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Himachal Pradesh High Court · body

2022 DIGILAW 752 (HP)

Anil Kumar v. Jyoti

2022-11-25

JYOTSNA REWAL DUA

body2022
JUDGMENT : Jyotsna Rewal Dua, J. 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 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 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 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. 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) 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 exparte 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. 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 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 (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). 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 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. 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. 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 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. 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 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 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. 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.” 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 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. 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 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 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 compensation amount, is quashed and set aside. 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 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 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.