Case: PRAKASH CHAND DAGA Vs. SAVETA SHARMA

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 asIn 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.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 others(2018) 3 SCC 1  the High Court concluded asthe 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 torecover the same from the registered owner i.e. respondent No.1 of the offending vehicle. Remaining conditions of disbursal of amount shall remain unaltered.?

Court's reasoning:
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.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.In Pushpa alias Leela and Ors. Vs. Shakuntala and Ors. (2011)2 SCC 240 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 losttheir 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.The law is thus well settled and can bethough 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.?P .P . Mohammed vs. K. Rajappan and Ors. (2008) 17 SCC 624 para 4