CENTRAL BANK OF INDIAversusJAGBIR SINGH

                         [2015] 3 S.C.R. 930


A                   CENTRAL BANK OF INDIA
                                  v.
                          JAGBIR SINGH

B                 (Civil Appeal No. 3645 of 2015)
                          APRIL 16, 2015
         [DIPAK MISRA AND PRAFULLA C. PANT, JJ.]
C        Consumer Protection Act, 1986 - s.14(1)(d) - Motor
    accident - Compensation - Liability - Vehicle purchased
  · with loan sanctioned by the Bank to the owner of the
    vehicle - Initially vehicle insured, however; on the date of
    accident vehicle not insured with any of the insurance
0 company - Said vehicle involved in the accident - Award
    of compensation against the owner of the vehicle - Liability
    of the financer-creditor bank - Held: Liability of the creditor
    bank, to get the vehicle insured is only till the vehicle comes
    out on the road - Creditor bank is not liable to get the
E insurance policy renewed on behalf of the owner of the
    vehicle from time to time - Thus, the order passed by the
    authorities under the1986 Act that the creditor bank is liable
    to pay compensation set aside - Motor Vehicles Act, 1988
    - s. 146.
F
         Allowing the appeal, the Court
      HELD: 1.1 The National Commission did not
  consider properly the well explained delay in filing the
  revision before it. Therefore, the impugned order
G dismissing the revision petition, in the instant case,
  cannot be sustained. [Para 6] [933-G-H; 934-B]
      1.2 The liability of the creditor bank, to get the
  vehicle insured is only till the vehicle comes out on the
H                              930
     CENTRAL BANK OF INDIA v. JAGBIR SINGH                931


road. The creditor bank is not liable to get the A
insurance policy renewed on behalf of the owner of the
vehicle from time to time. The impugned order passed
by the authorities under Consumer Protection Act,
1986, that the creditor bank ·is liable to pay
compensation is set aside. [Paras 8- 9] [935-C-D; 937- B
D-E]
   HDFC Bank Ltd. v. Kumari Reshma and others AIR
2015 SC 290 - relied to.
   Pradeep Kumar Jain v. Citi Bank and another (1999) C
6 sec 361 - referred to.
                 Case Law Reference
   (1999) 6 sec 361      referred to.     Para 7
                                                           D
   AIR 2015 SC 290       relied to.       Para 8, 9

   CIVIL: APPELLATE JURISDICTION: Civil Appeal No.
3645 of 2015.
                                                           E
    From the Judgment and Order dated 19.11.2013 of the
National Consumer Disputes Redressal Commission at
New Delhi in Revision Petition No. 3648 of 2013.

    0. P. Gaggar for the Appellant.
                                                           F
    N. Ganpathy for the Respondent.

   The judgment of the Court was delivered by

     PRAFULLA C. PANT, J. 1. This appeal is directed G
against order dated 19.11.2013, passed by National
Consumer Disputes Redressal Commission (for short
"NCDRC"), New Delhi, in Revision Petition No. 3648 of
2013 whereby the revision filed by the present appellant
is dismissed.                                            H
932         SUPREME COURT REPORTS                   (2015] 3 S.C.R.


A         2. We have heard learned counsel for the parties and
      perused the papers on record.

           3. Brief facts of the case, giving rise to this appeal, are
      that respondent Jagbir Singh purchased a tractor bearing
B     registration No. HR-14B-3913, after getting loan sanctioned
      from the appellant-Bank. In terms of conditions of loan the
      respondent was making deposits of the loan instalments
      of loan to the Bank. The vehicle was initially insured as
      required under Motor Vehicles Act, 1988, but no premium
C     of insurance was paid by the respondent for the period after
      25.5.2005. On 24.9.2007 at about 11.50 a.m., an accident
      occurred between the above vehicle and motorcycle
      bearing registration No. DL-3S-AY-0421, in which Pankaj
      son of Babu Ram Garg, died due to rash and negligent
D     driving on the part of Diwan Singh, driver of the tractor
      owned by respondent Jagbir Singh. The parents of the
      deceased filed claim petition No. 208/11/2007 before Motor
      Accident Claims Tribunal-II, Dwarka Courts, New Delhi,
      which was allowed by said Tribunal, vide its order dated
E     17 .11.2012 awarding compensation to the tune of
      Rs.4,01,460/- with 7.5% interest per annum, against driver
      and owner of the vehicle. It has not been disputed between
      the parties that on the date of accident the vehicle No. HR-
F     14B-3913 was not insured with any of the insurance
      companies, as required under Section 146 of the Motor
      Vehicles Act, 1988.

        4. The respondent filed complaint (No. 157 of 208)
  before District Consumer Disputes Redressal Forum,
G Jhajjar, praying that the Central Bank of India (appellant),
  i.e., the creditor bank should be made liable to pay the
  compensation, awarded against him by the Tribunal. The
  District Consumer Disputes Redressal Forum, vide its order
H dated 11.11.2009, held that the Bank (present appellant)
     CENTRAL BANK OF INDIA v. JAGBIR SINGH                  933
             [PRAFULLA C. PANT, J.]

is lia.ble for the legal consequences for not getting the A
insurance renewed. The State Consumer Disputes
Redressal Commission, Haryana, Panchkula, before whom
the Central Bank of India (creditor bank) filed First Appeal
No. 40 of 2010, vide its order dated 18.10.2012, dismissing
the appeal on the ground that in terms of loan agreement B
the Bank has a right to recover insurance premium, held
that the Bank cannot escape its liability. It appears that
the Bank finally approached NCDRC by filing Revision
Petition No. 3648 of 2013, but same was filed with delay
of 230 days, and NCDRC in its wisdom did not find the C
explanation advanced for condonation of delay as sufficient,
as such, the revision petition was dismissed as barred by
limitation. HencE'l, this appeal through special leave.

     5. Learned counsel for the appellant pointed out before D
us that the order of the State Consumer Disputes Redressal
Commission was received by the appellant only on
26.11.2012, after the same was dispatched by the
Commission on 19.11.2012. It is further submitted that the
branch of the appellant bank is situated in a remote village E
and due to shortage of staff the matter could be taken up
by the Regional Office only in December, 2012. It is
contended that since it took time in obtaining the necessary
permission for filing the revision, as such, the delay of 230 F
days, occurred in filing the revision petition, should have
been condoned by the NCDRC. Admittedly, the revision
petition was filed on 11.10.2013.

     6. Having heard learned counsel for the parties and
after going through the papers on record, we find that G
NCDRC has not considered properly the well explained
delay in filing the revision petition before it. In our opinion,
the time taken by the appellant bank in seeking permission
to file the revision petition, as the matter _had to be H
934         SUPREME COURT REPORTS                 [2015] 3 S.C.R.


A     processed at various levels, cannot be said to have been
      not sufficiently explained for the purpose of condonation
      of delay. Therefore, the impugned order dismissing the
      revision petition, in the present case, cannot be sustained.

B     7. On the merits of the case, we find that none of the
  authorities under the Consumer Protection Act, 1986, in the
  case at hand has taken note of the law laid down by this
  Court on the issue of liability of the financer, in the cases
  of accident occurred, after the vehicle is purchased with
C loan sanctioned to the owner of the vehicle. In Pradeep
  Kumar Jain v. Citi Bank and another1, discussing Section
  146 of Motor Vehicles Act, 1988, this Court has held as
  under: -

D          "5. Under Section 146 of the Act there is an obligation
           on the owner of a vehicle to take out an insurance
           policy as provided under Chapter XI of the Act. If any
           vehicle is driven without obtaining such an insurance
           policy it is punishable under Section 196 of the Act.
E          The policy may be comprehensive or only covering
           third parties or liability may be limited. Thus when the
           obligation was upon the appellant to obtain such a
         · policy, merely by passing of a cheque to be sent to the
           insurance company would not obviate his liability to
F          obtain such policy. It is not clear on the record as to
           the nature of the policy that had been obtained by the
           appellant earlier when he purchased the vehicle and
           which was to be renewed from time to time. It is also
           not clear whether even in the case of renewal, a fresh
G          application has to be made by the appellant or on the
           old policy itself an endorsement would have been
           made. In the absence of such material on record, and


H     1 (1999) e sec 351
     CENTRAL BANK OF INDIA v. JAGBIR SINGH                935
             [PRAFULLA C. PANT, J.]

    the nature of the insurance policy or any anxiety shown A
    by the appellant in obtaining the policy as he could not
    ply such vehicle without such an insurance policy being
    obtained, he cannot claim that merely because he had
    passed on the cheques, the entire liability to pay all
    damages arising would be upon the first respondent." B

     8. A Three-Judge Bench of this Court, in HDFC Bank
Ltd. v. Kumari Reshma and otherit!, has further explained
the law relating to liability of the creditor bank, and it has
been held that the liability of such bank to get the vehicle C
insured is only till the vehicle comes out on the road. In
other words, the creditor bank is not liable to get renewed
the insurance policy on behalf of the owner of the vehicle
from time to time. Paragraphs 23, 24 and relevant part of
paragraph 25 of that judgment are reproduced as under: - D ·

    "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 E
    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 F
    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
    r~view that the financier steps into the shoes of the G
    owner. Reliance placed on Mohan Benefit Pvt. Ltd. v.
    Kachraji Rayamalji & ors. [(1997) 9 SCC 103], in our


2 AIR 2015 SC 290                                           H
936    SUPREME COURT REPORTS                  [2015] 3 S.C.R.


A     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.
B     Be that as it may, the said case rested on its own facts,
      The decision in Rajasthan State Road Transport
      Corporation v. Kai/ash Nath Kothari & others [(1997)
       7 SCC 481], the Court fastened the liability on the
      Corporation regard being had to the definition of the
c     'owner' who was in control and possession of the
      vehicle. Similar to the effect is the judgment in National
      Insurance Co. Ltd. v. Deepa Devi & ors. [(2008) 1 SCC
      414]. Be it stated, in the said case the Court ruled that
      the State shall be liable to pay the amount of
D
      c:ompensation to the claimant and not the registered
      owner of the vehicle and the insurance company. In
      the case of Godavari Finance Company v. Degala
      Satyanarayanamma and others [(2008) 5 SCC 107],
E     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 Uttar
      Pradesh State Road Transport Corporation v. Ku/sum
      and others [(2011) 8 sec 142], the principle stated in
F     Kai/ash 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.
G
      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
H     as the owner. Needless to emphasise, if the vehicle is
       CENTRAL BANK OF INDIA v. JAGBIR SINGH                      937
               [PRAFULLA C. PANT, J.]

     insured, the insurer is bound to indemnify unless there A
     is violation of the terms of the policy under which the
     insurer can seek exoneration.
     25. In Pumya Kala Devi v. State of Assam & Anr. [2014
     (4) SCALE 586], a three-Judge Bench has categorically B
     held that the person in control and possession of the
     vehicle under an agreement of hypothecation should
     be construed as the owner and not alone the registered
     owner and thereafter the Court has adverted to the
     legislative intention, and ruled that the registered owner C
     of the vehicle should not be held liable if the vehicle
     is not in his possession and control. ....... "

    9. In view of the above discussion and the principle of
law laid down by this Court, the impugned order passed D
by the NCDRC and the orders passed by the State
Consumer Disputes Redressal Commission, Haryana and
the District Consumer Disputes Redressal Forum, Jhajjar,
are liable to be set aside.
                                                            E
    10. Accordingly the appeal is allowed and the
impugned order and the order passed by the authorities
under Consumer Protection Act, 1986, in the present case,
are set aside. No order as to costs.

Nidhi Jain                                      Appeal allowed.