Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL NO.11369 OF 2018 (Arising out of SLP(Civil)No.27296 of 2018)

PRAKASH CHAND DAGA …Appellant

VERSUS

SAVETA SHARMA & ORS. …Respondents

JUDGMENT 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 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:

Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     2

“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 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 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 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 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  claimant  and  the Insurance  Company  will  have  the  recovery  rights  to

1 (2018) 3 SCC 1

Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     3

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.”

4. Learned counsel appearing for the appellant submitted that the 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 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 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 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

Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     4

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.    

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 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.   

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 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

2 (2011)2 SCC 240

Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     5

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 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 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 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 “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  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

Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     6

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  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  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. 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 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  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 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:-

Civil Appeal No.11369 of 2018 Prakash Chand Daga  vs.  Saveta Sharma & Ors.                                                     7

“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 … … … 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

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.  

……………….………………………………J. [UDAY UMESH LALIT]

………………………………………………J. [DR. DHANANJAYA Y. CHANDRACHUD]

New Delhi; December 14, 2018.

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