of the Tribunal, the

present appeal has been preferred by the appellant to contend that at

the time of the accident, the appellant was not in possession and

control of the TSR, nor the driver of the TSR was employed by the

appellant, and, therefore, the learned Tribunal has wrongly held the

appellant to be jointly and severally liable along with the owner and

the driver of the TSR to pay compensation along with interest thereon

to the respondents No.1 and 2.

6. The sole issue which arises for consideration in this appeal, as

contended by Mr. Harvinder Singh, the learned counsel for the

appellant, is whether the appellant as the financier of the vehicle of

which the respondent No.4 was the registered owner at the time of the

accident could be held liable to pay compensation to the respondents

No.1 and 2, merely on account of the fact that he had taken the

offending vehicle/TSR on superdari on 21.10.1996 from Police

Station Pahar Ganj.

7. Mr. Harvinder Singh, the learned counsel for the appellant,

contended that on the date of the accident, the appellant was the

financier of the vehicle and the respondent No.4 Ramhit was the

registered owner, and that the respondent No.4 remained the

registered owner till the vehicle was transferred in the name of the

appellant in the record of the Transport Authority on 30.12.1996 on

the basis of a sale letter given by the respondent No.4 dated

16.11.1996. He further contended that the transfer fee for the

aforesaid transfer of the vehicle was deposited on 20.12.1996 vide

receipt No.850982 (Ex.R2W2/B). Prior to the transfer of this vehicle,

he stated, the appellant's name was endorsed as financier by the

concerned Transport Authority on 14.02.1994 vide receipt of the

Transport Authority Ex.R2W2/D, and the said hire-purchase

endorsement remained in favour of the appellant upto 20.12.1996,

i.e., the date on which the vehicle was transferred to the appellant on

the basis of the sale letter given by the respondent No.4. With regard

to the superdginama, the learned counsel for the appellant, contended

that the appellant had got released the offending vehicle on superdari

on 21.10.1996 only for the reason that the respondent No.4 was a

habitual defaulter who did not pay the instalments regularly and in

time and was always in arrears. Thus, there was no other option

available with the appellant as the financier of the vehicle, but to take

the vehicle on superdari from the concerned Police Station.

8. In order to buttress his aforesaid contentions, the learned

counsel for the appellant has taken me through the evidence adduced

before the learned Claims Tribunal to contend that there is not an iota

of evidence suggestive of the fact that the appellant was the owner of

the offending vehicle, or was in possession or control thereof on the

date of the accident, or the employer of the driver who had caused the

accident. He pointed out that only three witnesses had been examined

by the claimants, namely, PW1 Shri Ganesh Bahadur Kami, PW2

Shri Prem Bahadur and PW3 Shri Dhan Bahadur. All the said

witnesses had identified the dead body of the deceased and the

claimants had thereafter closed their evidence. The appellant had

examined himself as R2W1 by tendering in evidence his examination-

in-chief by way of affidavit (Ex.R2W1/A), wherein he had stated on

oath that on the date of the accident, i.e., on 20.10.1996, the

respondent No.4, namely, Ramhit was the registered owner of the

TSR in question and was in possession of the said vehicle for all

purposes. It was further stated therein that he had purchased the said

TSR from the respondent No.4 on 16.11.1996, i.e. after the date of the

alleged accident, and that the TSR had been transferred in his name

on 30th December, 1996 on the basis of the sale letter and other

documents. The respondent No. 4, namely, Ramhit, the registered

owner had not paid the instalments regularly and in time and was in

arrears, therefore, under such circumstances there was no option with

him (RW-1) but to take the vehicle on superdari on 21.10.1996 from

the police of Police Station Pahar Ganj, New Delhi.

9. The learned counsel for the appellant next drew my attention to

the testimony of R2W2, Shri Dinesh Verma, an official from the

Transport Department, who was summoned by the appellant with the

record pertaining to the ownership of Vehicle No. DL-1R 5965

(TSR). He deposed that as per the record of the Transport

Department, the said vehicle was transferred in the name of the

appellant on 20th December, 1996 and now stood registered in the

name of the appellant. He further stated that in October, 1996, this

vehicle was registered in the name of Sh. Ramhit (respondent No.4)

and proved on record the computerized copy of the relevant record of

the Transport Department as Exhibit R2W2/A, and the relevant pages

including the sale letter of the vehicle dated 16.11.1996 as Exhibit

R2W2/B.

10. Mr. Harvinder Singh, the learned counsel for the appellant

contended that in view of the fact that the testimonies of the appellant

(R2W1) and the official witness from the Transport Department

(R2W2) were unchallenged and unassailed on record, the appellant

was not liable to pay any compensation to the respondents No.1 and

2. The registered owner of the vehicle, at the time of the accident,

who was the respondent No.4 alone was liable to pay the same. The

appellant undisputedly was not the registered owner on the date of the

accident nor the offending vehicle was in his possession on the date

of the accident. Moreover, at the time of the accident, the appellant

was the financier, which fact stands proved from the testimony of

R2W2, who proved on record the Registration Certificate of the

vehicle dated 14.03.1991 [Exhibit R2W2/C (three sheets)] issued in

the name of the respondent No.4, the original receipt of hire-purchase

dated 14.02.1994 (R2W2/D), the endorsement entry made in favour

of the appellant on the third page of the Registration Certificate

(Exhibit R2W2/C) on 14.02.1994 and the removal of the said

Registration Certificate endorsement in favour of the appellant on 20 th

December, 1996 (Exhibit R2W2/B). It also stands established on

record that after removal of the hypothecation entry, a fresh

Registration Certificate as also a fresh permit was issued in the name

of the appellant, both of which were proved in evidence as Exhibit

PW1/9.

11. To counter the aforesaid contentions of the learned counsel for

the appellant, Mr. Ramesh Kumar, on behalf of the respondents No.1

and 2, raised a two-fold contention. First, the non-production of the

hire-purchase agreement gives rise to an adverse inference against the

appellant. Second, the mere fact that the appellant got the vehicle

released on superdari on the very next day after the accident, that is,

on 21st October, 1996 leads to the legal presumption that the vehicle

belonged to him. The said legal presumption, he contended, is further

strengthened by the fact that the appellant became the registered

owner subsequently, in December, 1996.

12. It was also contended by the learned counsel for the

respondents No. 1 and 2 that the appellant having filed a review

petition for the reduction of the quantum of compensation, and the

learned Tribunal having reduced the award amount to ` 2,45,000/-

alongwith interest at the rate of 7.5 per cent per annum by its order

dated 18.01.2008, is now estopped from challenging the judgment

and award of the learned Tribunal once again by filing an appeal

before this Court. He urged that if the appellant had any grievance

against the award, he, having filed an application before the learned

Tribunal for reduction of the award amount, could have additionally

challenged his liability to pay the award amount. This not having

been done by him, it is not open to him to now challenge the findings

of the learned Tribunal by filing an appeal.

13. Before dealing with the respective contentions of the parties, it

is deemed expedient even at the risk of repetition to highlight a few

necessary facts. On the date of the accident, that is, on 20th October,

1996, admittedly the registered owner was the respondent No.4,

Ramhit, but there existed an agreement between the respondent No.4,

Ramhit and the appellant whereby and whereunder the appellant was

financing the purchase of the TSR by the respondent No.4. The

respondent No.4 has not contested the case either before the learned

Tribunal or before this court. There is, thus, on record the unrebutted

testimony of the appellant, who appeared in the witness box as R2W1

to depose that he was neither the registered owner nor in possession

or control of the TSR in question. There is also on record the

unrebutted testimony of R2W2, the witness from the Transport

Department, who has placed on record the computerized copy of the

record of the Transport Department, which shows that on the date of

the accident, the vehicle in question was registered in the name of the

respondent No.4 and was transferred in the name of the appellant on

20th December, 1996. It has also been established that there exists in

the records of the concerned Transport Authority the Registration

Certificate in favour of the respondent No.4, which carries an

endorsement to the effect that on the date of the accident the vehicle

in question was hypothecated in favour of the appellant. There also

exists on record the fact that with effect from 20.12.1996, the vehicle

was registered in the name of the appellant. There is also on record

the superdarinama dated 21.10.1996 to show that the vehicle was got

released by the appellant on superdari immediately after the accident.

14. Adverting now to the question as to whether the appellant on

the basis of the aforesaid documents can be held liable to pay

compensation to the respondents No.1 and 2, the answer to the same,

in my opinion, must be held to be in the negative. I say so for the

reason that there is unrebutted and unrefuted evidence on record to

show that on the date of the accident the appellant was not the

registered owner of the vehicle in question nor he was in possession

and control thereof. There is also nothing on record to suggest that

the vehicle was plying under his instructions or that the driver was his

employee, who was working under his supervision and control. The

superdarinama alone, in my opinion, is of no avail to the respondents

No.1 and 2, more so as the registered owner of the vehicle on the date

of the accident, namely, the respondent No.4 has neither contested the

claim petition nor the present appeal in order to deny the ownership

or the possession of the offending vehicle.

15. The findings rendered by the Supreme Court in the case of

Godavari Finance Company Vs. Degala Satyanarayanamma and

Ors. (2008) 5 SCC 107, which is heavily relied upon by the learned

counsel for the appellant, are apposite in this regard. In the said case,

the question before the Supreme Court was whether a financier could

be said to be an owner of a motor vehicle financed by it within the

meaning of Section 2(30) of the Motor Vehicles Act, 1988. The facts

were that the appellant, M/s Godavari Finance Company, was

impleaded in the proceedings on the premise that it was the financier

of the vehicle which caused the accident. As the vehicle was the

subject matter of a hire-purchase agreement, the appellant's name was

mentioned in the registration book. Notwithstanding, the Supreme

Court, setting aside the judgments of the learned Tribunal and of the

High Court holding that the appellant as a registered owner was liable

for payment of compensation, held that in the case of a motor vehicle

which is subjected to a hire-purchase agreement, the financier cannot

ordinarily be treated to be the owner. The Supreme Court further

observed as under:- (SCC, pages 110-112)

"12. Section 2 of the Act provides for interpretation of various terms enumerated therein. It starts with the phrase "Unless the context otherwise requires". The definition of "owner" is a comprehensive one. The interpretation clause itself states that the vehicle which is the subject matter of a Hire Purchase Agreement, the person in possession of vehicle under that agreement shall be the owner. Thus, the name of financier in the Registration Certificate would not be decisive

for determination as to who was the owner of the vehicle. We are not unmindful of the fact that ordinarily the person in whose name the Registration Certificate stands should be presumed to be the owner but such a presumption can be drawn only in the absence of any other material brought on record or unless the context otherwise requires.

13. In case of a motor vehicle which is subjected to a hire purchase agreement, the financier cannot ordinarily be treated to be the owner. The person who is in possession of the vehicle, and not the financier being the owner would be liable to pay damages for the motor accident.

             14.     x     x     x     x      x

             15.     x     x     x     x      x

16. The question came up for consideration before this Court in Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and Ors., (1997) 7 SCC 481 where the owner of a vehicle rented the bus to Rajasthan State Road Transport Corporation. It met with an accident. Despite the fact that the driver of the bus was an employee of the registered owner of the vehicle, it was held: (SCC P.488, Para 17)

"17......Driver of the bus, even though an employee of the owner, was at the relevant time performing his duties under the order and command of the conductor of RSRTC for operation of the bus. So far

as the passengers of the ill-fated bus are concerned, their privity of contract was only with RSRTC to whom they had paid the fare for travelling in that bus and their safety therefore became the responsibility of the RSRTC while travelling in the bus. They had no privity of contract with Shri Sanjay Kumar, the owner of the bus at all. Had it been a case only of transfer of services of the driver and not of transfer of control of the driver from the owner to RSRTC, the matter may have been somewhat different. But on facts in this case and in view of Conditions 4 to 7 of the agreement (supra), the RSRTC must be held to be vicariously liable for the tort committed by the driver while plying the bus under contract of the RSRTC. The general proposition of law and the presumption arising therefrom that an employer, that is the person who has the right to hire and fire the employee, is generally responsible vicariously for the tort committed by the employee concerned during the course of his employment and within the scope of his authority, is a rebuttable presumption. If the original employer is able to establish that when the servant was lent, the effective control over him was also transferred to the hirer, the original owner can avoid his liability and the temporary employer or the hirer, as the case may be, must be held vicariously liable for the tort committed by the

employee concerned in the course of his employment while under the command and control of the hirer notwithstanding the fact that the driver would continue to be on the payroll of the original owner.

The proposition based on the general principle as noticed above is adequately rebutted in this case not only on the basis of the evidence led by the parties but also on the basis of Conditions 6 to 7 (supra), which go to show that the owner had not merely transferred the services of the driver to RSRTC but actual control and the driver was to act under the instructions, control and command of the conductor and other officers of RSRTC."

17. The question again came up for consideration recently before this Court in National Insurance Co. Ltd. v. Deepa Devi and Ors., (2008) 1 SCC 414. This Court in that case was dealing with a matter where the vehicle in question was requisitioned by the State Government and while holding that the owner of the vehicle would not be liable it was opined: (SCC Page 417, Para 10)

"10. Parliament either under the 1939 Act or the 1988 Act did not take into consideration a situation of this nature.

No doubt, Respondents 3 and 4 continued to be the registered owners of the vehicle despite the fact that the same was requisitioned by the District Magistrate in exercise of the power conferred upon him under the Representation of the

People Act. A vehicle is requisitioned by a statutory authority, pursuant to the provisions contained in a statute. The owner of the vehicle cannot refuse to abide by the order of requisition of the vehicle by the Deputy Commissioner.

While the vehicle remains under requisition, the owner does not exercise any control thereover. The driver may still be the employee of the owner of the vehicle but he has to drive it as per the direction of the officer of the State, who is put in-charge thereof. Save and except for legal ownership, for all intent and purport, the registered owner of the vehicle loses entire control thereover. He has no say as to whether the vehicle should be driven at a given point of time or not. He cannot ask the driver not to drive a vehicle on a bad road. He or the driver could not possibly say that the vehicle would not be driven in the night.

The purpose of requisition is to use the vehicle. For the period the vehicle remains under the control of the State and/or its officers, the owner is only entitled to payment of compensation therefor in terms of the Act but he cannot not (sic) exercise any control thereupon.

In a situation of this nature, this Court must proceed on the presumption that the Parliament while enacting the 1988 Act did not envisage such a situation. If in a given situation, the statutory definitions contained in the 1988 Act cannot be given effect to in letter and spirit, the

same should be understood from the common sense point of view."

In so opining the Court followed Kailash Nath Kothari (supra).

18. The legal principles as noticed hereinbefore, clearly show that the appellant was not liable to pay any compensation to the claimants."

16. The findings rendered in the aforesaid judgment, in my

opinion, leave no manner of doubt that it is the effective control and

actual possession of the vehicle in question on the date of the accident

which is the determining factor. Registration of a vehicle at the most

is one of the several factors to be kept in mind while determining the

question of ownership of the vehicle. In the present case, in view of

the evidence adverted to hereinbefore, there is, in my view, not an

iota of proof to suggest that the vehicle was in the possession and

control of the appellant on the date of the accident. Indubitably, the

appellant was the financier of the vehicle. Indubitably also, he had

got the vehicle released on superdari, but the mere circumstance of

his getting the vehicle released on superdari is by itself not sufficient

to hold that he was the owner of the vehicle, more so, when his

explanation for having the vehicle released on superdari and

subsequently purchasing the same was that the respondent No. 4 had

never paid the hire installments in time and had habitually defaulted

in payment of the same, leaving him with no other option and the said

explanation is unrebutted on record.

17. The reliance placed by the learned counsel for the respondents

No. 1 and 2 on the decision of the Supreme Court rendered in the case

of Mohan Benefit Pvt. Ltd. versus Kachraji Raymalji and Ors.,

(1997) 9 SCC 103, is also misplaced. The facts in the said case are

clearly distinguishable. In the said case, the conclusion of the

Tribunal, which was affirmed by the High Court in appeal, was that

the real documents executed between the parties at the time of the

alleged loan had been kept back from the court with ulterior motive

and, in that situation, all possible adverse inferences should be drawn

against the appellant. On consideration of the aforesaid facts, the

Supreme Court held that the High Court was justified in drawing

adverse inference against the financier and in mulcting liability on the

financier alongwith the owner and the driver on the ground that had

the documents, which reflected the true relationship between them

been produced, they would have "exploded" the case of the financier.

In the instant case, the facts are altogether different. There is a clear

endorsement on the Registration Certificate of the respondent No.4 to

show that the appellant was the financier of the vehicle in question.

Furthermore, the evidence adduced by the appellant to show that he

was neither in possession of the vehicle nor the vehicle was plying

under his supervision and control is unrebutted on record. It is

nobody's case that any "real documents" have been suppressed by the

appellant. True, the hire-purchase /hypothecation agreement is not on

record. But the endorsement of hypothecation on the Registration

Certificate of the vehicle is proved by the appellant by adducing the

evidence of the concerned witness from the Transport Authority,

which is unassailed on record.

18. In view of the aforesaid, the inevitable conclusion, in my

opinion, is that the appellant on the date of the accident was only the

financier of the vehicle and no liability can be fastened upon him.

Resultantly, the appeal succeeds and it is held that the appellant shall

not be liable for payment of the award amount to the respondents

No.1 and 2. The respondents No.1 and 2 shall, however, be at liberty

to recover the same from the respondent No.4, the registered owner of

the offending vehicle as on the date of the accident.

19. The appeal stands disposed of accordingly.

20. Records of the Claims Tribunal be sent back to the concerned

Tribunal forthwith.

REVA KHETRAPAL (JUDGE) October 12, 2011 km/sk