PUSHPA @ LEELA & ORS.versusSHAKUNTALA & ORS.

                        (2011] 1 S.C.R. 334
                                                              ,.
A                  PUSHPA @ LEELA & ORS.
                                 v.
                      SHAKUNTALA & ORS.
                  (Civil Appeal No.6924 of 2005)
                        JANUARY 12, 2011
B
             [AFTAB ALAM AND R.M. LODHA, JJ.]

        Motor Vehicles Act, 1988:                                   ~



c      s. 166 read with ss.2(30) and 50- Fatal accident- Claim
  petitions by heirs of deceased persons - At the time of
  accident offending truck in possession of transferee but
  change of ownership not recorded in registration certificate -
  Tr_uck covered under insurance policy taken out in the name
D of recorded owner - Claims Tribunal held the claimants
  entitled to compensation - Liability to pay compensation -
  HELD: In view of the omission to change the name of owner
  in certificate of registration, the transferor (recorded owner)
  must be deemed to continue as the owner of the vehicle for
  the purposes of the Act - Therefore, he was equally liable for
E
  payment of compensation amount - Further, since the
  insurance policy was taken out in his name, he was
  indemnified and the claim will be shifted to the insurer.

        Constitution of India, 1950:
                                                                    -
F
      Article 136 - Appeal - Similar relief to non-appellants -
  Claims Tribunal allowed two claim petitions filed by heirs of
  two victims of a motor accident and held them entitled to
  specified amounts of compensation - Appeal before
G
  Supreme Court only in one case by heirs of one of the
  deceased - Directions given to insurance company for
  payment of compensation to heirs of both the deceased in
                                                                    -
  both the cases - Motor Vehicles Act, 1988 - Appeal.


H                               334
       PUSHPA @ LEELA & ORS. v. SHAKUNTALA &               335
                       ORS.
          One 'PC' hired a truck for carrying some materials A
    and engaged 'NR' as labourer for loading and unloading
    the materials. The truck met with an accident as a result,
    all the three, namely, 'PC', 'NR' and the driver of the truck
    died. On the date of the accident the truck was in
    possession of the transferee although the transferor was B
    the registered owner thereof as the transferee was not
    registered as the owner, and the truck was covered by
    an insurance policy taken out in the name of the
    registered owner. The heirs of deceased 'PC' and 'NR'
    filed claim petitions against the transferee, the registered c
    owner, and the insurer. The Motor Accident Claims
    Tribunal held the heirs of 'PC' entitled to Rs.5,16,000/- and
    heirs of 'NR' to Rs.2,42,000/- as compensation and held
    the transferee alone as liable for payment of
    compensation. The appeals of the claimants were
                                                                  0
    dismissed by the High Court.
                                      /

         In the instant appeal filed by the heirs of deceased
    'PC', the question for consideration before the Court was:
    "whether in the fact and circumstances of the case the
    liability to pay the compensation amount as determined E
    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?"                                           F

         Allowing the appeal, the Court

         HELD:

-         1. It is undeniable that notwithstanding the sale of the G
     vehicle neither the transferor nor the transferee took any
     step for· the chang·e of the name of the owner in the
    ·certificate of registration of the vehicle. In view of this
     omission, the transferor must be deemed to continue as
                                                                   H
    336       SUPREME COURT REPORTS            [2011) 1 S.C.R.


A   the owner of the vehicle for the purposes of the Motor
    Vehicles Act, even though under the civil law he ceased
    to be its owner after its sale on 2.2.1993. Therefore, he
    was equally liable for payment of the compensation
    amount. Further, since an insurance policy in respect of
B   the truck was taken out in his name he was indemnified
    and the claim will be shifted to the insurer. 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
c   amount, as determined by the Claims Tribunal, to the
    appellants. [para 11,14 and 16] [342-F-G; 344-G-H; 345-A-
    G]
        Dr. T. V. Jose vs. Chacko P.M., 2001 (3) Suppl. SCR
          =
    366 2001 (8) SCC 748; P.P. Mohammed vs. K. Rajappan
D   & Ors., (2008) 17 SCC 624 - relied on

        National Insurance Company Ltd. vs. Deepa Devi & Ors.,
    2007 (13) SCR 134 = (2008) 1 SCC 414 - distinguished.

E      2. Even though the claimants in the other case,
  namely, the heirs and legal representatives of deceased
  'NR', have not come to this Court, it would be appropriate
  to give the same direction in respect of their case. There
  is absolutely no difference in the two cases. It is quite
F possible that the heirs and legal representatives of 'NR'
  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 'NR' to his
  heirs and legal representatives in case the amount has
  so far not been realised from the transferee as directed
G by the Claims Tribunal. [para 17] [345-H; 346-A-B]

                        Case Law Reference:
     2001 (3) Suppl. SCR 366 relied on              para 12

H    (2008) 11 sec 624          relied on           para 13
PUSHPA @ LEELA & ORS. v. SHAKUNTALA & ORS. 337


 2007 (13) SCR 134              distinguished          para 15       A
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6924 of 2005.

    From the Judgment & Order dated 15.07.2004 of the High
Court of Himachal Pradesh at Shimla in FAO No. 77 of 1999.           B

    E.C. Agrawala, Amit Kumar Sharma, Neha Agarwal for the
Appellants.

      Dr. K.S. Chauhan, Tej Singh Varun, Ajit Kumar Ekka,            C
Kartar Singh, Dr. Meera Aggrawal, Ramesh Chandra Mishra
for the Respondents.

    The Judgment of the Court was delivered by

     AFTAB ALAM, J. 1. Whether .in the fact and                      D
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            E
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            F
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           G
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
                                                                     H
    338      SUPREME COURT REPORTS                     [2011] 1 S.C.R.


A 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
8
    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
C   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 February 24, 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
D   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.
E   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 Chand and Nikku Ram lost their lives
    took place on May 7, 1994, i.e. during the period when the
F   policy taken out from the Oriental Insurance Company Ltd. was
    subsisting and valid.

       4. The heirs and legal representatives of both the
  deceased, Prem Chand and Nikku Ram filed separate claim
G 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 applie;ations, MAC petition no.62-NS/2 of 1994 filed by
H
 PUSH PA @ LEELA & ORS. v. SHAKUNTALA & ORS. 339
               [AFTAB ALAM, J.]
the heirs and legal representatives of the deceased Prem A
Chand (appellants in this appeal) and MAC petition no.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. AU the three B
respondents appeared before the Tribunal and filed their
separate replies resisting the c.laims 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 C
 evidence adduced on behalf of the claimants, found and held
 that both Prem Chand aod Nikku Ram died on May 7, 1994,
)n the accident caused by truck no.HPA-1435 which 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 D
 in the ill-fated truck as unauthorised or gratuitous passengers.
 The Claims Tribunal 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 and Rs.10,000/- for
 loss of consortium and Rs.2000/- as cremation charges. The E
 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/-.                                     F

      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 G
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 H
    340       SUPREME COURT REPORTS                   [2011) 1 S.C.R.


A   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 Ram alone was liable for payment of the
    compensation amount to the two claimants. In this connection,
B   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
c         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
D   Tribunal the claimants filed appeals before the Himachal
    Pradesh High Court being FAQ no.459 of 2000 (by the heirs
    and legal representatives of Prem Chand) and FAQ no. 77 of
    1999 (by the heirs and legal representatives of Nikku Ram).
    Both the appeals were dismissed by the High Court by a
E   common judgment and 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
F that has no relevance to the issue. Both the Tribunal and the
  High Court discussed at length the provision of section 157 of
  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
G 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 ln_surance
H Company ltd. in the name of Jitender Gupta after the sale of
PUSHPA @ LEELA & ORS. v. SHAKUNTALA & ORS. 341
             [AFTAB ALAM, J.]
the truck. But as stated earlier, section 157 has no application    A
in the facts of this case.

    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
                                                                    8
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- C
    purchase agreement, or an agreement of lease or an
    agreement of hypothecation, the person in possession of
    the vehicle under that agreement;"

                                            (Emphasis added)        D     .

      10. Then, section 50 of the Act lays down the procedure
for transfer of ownership. It is a long section and in~ofar as
relevant it is reproduced below:

     "50. Transfer of ownership.                                    E
     (1) Where the ownership of any motor vehicle registered
     under this Chapter is transferred,-        ·

           (a) the transferor shall,-
                                                                    F
            (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 G
            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
                                                                    .H·
    342       SUPREME COURT REPORTS                  [2011] 1 S.C.R.


A         (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 business
          where the vehicle is normally kept, as the case may be,
          and shall forward the certificate of registration to that
B         registering authority together with the prescribed fee and
          a copy of the re~ort 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
c
          (3) xxxxxxx

          (4) xxxxxxx

          (5) xxxxxxx
D
          (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.
E
          (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."
F        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
G   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
H
                  PUSHPA @ LEELA & ORS. v. SHAKUNTALA &                    343
                          ORS. [AFTAB ALAM, J.]
               Court in Dr. T. V. Jose vs. Chacko P.M., (2001) 8 SCC 748. In      A
               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
                                                                               B
                   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. 0.
••                 did not mean that the ownership of the vehicle had not
                                                                               c
                   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 D
                   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.                   E

                    10. 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.i\O.
                   There can be transfer of title by payment of consid(3ration F
                   and delivery of the car. The evidence on record shows
                   that ownership cif the car had been transfeffed. However
                   the Appellant still continued to remain liable to third
                   parties as his name continued in the records of R. T. 0.
                   as the owner. The Appellant could not escape that
     _..,..-                                                                       G
                   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 liability between the
                   Appellant and Mr. Roy Thomas. It will be to.- the Appellant
                                                                                   H



     '
    344       SUPREME COURT REPORTS                 [2011) 1 S.C.R.


A         to adopt appropriate proceedings against Mr. Roy Thomas
          if, in law, he is entitled to do so."

                                                 (Emphasis added}

          13. Again, in P.P. Mohammed vs. K. Rajappan & Ors.,
B   (2008} 17  sec  624, 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:
                                                                        "'"
c         "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
D         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
E
          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
F         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 section 50 of the Act, as noted above, the
G 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
H compensation    amount. Further, since an insurance policy in
· PUSHPA @ LEELA & ORS. v. SHAKUNTALA & ORS>345
               [AFTAB ALAM, J.]

 respect of the truck was taken out in his name he was                A
 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 8
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 C
Court in National Insurance Company Ltd. vs. Deepa Devi &
Ors., (2008) 1 SCC 414. 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 D
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 E
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 F
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          G
 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         H
    346       SUPREME COURT REPORTS                [2011) 1 S.C.R.


A 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
B 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.
    R.P.                                           Appeal allowed.
                                                                      ,