Karnataka High Court
The Manager vs Smt. Gourabai W/O Bhimappa ... on 22 June, 2022
Bench: P.Krishna Bhat
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MFA No. 24749 of 2010
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 22ND DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR JUSTICE P.KRISHNA BHAT
MISCELLANEOUS FIRST APPEAL NO. 24749 OF 2010 (MV-I)
BETWEEN:
THE MANAGER,
SHRI. DURDUNDESHWAR URBAN CO-OP.
CREDIT SOCIETY LTD.,
SANKESHWAR - 591 313,
TQ. HUKKERI, DIST. BELGAUM.
...PETITIONER
(BY SMT. SUNANDA P. PATIL, ADVOCATE)
AND:
1. SMT. GOURABAI W/O BHIMAPPA PADADALE,
AGE: 47 YEARS, OCC: HOUSEHOLD,
R/O KADAPUR - 591 281,
TQ. CHIKODI, DIST. BELGAUM.
2. SHRI. ANWAR ABDULRAHIM MIRJABHAI,
SINCE DECEASED BY HIS LRS,
2A SMT. RAJIYABI W/O ANWAR MIRJABAI,
AGE. 65 YEARS, OCC. HOUSEHOLD,
R/O. MANIKWADI - 591 308,
Digitally signed
by JAGADISH T
R
TALUKA. GOKAK, DIST. BELAGAVI.
Location: HIGH
COURT OF
KARNATAKA, 2B MISS. RAMIJA D/O ANWAR MIRJABAI
DHARWAD
Date:
2022.06.24
AGE. 33 YEARS, OCC. HOUSEHOLD,
10:22:21 +0530
R/O. MANIKWADI - 591 308,
TALUKA. GOKAK, DIST. BELAGAVI.
...RESPONDENTS
[BY SRI. SANJAY S. KATAGERI FOR R1 AND SRI S. B. PATIL, ADVOCATE
FOR R2(A) AND R2(B)]
MFA FILED U/SEC.173(1) OF MV ACT, 1988, AGAINST THE
JUDGEMENT AND AWARD DTD:09-03-2010 PASSED IN
MVC.NO.852/2008 ON THE FILE OF THE MEMBER, MACT-II, BELGAUM,
AND IN THE COURT OF THE I-ADDL. DISTRICT JUDGE, BELGAUM,
AWARDING THE COMPENSATION OF RS.3,62,000/- WITH INTEREST AT
THE RATE OF 6% P.A., FROM THE DATE OF PETITION TILL ITS DEPOSIT.
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MFA No. 24749 of 2010
THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY,
COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is at the instance of the offending Trax
vehicle bearing registration No.KA 23/M 3253 calling in
question the correctness of the judgment and award dated
09.03.2010 in MVC No.852/2008 passed by the learned
Motor Accident Claims Tribunal II, Belguam and in the
Court of the I Additional District Judge, Belgaum awarding
a compensation of Rs.3,62,000/- with interest of 6% p.a.
from the date of the petition till the date of payment.
2. Brief facts are that on 31.12.2007 while
deceased Bhimappa Annappa Padadale was proceeding on
his Hero honda Motorcycle bearing registration No.KA
23/R-8189 from Kadapur to Gadhingalaj, the offending
Trax bearing registration No.KA 23/M 3253 with its driver
driven in rash and negligent manner and in high speed
MFA No. 24749 of 2010
came and dashed against the motor vehicle resulting in
the death of the deceased.
3. On the filing of claim petition before the learned
Tribunal, both the RC owner of the vehicle and the present
appellant remained ex-parte.
4. During trial, the claimant examined herself as
PW.1 and Ex.P.1 to P.13 were marked. After hearing the
learned counsel for the claimant and perusing the records,
learned Tribunal allowed the claim petition in part
awarding compensation as stated hereinabove.
5. Learned counsel for the appellant strenuously
contended before me that the appellant remained ex-parte
and the learned Tribunal on account of the same had to
rely on the evidence of the claimant alone and the award
came to be passed fastening the liability to pay
compensation jointly and severally on both respondents
which included the present appellant. Her contention is
MFA No. 24749 of 2010
that, appellant was only the financier to respondent No.2
herein for purchasing the offending Trax and it had only
hypothecation agreement, but the possession and control
of the vehicle at the time of the accident was completely
with the respondent No.2-Anwar Abdulrahim Mirjabhai,
who was the RC owner of the vehicle. She therefore,
submitted that the appellant was not at all liable to pay
the compensation as it was not in control or possession
over the vehicle at the time of the accident. She therefore,
contended that the appeal is entitled to be allowed.
6. Learned counsel Sri Sanjay S. Katageri,
appearing for the claimant/respondent No.1 submitted
that the appellant had financed the purchase of offending
vehicle and it was having hypothecation agreement and
therefore it is to be construed that the appellant was also
in possession and control of the vehicle and further it
having not ensured that the borrower had renewed the
policy of insurance in respect of the vehicle at the time of
the accident is liable to pay compensation jointly and
MFA No. 24749 of 2010
severally with the RC owner respondent No.2 herein. He,
therefore, submitted and there is no error or illegality in
the judgment and award of the learned MACT and
accordingly the appeal is liable to be dismissed.
7. Learned counsel appearing for the legal
representatives of RC owner of the offending vehicle
respondent No.2 made submission in support of contention
raised by Sri Sanjay S. Katageri, learned counsel for
respondent No.1.
8. I have given my anxious consideration to the
submissions made on both sides and I have perused the
records.
9. The contention of the learned counsel for the
appellant is that the appellant had merely financed for the
purchase of the offending Trax vehicle involved in the
accident and it had only hypothecation agreement with the
owner of the offending vehicle. It is her further submission
MFA No. 24749 of 2010
that since as a financier appellant was not having any
control or possession over offending vehicle, it is not liable
to pay the compensation. The fact that the appellant was
the financier to the RC owner, who was respondent No.2 in
this appeal is not in dispute. It is also not in the dispute
that the appellant was having hypothecation agreement
with the RC owner of the vehicle now deceased respondent
No.2. However, on account of the appellant remaining ex-
parte before the learned MACT, the hypothecation
agreement is not on record here.
10. The financier for the purchase of the vehicle,
which is involved in the commission of the accident,
cannot be fastened with the liability to pay the
compensation merely on account of the fact that it had
financed for the purchase of the vehicle. Something more
needs to be proved before the learned MACT so as to
fasten the financier with the liability to pay compensation.
The said aspect of the matter is no longer res-integra. The
line of decisions rendered by the Hon'ble Supreme Court
MFA No. 24749 of 2010
show that the crucial aspect for determining the liability to
pay compensation wherever the vehicle involved is
financed by a financier is whether apart from the RC
owner, the financier had actual physical possession or
control over the vehicle at the time of the accident. Said
evidence is lacking in this case on account of appellant
remaining ex-parte before the learned Tribunal.
11. It is useful to make reference to the decision of
the Hon'ble Supreme Court in Naveen Kumar Vs. Vijay
Kumar and Others reported in (2018) 3 SCC.
"12. The subsequent decision of a Bench of three Judges of
this Court in HDFC Bank Ltd. v. Reshma involved an agreement of
hypothecation. The Tribunal held the financier of the vehicle to be
jointly and severally liable together with the owner on the ground
that it was under an obligation to ensure that the borrower had not
neglected to get the vehicle insured. The High Court had dismissed
the appeal filed by the Bank against the order of the Tribunal
holding it liable together with the owner. In the appeal before this
Court, Dipak Misra, J. (as the learned Chief Justice then was)
adverted during the course of the judgment to the principles laid
down by this Court in several earlier decisions, including of this
Court] . Noticing that the case before the court involved a
hypothecation agreement, this Court held: (SCC p. 693, para 22)
"22. In the present case, as the facts have been unfurled, the
appellant Bank had financed the owner for purchase of the vehicle
and the owner had entered into a hypothecation agreement with the
Bank. The borrower had the initial obligation to insure the vehicle,
MFA No. 24749 of 2010
but without insurance he plied the vehicle on the road and the
accident took place. Had the vehicle been insured, the insurance
company would have been liable and not the owner. There is no
cavil over the fact that the vehicle was the subject of an agreement
of hypothecation and was in possession and control of Respondent
2."
Since the second respondent was in control and possession of the
vehicle this Court held that the High Court was in error in fastening
the liability on the financier. The failure of the second respondent
to effect full payment for obtaining an insurance cover was neither
known to the financier nor was there any collusion on its part.
Consequently, the High Court was held to be in error in fastening
liability on the financier.
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,
(2015) 3 SCC 679: (2015) 2 SCC (Civ) 379: (2015) 2 SCC (Cri) 408
[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. Ltd. 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; Ramesh Mehta v.
Sanwal Chand Singhvi, (2004) 5 SCC 409; State of Maharashtra v.
Indian Medical Assn., (2002) 1 SCC 589 : 5 SCEC 217; Pandey & Co.
Builders (P) Ltd. v. State of Bihar, (2007) 1 SCC 467 and placed reliance
on Rajasthan SRTC v. Kailash Nath Kothari, (1997) 7 SCC 481;
National Insurance Co. Ltd. v. Durdadahya Kumar Samal, (1988) 1 ACC
204 : (1988) 2 TAC 25 (Ori) and Bhavnagar Municipality 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 v. Chacko P.M., (2001) 8
SCC 748, SCC p. 751, para 10 : 2002 SCC (Cri) 94; UP 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 (Civ) 251 : (2015) 1 SCC (Cri) 304.
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
MFA No. 24749 of 2010
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 1939 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, the legal heirs of the deceased
victim should not be left in a 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. 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 [HDFC
Bank Ltd. v. Reshma, (2015) 3 SCC 679 : (2015) 2 SCC (Civ) 379 :
(2015) 2 SCC (Cri) 408] and Purnya Kala Devi."
(Emphasis Supplied)
12. In view of the above decision, it is necessary in
the interest of justice, that appellant should be afforded
with an opportunity to lead evidence on the aspect as to
whether at the time of the accident it was having
possession of the offending vehicle. For the said purpose
among others the hypothecation agreement is most
crucial. It is also to be noted that inspite of appellant being
served with notice by the learned MACT it remained
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MFA No. 24749 of 2010
absent. On account of the same, the claimant who is
awarded with compensation has not been able to get the
benefit of the award inspite of learned MACT adjudicating
the dispute in the year 2010 itself. In that view of the
matter, I am of the considered view that appellant shall
pay a sum of Rs.50,000/- towards costs, which shall be
deposited within four weeks from today before the learned
MACT, which on being deposited shall be disbursed to the
claimant, hence the following:
ORDER
i) The above appeal is allowed.
ii) The judgment and award dated 09.03.2010
passed by the Motor Accident Claims Tribunal
II, Belgaum and The Court of the I Additional
District Judge, Belgaum in MVC No.852/2008 is
hereby set aside and the matter is remanded to
the learned MACT for fresh disposal of the
matter by affording opportunity to both sides.
iii) All contentions are kept open, since the claim
petition is of the year 2008 learned MACT is
directed to hear and decide the matter on or
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MFA No. 24749 of 2010
before 15.12.2022. Parties shall appear before
the learned MACT on 01.07.2022 at 11.00 am,
without further notice from the said Tribunal.
The amount in deposit before the Registry of
this Court shall be refunded to the appellant
after deducting Rs.50,000/- which shall be
transmitted to the learned MACT along with the
records forthwith so as to enable the learned
MACT to take up the matter on 01.07.2022.
Sd/-
JUDGE
SSP
