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2015 DIGILAW 1658 (HP)

Vijay Kumar v. Pawna Devi

2015-11-06

MANSOOR AHMAD MIR

body2015
JUDGMENT : Mansoor Ahmad Mir, Chief Justice (Oral) Both these appeals are outcome of one motor vehicular accident, thus, I deem it proper to determine both these appeals by this common judgment. 2. These appeals are directed against the judgment and award, dated 19.09.2009, made by the Motor Accident Claims Tribunal (I), Kangra at Dharamshala (for short "the Tribunal") in M.A.C.P. No. 99G/II-2005, titled as Smt. Pawna Devi and others versus Vijay Kumar and others, whereby compensation to the tune of Rs. 2,88,012/with interest @ 9% per annum from the date of filing of the petition till its finalization came to be awarded in favour of the claimants and against both the appellants, (for short "the impugned award"). 3. The claimants, the driver and the insurer of the offending vehicle have not questioned the impugned award on any count, thus, has attained finality so far it relates to them. 4. The appellants in both the appeals, i.e. registered owner-Vijay Kumar and Kamal Kumar, i.e. the person, who had purchased the offending vehicle in terms of agreement, Mark-A, have questioned the impugned award on the grounds taken in the respective memo of appeals. 5. Precisely, the ground of attack in both the appeals is that the Tribunal has fallen in an error in saddling both the appellants-owners of the offending vehicle with liability. 6. Heard. 7. The claimants, being the victims of the motor vehicular accident, which was caused by the driver, namely Shri Balwant Singh, while driving bus, bearing registration No. HP553486, rashly and negligently on 16.09.2005 at about 1.45 P.M., in which the deceased sustained injuries and succumbed to the injuries, filed claim petition before the Tribunal for grant of compensation to the tune of Rs. 8,50,000/, as per the breakups given in the claim petition. 8. The respondents resisted the claim petition on the grounds taken in the respective memo of objections. 9. Following issues came to be framed by the Tribunal on 30.06.2007: "1. Whether Bali Ram had died due to rash and negligent driving of Bus No. HP553486 by respondent No. 2? OPP 2. If issue No. 1 is proved in affirmative to what amount of compensation the petitioners are entitled to and from whom? OPP 3. Whether the petition is not maintainable? OPR1 4. Whether the petition is bad for non-joinder of necessary parties? OPR1 5. OPP 2. If issue No. 1 is proved in affirmative to what amount of compensation the petitioners are entitled to and from whom? OPP 3. Whether the petition is not maintainable? OPR1 4. Whether the petition is bad for non-joinder of necessary parties? OPR1 5. Whether the said vehicle has been insured with respondent No. 3 at the time of accident? OPR1 6. Whether the respondent o. 2 was not holding a valid and effective driving licence to drive the vehicle in question at the time of accident? OPR3 7. Relief." 10. Parties have led evidence. 11. There is no dispute about the findings returned by the Tribunal on any of the issues except issue No. 2 so far it relates to saddling both the owners with liability, thus, have attained finality and are accordingly upheld. 12. The bone of contention in both the appeals is whether the registered owner is to be saddled with liability or the person who had purchased the vehicle is to be saddled with liability? 13. The Tribunal has fallen in an error in saddling the registered owner with liability for the following reasons: 14. Vijay Kumar was the registered owner, who had sold the offending vehicle to Kamal Kumar in terms of agreement, dated 02.07.2002 (Mark-A). Moreover, in paras 1 and 3 of the affidavit, dated 29.09.2006 (Ext. RW3/A), which stands duly proved, Kamal Kumar has admitted that he had purchased the vehicle from Vijay Kumar and was responsible for any kind of taxes, challan and claims arising out of the accident. 15. However, Kamal Kumar has taken U-turn by taking a ground in the reply and while appearing in the witness box before the Tribunal that he had not paid the consideration amount to Vijay Kumar, who had taken the possession of the vehicle from him within a period of three months from 02.07.2002, i.e. from the date of entering into the agreement. 16. The said defence of Kamal Kumar is not tenable for the following reason: 17. Kamal Kumar has appeared in the witness box as RW2 and has stated in his cross-examination that it is a fact that he had applied for release of the offending vehicle before the Court of competent jurisdiction which was seized in the case relating to the accident, which has given birth to the claim petition. Kamal Kumar has appeared in the witness box as RW2 and has stated in his cross-examination that it is a fact that he had applied for release of the offending vehicle before the Court of competent jurisdiction which was seized in the case relating to the accident, which has given birth to the claim petition. The said statement of Kamal Kumar has also been discussed by the Tribunal in para 16 of the impugned award. 18. Learned counsel for Kamal Kumar was asked to justify and explain what were the reasons for filing an application for release of the said vehicle before the Court of competent jurisdiction, was not in a position to do so. 19. The Apex Court in the case titled as HDFC Bank Ltd. versus Kumari Reshma and Ors., reported in 2014 AIR SCW 6673, held that if a person has purchased a vehicle by hirepurchase agreement or an agreement of hypothecation, the person in possession of the vehicle under that agreement is the owner. It is apt to reproduce paras 10, 23 and 24 of the judgment herein: "10. On a plain reading of the aforesaid definition, it is demonstrable that a person in whose name a motor vehicle stands registered is the owner of the vehicle and, where motor vehicle is the subject of hire-purchase agreement or an agreement of hypothecation, the person in possession of the vehicle under that agreement is the owner. It also stipulates that in case of a minor, the guardian of such a minor shall be treated as the owner. Thus, the intention of the legislature in case of a minor is mandated to treat the guardian of such a minor as the 'owner'. This is the first exception to the definition of the term 'owner'. The second exception that has been carved out is that in relation to a motor vehicle, which is the subject of hire-purchase agreement or an agreement of lease or an agreement of hypothecation, the person in possession of vehicle under that agreement is the owner. Be it noted, the legislature has deliberately carved out these exceptions from registered owners thereby making the guardian of a minor liable, and the person in possession of the vehicle under the agreements mentioned in the dictionary clause to be the owners for the purposes of this Act. 11. to 22. .............. 23. Be it noted, the legislature has deliberately carved out these exceptions from registered owners thereby making the guardian of a minor liable, and the person in possession of the vehicle under the agreements mentioned in the dictionary clause to be the owners for the purposes of this Act. 11. to 22. .............. 23. 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, 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 subject of an agreement of hypothecation and was in possession and control under the respondent No. 2. The High Court has proceeded both in the main judgment as well as in the review that the financier steps into the shoes of the owner. Reliance placed on Kachraji Rayamalji (1995 AIR SCW 1491) (supra), in our considered opinion, was inappropriate because in the instant case all the documents were filed by the bank. In the said case, two Judge Bench of this Court had doubted the relationship between the appellant and the respondent therein from the hire-purchase agreement. Be that as it may, the said case rested on its own facts. The decision in Kailash Nath Kothari ( AIR 1997 SC 3444 ) (supra), the Court fastened the liability on the Corporation regard being had to the definition of the 'owner' who was in control and possession of the vehicle. Similar to the effect is the judgment in Deepa Devi ( AIR 2008 SC 735 ) (supra). Be it stated, in the said case the Court ruled that the State shall be liable to pay the amount of compensation to the claimant and not the registered owner of the vehicle and the insurance company. In the case of Degala Satyanarayanamma ( AIR 2008 SC 2493 ) (supra), the learned Judges distinguished the ratio in Deepa Devi (supra) on the ground that it hinged on its special facts and fastened the liability on the insurer. In the case of Degala Satyanarayanamma ( AIR 2008 SC 2493 ) (supra), the learned Judges distinguished the ratio in Deepa Devi (supra) on the ground that it hinged on its special facts and fastened the liability on the insurer. In Kulsum (supra), the principle stated in Kailash Nath Kothari (supra) was distinguished and taking note of the fact that at the relevant time, the vehicle in question was insured with it and the policy was very much in force and hence, the insurer was liable to indemnify the owner. 24. On a careful analysis of the principles stated in the foregoing cases, it is found that there is a common thread that the person in possession of the vehicle under the hypothecation agreement has been treated as the owner. Needless to emphasise, if the vehicle is insured, the insurer is bound to indemnify unless there is violation of the terms of the policy under which the insurer can seek exoneration." 20. The Apex Court in the latest judgment in Civil Appeal No. 5293 of 2010, titled as Managing Director, K.S.R.T.C. versus New India Assurance Co. Ltd. & Anr. with MD Karnataka Road Transport Corpn. & Anr. versus Thippamma & Ors, decided on 27.10.2015, has laid down the same principle. It is profitable to reproduce relevant portion of para 32, paras 33 and 34 herein: "32. ..............This Court has held that even when there was an agreement of and vehicle has been insured and agreement holder is treated an owner, the insurer cannot escape the liability to make indemnification. 33. In view of the decision in HDFC Bank Limited v. Reshma and Ors., the insurer cannot escape the liability, when ownership changes due to the hypothecation agreement. In the case of hire also, it cannot escape the liability, even if the ownership changes. Even though, KSRTC is treated as owner under Section 2(30) of the Act of 1988, the registered owner continues to remain liable as per terms and conditions of lease agreement lawfully entered into with KSRTC. 34. In the case of hire also, it cannot escape the liability, even if the ownership changes. Even though, KSRTC is treated as owner under Section 2(30) of the Act of 1988, the registered owner continues to remain liable as per terms and conditions of lease agreement lawfully entered into with KSRTC. 34. In view of the aforesaid discussion, we hold that registered owner, insurer as well as KSRTC would be liable to make the payment of compensation jointly and severally to the claimants and the KSRTC in terms of the lease agreement entered into with the registered owner would be entitled to recover the amount paid to the claimants from the owner as stipulated in the agreement or from the insurer." 21. Applying the tests to the instant case, Kamal Kumar was to be saddled with entire liability. 22. Having said so, the impugned award is modified by providing that Kamal Kumar is saddled with entire liability and Vijay Kumar is exonerated. 23. At this stage, learned counsel for the insurer stated at the Bar that the entire awarded amount stand deposited and paid to the claimants and execution is pending. 24. In terms of the observations made hereinabove, the insurer has to press the execution petition before the Executing Court viz-a-viz Kamal Kumar. 25. Accordingly, the impugned award is modified, the appeal filed by Vijay Kumar, i.e. FAO No. 23 of 2010 is allowed and the appeal filed by Kamal Kumar, i.e. FAO No. 291 of 2010, is dismissed, as indicated hereinabove. 26. Send down the record after placing copy of the judgment on Tribunal's file.