Pushpa @ Leela &
Ors. Vs Shakuntala & Ors.
JUDGMENT
AFTAB ALAM, J.
1.
Whether
in the fact and circumstances of the case the liability to pay the compensation
amount as determined by the Motor Accident Claims Tribunal was of the purchaser
of the vehicle alone or whether the liability of the recorded owner of the
vehicle was coextensive and from the recorded owner it would pass on to the
insurer of the vehicle? This is the short question that arises for
consideration in this appeal by special leave filed at the instance of the
claimants.
2.
The
appellants, claimants before the Claims Tribunal are the heirs and legal
representatives of one Prem Chand who died in a motor accident on May 7, 1994.
Prem Chand had hired the truck bearing registration no.HPA-1435 for carrying
some materials and food articles for a wedding in the family. He got the
materials to be transported loaded on the truck by a labourer, Nikku Ram whom
he had engaged for that purpose and took him along with him on the truck for
unloading the consignment at the destination. According to the claimants, the
driver Roop Ram was driving the truck rashly and at a very high speed. As a
result, the truck met with an accident and at about 6.30-7pm while running on
Dhararu Dhar Road near Bangora, Tehsil Arki, District Solan, in the State of
Himachal Pradesh, it went off the road and overturned leading to the death of
all the three persons, Including the driver.
3.
The
truck had a little history of its own that actually gives rise to the question
set out at the beginning of the judgment. It earlier belonged to one Jitender
Gupta who was its registered owner. Jitender Gupta sold the truck to Salig Ram
on February 2, 1993 and gave its possession to the transferee. On the date of
the sale, the truck was covered by an insurance policy taken out by Jitender
Gupta from New India Assurance Company Ltd. The insurance policy was issued on
February 25, 1992 and it was due to expire on February24, 1993. Despite the
sale of the vehicle by Jitender Gupta to Salig Ram, the change of ownership of
the vehicle was not entered in its certificate of registration. After the
earlier policy issued by New India Assurance Company Ltd. expired on February
24, 1993, there was a period when the truck was not covered by any insurance
policy. Later on, however, Salig Ram took out an insurance policy for the truck
from Oriental Insurance Company Ltd. bearing policy no.31/94/00628. The policy
was taken in the name of Jitender Gupta, the earlier owner of the truck, and it
was valid from December 8, 1993 to December 7, 1994. The accident in which Prem
Chandand Nikku Ram lost their lives took place on May 7, 1994, i.e. during the period
when the policy taken out from the Oriental Insurance Company Ltd. was
subsisting and valid.
4.
The
heirs and legal representatives of both the deceased, Prem Chandand Nikku Ram
filed separate claim applications before the Motor Accident Claims Tribunal,
Solan, Himachal Pradesh. In both the claim applications Salig Ram, the
transferee was impleaded as respondent no.1, Jitender Gupta, the original owner
of the truck as respondent no.2 and Oriental Insurance Company Ltd. as
respondent no.3. The two claim applications, MAC petition no.62-NS/2 of 1994
filed by the heirs and legal representatives of the deceased Prem Chand
(appellants in this appeal) and MAC petitionno.63-NS/2 of 1994 filed by the
heirs and legal representatives of the deceased Nikku Ram (who pursued the
matter only up to the High Court and who have not been able to come to this
Court in appeal) were consolidated and heard together. All the three
respondents appeared before the Tribunal and filed their separate replies
resisting the claims of the two claimants. But none of the respondents led any
evidences before the Claims Tribunal.
5.
The
Claims Tribunal, on the basis of the ex parte evidence adduced onbehalf of the
claimants, found and held that both Prem Chand and Nikku Ram died on May 7,
1994, in the accident caused by truck no.HPA-1435which was being driven by its
driver Roop Ram in a rash and negligent manner. It also found that Prem Chand
and Nikku Ram were not travelling in the ill-fated truck as un authorised or
gratuitous passengers. The ClaimsTribunal further held that the heirs and legal
representatives of Prem Chand were entitled to a sum of Rs.5,04,000/- for the
loss of dependency andRs.10,000/- for loss of consortium and Rs.2000/- as
cremation charges. The heirs and legal representatives of Prem Chand were,
thus, held entitled to a total compensation of Rs.5,16,000/-. In case of the
heirs and legal representatives of the deceased Nikku Ram, the Claims Tribunal
held that they were entitled to a total compensation of Rs.2,42,000/-.
6.
Coming
next to the question of liability of payment, the issue that is most crucial
for the claimants from the practical point of view, the Claims Tribunal held
that no liability for payment of compensation to the claimants would attach to
Jitender Gupta since he had ceased to be the owner of the vehicle after its
sale to Salig Ram on February 2, 1993. It further held that even though an
insurance policy for the truck was taken out from Oriental Insurance Company
Ltd., the policy was in the name of Jitender Gupta, who was no longer the owner
of the truck on the date the policy was taken out and there was no privity of
contract between Salig Ram, the owner of the truck and the insurance company.
Hence, the insurance policy was of no use for indemnifying Salig Ram, the owner
of the truck. In short, Salig Ramalone was liable for payment of the
compensation amount to the two claimants. In this connection, the Claims
Tribunal in paragraph 46 of its judgment held and observed as followed: "Because
the subsequent policy was taken by respondent no.2 effective from 08.12.1993
to 07.12.1994 when he was not owner having no right, title or interest to
obtain the policy. The owner at that time was respondent no.1 who never
entered into any privy of contract with respondent no.3 to cover third party
risks qua the vehicle."
7.
Against
the judgment and award made by the Claims Tribunal the claimants filed appeals
before the Himachal Pradesh High Court being FAOno.459 of 2000 (by the heirs
and legal representatives of Prem Chand) and FAO no.77 of 1999 (by the heirs
and legal representatives of Nikku Ram).Both the appeals were dismissed by the
High Court by a common judgment land order dated July 15, 2004.
8.
We
have examined the judgments passed by the Claims Tribunal and the High Court
and we find that both the Tribunal and the High Court addressed the question of
the liability of the recorded owner of the vehicle on the basis of a provision
that has no relevance to the issue. Both the Tribunal and the High Court
discussed at length the provision of section 157of the Motor Vehicles Act, 1988
("the Act" for short) that deals with" Transfer of Certificate
of Insurance". So far as that section is concerned the Tribunal and the
High Court were right in holding that section 157 of the Act would apply only
to the earlier policy (being that of New India Assurance Company Ltd.) taken
out by Jitender Gupta during the validity period of which the truck was sold by
him to Salig Ram and it can have no application to the second policy taken out
from Oriental Insurance Company Ltd. in the name of Jitender Gupta after the
sale of the truck. But as stated earlier, section 157 has no application in the
facts of this case.
9.
9.
The question of the liability of the recorded owner of the vehicle has to be
examined under different provisions of the Act. Section 2(30) of the Act
defines "owner" in the following terms: "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;" (Emphasis added)
10.
Then,
section 50 of the Act lays down the procedure for transfer of ownership. It is
a long section and insofar as relevant it is reproduced below:
"50. Transfer
of ownership.
(1) Where the
ownership of any motor vehicle registered under this Chapter is transferred,-
(a) the transferor
shall,-
(i) in the case of a
vehicle registered within the same State, within fourteen days of the
transfer, report the fact of transfer, in such form with such documents and
in such manner, as may be prescribed by the Central Government to the registering
authority within whose jurisdiction the transfer is to be effected and shall
simultaneously send a copy of the said report to the transferee; and
(ii) xxxxxxx
(b) the transferee
shall, within thirty days of the transfer, report the transfer to the
registering authority within whose jurisdiction he has the residence or place
of 8 business where the vehicle is normally kept, as the case may be, and
shall forward the certificate of registration to that registering authority
together with the prescribed fee and a copy of the report received by him from
the transferor in order that particulars of the transfer of ownership may be
entered in the certificate of registration.
(2) xxxxxxx
(3) xxxxxxx
(4) xxxxxxx
(5) xxxxxxx
(6) On receipt of a
report under sub-section (1), or an application under subsection (2), the
registering authority may cause the transfer of ownership to be entered in
the certificate of registration. (7) A registering authority making any such
entry shall communicate the transfer of ownership to the transferor and to the
original registering authority, if it is not the original registering
authority."
11.
It
is undeniable that notwithstanding the sale of the vehicle neither the transferor
Jitender Gupta nor the transferee Salig Ram took any step for the change of the
name of the owner in the certificate of registration of the vehicle. In view of
this omission Jitender Gupta must be deemed to continue as the owner of the
vehicle for the purposes of the Act, even though under the civil law he ceased
to be its owner after its sale on February 2, 1993.
12.
The
question of the liability of the recorded owner of a vehicle after its sale to
another person was considered by this Court in Dr. T.V. Jose vs. Chacko P.M.,
(2001) 8 SCC 748. In paragraphs 9 and 10 of the decision, the Court observed
and held as follows:
"9. Mr. Iyer
appearing for the Appellant submitted that the High Court was wrong in
ignoring the oral evidence on record. He submitted that the oral evidence
clearly showed that the Appellant was not the owner of the car on the date of
the accident. Mr. Iyer submitted that merely because the name had not been
changed in the records of R.T.O. did not mean that the ownership of the
vehicle had not been transferred. Mr. Iyer submitted that the real owner of
the car was Mr. Roy Thomas. Mr. Iyer submitted that Mr. Roy Thomas had been made
party-Respondent No.9 to these Appeals. He pointed out that an Advocate had
filed appearance on behalf of Mr. Roy Thomas but had then applied for and was
permitted to withdraw the appearance. He pointed out that Mr. Roy Thomas had
been duly served and a public notice had also been issued. He pointed out
that Mr. Roy Thomas had chosen not to appear in these Appeals. He submitted
that the liability, if any, was of Mr. Roy Thomas.
We agree with Mr.
Iyer that the High Court was not right in holding that the Appellant
continued to be the owner as the name had not been changed in the records of
R.T.O. There can be transfer of title by payment of 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 R.T.O. as the owner.
The Appellant could not escape that liability by merely joining Mr. Roy
Thomas in these Appeals. Mr. Roy Thomas was not a party either before MACT or
the High Court. In these Appeals we cannot and will not go into the question
of inter se 10 liability between the Appellant and Mr. Roy Thomas. It will
be for the Appellant to adopt appropriate proceedings against Mr. Roy Thomas
if, in law, he is entitled to do so." (Emphasis added)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Again,
in P.P. Mohammed vs. K. Rajappan & Ors., (2008) 17 SCC624, this Court
examined the same issue under somewhat similar set of facts as in the present
case. In paragraph 4 of the decision, this Court observed and held as follows:
"4. These appeals are filed by the appellants. The insurance company has
chosen not to file any appeal. The question before this Court is whether by
reason of the fact that the vehicle has been transferred to Respondent 4 and
thereafter to Respondent 5, the appellant got absolved from liability to the
third person who was injured. This question has been answered by this Court
in T.V. Jose (Dr.) v. Chacko P.M. wherein it is held that 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. We are in agreement with the view expressed
therein. Merely because the vehicle was transferred does not mean that the
appellant 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." (Emphasis
added)
14.
The
decision in Dr. T.V. Jose was rendered under the Motor Vehicles Act, 1939. But
having regard to the provisions of section 2(30) and section50 of the Act, as
noted above, the ratio 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. Further, since an insurance
policy in respect of the truck was taken out in his name he was indemnified and
the claim will be shifted to the insurer, Oriental Insurance Company Ltd.
15.
Learned
counsel for the insurance company submitted that even though the registered
owner of the vehicle was Jitender Gupta, after the sale of the truck he had no
control over it and the possession and control of the truck were in the hands
of the transferee, Salig Ram. No liability can, therefore, be fastened on
Jitender Gupta, the transferor of the truck. In support of this submission he
relied upon a decision of this Court in National Insurance Company Ltd. vs.
Deepa Devi & Ors., (2008) 1 SCC414. The facts of the case in Deepa Devi are
entirely different. In that case the vehicle was requisitioned by the District
Magistrate in exercise of the powers conferred upon him under the Representation
of the People Act,1951. In that circumstance, this Court observed that the
owner of the vehicle cannot refuse to abide by the order of requisition of the
vehicle by the Deputy Commissioner. While the vehicle remained under
requisition, the owner did not exercise any control over it: the driver might
still be the employee of the owner of the vehicle but he had to drive the
vehicle according to the direction of the officer of the State, in whose charge
the vehicle was given. Save and except the legal ownership, the registered owner
of the vehicle had lost all control over the vehicle. The decision in Deepa
Devi was rendered on the special facts of that case and it has no application
to the facts of the case in hand.
16.
In
light of the discussion made above it is held that the compensation amount is
equally realisable from respondent no.3, Oriental Insurance Company Ltd. and it
is directed to make full payment of the compensation amount as determined by
the Claims Tribunal to the appellants within two months from the date of this
judgment.
17.
Even
though the claimants in the other case, the heirs and legal representatives of
Nikku Ram, have not come to this Court, we consider it appropriate to give the
same direction in respect of their case. There is absolutely no difference in
the case of Nikku Ram and Prem Chand. Nikku Ram, being a daily wage earner was
given a compensation of Rs.2,42,000/-.It is quite possible that his heirs and
legal representatives were unable to come to this Court simply for want of
sufficient means. The insurance company must pay the compensation amount
determined in case of Nikku Ram to his heirs and legal representatives in case
the amount has so far not been realised from Salig Ram as directed by the
Claims Tribunal.18. The appeal is allowed but with no order as to costs.
....................................J.
(AFTAB ALAM)
....................................J.
(R.M. LODHA)
New
Delhi
January
12, 2011.
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