Case: SURENDRA KUMAR BHILAWE Vs. THE NEW INDIA ASSURANCE COMPANY LTD

Motor Vehicles Accidents Claims Tribunal in case of an accident, was that 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. This Court found that the person whose name continued in the records of the registering authority as the owner of the truck was equally liable for payment of the compensation, having regard to the provisions of Section 2(30) read with Section 50 of the Motor Vehicles Act, 1988 and since an insurance policy had been taken out in the name of the recorded owner, he was indemnified and the Insurer would be liable to satisfy the third party claims. 48. In Naveen Kumar vs. Vijay Kumar and Others (2018) 3 SCC 1 , a three- Judge Bench of this Court held that in view of the definition of the expression owner in Section 2(30) of the Motor Vehicles Act, 1988, it is the person in whose name the motor vehicle stands registered, who, for the purposes of the said Act, would be treated as the owner of the vehicle. Where the registered owner purports 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 his liability as owner. 49. The Judgment of this Court in Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident. 50. The policy of insurance in this case, was apparently a comprehensive policy of Insurance which covered third party risk as well. The Insurer could not have repudiated only one part of the contract of insurance to reimburse the owner for losses, when it could not have evaded its liability to third parties under the same contract of Insurance in case of death, injury, loss or damage by reason of an accident. 51. The FIR was lodged within three days of the accident. In the case of a major accident of the kind as in this case, where the said truck had turned turtle and fallen into a river, slight delay if any, on the part of the traumatized driver to lodge an FIR, cannot defeat the legitimate claim of the Insured. Of course in our view, there was no delay at all in lodging the FIR. In case of a serious accident in course of inter-state transportation of goods, delay of 20 days in lodging a claim is also no delay at all. It is nobodys case that the claim application filed by the Appellant was time barred. Moreover, the Insurer had, in any case, duly sent its Surveyors/ Assessors to assess the loss. The claim of the Appellant could not have, in this case, been resisted, either on the ground of delay in lodging the FIR, or on the ground of delay in lodging an Accident Information Report, or on the ground of delay in making a claim. 52. In any case, as held by this Court in Om Prakash vs. Reliance General Insurance and Another (2017) 1 SCC 724 delay in intimation of accident, or submission of documents due to unavoidable circumstances, should not bar settlement of genuine claims. 53. In our considered opinion, the National Commission erred in law in reversing the concurrent factual findings of the District Forum and the National Commission ignoring vital admitted facts as stated above, including registration of the said truck being in the name of the Appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the Appellant of the premium for the Insurance Policy, issuance of Insurance Policy in the name of the Appellant, permit in the name of the Appellant even after three years and seven months, absence of No Objection from the financier bank etc. and also overlooking the definition of owner in Section 2(30) of the Motor Vehicles Act, as also other relevant provisions of the Motor Vehicles Act and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 157. 54. In view of the definition of owner in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari. 55. The judgment of this Court in Oriental Insurance vs. Sony Cheriyam (1999) 6 SCC 451 was rendered in the context of liability of an Insurer in terms of the insurance policy and is not attracted in this case, where the claim of the insured has not been rejected on the ground of the same not being covered by the policy of insurance, but on the ground of purported transfer to a third party by entering into a sale agreement. 56. We have not dealt with the judgments of the National Commission and/or other Fora under the Consumer Protection Act, 1986, relied upon by the parties, as they are factually distinguishable and are in any case, not precedents binding on this Court. In any case, we have considered and dealt with the submission of the respective parties at length.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]28. The National Commission completely ignored the following concurrent factual findings of the District Forum and State Commission:-(i) Even after the date of the purported sale agreement, that is, 11.4.2008, the Appellant continued to pay instalments to ICICI Bank towards repayment of the loan for purchase of the said truck.(ii) The ICICI Bank had neither released the said truck from hypothecation nor given No Objection for the sale of the said truck.(iii) The Appellant paid the premium and took out the policy of insurance on or about 31.5.2011 covering the period from 2.6.2011 to 1.6.2012 in his own name. This was over three years after the date of the purported sale agreement.(iv) No steps were taken by the Appellant or by Mohammad Iliyas Ansari to have the registration of the said truck transferred in the name of Mohammad Iliyas Ansari.(v) The permit for operating the said truck was still in the name of the Appellant over three years after the purported sale agreement.29. There was no material evidence at all before the National Commission, on the basis of which the National Commission could have reversed the concurrent factual findings of the District Forum and the State Commission which unerringly led to the conclusion that ownership of the said truck never stood transferred to Mohammad Iliyas Ansari30. In fact, the National Commission did not address the following questions:-(i) Who actually paid instalments to ICICI Bank after 11.4.2008 – the Appellant or Mohammad Iliyas Ansari? The concurrent finding of the District Forum and the State Commission that the Appellant paid instalments to ICICI Bank even after 11.4.2008, therefore, remained unshaken.(ii) If the ownership of the said truck stood transferred on 11.4.2008, why would the Appellant continue to pay the instalments to ICICI Bank towards repayment of the loan for purchase of the said truck?(iii) Was any No Objection obtained from ICICI Bank for transfer of the said truck?(iv) Could the Appellant have transferred the said truck without No Objection from ICICI Bank?(v) Who actually paid the Insurance Premium on 31.5.2011 for the said Policy No.45030031110100001693 effective from 2.6.2011 to 1.6.2012?(vi) If the ownership of the said truck were transferred, why would the Appellant have taken out an Insurance Policy covering the said truck in his own name even on 31.5.2011, after over three years?(vii) Was the Driver Rajendra Singh employee of the Appellant or of Mohammad Iliyas Ansari? Was any statement in this regard taken either from Driver Rajendra Singh or Mohammad Iliyas Ansari?(viii) Were any steps ever taken for transfer of registration of the said truck in the name of Mohammad Iliyas Ansari?(ix) If the ownership of the said truck stood transferred to Mohammad Iliyas Ansari, why did he not take steps to have the registration of the said truck transferred in his own name even after three years?(x) In whose name did the permit to operate the said truck stand?(xi) Why would Mohammad Iliyas Ansari run the said truck with a permit in the name of the Appellant, if he was its owner, thereby exposing himself to penal consequences under the Motor Vehicle Act and the Rules framed thereunder?(xii) Could ownership of the said truck be transferred without transfer of registration in the name of the transferee, in view of the Motor Vehicle Act, 1988 and the Rules framed thereunder?31. In our considered opinion, Sections 19 and 20 of the Sale of Goods Act, 1930, which deal with the stage at which the property in movable goods passes to the buyer, is of no assistance to the Insurer. There can be no doubt that property in a specific movable property is transferred to the buyer at such time as parties to the contract intend it to be transferred, provided such immovable property is free to be transferred, and/or in other words capable of being transferred32. If there is an impediment to the transfer, as in the instant case, where No Objection of the financier bank was imperative for transfer of the said truck, there could be no question of transfer of title until the impediment were removed, for otherwise the contract for transfer would be injurious to the financier bank, immoral, unlawful and void under Section 10 read with Sections 23 and 24 of the Contract Act, 187233. It was thus, an implicit condition of the agreement for transfer of the said truck, that the transfer would be complete only upon issuance of No Objection by the financier bank and upon compliance with the statutory requirements for transfer of a motor vehicle34. The contract in this case, could not possibly have been an unconditional contract of transfer of movable property in deliverable state, but a contract to transfer, contingent upon No Objection from ICICI Bank, and compliance with the statutory provisions of the Motor Vehicles Act, 1988 and the Rules framed thereunder. Sections 19 and 20 of the Sale of Goods Act are not attracted35. The National Commission overlooked the definition of owner in Section 2(30) of the Motor Vehicle Act, 1988. In Section 2(30) owner has been defined to mean 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. Even assuming that Mohammad Iliyas Ansari was in possession of the said truck at the time of the accident, such possession was not under any agreement of lease, hire purchase or hypothecation with ICIC Bank.37. The National Commission also overlooked other applicable provisions of the Motor Vehicle Act 1988, particularly Sections 39 to 41, 50, 51, 66, 69, 82, 84(g), 86(c), 146, 157, 177 and 192A.39. It appears that the National Commission patently erred in holding that the Appellant had been paid the consideration without even examining if Mohammad Iliyas Ansari had paid any instalments to ICICI Bank40. The finding of the National Commission that the fact of registration of the said truck in the name of the Appellant was inconsequential is also not sustainable in law. Section 2(30) of the Motor Vehicles Act, 1988 defines owner to mean the person in whose name the motor vehicle stands registered. The definition of owner has been overlooked and ignored by the National Commission. Had ownership of the said truck intended to be transferred forthwith, the registration would have been transferred in the name of the transferee, as also the permit to operate the said truck for carriage of goods41. It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws. It does not also stand to reason why a person who has transferred the ownership of the vehicle should, for over three years, benevolently go on repaying the loan for purchase of the vehicle, take out insurance policies to cover the vehicle or otherwise discharge obligations of ownership42. It is equally incredible that an owner of a vehicle who has paid consideration to acquire the vehicle would not insist on transfer of the permit and thereby expose himself to the penal consequence of operating a goods vehicle without a valid permit43. The National Commission also failed to appreciate that Section 157 of the Motor Vehicles Act provides that where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate are to be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred, with effect from the date of its transfer44. The explanation to Section 157 clarifies, for the removal of all doubts, that such deemed transfer would include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. The transferee might, within 14 days from the date of transfer, apply to the Insurer in the prescribed form, for making requisite changes in the certificate of insurance and the policy of insurance with regard to the factum of transfer of insurance. There could be no reason for a transferee of an insured motor vehicle, to refrain from applying for endorsement of the transfer in the Insurance Policy Certificate when insurance covering third party risk is mandatory for using a vehicle45. In any case, there could be no reason for the Appellant to take out an insurance cover in his own name as late as on 31.5.2011, covering the period from 2.6.2011 till 1.6.2012, if the Appellant had transferred ownership of the vehicle in April 2008. It is incredible that the transferee, Mohammad Iliyas Ansari would take the risk of operating a vehicle, owned by him, without taking out a policy of Insurance in his own name, inter alia, covering third party risks, notwithstanding the mandate of Section 146 of the Motor Vehicles Act, 1988 prohibiting the use of a motor vehicle without third party insurance49. The Judgment of this Court in Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) were rendered in the context of liability to satisfy third party claims and as such distinguishable factually. However, the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident50. The policy of insurance in this case, was apparently a comprehensive policy of Insurance which covered third party risk as well. The Insurer could not have repudiated only one part of the contract of insurance to reimburse the owner for losses, when it could not have evaded its liability to third parties under the same contract of Insurance in case of death, injury, loss or damage by reason of an accident51. The FIR was lodged within three days of the accident. In the case of a major accident of the kind as in this case, where the said truck had turned turtle and fallen into a river, slight delay if any, on the part of the traumatized driver to lodge an FIR, cannot defeat the legitimate claim of the Insured. Of course in our view, there was no delay at all in lodging the FIR. In case of a serious accident in course of inter-state transportation of goods, delay of 20 days in lodging a claim is also no delay at all. It is nobodys case that the claim application filed by the Appellant was time barred. Moreover, the Insurer had, in any case, duly sent its Surveyors/ Assessors to assess the loss. The claim of the Appellant could not have, in this case, been resisted, either on the ground of delay in lodging the FIR, or on the ground of delay in lodging an Accident Information Report, or on the ground of delay in making a claim52. In any case, as held by this Court in Om Prakash vs. Reliance General Insurance and Another (2017) 1 SCC 724 delay in intimation of accident, or submission of documents due to unavoidable circumstances, should not bar settlement of genuine claims53. In our considered opinion, the National Commission erred in law in reversing the concurrent factual findings of the District Forum and the National Commission ignoring vital admitted facts as stated above, including registration of the said truck being in the name of the Appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the Appellant of the premium for the Insurance Policy, issuance of Insurance Policy in the name of the Appellant, permit in the name of the Appellant even after three years and seven months, absence of No Objection from the financier bank etc. and also overlooking the definition of owner in Section 2(30) of the Motor Vehicles Act, as also other relevant provisions of the Motor Vehicles Act and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 15754. In view of the definition of owner in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari.55. The judgment of this Court in Oriental Insurance vs. Sony Cheriyam (1999) 6 SCC 451 was rendered in the context of liability of an Insurer in terms of the insurance policy and is not attracted in this case, where the claim of the insured has not been rejected on the ground of the same not being covered by the policy of insurance, but on the ground of purported transfer to a third party by entering into a sale agreement56. We have not dealt with the judgments of the National Commission and/or other Fora under the Consumer Protection Act, 1986, relied upon by the parties, as they are factually distinguishable and are in any case, not precedents binding on this Court. In any case, we have considered and dealt with the submission of the respective parties at length.