‘OWNER’ IN CASE OF ACCIDENT IS A PERSON WHOSE NAME IS REGISTERED

The #SupremeCourt of India recently clarified vide #Judgment dated 18.06.2020 in the case of Surendra Kumar Bhilawe V. The New India Assurance Company Limited [Civil Appeal No. 2632 of 2020] that ‘#owner’ means the person in whose name the motor vehicle stands registered under the #MotorVehiclesAct, 1988.

The facts pertaining to the case involves Mr. Surendra Kumar Bhilawe (the Appellant), who was the owner of a Truck, which was covered by a Policy of Insurance issued by the New India Assurance Company Limited (the Insurer) effective for the period from 02.06.2011 to 01.06.2012. The said Truck, which was loaded with Ammonia Nitrate at Raipur, started its journey driven by one Mr. Rajendra Singh.

While on the journey the said Truck met with an accident on road. It was stated that the accident occurred in the driver’s efforts to save a cow, which had come on its way and he lost his control on the vehicle. This caused the vehicle to fall into a river by the side of the road and the Truck was extensively damaged. The Ammonia Nitrate, carried in the Truck was also washed away.

Proceedings:

The Appellant lodged the claim with the Insurer. However, the Insurer repudiated the said claim on the ground that the Appellant had sold the said Truck to one Mr. Mohammad Iliyas Ansari (the Transferee) on 11.4.2008 for a consideration of Rs.1,40,000/- and also on the ground of delay in filing a police complaint and in lodging the claim for reimbursement of losses.

Being aggrieved by the action of the Insurer, the Appellant filed Complaint before the District Consumer Disputes Redressal Forum, which vide Judgment dated 09.01.2014 allowed the Complaint and directed the Insurer to pay Rs 4, 93,500/- along with interest. It also granted relief in terms of compensation to the tune of Rs 7000/- for mental agony and cost of litigation. The said relief was granted on the ground that the ownership of the said Truck never stood transferred to the Transferee. The said Judgment of the District Forum was appealed before the State Consumer Disputes Redressal Commission, which was dismissed vide an Order dated 22.07.2014, on the same ground.

The Insurer filed Revision Petition before the National Consumer Disputes Redressal Commission challenging the Order of the State Commission. The National Commission allowed the said Revision Petition, and set aside the Orders of the District Forum and the State Commission respectively, and dismissed the Complaint of the Appellant. It was dismissed on the ground that the Appellant had sold his vehicle to the Transferee and ownership in the vehicle passes to the purchaser thereby the Insurer is not liable to pay for losses.

The Appellant appealed before the Supreme Court and contented that even though he had entered into a Sale Agreement with the Transferee, he had not actually transferred ownership of the vehicle to him. Even after the Sale Agreement, the Appellant had himself been paying instalments, to Bank, towards repayment of the loan obtained by him for purchase of the said Truck.

Legal Issue

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?

Judgment

The Court allowed the Appeal. While dealing with the aforesaid issue the Court firstly, looked into the definition of ‘owner’ under the old Act, of 1939, and observed that the term ‘owner’ meant the person in possession of a motor vehicle. It said that legislature has consciously changed the definition of ‘owner’ to mean the person in whose name the motor vehicle stands under the Motor Vehicles Act, 1988. This definition of ‘owner’ has been overlooked and ignored by the National Commission.

Thereafter, the Court referred to its earlier Judgments passed in Naveen Kumar v. Vijay Kumar and Others [(2018) 3 SCC 1] and Pushpa Leela & Ors. v. Shakuntala [(2011) 2 SCC 240], which were rendered in the context of liability to satisfy third party claims. However, the dictum of this Court was 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.

It was held that the ownership of the Truck stands in the name of the Appellant on the day accident occurred. It noted that in Certificate of Registration of the Vehicle in question, the name of the Appellant is recorded as registered owner. And he was the one who was paying the instalments to the Bank and not the Transferee, in whose name Sale Agreement was executed.

It further referred to various provisions of the Motor Vehicle Act, 1988 and judicial precedent to finally decide that “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.”

Thus, the Court set aside the impugned Order of the National Commission under Appeal and upheld the Order of the District Forum as the correct interpretation of the Law.

Lakshmi Vishwakarma

Associate

The Indian Lawyer