Case: M/S Godavari Finance Co Vs. Degala Satyanarayanamma

3. Ch. Praveen Kumar, fourth respondent, was the owner of a vehicle being a mini truck of Mahendra Nissan make purchased by him having been financed by the appellant for a sum of Rs.50,000/-. The said loan was discharged by him by the end of 1995.4. Indisputably the said vehicle had all along been in possession and control of the fourth respondent herein. It met with an accident on 29th May, 1995. In the said accident one Degala Balakrishana died. Respondent Nos. 1 and 2 filed an application claiming compensation alleging rash and negligent driving on the part of the driver of the said vehicle.5. On or about 18th June, 1998, the appellant herein was impleaded in the proceeding on the premises that it was the financer of the said vehicle.6. The name of the appellant as a financer indisputably was incorporated in the Registration Book of the vehicle. However, the extract of Registration Book revealed that the vehicle was registered in the name of the 4th respondent only w.e.f. 3rd June, 1992. It further revealed that the said vehicle was held under a Hire Purchase Agreement with the appellant w.e.f. 6th February, 1995 which was cancelled on 10th November, 1995.7. Appellant herein filed a written statement stating that on the date of accident the ownership of the vehicle was solely with the 4th respondent and not with the appellant. The Motor Vehicle Accident Claims Tribunal by a judgment dated 28th October, 1998 awarded a sum of Rs.2,08,000/- in favour of the respondent Nos. 1 and 2. The objection of the appellant that it was not liable to pay any amount of compensation together with the owner of the vehicle, driver and insurance company was rejected by the Tribunalthe light of the decisions cited above, the legal position that emerges is that it is the person who is in actual possession and control of the vehicle, who can be brought under the definition of owner, under the Act in order to make him tortuously liable for the acts of the servant and the burden lies upon the party, who asserts it and on their failure adverse inference can be drawn and the financier can also fastened with liability alongwith the registered owner. In our case, R-4 except taking a plea that the vehicle is under the control of the owner R-2, it failed to file documents to show the nature of the transaction between it and R-2 and who is in actual control of the vehicle. The mere fact that RW.1, widow of the deceased admitted in her evidence that the vehicle belong to R-2 and it is in his custody, in my view, it cannot absolve R-4 from the burden of establishing this fact in order of avoid the liability. P.W.1 a widow and a third party cannot be attributed with knowledge of control over the vehicle and the actual contract between the parties. Thus, it is quite evident that R-2 and R-4 did not place any material to show as to who is in actual control of the vehicle and what are the rights of R-4 over it.An appeal preferred there against by the appellant herein, by reason of the impugned judgment, dated 8th August, 2006 has been dismissed.

Court's reasoning:
13. In case of a motor vehicle which is subjected to a hire purchase agreement, the financer cannot ordinarily be treated to be the owner. The person who is in possession of the vehicle, and not the financer being the owner would be liable to pay damages for the motor accident.In terms of the aforesaid provisions, the Tribunal is required to issue a notice to the insurer and after giving the parties, including the insurer, an opportunity of being heard, it must hold an inquiry into the claims and determine the person who would be liable therefor. It can make an award and while doing so it can specify the amount which could be paid by the insured or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be.16. An application for payment of compensation is filed before the Tribunal constituted under Section 165 of the Act for adjudicating upon the claim for compensation in respect of accident involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both. Use of the motor vehicle is a sine qua non for entertaining a claim for compensation. Ordinarily if driver of the vehicle would use the same, he remains in possession or control thereof. Owner of the vehicle, although may not have anything to do with the use of vehicle at the time of the accident, actually he may be held to be constructively liable as the employer of the driver. What is, therefore, essential for passing an award is to find out the liabilities of the persons who are involved in the use of the vehicle or the persons who are vicariously liable. The insurance company becomes a necessary party to such claims as in the event the owner of the vehicle is found to be liable, it would have to reimburse the owner inasmuch as a vehicle is compulsorably insurable so far as a third party is concerned, as contemplated under Section 147 thereof. Therefore, there cannot be any doubt whatsoever that the possession or control of a vehicle plays a vital role.