JUDGMENT
1. This is an appeal filed by the Insurer of the offending vehicle i.e. car bearing Regn. No. CAV 3548, challenging the judgment and award dated August 4, 1990 of the MACT-III, Bangalore in MVC 844/86 against appellant and Respondents 3 and 4 herein, granting compensation of Rupees 16,500/- with 9% interest per annum to the injured claimant W. H. Devakumar who is respondent No. 1 in this appeal.
2. Appellant was respondent No. 1 in the said case. Respondent Nos. 2, 3 and 4 were occupying the same position therein.
3. Respondent No. 1 (hereinafter referred to as ‘the petitioner’) had filed his claim petition under Sec. 110-A of the Motor Vehicles Act, 1939 (‘the Act’ for short) before the Tribunal for grant of compensation on
account of the injuries sustained by him and the damage caused to his car bearing Regn. No. MYU 5221 in the accident occurred on 30-6-86 at about 9.45 p.m. near Plaza theatre in Bangalore City when his car was hit by the said offending car bearing Regn. No. CAV 3548 allegedly due to negligent driving thereof by its driver respondent No. 3, The petition claim was contested by the appellant, respondent No. 2 and respondent No. 4 respectively by filing separate written statements. The main ground on which appellant and respondent No. 2 contested the petition claim was that the accident occurred due to the negligent driving of his said car by the petitioner himself. Respondent No. 2 and respondent No. 4 were impleaded in the petition as owners of the offending car CAV 3548. Respondent No. 2 has not specifically averred in his written statement that he was the owner of the said car though it is stated therein that he got the repairs of that damaged car i.e. CAV 3548 effected spending Rs. 35,000/-. On the other hand, respondent No. 4 has, in his written statement, specifically stated that he was the owner of the said car and was only insured with the appellant under its valid current insurance policy as at the material time. It is further contended by him therein that respondent No. 2 was not the owner of that car.
4. The petitioner himself gave his evidence as P. W. 1 and produced the documents Ex. P1 to P6 on record before the Tribunal in proof of his case. No oral evidence as such was let in on record from respondents’ side. The copy of appellant’s relevant insurance policy and ‘B registar’ extract obtained from the concerned R.T.O. in respect of the offending car CAV 3548 were not exhibited from appellant’s side as Ex. R1 and R2, with consent of both parties, in evidence on record before the Tribunal.
5. On the basis of the evidence, the learned Presiding Officer of the Tribunal computed the total compensation at Rupees 16,500/- as payable to the petitioner and has granted the same to him with 9% interest from date of petition. He has further held in his impugned judgment that respondent No. 4
was the registered owner of the said offending car as on the date of accident i.e. 30-6-86, and that respondent No, 2 was not the owner thereof. The Tribunal has passed its impugned award against appellant, respondent No. 3 and respondent No. 4 holding them jointly and severally liable to pay compensation to the petitioner.
6. The appellant has challenged the Tribunal’s finding holding him liable to pay compensation to the petitioner, on the ground that as borne out by Ex R2 ‘B’ register extract the said offending car bearing Regn. No. CAV 3548 was sold out by respondent No. 4 to respondent No. 2 on 20-11-1985 i.e. long prior to the date of accident which occurred on 30-6-86.
7. Heard the arguments on both sides.
8. Ex. R1 is the policy of the appellant issued in favour of respondent No. 4 in respect of the said offending car No. CAV 3548 covering the third party risk for the period from 14-8-1985 to 13-8-86. The contents of Ex. R2’B’ register extract disclose that respondent No. 4 was the registered owner thereof and that it was registered with the R.T.0. on 23-8-85. The relevant item No. 24 then providing for information of transfer of the vehicle, if any, contains the entry showing that the said car was transferred in the name of Respondent No. 2 with effect from 20-11-85. The appellant’s objection before the Tribunal that the liability under Ex. R1 policy stood extinguished with effect from 20-11-85 on which date the said car of R4 is shown to have been transferred to R2 as per the entries in Ex R2, has been negatived by the learned Presiding Officer of the Tribunal with the following patently incorrect observation:
“As per Ex. R2 B register extract it is clear the registration certificate in respect of the Maruthi car was transferred to the name of the 4th respondent on 20-11-1985. Admittedly, the accident took place on 30-6-86. So, the 2nd respondent is in no way concerned with the vehicle in question. So, in my opinion the respondents 1, 2 and 4 are alone liable to pay the award amount that may be awarded to the petitioner.”
Nevertheless, for the different reason discussed hereinbelow I find that appellant cannot escape its liability to indemnify respondent No. 4 under Ex. R1 merely on the strength of the said entries in Ex. R2.
9. It is on the basis of the aforementioned entry contained in Ex. R2 which Sri K. Suryanarayana Rao, learned counse! for appellant, reiterating the objection, contended that the car was transferred and sold out by respondent No. 4 to respondent No. 2 on 20-11-85 without intimation to appellant as required under Sec. 103-A of the Act and since he was no longer the owner thereof as on the date of accident i.e. 30-6-1986, the appellant insurer is not liable to indemnify him under its Ex. R1 policy as the same stood automatically lapsed on and with effect from 20-11-1985. In support of this contention reliance was placed by him on two Full Bench decisions of this Court rendered in National Insurance Co. Ltd. v. Mallikarjun, ILR (1990) Kant 1 : (AIR 1990 Kant 266) and in Paragouda v. Bhimappa, .
10. It was argued otherwise by learned counsel for respondent No. 1, Sri T. V. Srinivasa Murthy, that the said entry in Ex. R2 does not provide sufficient proof of the sale of the said car bearing No. CAV 3548 by respondent No. 4 in favour of respondent No. 2 in the absence of other independent substantive evidence in proof of this fact. He, therefore, maintained that respondent No. 4 himself was the registered owner of the said car as on the date of accident and he is entitled to be indemnified by appellant under its insurance policy Ex. R1. So canvassing his argument, he sought to support the impugned award of the Tribunal.
11. It is held by this Court in National Insurance Company v. Mallikarjun, (FB) supra, that :
“The insurance company is not liable to answer the liability arising out of an accident met with by the vehicle after the transfer of ownership but during the period for which the insured policy is issued. The insurer is entitled to avoid the liability against third party risks
on the plea that the insured had sold the vehicle covered by insurance policy before the date of accident without intimation by the owner.
In its later Full Bench decision in Paragouda v. Bhimappa, supra, this Court has held (at Pp. 107 and 108 of AIR):
“…..it is well settled that the transfer of ownership of a vehicle, being a movable property, is governed by the Sale of Goods Act……………………………………
The endorsement of transfer in the record of registering authority is also not a condition precedent to the transfer to take effect, nor does it deal with the legality or otherwise of the transfer which must be determined under the general law and also the Sale of Goods Act.
… … … …
The proper view appears to be that unless it is proved that the ‘registered owner’ has ceased to be the owner of the vehicle, he continues to be liable in the event of an accident for the claims of the third parties, [a other words, the onus to establish cessation of his title in the vehicle by virtue of a bona fide transfer thereof lies upon the registered owner and, unless and until that burden is discharged, he would continue to be liable to meet the liability arising out of an accident involving the vehicle.” (Emphasis made)
12. As already indicated, except the said entry of registering authority contained in Ex. R-2 ‘B’ register extract indicating the transfer of ownership of the said car in the name of respondent No. 2 with effect from 20-11-1985, there is absolutely no independent evidence available on record in proof of its sale transaction between respondent No. 4 and respondent No. 2. As a matter of fact, it is the definite case of respondent No. 4 pleaded in his written statement that he was the owner of the said car as on the date of accident and that respondent No. 2 was not at all the owner thereof. The Supreme Court in the case of Madras State v. G. Dunkeriey and Co., , throwing sufficient light on the essential ingredients of a sale pertaining to Sale of Goods has enunciated the law as under (at p. 567 of AIR):
“Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be art agreement between the parties for the purpose of transferring title to goods which of course presupposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all these elements are present, there can be no sale. Thus, if merely title to the goods passes but not as a result of any contract between the parties, express or implied, there is no sale. So also if the consideration for the transfer was not money but other valuable consideration, it may then be exchange or barter but not a sale. And if under the contract of sale, title to the goods has not passed, then there is an agreement to sell and not a completed sale.”
(Emphasis made)
It is made clear by the above pronouncement of Supreme Court that in the absence of clear proof of all the essential ingredients of sale mere passing of title to the goods cannot be sufficient evidence of sale of the particular goods.
13. Thus, to constitute a valid sale of the goods under the Sale of Goods Act, there must be cogent and convincing evidence of: (i) agreement between the competent parties, (ii) the price for the goods, and (iii) passing of the property in the goods. Unless all these ingredients of sale arc duly proved, mere entry or endorsement made by the registering authority under Sec. 31 of the Act in the relevant record/registers showing transfer of ownership of a vehicle does not amount to sufficient proof of sale of that vehicle.
14. In the case on hand, as has been already indicated above, except the said entry in Ex. R2 ‘B’ register extract showing the transfer of the said car CAV 3548 in the name of respondent No. 2 with effect from 20-11-1985, which may be indicative of prima facie passing of title to the said car in his favour, there is not an iota of further evidence on record in proof of other essential ingredients of its sale by respondent N’o. 4, So, it cannot be stated and held that the said entry by itself proves the sale of the said car to the latter by
the former, more so, when he has taken a definite stand in his written statement that in fact he was the owner of the said car and net respondent No. 2. Hence, 1 find that there being no sufficient proof of the transfer of ownership of the said car by way of sale to respondent No. 2 by respondent No. 4, the latter continued to be the registered owner thereof as on the date of accident and in that view of the matter he is entitled to be indemnified by the appellant under Ex. R1 policy against his liability towards the petitioner’s claim. Therefore, the contention of Sri K. Suryanarayana Rao, learned counsel for appellant, is without legal force. The appeal is, therefore devoid of merit.
Hence the appeal is dismissed. Parties to bear their own costs.