Decided On: 25Th November vs Jyoti And Others
2022 Latest Caselaw 9891 HP

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA FAO No.242 of 2018 Decided on: 25th November, 2022 ________________________________________________________________ Anil Kumar and others ....Appellants

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                                       Versus
    Jyoti and others                                    ...Respondents

________________________________________________________________

Coram

Hon'ble Ms. Justice Jyotsna Rewal Dua, Judge

1 Whether approved for reporting? Yes.

________________________________________________________________ For the appellants: Mr. Ashok Kumar Thakur, Advocate.

    For the respondents:                   Mr.   Anup    Rattan,                 Advocate,       for
                       r                   respondents No. 1 to 3.

                                           Mr.   Anuj    Gupta,                  Advocate,       for
                                           respondent No.6.

                                           Mr. Ashwani Sharma, Senior Advocate,


                                           with Mr. Ishan Sharma, Advocate, for
                                           respondent No.7.




    Jyotsna Rewal Dua, Judge

In a motor accident claim case involving transfer of the

vehicle, the correctness of the liability fastened upon the transferee

and driver of the vehicle to satisfy the compensation amount

awarded by the learned Motor Accident Claims Tribunal (learned

Tribunal in short) is in question in this appeal.

2. One Sh. Yugal Kishore died in a motor accident on

Whether reporters of Local Papers may be allowed to see the judgment?

04.08.2010. His wife, two minor children and parents preferred a

claim petition under Section 166 of the Motor Vehicles Act (Act

hereinafter). The vehicle in question was registered in the name of

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Smt. Rajni Gupta (respondent No.6). The insurance policy of the

vehicle on the date of accident was also in the name of registered

owner of the vehicle. The vehicle, however, was transferred in the

name of Anil Kumar (appellant No.1). The transferee of the vehicle

had admitted purchasing the vehicle from its registered owner

(transferor). The facts regarding transfer of vehicle were admittedly

not disclosed to the insurer of the vehicle (respondent No.7). The

learned Tribunal vide its award dated 15.12.2017, allowed

compensation of Rs.10,29,700/- alongwith interest @ 9 % per

annum from the date of filing of the petition till its realization in

favour of the claimants. The liability to satisfy the award was

fastened upon Sh. Anil Kumar (transferee of the vehicle) and Sh.

Kewal Krishan (driver of the vehicle having been held liable to

satisfy the award, the transferee and the driver of the vehicle have

preferred the instant appeal.

3. Contentions

3(i). Learned counsel for the appellants submitted that the

vehicle in question was registered in the name of respondent No.6

(Smt. Rajni Gupta). The insurance policy of the vehicle was also

standing in the name of its registered owner Smt. Rajni Gupta.

The insurer was respondent No.7-Company. The accident involving

the vehicle in question that resulted in death of Sh. Yugal Kishore,

had occurred on 04.08.2010. The insurance policy was alive on

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that date. There was privity of contract between the registered

owner of the vehicle and the Insurance Company i.e. respondent

No.7 on the date of the accident. The liability to satisfy the award,

therefore was incorrectly fastened upon the appellants. It should

have been borne by the insurer of the vehicle. In support of such

contentions, reliance was placed upon (2020) 11 SCC 745 titled

Balwant Singh and Sons Vs. National Insurance Company

Limited and another.

3(ii) Learned counsel for respondent No.6, the registered

owner and transferor of the vehicle while supplementing the

submissions of the appellants, contended that the learned

Tribunal had not properly scrutinized the documents while

fastening the liability to pay the compensation amount upon the

appellants. The finding that there was no privity of contract

between the owner of the vehicle and the Insurance Company, was

incorrect and de hors the documents placed on record. On the date

of accident, the registered owner of the vehicle was respondent

No.6. The insurance policy of the vehicle was standing in the name

of respondent No.6 on the date of accident. Hence, it was

respondent No.6 and consequently the Insurance Company

(respondent No.7), which should have borne the liability to pay the

compensation amount.

3(iii) Learned senior counsel for respondent No.7 (Insurer)

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strenuously defended the impugned award. Referring to various

documents placed on record including the registration certificate of

the vehicle in question, the insurance policy and the statement of

appellant No.1 (transferee of the vehicle), it was contended that the

insurance policy was though in the name of respondent No.6, but

the address given therein was that of appellant No.1. That

appellant No.1, while appearing in the witness-box as RW-1, had

admitted having purchased the vehicle from its registered owner

i.e. respondent No.6 in the year 2002. No information w.r.t.

purchase of the vehicle was imparted to the Insurance Company

either by the transferor (respondent No.6) or by the transferee

(appellant No.1) of the vehicle. The accident occurred eight years

after the alleged transfer of the vehicle. In the given facts, the

Insurance Company cannot be held liable to satisfy the awarded

compensation amount. It was also contended that respondent No.6

(registered owner/transferor of the vehicle) had been proceeded ex-

parte before the learned Tribunal. The transferee had also chosen

not to file separate reply to the claim petition. He had adopted the

reply filed by appellant No.2 i.e. driver. The statement given by

appellant No.1 (transferee) as RW-1 was beyond the scope of

pleadings and as such could not be looked into. Reliance in this

regard was placed upon 2014(2) Shim. LC 822, titled Deepak

Parkash Vs Sunil Kumar. Learned Senior counsel also submitted

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that the judgment of the Hon'ble Apex Court in Balwant Singh

case (supra) was in a different factual scenario, where policy of

insurance was issued by the insurer in the name of transferor, but

it reflected the name of transferee as well. The said judgment,

which originated from a decision of National Consumer Disputes

Redressal, will not have any applicability to the instant case which

arises from an award passed by the Motor Accident Claims

Tribunal under the provisions of the Motor Vehicles Act. Referring

to 2004 (2) Shim. L.C. 478, titled Narbada (Smt.) and others

Vs Smt. Rajni Kanta and others and Pushpa (Smt.) and others

Vs. Shakuntla and others and 1999 ACJ 615, titled National

Insurance Co. Ltd. Vs. Ishroo Devi and others, it was submitted

that liability to satisfy the award was justly fixed upon the

appellants. For the fault of transferor and transferee of the vehicle

in not intimating the fact of transfer of the vehicle to Insurance

Company, it cannot be held liable to pay the compensation

amount to the claimants.

4. Observations

Having heard learned counsel for the parties on both

sides and on going through the record, I am of the considered view

that this appeal deserves to be allowed for the following reasons: -

4(i) The vehicle in question was a Maruti Van bearing No.

DL-4CN-1782. It was registered in the name of Smt. Rajni Gupta

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(respondent No.6) on 23.07.2000. The registration certificate of the

vehicle is Ex.R-1. Insurance policy of the vehicle is also on record

as Ex.RX. The period of insurance commenced from 07.09.2009.

The insurance policy was valid till 06.09.2010. The insurance

policy was in the name of respondent No.6 Smt. Rajni Gupta, c/o

Anil Kumar. It is not in dispute that the accident occurred on

04.08.2010 i.e. during subsistence of the insurance policy (Ex.RX).

It is also not in dispute that registered owner of the vehicle on the

date of accident was the insured i.e. Smt. Rajni Gupta (respondent

No.6).

4(ii) The Hon'ble Apex Court in (2018) 3 SCC 1, titled

Naveen Kumar Vs. Vijay Kumar and others, was considering a

situation where the registered owner had purported to transfer the

vehicle but continued to be reflected in the record of registering

authority as owner of the vehicle. The Apex Court considered the

definition of "Owner" in Section 2(30) of the 1988 Act and in

Section 2(19) of the 1939 Act as under: -

"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 vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire- purchase agreement, or an agreement of lease or an

.

agreement of hypothecation, the person in possession of the vehicle under that agreement."

The person in whose name a motor vehicle stands

registered is the owner of the vehicle for the purposes of the Act. The use of the expression 'means' is a clear indication of the position that it is the registered owner

who Parliament has regarded as the owner of the vehicle. In the earlier Act of 1939, the expression 'owner' was defined in Section 2(19) as follows:

"2. (19) 'owner' means, where the person in possession of r a motor vehicle is a minor, the guardian of such

minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement."

Comparing the definition of 'owner' as given in

both the Acts, it was held that under the 1988 Act, the owner

of the vehicle would be the person in whose name the motor

vehicle stands registered. Para-7 of the judgment reads as

follows:-

"7. Evidently, Parliament while enacting the Motor Vehicles Act, 1988 made a specific change by recasting the earlier definition. Section 2(19) of the earlier Act stipulated that where a person in possession of a motor vehicle is a minor the guardian of the minor would be the owner and where the motor vehicle was subject to a hire purchase agreement, the person in possession of the vehicle under

the agreement would be the owner. 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 vehicle stands registered. Where such a person is a minor the

.

guardian of the minor would be the owner. In relation to a

motor vehicle which is the subject of an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement would be

the owner. The latter part of the definition is in the nature of an exception which applies where the motor vehicle is the subject of a hire purchase agreement or of an

agreement of lease or hypothecation. Otherwise the definition stipulates that for the purposes of the Act, the person in whose name the motor vehicle stands registered is treated as the owner."

Section 50 of the Motor Vehicles Act, which deals with

the procedure for transfer of the ownership was also noticed in the

judgment.

After adverting to its several previous authorities on

the subject, the Hon'ble Supreme Court held that the principle

underlying the provisions of Section 2(30) is that the victim of a

motor accident or in the case of death, the legal heirs of the

deceased should not be left in the state of uncertainty. A claimant

for compensation ought not to be burdened with following a trail of

successive transfers, which are not registered with the registering

authority. To hold otherwise would be to defeat the salutary object

and purpose of the Act. Hence, the interpretation to be placed

must facilitate the fulfilment of the object of the law. Failure to

intimate the transfer will only result in a fine under Section 50(3)

but will not invalidate the transfer of the vehicle. There can be

transfer of title by payment of consideration of delivery of the

.

vehicle, but for the purposes of the Act, the person whose name is

reflected in the records of the registering authority, is the owner.

The owner within the meaning of Section 2(30) is liable to

compensate. Para 13 and 14 of the judgment relevant to the

context reads as under:-

"13 The consistent thread of reasoning which emerges from the above 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 stands registered who, for

the purposes of the Act, would be treated as the 'owner'. However, where a person is a minor, the guardian of the minor would be treated as the owner. Where a motor

vehicle is subject to an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement is treated as the owner. In a

situation such as the present where the registered owner has purported to transfer the vehicle but continues to be

reflected in the records of the registering authority as the owner of the vehicle, he would not stand absolved of

liability. Parliament has consciously introduced the definition of the expression 'owner' in Section 2(30), making a departure 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 victim of a motor accident or, in the case of a death, the legal heirs of the deceased victim should not be left in a state of uncertainty. A claimant for compensation ought not to be

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burdened with following a trail of successive transfers, which are not registered with the registering authority. To hold otherwise would be to defeat the salutary object and purpose of the Act. Hence, the interpretation to be placed

.

must facilitate the fulfilment of the object of the law. In the

present case, the First respondent was the 'owner' of the vehicle involved in the accident within the meaning of Section 2(30). The liability to pay compensation stands

fastened upon him. Admittedly, the vehicle was uninsured. The High Court has proceeded upon a misconstruction of the judgments of this Court in Reshma

and Purnya Kala Devi.

14. The submission of the Petitioner is that a failure to intimate the transfer will only result in a fine under Section 50(3) but will not invalidate the transfer of the

vehicle. In Dr T V Jose, this Court observed that there can

be transfer of title by payment of consideration and delivery of the car. But for the purposes of the Act, the person whose name is reflected in the records of the

registering authority is the owner. The owner within the meaning of Section 2(30) is liable to compensate. The mandate of the law must be fulfilled."

To the similar effect is the judgment in (2019) 2 SCC

747, titled Prakash Chand Daga Vs. Saveta Sharma and

others. The law relating to the liability of registered

owner/transferee of the vehicle was summarized is as under:-

"9. The law is thus well settled and can be summarized:-

"4........Even though in law there would be a transfer of ownership of the vehicle, that, by itself, would not absolve the party, in whose name the vehicle stands in RTO records, from liability to a third

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person ... ... ... Merely because the vehicle was transferred does not mean that such registered owner stands absolved of his liability to a third person. So long as his name continues in RTO

.

records, he remains liable to a third person."

In (2020) 11 SCC 741, titled Balwant Singh and

Sons Vs. National Insurance Company Limited and another,

provisions of the Motor Vehicles Act were under consideration.

Taking note of various precedents in time line including the above

referred judgments in Prakash Chand Daga and Naveen Kumar

cases (supra), it was held that so long as the name of the

registered owner continues in the certificate of registration in the

records of the RTO, that person as an owner would continue to be

liable to a third party, under Chapter XI of the Act. It would be

appropriate to extract the relevant para from the judgment

hereinafter: -

"19. The principle that emerges from the precedents of this

Court is that even though in law there would be a transfer of ownership of the vehicle, that by itself would not absolve the person in whose name the

vehicle stands in the registration certificate, from liability to a third party. So long as the name of the registered owner continues in the certificate of registration in the records of the RTO, that person as an owner would continue to be liable to a third party under Chapter XI of the Motor Vehicles Act, 1986. The above decisions, therefore, deal with the obligation of the registered owner to meet third party claims."

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4(iii) It is not in dispute that the vehicle in question was

sold by respondent No.6 to appellant No.1. The exact date of such

sale cannot be discerned from the record. Respondent No.6 was

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proceeded ex-parte whereas appellant No.1 adopted the reply filed

by the driver of the vehicle. While appearing as RW-1, the

appellant No.1 stated having purchased the vehicle from

respondent No.6 in the year 2002. However, no such pleading or

document to this effect is available on record.

4(iv) The contention of insurer is that in view of the

statement of RW-1, it has to be considered that the vehicle was

transferred by respondent No.6 in favour of appellant No.1 prior to

coming into force of insurance policy (Ex.RX). There is no

document to establish this assertion. No concrete evidence to this

effect is available on record. Insurance policies for the period prior

to 07.09.2009 are also not on record. In the reply, this plea has

not been taken by the insurance company (respondent No.7). The

stand there is that there is no privity of contract between the

(appellant No.1) transferee and the Insurance Company. In

Balwant Singh's case, supra, premium was accepted by the

insurer from the transferee and policy document was issued to the

transferee. If the contention of the insurer is accepted in the

present case, the question then arises as to why the Insurance

Company accepted the premium in the name of registered owner of

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the vehicle, but with a different address given that of transferee. It

is a fact that the vehicle was insured in the name of Smt. Rajni

Gupta. The insurance policy was issued in the name of registered

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owner of the vehicle (respondent No.6) i.e. Smt. Rajni Gupta c/o

Anil Gupta (the transferee-appellant No.1). The vehicle was

standing in the name of its registered owner in the concerned RTO

record on the date of accident. The vehicle as on that date was

duly insured by respondent No.7 (insurer) showing the registered

owner of the vehicle as the insured. It has been repeatedly held by

the Hon'ble Apex Court that even though in law, there would be a

transfer of ownership of the vehicle but that by itself would not

absolve the person in whose name the vehicle stands in the

registration certificate from liability to a third party. The

claimants-the third parties cannot be made to suffer. They cannot

be deprived of benefits flowing from Chapter XI of the beneficial

legislation, i.e. the Motor Vehicles Act. Hence, in view of the law

laid down by the Hon'ble Apex Court, the insured-registered owner

(respondent No.6) and consequently the insurer (respondent No.7)

cannot escape liability to pay the awarded compensation amount

to the claimants.

5. For the aforesaid reasons, the appeal is allowed. The

impugned award dated 15.12.2017 to the extent it places liability

upon the appellants for satisfying the payment of awarded

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compensation amount, is quashed and set aside. It is held that

since respondent No.6 was the registered owner of the vehicle in

question, which was duly insured by respondent No.7 at the time

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of accident, the liability to satisfy the award shall be borne by

respondent No.7. Accordingly, respondent No.7 is ordered to

deposit the entire compensation amount in terms of the award in

the Registry of this Court within a period of six weeks.

Pending miscellaneous application(s), if any, also

stand disposed of.

Jyotsna Rewal Dua

Judge November 25, 2022 R.Atal