In the High Court of Punjab and Haryana at Chandigarh F.A.O. No. 3447 of 2008 (O&M) Date of decision: August 11, 2009 M/s Indusland Bank Limited .. Appellant Vs. Ramesh and others .. Respondents F.A.O. No.3448 of 2008 (O&M) M/s Indusland Bank Limited .. Appellant Vs. Sharda and others .. Respondents Coram: Hon'ble Mr. Justice A.N. Jindal Present: Mr. Ashwani Talwar, Advocate for the appellant. Mr. Sanjay Mittal, Advocate for respondents No.1 and 2. Mr. Arun Yadav, Advocate for respondent No.4. A.N. Jindal, J This order of mine shall dispose of two connected F.A.O. Nos. 3447 and 3448 of 2008, having arisen out of the judgment dated 19.7.2008 passed by the Motor Accident Claims Tribunal, Rewari, whereby the Tribunal has awarded compensation as under :- MACT Case No.42 of 2006, titled as Ramesh & Pankaj vs. Jile Singh and others decided on 19.7.2008 Compensation to the tune of Rs.2,97,000/- . MACT Case No.53 of 2006, titled as Sharda vs. Jile Singh and others decided on 19.7.2008 Compensation to the tune of Rs.37,000/-. However, claimant in both the petitions were awarded interest at the rate of 7.5% per annum from the date of filing of the petition till actual realization. F.A.O. No. 3447 of 2008 & F.A.O. No.3448 of 2008 -2- Since the appellant was also held responsible for payment of compensation along others, therefore, this appeal. Neither the claimant nor the Insurance Company have filed the appeal. It is only Indusland Bank, who is the financier, has come up in appeal. It has been submitted by the learned counsel for the appellant that while passing the impugned award the Tribunal has failed to appreciate that the appellant could not be held liable for payment of the compensation as respondent Om Parkash owner of the vehicle had taken the vehicle on loan and purchased the same on hypothecation basis. Though, the vehicle was only hypothecated with the appellant, but the possession and ownership of the vehicle remained with the respondent Om Parkash, the appellant had only lien over the vehicle. It was the duty of the respondent No.4 to get the vehicle insured before bringing the same on the road. He failed to do so. Even the convenants entered into between the parties also provide responsibility of the borrower to get the vehicle insured. As such, the learned Tribunal has wrongly held the appellant jointly and severely liable along with the respondents No.3 and 4. Heard. There is no denying a fact that the respondent No.4 had purchased the truck bearing registration No.HR-38-F-6097 on the basis of hypothecation agreement. At the time of taking the loan, the borrower had entered into an agreement regarding getting the vehicle insured. The relevant extract of Rule 8 (d) of the Convenant/Undertaking of borrower is reproduced as under :- “8.0 The convenants / Undertaking of the borrower The borrower shall (a) XX XX XX (b) XX XX XX © XX XX XX (d) Ensure that the Asset is always duly and properly insured with any insurer approved by the Lender, covering all the risks and hazards, including risks F.A.O. No. 3447 of 2008 & F.A.O. No.3448 of 2008 -3- against fire, riots, civil commotions, floods and such wider liability to which the asset is normally exposed and unlimited third party liability risk, in order to safeguard the security of the loan and to ensure that the lien of the lender is marked on the insurance policy, as the beneficiary. (e) Immediately inform the insurance company of any loss or damage to the Asset which he may suffer due to any force majeure or act of God, such as earthquakes, flood, tempest, theft or typhoon etc. or otherwise and simultaneously keep the lender informed.” On reading of the aforesaid convenanat, it reveals that the appellant had no role to play in the insurance of the vehicle and it is only the respondent Om Parkash who was to get the vehicle insured, therefore, the appellant- financier could not be held liable as it was not for the appellant to insure the vehicle. Now coming to the ownership, the appellant was only a financier, whereas, the respondent Om Parakash remained the owner of the vehicle and it was in his possession. Since he had control over the vehicle, therefore, the mere fact that the appellant was the financier is not sufficient to hold him as owner. The word “owner” has been defined by Section 2 (3) of the Act, which reads as under :- “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-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement” From the bare reading of the Section it transpires that the appellant being the financier had no actual control or possession of the vehicle, whereas, the respondent Om Parkash was in actual possession of F.A.O. No. 3447 of 2008 & F.A.O. No.3448 of 2008 -4- the same though being borrower. As such, the appellant cannot be held liable. Resultantly, these appeals are accepted, the impugned award is set aside qua the appellant-financier and the compensation as awarded by the Tribunal would be paid by the respondent No.4 in FAO No.3447 of 2008 and respondent No.3 in FAO No.3448 of 2008. August 11, 2009 (A.N. Jindal) deepak Judge