Madras High Court
The Manager vs Jannath Beevi on 24 November, 2023
C.M.A(MD)No.189 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 07.09.2023
Pronounced On : 24.11.2023
CORAM
THE HONOURABLE MR.JUSTICE K.MURALI SHANKAR
C.M.A(MD)No.189 of 2019
The Manager,
M/s.Waluj Two Wheeler Section,
Baja Auto Limited,
Bajaj Nagar,
Awrangabad-431 136.
Maharashtra State : Appellant / Respondent No.1
Vs.
1.Jannath Beevi
2.Haja Moideen
3.Minor.Nizar
4.Minor.Parveen
5.Minor.Jahangir
(minor respondents 3 to 5 are
represented by their mother are
guardian, the first respondent herein)
6.Nallammal : Respondents 1 to 6 /
Petitioners 1 to 5 & 7
7.M.Sukumaran
8.M/S.A.V.M.Auto,
Bajaj Two Wheelers Agencies,
Alangudi Road,
Pudukkottai,
Tamil Nadu.
1/19
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C.M.A(MD)No.189 of 2019
9.Murugesan
10.The Branch Manager,
Indus Ind Bank,
No.24, veeramakaliamman Kovil Complex,
Pattukkottai Road,
Aranthangi,
Pudukkottai District.
PRAYER:- Civil Miscellaneous Appeal filed under Section 173 of the
Motor Vehicles Act, 1988, to set aside the award and decree dated
23.11.2017 passed in M.C.O.P.No.762 of 2010 on the file of Motor
Accident Claims Tribunal, Additional District Judge, Presiding Officer,
Pudukkottai and allow this present Civil Miscellaneous Appeal.
For Appellant : Mr.R.Subramanian
For Respondents : Mr.P.Ganapathi Subramanian
1 to 6
For 8th Respondent : Mr.N.Balakrishnan
For 9th Respondent : Mr.K.Gokul
For Respondents : No appearance
7 and 10
JUDGMENT
This civil miscellaneous appeal is directed against the award
passed in M.C.O.P.No.762 of 2010 dated 23.11.2017 on the file of the
Motor Accident Claims Tribunal/Additional District Judge/Presiding
Officer, Pudukkottai.
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2.The appellant/first respondent who was made liable along with
the respondents 7 to 9/respondents 2 to 4 to pay compensation of Rs.
14,05,000/- with interest at 7.5% per annum to the respondents 1 to
6/claimants for the death of Ayyub Khan consequent to an accident
occurred on 05.03.2006, challenged the liability mulcted on it.
For the sake of convenience and brevity, the parties hereinafter will
be referred as per their ranking/status before the Tribunal.
3.It is pertinent to note that the appellant has not challenged the
finding of the Tribunal that the accident had occurred only due to the
rash and negligence driving of the fourth respondent and that they have
also not challenged the quantum of compensation awarded by the
Tribunal.
4.Admittedly, the vehicle involved in the accident, i.e., new Bajaj
CT 100 bearing Chasis No.MDZ/DDDUZZ/MWJ 37911 and Engine
No.DUM BMH 85257 M/C was manufactured by the first respondent
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and the same was sent to sale for their dealers/respondents 2 and 3. It is
not in dispute that the fifth respondent financier has agreed to finance the
fourth respondent for purchasing the said vehicle from the third
respondent/dealer. The claimants have filed the claim petition against the
respondents 1 to 4 alleging that the respondents 1 to 4 are the owners of
the vehicle in question and that the during the pendency of the claim
petition, the fifth respondent/insurer was impleaded and that therefore,
all the respondents are jointly and severely liable for the claim.
5.The defence of the respondents 1 to 3 is that the first respondent
position is only as a manufacturer of the vehicle, that the fourth
respondent has purchased the vehicle from the third respondent that the
fourth respondent has purchased the vehicle through the finance arranged
by the fifth respondent, and that since the vehicle was sold to the fourth
respondent, the respondents 1 to 3 have ceased to exercise any right over
the two wheeler and that therefore, they are not liable for the claim.
6.During the trial, the claimants have examined, the Claimants 1
and 2 as P.W.1 and 2 respectively and one Mohammed Ifrahim as P.W.3
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and exhibited 10 documents as Ex.P.1 to P.10. The respondents 1 to 3
have examined the second respondent as R.W.1 and exhibited one
document as Ex.R1. The fifth respondent has examined its official as
R.W.2 and exhibited loan application as Ex.X.1.
7. The learned trial Judge upon considering the evidence both oral
and documentary and on hearing arguments of both sides, has passed the
impugned order dated 23.11.2017 mulcted liability on the respondents 1
to 4 and dismissed the claim petition as against the fifth respondent.
Aggrieved by the impugned award, the first respondent/the manufacturer
of the vehicle has preferred the present appeal.
8.The learned counsel appearing for the appellant would submit
that the Tribunal erred in fastening liability on the appellant, who is only
the manufacturer of the vehicle. that the fourth respondent purchased the
vehicle from the third respondent and took it from the show room
without registration and insurance, that the Tribunal has failed to
consider that the purchaser had given a letter to the dealer stating that he
was taking delivery of the vehicle without registration and insurance and
that therefore, the Tribunal erred in mulcting liability on the appellant.
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9.It is the specific case of the respondents 1 to 3 that the fourth
respondent has purchased the vehicle through finance given by the fifth
respondent that the fourth respondent by giving letter under Ex.R.1 had
taken delivery of the vehicle and he has taken delivery of the vehicle
without registration and without insurance at his own risk and that
therefore, the fourth respondent being the owner of the vehicle, is liable
for the claim. Admittedly the fourth respondent had remained exparte.
The Tribunal had rightly relied on the decision of the Honourable
Supreme Court in Dr. T. V. Jose Appellant vs Chacko P. M. Alias
Thankachan & other reported in (2001) 8 SCC 748, and in P.P.Mohamed
Vs. K.Rajappan and others reported in 2008(17) SCC 624 and HDFC
Bank limited Vs. Kumari Reshma, and others reported in AIR 2015 SC
290 and the relevant passage in the HDFC Bank Limited case is
extracted hereunder:
“While dealing with the facet of liability, the Court
referred to the authority in T.V.Jose (Dr.) Vs. Chacko
P.M. Where in it has been held thus:
There can be transfer of title by payment of
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consideration and delivery of the car. The evidence
on record shows that ownership of the car had been
transferred. However, the appellant still continued to
remain liable to third parties as his name continued in
the records of RTO as the owner.
Thereafter, the Court held thus:
“The decision in T.V.Jose (Dr.) was rendered under
the Motor Vehicles Act, 1939. But having reagard to
the provisions of Section (30) and Section 50 of the
Act, as noted above, the ration of the decision shall
apply with equal force to the facts of the case arising
under the 1988 Act. On the basis of these decisions,
the inescapable conclusion is that Jitender Gupta,
whose name continued in the records of the
registering authority as the owner of the truck was
equally liable for payment of the compensation
amount.”
10.In a similar case, a learned Judge of this Court, in the case of
the Managing Director, Sakthi Auto Agencies, T.P.S.Nagar, Thanjavur.
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Vs. Santhi and others, in C.M.A.(MD).No.742 of 2017 has held that the
ownership of the vehicle legally passes to the purchaser only after
temporary/permanent registration of the vehicle in the name of the
purchaser and the relevant paragraphs are extracted hereunder:
20. Section 39 of the Motor Vehicles Act makes it
mandatory that no person shall drive any motor vehicle
and no owner of a motor vehicle shall cause or permit the
vehicle to be driven in any public place unless the vehicle
is registered in accordance with the Motor Vehicles Act.
However, as per the proviso, it shall not apply to the
Motor Vehicle in possession of a dealer subject to the
conditions as may be prescribed by the Central
Government. As per Rule 33 of Central Motor Vehicle
Rules, 13/26 though a dealer is exempted from the
necessity of registration, he should obtain a Trade
Certificate from the registering authority having
jurisdiction in the area, in which, the dealer is doing his
business in accordance with the provisions of the Rules.
The dealer has to make an application under Rule 34 of
Central Motor Vehicle Rules and any certificate that is
granted is valid only for a period of twelve months from
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the date of the issue or renewal thereon. As per Rule 40,
the Trade Certificate shall be used only by the person to
whom it is issued and such person shall not allow or offer
or cause the certificate or the number assigned to them to
be used by any other person.
21. Rule 41 enumerates the purposes for which the
Motor Vehicle with Trade Certificate may be used. The
said Rule enumerates eight circumstances under which the
vehicle can be used in public place which includes testing,
proceeding to or returning, from weigh bridge, trial or
demonstration by or for the benefit of a prospective
purchaser, proceeding to or returning from the premises of
a dealer or of a purchaser, proceeding to or returning from
a workshop with the objective of fitting a body to the
vehicle or painting and for repairs, proceeding to 14/26
and returning from Airport, Railway Station, wharf for or
after being transported and for removing the vehicle, after
that it has been taken possession of by or on behalf of the
financier due to any default on the part of the other party
under the provisions of an agreement of hirepurchase
lease or hypothecation. Therefore, it is clear that a dealer
should possesses a Trade Certificate to use the vehicle in a
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public place for certain limited purposes. The registering
authority has been granted power under Rule 44 either to
suspend or cancel such a Trade Certificate for violation of
the Rules. From the pleadings and evidence let in by the
appellant herein before the Tribunal, this Court could not
find that any Trade Certificate has been obtained by the
appellant for using the vehicle in a public place without
registration or Insurance policy. Even assuming that a
Trade Certificate has been obtained, it is not the case of
the appellant that the vehicle was used for anyone of the
purposes mentioned under Rule 41 of Central Motor
Vehicle Rules, 1989.
22. The appellant had contended that the vehicle
has been registered in the name of the first respondent and
insured with the second respondent and on subsequent
date to the accident and therefore, the first respondent and
the Insurance Company alone are liable to pay the
compensation. The judgment of the Honourable Supreme
Court reported in (2016) 4 SCC 82 (Commissioner of
Commercial Taxes, Thiruvananthapuram, Kerala V.K.T.C.
Automobiles) in paragraph No. 20 and 21 reads as
follows: “20. But this legal proposition does not take the
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appellant for. It must be carefully seen as to when the
properties, particularly possession of a motor vehicle
passes or can pass legally to the purchaser, authorizing
him to apply for registration. Only after obtaining valid
registration under the Motor Vehicles Act, the purchaser
gets entitled to use the vehicle in public places. Under the
scheme of the Motor Vehicles Act, 1988 and the Central
motor Vehicles Rules 1989 the dealer cannot permit the
purchaser to use the motor vehicle and thus enjoy its
possession unless and until a temporary or permanent
registration is obtained by him. Only thereafter, the vehicle
can safely be said to be no more under possession of the
dealer. Clearly, mere mentioning of engine number and
chassis number of a motor vehicle in the invoice of sale
does not entitle the intending purchaser to appropriate all
the goods i.e. the motor vehicle till its possession is or can
be lawfully handed over to him by the dealer without
violating the statutory provisions governing motor
vehicles. Such transfer of possession can take place only
when the vehicle reaches the place where the registering
authority will be obliged to inspect for the purpose of
finding out whether it is a roadworthy and registrable
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motor vehicle and whether its identification marks tally
with those given in the sale invoice and the application for
registration. The possession can lawfully be handed over
to the purchaser at this juncture because law requires the
purchaser as an “owner” to make an application for
registration but at the same time the law also prohibits use
of the motor vehicle by the owner until is duly registered
by the registering authority. Hence, in order to satisfy the
requirement of law noticed above, the dealer can deliver
possession and owner can take possession and present the
vehicle for registration only when it reaches the office of
the registering authority. With the handing over of the
possession of a specific motor vehicle just prior to
registration, the dealer completes the agreement of sale
rendering it a perfected sale. The purchaser as an
“owner” under the Motor Vehicles Act is thereafter
obliged to obtain certificate of registration which alone
entitles him to enjoy the possession of the vehicle in
practical terms by enjoying the right to use the vehicle at
public places, after meeting the other statutory obligations
of insurance, etc. Hence, technically though the
registration of a motor vehicle is a post-sale event, the
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event of sale is closely linked in time with the event of
registration. Neither the manufacturer nor can the dealer
of a motor vehicle permit the intended purchaser having
an agreement of sale to use the motor vehicle even for
taking it to the registration office in view of the statutory
provisions already noticed. Hence lawful possession with
the right of use is permissible to be given to the intended
owner only after reaching the vehicle to the office of the
registering authority. Thus seen, in practical terms though
sale precedes the event of registration, in normal
circumstances and as the law stands, it is coterminous
with registration of a new motor vehicle”
23. The judgment of the Honourable Supreme
Court reported in (2020) 15 SCC 438 (Tata Motors
Limited V. State of Jharkhand and others) in paragraph
No.7 reads as follows: “7 .......... In case a dealer or a
manufacturer is not having trade certificate, in order to
drive the motor vehicle during the period it remains with
him, he is supposed to get the vehicle registered for a
temporary period. This temporary registration is to be
done as per the provisions contained in Section 43 of the
MV Act. It may be clarified that such temporary
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registration can be obtained by any person who is the
owner of a motor vehicle and is not confined to a dealer or
a manufacturer.”
24. A combined reading of the judgments of the
Hon'ble Supreme Court will make it clear that the
ownership of the vehicle legally passes to the purchaser
only after temporary/permanent registration of the vehicle
in the name of the purchaser. Any handing over of the
possession to the purchaser without registration of the
vehicle has to be considered to be violation of the statuary
provisions as contemplated under Section 41 of the Motor
Vehicles Act. An application for registration can be made
only on behalf of the owner of a Motor vehicle. Therefore,
when the vehicle is in the possession of a dealer and if he
wants to use the vehicle in a public road for any other
purpose, other than what is stated under Rule 41 of
Central Motor Vehicle Rules, the dealer has to apply for
temporary certificate of registration. The judgment of the
Hon'ble Supreme Court reported in (2020) 15 SCC 438
(Tata Motors Limited V. State of Jharkhand and others)
paragraph No.7 has clarified that the temporary
registration can be obtained by any person who is the
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owner of a motor vehicle and is not confined to a dealer or
manufacturer. Therefore, it is clear that a dealer can also
be considered to be a owner of the vehicle provided he
applies for a temporary registration under Section 43 of
the Motor Vehicles Act, for the purposes of usage of the
vehicle in a public road other than the purposes those
enumerated under Rule 41 of Central Motor Vehicles
Rules.
25. In the present case, the appellant/dealer had
permitted the usage of the vehicle in a public road by one
Ramesh without obtaining any temporary registration and
admittedly, not for the purposes mentioned under Rule 41
of Central Motor Vehicles Rules. A dealer is expected to
obtain a trade certificate under Rule 34 of Central Motor
Vehicles Act, for operating the vehicle in a public road
without registration for certain limited purposes. The
dealer has to obtain either the trade certificate for using
the vehicle for limited purposes or should go for a
temporary registration of the vehicle under Section 43 of
the Motor Vehicle Act, if he wants to use the vehicle in a
public road. Merely by avoiding temporary registration
under Section 43 of the Act, a dealer cannot claim that he
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is not the owner of the vehicle. The appellant/ dealer
cannot take advantage of his own wrong and contend that
having not obtained temporary registration under Section
43 of the Act, he is not the owner of the vehicle.
11.As already pointed out, in the case on hand, the vehicle was
neither registered nor insured on the date of accident. Admittedly, the
vehicle was not registered in the name of the fourth respondent. No
doubt, the respondents 1 to 3 have taken a defence that the fourth
respondent, after giving a letter, had taken delivery of the vehicle at his
own risk. But Rule 42 of Central Motor vehicles Rules, 1989 mandates
that no holder of a trade certificate shall deliver a motor vehicle to a
purchaser without registration, whether temporary or permanent.
12.As rightly pointed out that the learned counsel for the
claimants, the dealers are duty bound to make sure that the vehicle was
registered before delivering the same to the purchaser. Moreover, until
the vehicle is registered in the name of the purchaser, the ownership of
the vehicle remain to be vested with the dealer. But in our case,
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dealers/respondents 2 and 3 have not challenged the finding of the
Tribunal mulcting liability on them, whereas, the first
respondent/manufacturer alone has come forward with this appeal. Even
according to the dealers/respondents 2 and 3, once the manufacturer
delivers the vehicles to the dealers, the manufacturer ceases to be the
owner of the vehicle and he has no connection with the vehicles. As
already pointed out, the respondents 2 and 3 have specifically admitted
that they are the dealers of the first respondent with respect to the two
wheelers. The claimants have not shown that the first respondent was still
having right or ownership over the vehicle and the same was within their
control and custody.
13.Considering the above, the impugned order mulcting liability
on the manufacturer, is not in accordance with law and as such, the same
is liable to be set aside. As already pointed out, the appellant has not
challenged the quantum of compensation. Hence, this Court concludes
that the civil miscellaneous appeal is liable to be allowed.
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14.Considering the other facts and circumstances of the case, this
Court further decides that the parties are to be directed to bear their own
cost.
15. In the result, civil miscellaneous appeal is allowed and the
impugned award dated 23.11.2017 passed in M.C.O.P.No.762 of 2010
mulcting liability on the appellant /first respondent is set aside.
24.11.2023
NCC : Yes/No
Index : Yes : No
Internet : Yes : No
vsg
To
1.The Motor Accident Claims Tribunal,
Additional District Judge, Presiding Officer,
Pudukkottai.
2.The Record Keeper,
Vernacular Section,
Madurai Bench of Madras High Court,
Madurai.
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K.MURALI SHANKAR,J.
vsg
Pre-delivery order made in
24.11.2023
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