PRAKASH CHAND DAGAversusSAVETA SHARMA & ORS.

936                     [2018] REPORTS
               SUPREME COURT   13 S.C.R. 936                [2018] 13 S.C.R.


A                         PRAKASH CHAND DAGA
                                         v.
                           SAVETA SHARMA & ORS.
                         (Civil Appeal No. 11369 of 2018)
B                             DECEMBER 14, 2018
                         [UDAY UMESH LALIT AND
               DR. DHANANJAYA Y CHANDRACHUD, JJ.]
             Motor Vehicles Act, 1988 – ss.2(30), 50 and 177 –
      Compensation – Appellant, original owner of a car, sold the said
C     vehicle to the first respondent – Vehicle got involved in an accident
      – Second respondent received injuries – Claim petition by second
      respondent – Tribunal assessed compensation at Rs.12.47 lakhs
      and the liability was fastened on the driver and first respondent –
      High Court modified the award to the extent that the Insurance
D     Company was liable to make compensation to the claimant and the
      Insurance Company was given recovery rights to recover the same
      from the appellant-registered owner of the vehicle – On appeal,
      held: It is settled that 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
E     records, he remains liable to a third person – Thus, High Court was
      right in its finding that despite the sale of the vehicle, no transfer of
      ownership, in accordance with s.50 of the Act was effected and the
      appellant continued to be the owner of the vehicle.
            Dismissing the appeal, the Court
F            HELD: 1. Section 50 of the Motor Vehicles Act, 1988
      prescribes timelines within which the transferor and the
      transferee are required to report the factum of transfer. As per
      Sub-Section 3 of said Section 50, if there be failure to report the
      fact of transfer, fine could be imposed and an action under Section
G     177 could thereafter be taken if there is failure to pay the amount
      of fine. These timelines and obligations are only to facilitate the
      reporting of the transfer. It is not as if that if an accident occurs
      within the period prescribed for reporting said transfer, the
      transferor is absolved of the liability. [Para 5][939-D-E]

H
                                     936
   PRAKASH CHAND DAGA v. SAVETA SHARMA & ORS.                              937


      2. Chapter XII of the Act deals with Claims Tribunals and            A
as to how applications for compensation are to be preferred and
dealt with. While considering such claims, the Claims Tribunal,
in case of an accident is required to specify the amount which
shall be paid by the insurer or owner or driver of the vehicle
involved in the accident or whether such amount be paid by all or
                                                                           B
any of them, as the case may be. It is well settled that for the
purposes of fixing such liability the concept of ownership has to
be understood in terms of specific definition of ‘owner’ as defined
in Section 2(30) of the Act. [Para 6][939-E-F]
      3. The High Court found that despite the sale of the vehicle,
no transfer of ownership, in accordance with Section 50 of the             C
Act was effected and as such the appellant continued to be the
owner in terms of definition as incorporated in Section 2(30)
of the Act. The High Court was absolutely right in allowing
the appeal. The challenge raised by the appellant must fail.
[Paras 3 and 9][938-E-F; 941-F]                                            D
      Naveen Kumar v. Vijay Kumar and Others (2018) 9 SCC
      1 : [ 2017] 12 SCR 805 ; Pushpa alias Leela and Ors.
      v. Shakuntala and Ors.(2011) 2 SCC 240 : [2011] 1
      SCR 334 – relied on.
                       Case Law Reference                                  E
[2017] 12 SCR 805               relied on                 Para 8
[2011] 1 SCR 334                relied on                 Para 7
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11369
of 2018.
                                                                           F
      From the Judgment and Order dated 05.04.2018 of the High Court
of Punjab and Haryana at Chandigarh in F.A.O. No. 7010 of 2011.
      Siddharth H. Rawal, Prashant Kumar, Joseph Pookkatt,
M/S. Ap & J Chambers, Advs. for the Appellant.
      The Judgment of the Court was delivered by                           G
      UDAY UMESH LALIT, J.
      1. This appeal challenges the judgment and order dated 05.04.2018
passed by the High Court of Punjab and Haryana at Chandigarh in FAO
No.7010/2011.
      2. The appellant, original owner of a Santro Car sold said vehicle   H
938                SUPREME COURT REPORTS                         [2018] 13 S.C.R.


A     to Ms. Saveta Sharma, first respondent on 11.09.2009. According to the
      appellant, after receiving due consideration, the possession was
      transferred to said first respondent. An accident occurred on 09.10.2009
      in which one Rakesh Kumar, second respondent, received injuries. In a
      claim lodged by second respondent, the Motor Accident Claims Tribunal
      assessed the compensation at Rs.12.47 lakhs and directed as under:
B
                “32. In view of my findings on the various issues above, the claim
                petition is allowed with costs and claimant is awarded total
                compensation of Rs.12,47,739/- (Rs. Twelve lacs Forty Seven
                Thousand Seven Hundred Thirty Nine only), Rs.11,58,489/-
                compensation for medical expenses etc. + Rs.60,000/- as
C               compensation for pain and sufferings + Rs.18,000/- as
                compensation for loss of income + Rs.11,250/- as compensation
                for temporary disability from respondent No.2 and 3 alone. Keeping
                in view prevalent interest rates, the claimant shall also be entitled
                to interest on the above awarded amount at the rate of 7.5% per
D               annum from the date of filing of petition till final realisation. The
                liability of the respondent No.2 and 3 to pay the compensation
                shall be joint as well as several. Memo of costs be prepared and
                file be consigned to records.”
             3. Since the liability was fastened on the driver and first respondent,
      the aforesaid decision was challenged by them in the High Court by
E
      filing FAO No.7010/2011. The High Court found that despite the sale of
      the vehicle on 11.09.2009, no transfer of ownership, in accordance with
      Section 50 of the Motor Vehicles Act,1988 (‘the Act’ for short) was
      effected and as such the appellant continued to be the owner in terms of
      definition as incorporated in Section 2(30) of the Act. Relying on the
F     decision of this Court in Naveen Kumar vs. Vijay Kumar and others1
      the High Court concluded as under.
                “Applying the ratio of the above said judgment to the facts of the
                present case, the award stands modified to the above extent that
                the Insurance Company is liable to make the compensation to the
G               claimant and the Insurance Company will have the recovery rights
                to recover the same from the registered owner i.e. respondent
                No.1 of the offending vehicle. Remaining conditions of disbursal
                of amount shall remain unaltered.”

      1
H         (2018) 3 SCC 1
       PRAKASH CHAND DAGA v. SAVETA SHARMA & ORS.                                939
                 [UDAY UMESH LALIT, J.]

       4. Learned counsel appearing for the appellant submitted that the         A
accident had occurred within thirty days of the transfer when the statutory
period as prescribed under Section 50(1)(b) of the Act had not expired
and as such the liability could not be fastened on the present appellant.
Though served, the transferee, namely, first respondent has chosen not
to appear in the matter. We have gone through the record and considered
                                                                                 B
the submissions advanced by the learned counsel for the appellant and
the Insurance Company.
        5. It is true that in terms of Section 50 of the Act, the transfer of
a vehicle ought to be registered within 30 days of the sale. Section 50(1)
of the Act obliges the transferor to report the fact of transfer within 14
days of the transfer. In case the vehicle is sold outside State, the period      C
within which the transfer ought to be reported gets extended. On the
other hand, the transferee is also obliged to report the transfer to the
registering authority within whose jurisdiction the transferee has the
residence or place of business where the vehicle is normally kept. Section
50 thus prescribes timelines within which the transferor and the transferee      D
are required to report the factum of transfer. As per Sub-Section 3 of
said Section 50, if there be failure to report the fact of transfer, fine
could be imposed and an action under Section 177 could thereafter be
taken if there is failure to pay the amount of fine. These timelines and
obligations are only to facilitate the reporting of the transfer. It is not as
if that if an accident occurs within the period prescribed for reporting         E
said transfer, the transferor is absolved of the liability.
       6. Chapter XII of the Act deals with Claims Tribunals and as to
how applications for compensation are to be preferred and dealt with.
While considering such claims, the Claims Tribunal, in case of an accident
is required to specify the amount which shall be paid by the insurer or          F
owner or driver of the vehicle involved in the accident or whether such
amount be paid by all or any of them, as the case may be. It is well
settled that for the purposes of fixing such liability the concept of
ownership has to be understood in terms of specific definition of ‘owner’
as defined in Section 2(30) of the Act.
                                                                                 G
       7. In Pushpa alias Leela and Ors. Vs. Shakuntala and Ors.2
the vehicle in question belonged to one Jitender Gupta who was its
registered owner. He sold said vehicle to one Salig Ram on 02.02.1993
and gave its possession to the transferee. Despite said sale, the change
2
    (2011)2 SCC 240                                                              H
940            SUPREME COURT REPORTS                          [2018] 13 S.C.R.


A     of ownership was not entered in the Certificate of Registration. The
      earlier insurance policy having expired, the transferee took out fresh
      insurance policy in the name of original owner Jitender Gupta. In an
      accident that took place on 07.05.1994 two persons lost their lives. The
      heirs and legal representatives lodged separate claims and an issue arose
      as to who was liable as owner. The submissions that Jitender Gupta, the
B
      registered owner had no control over the vehicle and the possession and
      control of the vehicle was in the hands of the transferee and as such no
      liability could be fastened on the transferor were rejected by this Court.
      It was observed in para 11 as under:
            “11. It is undeniable that notwithstanding the sale of the vehicle
C           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
D           law he ceased to be its owner after its sale on 2.2.1993.”
            8. In the decision in Naveen Kumar (supra) the legal position
      was adverted to and this Court observed as under:
            “13. The consistent thread of reasoning which emerges from the
            above decisions is that in view of the definition of the expression
E           “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
F           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
G           the definition of the expression “owner” in Section 2(30), making
            a departure from the provisions of Section 2(19) in the earlier
            1939 Act. 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
H           with following a trail of successive transfers, which are not
       PRAKASH CHAND DAGA v. SAVETA SHARMA & ORS.                                    941
                 [UDAY UMESH LALIT, J.]

          registered with the Registering Authority. To hold otherwise would         A
          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
                                                                                     B
          fastened upon him. Admittedly, the vehicle was uninsured. The
          High Court has proceeded upon a misconstruction of the judgments
          of this Court in Reshma (2015)3 SCC 679 and Purnya Kala Devi
          (2014) 14 SCC 142.
          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       C
          not invalidate the transfer of the vehicle. In T.V. Jose (2001)8
          SCC 748, 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               D
          within the meaning of Section 2(30) is liable to compensate. The
          mandate of the law must be fulfilled.”
          9. The law is thus well settled and can be summarised:-
          “Even though in law there would be a transfer of ownership of
          the vehicle, that, by itself, would not absolve the party, in whose        E
          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.” 3
                                                                                     F
      The High Court was therefore absolutely right in allowing the
appeal. The challenge raised by the appellant must fail.
          10. This appeal is dismissed. No costs.

Ankit Gyan                                                       Appeal dismissed.
                                                                                     G




3
    P.P. Mohammed vs. K. Rajappan and Ors. (2008) 17 SCC 624 para 4                  H