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2016 DIGILAW 2244 (HP)

Tilak Raj Sood v. Rajmati

2016-10-21

MANSOOR AHMAD MIR

body2016
JUDGMENT : Mansoor Ahmad Mir, J. This appeal is directed against the judgment and award, dated 1st September, 2011, made by the Motor Accident Claims Tribunal, Kullu, Himachal Pradesh (for short ‘the Tribunal’) in Claim Petition No. 56 of 2008, titled as Smt. Rajmati versus Sh. Tilak Raj Sood & others, whereby compensation to the tune of Rs. 4,60,000/- with interest @ 9% per annum from the date of filing of the claim petition till its realization came to be awarded in favour of the claimant and appellant-registered owner was saddled with liability (for short ‘the impugned award’). 2. The claimant, driver and Pawan Kumar transferee, have not questioned the impugned award, on any count. Thus, it has attained finality, so far it relates to them. 3. Learned Counsel for the appellant argued that though the appellant was the registered owner of the vehicle bearing registration No. HP-37-2273, but he had sold it to respondent No.3-Pawan Kumar, was in possession and control of the said vehicle at the time of the accident, stand proved before the Tribunal, thus the Tribunal has fallen in an error in saddling the appellant with liability. 4. Learned Counsel for respondent No. 3 argued that appellant is the registered owner of the offending vehicle, all the documents are still in his name and the Tribunal has rightly saddled the appellant with the liability. 5. Heard. Perused. 6. The Tribunal has fallen in an error in saddling the appellant with liability for the following reasons. 7. Admittedly, appellant-Tilak Raj was registered owner of the offending vehicle, but he had executed an affidavit (Ext. RW-2/A) in favour of respondent No. 3-Pawan Kumar, whereby he has stated that he had sold the offending vehicle to Pawan Kumar and he had no objection in case the said vehicle was transferred in the name of Pawan Kumar. Further, he has stated that till the execution of the said deed, all the liabilities were to be satisfied by him, i.e. the registered owner and thereafter, it is the duty and liability of Pawan Kumar. Pawan Kumar has also executed an affidavit (Ext. RW-2/B), whereby he has admitted that he has purchased the offending vehicle from appellant-Tilak Raj. 8. Both the aforesaid documents do disclose that Pawan Kumar was in possession and control of the offending vehicle at the time of accident. 9. Pawan Kumar has also executed an affidavit (Ext. RW-2/B), whereby he has admitted that he has purchased the offending vehicle from appellant-Tilak Raj. 8. Both the aforesaid documents do disclose that Pawan Kumar was in possession and control of the offending vehicle at the time of accident. 9. RW-4, Head Constable Saraswati Devi has deposed that she has seized the documents of the offending vehicle, which was in the name of appellant-Tilak Raj, he had executed so many documents including Forms No. 29 & 30 in terms of the mandate of the Motor Vehicles Act and Rules, but the offending vehicle was not transferred till that date. Thus, her statement also supports the contention that the vehicle was sold and in possession of Pawan Kumar. 10. This Court in FAO No. 23 of 2010, titled as Vijay Kumar versus Pawna Devi & others, alongwith another connected matter, decided on 06.11.2015, has already determined the said issue and held that the person who is in possession and control of the offending vehicle at the time of accident, is responsible. 11. It is apt to reproduce para-19 of the aforesaid judgment herein:- “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 hire-purchase 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'. 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. 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. 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 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." 12 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, reported in 2015 AIR SCW 6145, 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. 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 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." 13. Applying the tests to the instant case, Pawan Kumar has to satisfy the entire liability. 14. Having said so, the impugned award is modified by providing that Pawan Kumar is saddled with the entire liability and appellant-registered owner is exonerated/discharged. 15. Learned Counsel for the appellant stated at the Bar that the appellant has deposited the entire awarded amount. 16. The amount deposited by the appellant be released in favour of the claimant through payees’ account cheque or by depositing the same in her account. 17. Respondent No. 3 is directed to deposit the awarded amount within eight weeks from today. On deposit, the same be released in favour of the appellant through payees’ account cheque or by depositing the same in his account. 18. The appeal stands disposed of accordingly, as indicated above. 19. Send down the record after placing a copy of the judgment on Tribunal's file.