We all own a vehicle of our own. We sell our used vehicles or sometimes we  purchase used vehicles. But do we ensure that the vehicles are duly transferred in the name of the purchasers in the records of the Registration Department? Perhaps the answer is ‘NO’ because we are not aware of the legal consequences inspite of the clear law laid down by  the Apex Court in this regard more than 2 years ago. A larger bench of the Apex Court had given a landmark judgement in this regard on 6 February 2018 in the case of  Naveen Kumar vs. Vijay Kumar and Others (2018) 3 SCC 1, wherein the Court held that if the seller of a vehicle does not get the name of the purchaser changed in the records of the concerned Registration Authority, he shall be liable to pay compensation for the mishap. Thus, when the registered owner has purported to have transferred the vehicle but his name continues to be reflected in the records as the owner, he would not stand absolved of liability for any accident/mishap.

The brief facts of the case are an accident took place on 27 May 2009 when a motor vehicle driven by one Rakesh hit one Jai Devi and her nephew Nitin as they were walking down a street in their village wherein Nitin died on the spot while Jai Devi received multiple injuries. Two claim petitions were filed before the Motor Accident Claims Tribunal. The vehicle involved in the accident was registered in the name of one Vijay Kumar who claimed that  he had sold the vehicle to the Second respondent on 12 July 2007 prior to the accident and had handed over possession of the vehicle together with relevant documents including the registration certificate, and forms 29 and 30 for transfer of the vehicle. The Second respondent stated before the Tribunal that he sold the vehicle to the Third respondent on 18 September 2008. The Third respondent in turn claimed before the Tribunal to have sold the vehicle to the petitioner. The petitioner, in the course of his written statement claimed that he had sold the vehicle to Meer Singh. The succession of transfers was put forth as a defence to the claim for compensation.

 The Tribunal granted compensation of Rs 10,000/- to Smt. Jai Devi and of Rs. 3,75,000/- on account of the death of Nitin, to his parents. The Tribunal noted that the registration certificate of the offending vehicle continued to be in the name of the First respondent. The Tribunal held the First respondent jointly and severally liable together with the driver of the vehicle as the vehicle was uninsured on the date of the accident.

The award of the Tribunal was challenged by the First respondent in appeal before the High Court of Punjab and Haryana wherein the appeal was allowed on 25 January 2016 on the ground that there was no justification for the Tribunal to pass an award against the registered owner when there was evidence that he had transferred the vehicle and the last admitted owner was the appellant herein. In the view of the High Court, the Tribunal ought to have passed an award only against the appellant as the owner.

The order of the High Court was challenged before the Apex Court wherein it was urged that Section 2(30) of the Motor Vehicles Act, 1988 mandates that the person in whose name a motor vehicle is registered is the owner and the only two exceptions to that principle are where such a person is a minor or where the subject vehicle is under a hire purchase agreement .

The appellant relying upon the judgements in the case of Purnya Kala Devi v State of Assam & HDFC Bank Limited v Reshma and Section 2(30) of the Motor Vehicles Act, 1988 contended that the person in whose name a motor vehicle is registered is the owner.The appellant also highlighted that in the case of Pushpa alias Leela v Shakuntala ((2011) 2 SCC 240) the position has been clarified by holding that where notwithstanding the sale of a vehicle, neither the transferor nor the transferee have taken any step for change in the name of owner in the certificate of registration, the person in whose name the registration stands must be deemed to continue as the owner of the vehicle for the purposes of the Act.

However, it was contended on behalf of the Respondent that the registered owner at the best can be regarded as an ostensible owner of the vehicle but not the real owner after the sale of the vehicle, even if his name is there on the Registration Certificate of the vehicle. It was also pleaded that the definition of owner in the Section 2(30) of the Act, is not a complete code and the exceptions contained therein are not exhaustive. It was also vehemently argued that Section 50 of the Motor Vehicles Act casts the onus of changing the name in the registration certificate, on both the transferor as well as the transferee, and hence the transferor (the registered owner) cannot be made liable, and the transferee who has control over the use of vehicle should be made liable.

The Court was not convinced by the arguments of the Respondent and held  thus:

“2(30) “owner” means 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.” The person in whose name a motor vehicle stands registered is the owner of the vehicle for the purposes of the Act. The use of the expression ‘means’ is a clear indication of the position that it is the registered owner who Parliament has regarded as the owner of the vehicle.”

The Court followed  it’s earlier decisions in this regard and held as under:

“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’…….

 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 Act of 1939. 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 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 Court finally set aside the erroneous order of the Punjab & Haryana High Court and held thus:

“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. ..

…..For the above reasons we allow the appeal and direct that the liability to compensate the claimants in terms of the judgment of the Tribunal will stand fastened upon the First respondent.”

This decision of the larger Bench of the Apex Court is binding on all the citizens of our country. It is therefore imperative on all people selling their vehicles to ensure that the purchaser gets the vehicle transferred in his name in the records of the Registration Department else they will be legally held liable in case of any mishappening/accident and be fastened with the liability to pay compensation to the injured/ deceased due to mishap. This landmark judgement should act as a ‘wake- up call’ for the ‘careless & the inattentive’.

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