India: Who Is The "Owner" Of A Motor Vehicle Under Motor Vehicles Act?

Last Updated: 20 March 2018
Article by S.S. Rana & Co. Advocates

Recently, the Supreme Court in its judgement in the case of Naveen Kumar v. Vijay Kumar and Ors. interpreted the expression 'owner' in Section 2 (30) of the Motor Vehicles Act, 1988, to be the person under whose name the motor vehicle stands registered. The Hon'ble Court further clarified that instances where the transfer of vehicle is not registered with an authority the original owner will be liable.

Brief Facts

  • On May 27, 2009 at about 7:30 pm, an accident took place, in which Smt. Jai Devi and her nephew Nitin were hit by a motor vehicle, driven by Rakesh in the reverse gear. Nitin died on the spot as he was run over by the rear wheel of the car and Smt. Jai Devi received multiple injuries.
  • The Motor Accident Claims Tribunal
  • Two petitions were filed before the Motor Accident Claims Tribunal (hereinafter referred to as 'the Tribunal') by Smt. Jai Devi and by Shri Somvir and Smt. Saroj, the parents of Nitin.
  • The vehicle involved in the accident, a Maruti-800 bearing Registration DL-3CC-3684, (hereinafter referred to as 'the vehicle') was registered in the name of Vijay Kumar (hereinafter referred to as 'the 1st Respondent').
  • The 1st Respondent claimed that the vehicle was sold to the 2nd Respondent on July 12, 2007 and had handed over possession of the vehicle together with relevant documents.
  • The 2nd Respondent stated before the Tribunal that he sold the vehicle to the 3rd Respondent on September 18, 2008.
  • Further, the 3rd Respondent in turn claimed before the Tribunal to have sold the vehicle to Naveen Kumar (hereinafter referred to as 'the Appellant').
  • The Appellant, in the course of his written statement claimed that he had sold the vehicle to Meer Singh. The succession of transfers was put forth as a defence to the claim.
  • The tribunal in its decision dated October 6, 2012, granted compensation of INR 10,000/- to Smt. Jai Devi and of INR 3,75,000/- on account of the death of Nitin, to his parents. It was noted in the decision that the registration certificate of the offending vehicle continues to be in the name of the 1st Respondent. Therefore, the 1st Respondent is jointly and severally liable together with the driver of the vehicle.
  • High Court of Punjab and Haryana

    • The decision of the Tribunal was challenged by the 1st Respondent before the High Court of Punjab and Haryana (hereinafter referred to as 'the High Court').
    • The appeal was allowed on January 25, 2016 by the Single Judge Bench on the ground that there was no justification for the Tribunal to pass an award against the registered owner when there was evidence that he had transferred the vehicle and the last admitted owner was the Appellant herein.
    • Taking into consideration the judgements in HDFC Bank Limited v Reshma ((2015) 3 SCC 679) and Purnya Kala Devi v State of Assam ((2014) 14 SCC 142), it was held that the Tribunal ought to have passed an award only against the Appellant as the owner.
  • Aggrieved by the abovementioned order 'Naveen Kumar' appealed before the Supreme Court by way of a Special Leave Petition.

Issues

Who is the 'owner' under Section 2 (30) of the Motor Vehicles Act, 1988?

Appellants Contentions

  • It was stated that the High Court has proceeded on a manifestly erroneous construction of the legal position.
  • Relying upon the judgements in the case of Purnya Kala Devi v State of Assam, HDFC Bank Limited v Reshma and Section 2(30) of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the act') it was contended that the person in whose name a motor vehicle is registered is the owner.
  • Further, it was contended that the High Court was in error in foisting the liability on the appellant who is not the registered owner of the vehicle.
  • The appellant also highlighted that in the case of Pushpa alias Leela v Shakuntala ((2011) 2 SCC 240) the position has been clarified by holding that where notwithstanding the sale of a vehicle, neither the transferor nor the transferee have taken any step for change in the name of owner in the certificate of registration, the person in whose name the registration stands must be deemed to continue as the owner of the vehicle for the purposes of the Act.

Respondents Contentions

  • The Respondents submitted that the judgment of the Tribunal was correct and further contended that the Appellant as the person in physical possession and control of the vehicle was liable.
  • While discussing Section 2 (30) of the Act the Respondent also pointed out that the person in whose name a motor vehicle is registered is the owner.
  • The view of the Court in the case of P P Mohammed v K Rajappan ((2008) 17 SCC 624) was reiterated by the Respondents. It was submitted that the person whose name continues in the record of the registering authority as the owner of the vehicle is equally liable together with the insurer

Court's Decision

  • The Court pointed out that Section 2 (30) of the Act states that it is the person in whose name the motor vehicle stands registered 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.
  • The Court also held that 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. Thus, in its judgement, the Supreme Court upholding the decision of the Tribunal directed Respondent No. 1 to pay the compensation and the judgment of the High Court was set aside.

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 4012 3000). Our website can be accessed at www.ssrana.in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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