PRAKASH CHAND DAGA versus SAVETA SHARMA & ORS.
[2018] 13 S.C.R. 936, Supreme Court of India, 2018
Outcome: Dismissed (Dismissed)
Segment: Ratio
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SUPREME COURT REPORTS
[2018] 13  S.C.R.
PRAKASH CHAND DAGA
v.
SAVETA SHARMA & ORS.
(Civil Appeal No. 11369 of 2018)
DECEMBER 14, 2018
[UDAY UMESH LALIT AND
DR. DHANANJAYA Y CHANDRACHUD, JJ.]
Motor Vehicles Act, 1988 – ss.2(30), 50 and 177 –
Compensation – Appellant, original owner of a car, sold the said
vehicle to the first respondent – Vehicle got involved in an accident
– Second respondent received injuries – Claim petition by second
respondent – Tribunal assessed compensation at Rs.12.47 lakhs
and the liability was fastened on the driver and first respondent –
High Court modified the award to the extent that the Insurance
Company was liable to make compensation to the claimant and the
Insurance Company was given recovery rights to recover the same
from the appellant-registered owner of the vehicle – On appeal,
held: It is settled that 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 – Thus, High Court was
right in its finding that despite the sale of the vehicle, no transfer of
ownership, in accordance with s.50 of the Act was effected and the
appellant continued to be the owner of the vehicle.
Dismissing the appeal, the Court
HELD: 1. Section 50 of the Motor Vehicles Act, 1988
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 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.  [Para 5][939-D-E]
[2018] 13  S.C.R. 936
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2. 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.  [Para 6][939-E-F]
3. The High Court found that despite the sale of the vehicle,
no transfer of ownership, in accordance with Section 50 of the
Act 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. The High Court was absolutely right in allowing
the appeal. The challenge raised by the appellant must fail.
[Paras 3 and 9][938-E-F; 941-F]
Naveen Kumar v. Vijay Kumar and Others (2018) 9 SCC
1 : [ 2017] 12 SCR 805 ; Pushpa alias Leela and Ors.
v. Shakuntala and Ors.(2011) 2 SCC 240 : [2011] 1
SCR 334 – relied on.
Case Law Reference
[2017] 12 SCR 805
relied on
Para 8
[2011] 1 SCR 334
relied on
Para 7
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11369
of 2018.
From the Judgment and Order dated 05.04.2018 of the High Court
of Punjab and Haryana at Chandigarh in F.A.O. No. 7010 of
2011.
Siddharth H. Rawal, Prashant Kumar, Joseph Pookkatt,
M/S. Ap & J Chambers, Advs. for the Appellant.
The Judgment of the Court was delivered by
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
PRAKASH CHAND DAGA v. SAVETA SHARMA & ORS.
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SUPREME COURT REPORTS
[2018] 13  S.C.R.
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:
“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 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.”
1(2018) 3 SCC 1
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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 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
2(2011)2 SCC 240
PRAKASH CHAND DAGA v. SAVETA SHARMA & ORS.
[UDAY UMESH LALIT, J.]
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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 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 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
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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:-
“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.
3P.P. Mohammed vs. K. Rajappan and Ors. (2008) 17 SCC 624 para 4
Ankit Gyan
Appeal dismissed.
PRAKASH CHAND DAGA v. SAVETA SHARMA & ORS.
[UDAY UMESH LALIT, J.]