REPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ MAC.APP.164/2010 and CM Nos.4807/2010 (stay) and
4809/2010 (under Order XLI Rule 27 CPC)
MUKESH KUMAR ..... Appellant
Through: Mr. Hari Shankar, Advocate
versus
SMT. KAMLESH DEVI & ORS ..... Respondents
Through: Mr. Bhupesh Narula, Advocate for
the respondents No.1 to 4
Mr. V.K. Goel, Advocate for the
respondent No.6
Mr. L.K. Tyagi, Advocate for the
respondent No.7
% Date of Decision : May 11, 2011
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
MAC. APP. 164/2010 Page 1 of 32
: REVA KHETRAPAL, J.
1. This appeal is directed against the judgment and award dated
27th May, 2009 passed by the Motor Accidents Claims Tribunal,
Delhi.
2. The brief facts leading to the filing of the appeal are as follows.
3. The respondents No.1 to 4 filed a petition under Sections 166
and 140 of the Motor Vehicles Act against the appellant and the
respondents No.5 to 7 for grant of compensation of ` 20 lakhs jointly
and severally together with interest thereon. The said claim petition
was filed as a result of a road accident which took place on
12.02.2005 at 2.30 p.m. when Shri Bishambar, the husband of the
respondent No.1 and the father of the respondents No.2 to 4, was
crossing the main road at Lal Bahadur Shastri Marg and was hit by a
scooter bearing No.DL-7S-K-9664, being driven by the respondent
No.5, who was coming from the side of Sudharshan Chowk rashly
and negligently at a very high speed. A case bearing FIR No.54/05
was registered under Sections 279/304-A IPC against the respondent
No.5, who was then arrested and charge-sheeted for the aforesaid
MAC. APP. 164/2010 Page 2 of 32
offences as well as for the offence punishable under Section 3 of the
Motor Vehicles Act, 1988 for not possessing a driving licence.
4. Although initially the petition was instituted under Section 166
read with Section 140 of the Motor Vehicles Act, it was subsequently
converted into a petition under Section 163-A of the said Act with the
leave of the Claims Tribunal. Notice of the filing of the petition was
served on the respondents No.5 to 7 and the appellant. The driver of
the alleged offending vehicle, the respondent No.5 herein, contested
the case on the ground that he was not driving vehicle No.DL-7S-K-
9664 at the time of the accident. The appellant, Shri Mukesh Kumar
contested the case on the ground that he had sold the vehicle in
question to the respondent No.6 herein, Shri Om Prakash, son of Shri
J.M. Aggarwal, resident of Kalyanpuri, Delhi on 20.07.2004. The
respondent No.6, in his turn, contested the case on the ground that he
was not aware of the accident and the death of the deceased as the
alleged offending scooter was not in his possession at the time of the
accident. He submitted that he had purchased the scooter from Shri
Mukesh Kumar, the appellant in the month of July, 2004 and the
MAC. APP. 164/2010 Page 3 of 32
latter had handed over the possession of the said scooter to him with
the assurance that the requisite Forms 29 and 30 for change of
ownership through the Registering Authority would be delivered to
him within the prescribed period of one month from the date of the
delivery challan, which was signed by him on 20.07.2004. However,
despite his repeated requests the appellant did not deliver the required
forms and delayed the matter on one pretext or the other for reasons
best known to him, and as such, he could not get the vehicle
transferred in his name within the prescribed period of one month.
Thereupon, he claims that it was orally agreed that the appellant
would take back the possession of the scooter and thus he handed
over the possession of the scooter back to the appellant, and as a
result the said scooter was in the possession and control of the
appellant at the time of the accident.
5. The respondent No.7 – Insurance Company in the written
statement filed by it admitted that the offending vehicle was insured
with it vide policy No.221504/31/04/01393, which was valid from
MAC. APP. 164/2010 Page 4 of 32
01.06.2004 to 31.05.2005. It, however, denied the remaining
allegations and prayed for dismissal of the claim petition.
6. After the framing of issues, the parties adduced their respective
evidence. The respondents No.1 to 4 summoned in the witness box
PW1 Smt. Kamlesh Devi, the widow of the deceased and PW2 Shri
Harish Chand Pandey, who proved on record the post-mortem report
of the deceased. The appellant Mukesh Kumar, who is the recorded
owner, examined himself as R2W1. The respondent No.7 – Insurance
Company examined its Assistant Manager Shri R.K. Sharma as
R3W1. The respondent No.6 Om Prakash examined himself as
R4W1.
7. The learned Tribunal by its award dated 27.05.2009 held that
the deceased Bishambar had sustained fatal injuries in the motor
accident involving the offending vehicle and accordingly the
respondents No.1 to 4/claimants in the claim petition had become
entitled to receive compensation of ` 4,08,000/- with interest thereon
@ 7% per annum from the date of the filing of the petition till the
date of realisation of the award amount. As regards the
MAC. APP. 164/2010 Page 5 of 32
apportionment of liability, the learned Claims Tribunal, after sifting
through the evidence, came to the conclusion that the appellant Shri
Mukesh Kumar was the registered owner of the offending vehicle and
the respondent No.6 Shri Om Prakash was the de facto owner of the
offending vehicle on the date of the accident. The learned Claims
Tribunal noted that neither the appellant nor the respondent No.6 had
disputed the driving of the offending vehicle by Shri Umesh Kumar,
the respondent No.5, however, neither of them had adduced any
evidence that they had ever engaged the said Shri Umesh Kumar as
their driver to drive the offending vehicle or allowed the offending
vehicle to be driven by him. The learned Claims Tribunal also noted
that the Insurance Company had proved on record the copy of the
charge-sheet filed by the police against Shri Umesh Kumar, the
respondent No.5 as Ex.R3W1/E, showing that not only Shri Umesh
Kumar was charge-sheeted for the trial of offences punishable under
Sections 279/304-A IPC, but was also charge-sheeted for the offence
punishable under Section 3 of the Motor Vehicles Act, which section
provides the necessity for a driving licence. The learned Claims
MAC. APP. 164/2010 Page 6 of 32
Tribunal held that the material on record had established that the
respondent No.5 did not have a driving licence to drive the offending
vehicle on the date of the accident, inasmuch as even during the
pendency of the case neither any copy of driving licence was filed nor
proved on record. Since the respondent No.5 was not having any
driving licence to drive the offending vehicle on the date of the
accident and the registered owner as well as the de facto owner had
failed to adduce any evidence that either of them had allowed the
respondent No.5 to drive the offending vehicle after seeing his driving
licence, the learned Tribunal held that the Insurance Company could
not be held liable to make payment of the compensation awarded to
the claimants.
8. After exonerating the Insurance Company in the aforesaid
manner, the learned Tribunal deduced from the evidence on the
record that on the date of the accident, the offending vehicle was in
the possession of the respondent No.6, as he had failed to prove that
he had given possession of it back to the appellant prior to the date of
the accident. The learned Claims Tribunal, therefore, held that the
MAC. APP. 164/2010 Page 7 of 32
appellant as the registered owner and the respondent No.6 as the de
facto owner were both vicariously liable for the death of the deceased
in the accident and thus, both were equally liable to pay compensation
to the claimants.
9. Aggrieved by the aforesaid findings of the Claims Tribunal, the
appellant, who is undeniably the registered owner of the offending
vehicle, has assailed the same by filing the present appeal, which is
contested by all the respondents albeit on different grounds.
10. Before me, the contention of Mr. Hari Shankar, the learned
counsel for the appellant, was that it was the admitted case of the
parties that the offending vehicle had been purchased for the sum of `
8,000/- as total sale consideration from the appellant by the
respondent No.6, Shri Om Prakash. It was also the admitted case of
the parties that the respondent No.6 had taken possession of the
aforesaid vehicle on 20th July, 2004. He submitted that both the said
facts are not disputed either in the written statement filed by the
respondent No.6 or in the course of his cross-examination, and this
conclusively proved that the appellant was not in possession and
MAC. APP. 164/2010 Page 8 of 32
control of the offending scooter on the date of the accident. Thus, it
is the respondent No.6 and not the appellant who could be held
vicariously liable for the rash and negligent driving of the respondent
No.5, as it was the respondent No.6 who had handed over the vehicle
in question to the respondent No.5 to drive the same. Admittedly
also, it was the respondent No.5 who was driving the vehicle in
question and against whom case FIR No.54/05 had been registered for
the offences punishable under Sections 279/304-A IPC and Section 3
of the Motor Vehicles Act, 1988. The execution of the delivery
receipt by the respondent No.6, and the fact that physical possession
of the scooter had been handed over to the respondent No.6 on the
same day, showed that the appellant had no connection with the
scooter on the date of the accident. This was sufficient to exonerate
the appellant. Reliance was placed by the learned counsel for the
appellant, in this context, upon a judgment of the Punjab and Haryana
High Court rendered in the case of Harbans Singh vs. Krishan Lal
and Ors. reported in 1984 ACJ 650 and in particular paragraph 5 of
the said judgment, which reads as under:
MAC. APP. 164/2010 Page 9 of 32
“5. The point sought to be urged by Mr. G.
L. Nagpal, counsel for the claimants was that
as the tempo stood registered in the name of
Harbans Singh at the time of the accident, he
retained ownership over it and was thus liable.
In other words, registration in the name of the
purchaser was a necessary ingredient for
transfer of title of the vehicle concerned. This is
a contention wholly devoid of merit. A similar
point was raised in Phul Bus Service (Regd.),
Rampura v. Financial Commissioner, Taxation
(1968) ACJ 57 (P & H), where it was held that
ownership of a motor vehicle is transferred in
the same manner and subject to the same
limitations and rules as apply to all other
movable property and an absolute transferee of
a motor vehicle does not cease to be the owner
thereof merely because his name has not yet
been substituted for the name of the transferor
in the registration certificate of the vehicle
issued under the Motor Vehicles Act. It was
specifically observed that registration under the
Motor Vehicles Act was not a necessary
ingredient of a completed title of ownership of a
motor vehicle.”11. Further, in support of his contention that the learned Claims
Tribunal had erroneously held the appellant to be vicariously liable,
the learned counsel for the appellant referred to the meaning of the
expression “vicarious liability” in Black’s Law Dictionary, Seventh
Edition, wherein “vicarious liability” is defined as follows:
MAC. APP. 164/2010 Page 10 of 32
“Liability that a supervisory party (such as an
employer) bears for the actionable conduct of a
subordinate or associate (such as an employee)
because of the relationship between the two
parties.”12. The learned counsel for the respondent No.6, Shri V.K. Goel
Advocate sought to rebut the aforesaid submissions of the learned
counsel for the appellant by raising a two-fold contention. He
contended that the Form Nos.29 and 30 placed on record by the
appellant were signed only by the appellant and not by the respondent
No.6. This clearly showed that at no point of time the appellant made
any move to have the registration of the vehicle transferred to the new
purchaser, viz., the respondent No.6. The second contention of Mr.
Goel was that the onus of proving that the respondent No.5 – driver
was driving the vehicle, and further that it was being driven under the
instructions of the respondent No.6 was upon the Insurance
Company, and the Insurance Company had failed to discharge the
said onus.
13. In support of his aforesaid contentions, the learned counsel
relied upon the testimony of the respondent No.6, Shri Om Prakash
MAC. APP. 164/2010 Page 11 of 32
himself, who appeared in the witness box as R4W1 to tender hisexamination-in-chief by way of an affidavit, Ex.R4W1/A. In his said
affidavit, the respondent No.6 though stated that he had purchased
scooter No. DL-7S-K-9664 from the appellant Shri Mukesh Kumar
on 20.07.2004 and the appellant had handed over the possession of
the said scooter to him with the assurance that the requisite Forms 29
and 30 for change of ownership through the Registering Authority,
viz., the Directorate of Transport, would be given within the
prescribed period of one month from the date of delivery challan,
which was signed by him on 20.07.2004, the said Forms were not
delivered by the appellant within the aforesaid period. He further
stated that it was, therefore, agreed between him (the respondent
No.6) and the appellant that the appellant will take back the
possession of the vehicle and, as such, he (the respondent No.6)
handed over the possession of the said scooter back to the appellant.
Since the scooter in question was in possession of the appellant who
was the recorded owner of the same, the respondent No.6 had no
knowledge about the accident which took place on 12.02.2005.
MAC. APP. 164/2010 Page 12 of 32
Significantly, the respondent No.6 in his affidavit, Ex.R4W1/A statedthat he was not aware as to who was driving the scooter at the time of
the accident and he had also not made any effort to take back the
scooter on superdari from the concerned authority.
14. Mr. V.K. Goel, the learned counsel for the respondent No.6
contended that the aforesaid testimony of the respondent No.6
conclusively showed that he was not in possession and control of
scooter No.DL-7S-K-9664 on 12.02.2005, when the accident took
place and, as such, the liability to pay compensation to the
respondents No.1 to 4 could not be fastened upon him.
15. Mr. L.K. Tyagi, the learned counsel for the respondent No.7 –
Insurance Company, to rebut the contentions raised on behalf of the
respondent No.6, argued that in the written statement of the
respondent No.6, the respondent No.6 had clearly admitted that he
had purchased the offending scooter from Shri Mukesh Kumar and
the latter had handed over the possession of the said scooter to the
respondent No.6. This being so, the burden lay heavily on the
respondent No.6 to prove that he had returned the vehicle of the
MAC. APP. 164/2010 Page 13 of 32
appellant on 30th August, 2004 as alleged by him or on any other datewhatsoever. He had miserably failed to discharge the said burden. In
such circumstances, his sworn testimony that he did not know who
was driving the vehicle was not worthy of credence. Furthermore,
Mr. Tyagi submitted, relying upon the judgments of Supreme Court
in Ishwar Chandra vs. Oriental Insurance Co. Ltd. 2007 III AD
(SC) 753, National Insurance Co. Ltd. Vs. Swaran Singh & Ors.
(2004) 3 SCC 297, Sardari and Ors. Vs. Sushil Kumar and Ors.
2008 ACJ 1307 and United India Insurance Co. Ltd. Vs. Rakesh
Kumar Arora & Ors. 2008 (13) Scale 35, that in view of the fact that
the respondent No.5 – driver was charge-sheeted under Section 3 of
the Motor Vehicles Act, for not possessing a driving licence, the
breach of the conditions of the insurance policy by the insured stood
proved. In this context, the learned counsel referred to the testimony
of R3W1 Shri R.K. Sharma, Assistant Manager of the Insurance
Company, who proved on record the certified copy of the challan
filed by the police under Sections 279/304-A IPC and Section 3/181
of the Motor Vehicles Act, 1988 as Ex.R3W1/E and pointed out that
MAC. APP. 164/2010 Page 14 of 32
there was no cross-examination of this witness on the aspect of theaforesaid challan having been filed against the respondent No.5.
16. Mr. Tyagi also contended on behalf of the Insurance Company
that there is a subtle but fine distinction between a case where the
licence is fake and a case where the driver holds no licence at all. In
the former category of cases, the learned counsel contended, the onus
was on the Insurance Company to prove that the insured was aware
that the driver of his vehicle was holding a fake licence. In other
words, the Insurance Company was required to prove that a breach of
the policy conditions had been wilfully committed by the
insured/owner. However, in the latter category of cases, viz., the
cases in which the driver holds no driving licence at all, as in the
instant case, it is sufficient for the Insurance Company to prove that
the offending vehicle was being driven by the insured or by his driver
without a driving licence and nothing further has to be proved.
17. Mr. Bhupesh Narula, who appeared on behalf of the
respondents No.1 to 4, the claimants in the claim petition, sought to
counter the submissions of Mr. Tyagi by contending that it is the well
MAC. APP. 164/2010 Page 15 of 32
settled position of law that if there is any breach of the policyconditions, the claimants should not be made to suffer for the same
and it is always open to the Insurance Company to realise the amount
from the insured in accordance with law. In the aforesaid context,
Mr. Bhupesh Narula relied upon the decisions rendered in the
following cases:
(i) New India Assurance Co., Shimla vs. Kamla and Ors. I
(2002) ACC 346 (SC).
In this case, the question arose whether by virtue
of Section 149(2)(a)(ii) an Insurance Company could
avoid liability if it is proved that the driving licence was
fake. The Supreme Court considered in detail the
provisions of Section 149 of the Motor Vehicles Act,
1988 and concluded that the insurer has to pay to third
parties on account of the fact that a policy of insurance
had been issued in respect of the vehicle. It was held
that the insurer may be entitled to recover such amount
from the insured if the insurer was not otherwise liable to
MAC. APP. 164/2010 Page 16 of 32
pay such sum to the insured by virtue of the contract ofinsurance. The question as to whether or not the insured
would be protected if he had made all enquiries was left
open.
(ii) United India Insurance Co. Ltd. Vs. Lehru and Ors. I
(2003) ACC 611 (SC).
This case came up before the Supreme Court
subsequent to Kamla’s case (supra) and it was submitted
that the decision in Kamla’s case was not correct. The
Supreme Court once again considered the provisions of
Section 149(2)(a)(ii) and categorically reiterated that it
was not sufficient to show that the person driving at the
time of the accident was not duly licensed and the
Insurance Company must establish that the breach was
on the part of the insured. In the penultimate paragraph
of its judgment, the Court held:
“More importantly even in such a case
the Insurance Company would remain
liable to the innocent third party, but it
may be able to recover from the insured.MAC. APP. 164/2010 Page 17 of 32
This is the law which has been laid down
in Skandia’s, Sohan Lal Passi’s and
Kamla’s cases. We are in full agreement
with the views expressed therein and see
no reason to take a different view.”(iii) New India Assurance Co. Ltd. Vs. Jyotirmayee @ Ranu
Rout & Ors. II (2007) ACC 893 (DB).
In this case, relying upon the decisions of the
Supreme Court in Kamla’s and Lehru’s case (supra), a
Division Bench of the Orissa High Court held:
“In this regard it is well settled position
of law that, if there was any breach of the
policy condition it is always open to the
Insurance Company to release (sic.
realize) the amount from the insured in
accordance with law and the claimants
should not suffer.”18. Having heard the learned counsel for the parties at considerable
length and scrutinized the records, my findings on the various issues
raised in the appeal, factual and legal, are as under.
19. The execution of the delivery receipt has been unequivocally
admitted by the respondent No.6, Shri Om Prakash as also the fact
that on the date of the execution thereof, i.e., on 20.07.2004, the
MAC. APP. 164/2010 Page 18 of 32
delivery of the vehicle was handed over to him thereunder. Once theexecution of a document has been admitted as in the present case, the
well settled position of law is that no oral evidence contrary to that
can be referred to. In other words, the subsequent oral arrangement
set up by the respondent No.6, viz., that there was an agreement
between him and the appellant whereunder he returned the offending
vehicle to the appellant, cannot be proved by parol evidence. Section
91 of the Indian Evidence Act deals with the exclusion of evidence of
oral agreement between the parties for the purpose of contradicting,
varying, etc. any written agreement and lays down that where under
law, a contract or disposition is required to be in writing and the same
has been reduced into writing, its terms cannot be modified or altered
or substituted by oral contract or disposition. (See S. Saktivel (dead)
by LRs vs. M. Venugopal Pillai and Ors. (2000) 7 SCC 104). This
being the law, this Court is unable to accept the version of the
respondent No.6 that he had returned the vehicle to the appellant.
The necessary corollary is that the respondent No.6 must be held to be
in possession and control of the vehicle on the date of the accident.
MAC. APP. 164/2010 Page 19 of 32
20. The next question which arises for consideration is the question
of the liability of the recorded owner of a vehicle, viz., the appellant
herein, after its sale to another person. In the case of Pushpa @ Leela
& Ors. Vs. Shakuntala & Ors., Civil Appeal No.6924/2005 decided
on January 12, 2011, the Supreme Court has adjudicated upon the
very same question which has been formulated in paragraph 1 of its
judgment as follows:
“Whether in the fact and circumstances of the
case the liability to pay the compensation
amount as determined by the Motor Accident
Claims Tribunal was of the purchaser of the
vehicle alone or whether the liability of the
recorded owner of the vehicle was coextensive
and from the recorded owner it would pass on
to the insurer of the vehicle?”21. In the aforesaid case, the offending truck, as noted by the Apex
Court, had a little history of its own. It earlier belonged to one
Jitender Gupta, who was its registered owner. Jitender Gupta sold the
truck to Salig Ram and gave its possession to the transferee. Despite
the sale of the vehicle by Jitender Gupta to Salig Ram, the change of
ownership of the vehicle was not entered in the certificate of
registration. After the earlier policy issued by M/s. New India
MAC. APP. 164/2010 Page 20 of 32
Assurance Co. Ltd. in favour of Jitender Gupta had lapsed, anotherpolicy was taken out by Salig Ram from M/s. Oriental Insurance Co.
Ltd. in the name of Jitender Gupta, the earlier owner of the truck. It
was during the subsistence and period of validity of this insurance
policy that the accident took place. The Claims Tribunal held that
there was no privity of contract between Salig Ram, the owner of the
truck and the Insurance Company, M/s. Oriental Insurance Co. Ltd.
Hence the insurance policy was of no use for the purpose of
indemnifying Salig Ram. In short, Salig Ram alone was liable for
payment of the compensation amount to the claimants. An appeal
against the judgment and award made by the Claims Tribunal was
preferred before the Himachal Pradesh High Court, which was
dismissed. On further appeal, after examining at length the
provisions of law with regard to ownership of motor vehicles, as
incorporated in Section 2(30) of the Motor Vehicles Act, 1988 and
Section 50 thereof, the Supreme Court held that it was undeniable that
notwithstanding the sale of the vehicle neither the transferor Jitender
Gupta nor the transferee had taken any step for the change of the
MAC. APP. 164/2010 Page 21 of 32
name of the owner in the certificate of registration of the vehicle. Itfurther held that in view of this omission, Jitender Gupta must be
deemed to continue as the owner of the vehicle for the purposes of the
Act, even though under the civil law he ceased to be its owner after its
sale on February 02, 1993. Significantly, in arriving at the aforesaid
conclusion, the Supreme Court relied upon its earlier decisions in Dr.
T.V. Jose vs. Chacko P.M. (2001) 8 SCC 748 and P.P. Mohammed
vs. K. Rajappan & Ors. (2008) 17 SCC 624. The relevant portion of
the judgment of the Supreme Court in Pushpa’s case (supra) is
reproduced hereunder:
“12. The question of the liability of the
recorded owner of a vehicle after its sale to
another person was considered by this Court in
Dr. T.V. Jose vs. Chacko P.M. (2001) 8 SCC748. In paragraphs 9 and 10 of the decision,
the Court observed and held as follows:“9. Mr. Iyer appearing for the
Appellant submitted that the High Court
was wrong in ignoring the oral evidence
on record. He submitted that the oral
evidence clearly showed that the
Appellant was not the owner of the car on
the date of the accident. Mr. Iyer
submitted that merely because the name
had not been changed in the records ofMAC. APP. 164/2010 Page 22 of 32
R.T.O. did not mean that the ownership of
the vehicle had not been transferred. Mr.
Iyer submitted that the real owner of the
car was Mr. Roy Thomas. Mr. Iyer
submitted that Mr. Roy Thomas had been
made party-Respondent No. 9 to these
Appeals. He pointed out that an Advocate
had filed appearance on behalf of Mr.
Roy Thomas but had then applied for and
was permitted to withdraw the
appearance. He pointed out that Mr. Roy
Thomas had been duly served and a
public notice had also been issued. He
pointed out that Mr. Roy Thomas had
chosen not to appear in these Appeals. He
submitted that the liability, if any, was of
Mr. Roy Thomas.10. We agree with Mr. Iyer that the
High Court was not right in holding that
the Appellant continued to be the owner
as the name had not been changed in the
records of R.T.O. There can be transfer
of title by payment of consideration and
delivery of the car. The evidence on
record shows that ownership of the car
had been transferred. However the
Appellant still continued to remain liable
to third parties as his name continued in
the records of R.T.O. as the owner. The
Appellant could not escape that liability
by merely joining Mr. Roy Thomas in
these Appeals. Mr. Roy Thomas was not
a party either before MACT or the High
Court. In these Appeals we cannot and
will not go into the question of inter se
liability between the Appellant and Mr.MAC. APP. 164/2010 Page 23 of 32
Roy Thomas. It will be for the Appellant
to adopt appropriate proceedings against
Mr. Roy Thomas if, in law, he is entitled
to do so.”(Emphasis added)
13. Again, in P.P. Mohammed v. K.
Rajappan and Ors. (2008) 17 SCC 624, this
Court examined the same issue under somewhat
similar set of facts as in the present case. In
paragraph 4 of the decision, this Court
observed and held as follows:“4. These appeals are filed by the
Appellants. The insurance company has
chosen not to file any appeal. The
question before this Court is whether by
reason of the fact that the vehicle has
been transferred to Respondent 4 and
thereafter to Respondent 5, the Appellant
got absolved from liability to the third
person who was injured. This question
has been answered by this Court in T.V.
Jose (Dr.) v. Chacko P.M. wherein it is
held that even though 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. We are in agreement with
the view expressed therein. Merely
because the vehicle was transferred does
not mean that the Appellant 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.”MAC. APP. 164/2010 Page 24 of 32
(Emphasis added)
14. The decision in Dr. T.V. Jose was
rendered under the Motor Vehicles Act, 1939.
But having regard to the provisions of Section
2(30) and section 50 of the Act, as noted above,
the ratio of the decision shall apply with equal
force to the facts of the case arising under the
1988 Act. On the basis of these decisions, the
inescapable conclusion is that Jitender Gupta,
whose name continued in the records of the
registering authority as the owner of the truck
was equally liable for payment of the
compensation amount. Further, since an
insurance policy in respect of the truck was
taken out in his name he was indemnified and
the claim will be shifted to the insurer, Oriental
Insurance Company Ltd.15. Learned Counsel for the insurance company
submitted that even though the registered owner
of the vehicle was Jitender Gupta, after the sale
of the truck he had no control over it and the
possession and control of the truck were in the
hands of the transferee, Salig Ram. No liability
can, therefore, be fastened on Jitender Gupta,
the transferor of the truck. In support of this
submission he relied upon a decision of this
Court in National Insurance Company Ltd. v.
Deepa Devi and Ors. (2008) 1 SCC 414. The
facts of the case in Deepa Devi are entirely
different. In that case the vehicle was
requisitioned by the District Magistrate in
exercise of the powers conferred upon him
under the Representation of the People Act,
1951. In that circumstance, this Court observedMAC. APP. 164/2010 Page 25 of 32
that the owner of the vehicle cannot refuse to
abide by the order of requisition of the vehicle
by the Deputy Commissioner. While the vehicle
remained under requisition, the owner did not
exercise any control over it: the driver might
still be the employee of the owner of the vehicle
but he had to drive the vehicle according to the
direction of the officer of the State, in whose
charge the vehicle was given. Save and except
the legal ownership, the registered owner of the
vehicle had lost all control over the vehicle. The
decision in Deepa Devi was rendered on the
special facts of that case and it has no
application to the facts of the case in hand.16. In light of the discussion made above it is
held that the compensation amount is equally
realisable from Respondent No. 3, Oriental
Insurance Company Ltd. and it is directed to
make full payment of the compensation amount
as determined by the Claims Tribunal to the
Appellants within two months from the date of
this judgment.”22. The facts of the present case are practically identical with the
facts in the aforementioned case and thus this Court has no difficulty
in arriving at the conclusion that on the date of the accident the
appellant who was the registered owner of the offending vehicle must
be deemed to continue as the owner of the vehicle for the purposes of
the Motor Vehicles Act, even though under the civil law he ceased to
MAC. APP. 164/2010 Page 26 of 32
be its owner after its sale on 20.07.2004. Accordingly, the appellantand the respondent No.6 are equally liable for the compensation
payable to the claimants. Further, this Court also has no difficulty in
holding that since the insurance policy in respect of the offending
scooter was in the name of the appellant, he was indemnified and the
liability to pay the claim amount will accordingly be shifted to the
insurer, M/s. United India Insurance Co. Ltd.
23. A residual question remains to be addressed, to which it is now
proposed to advert. Allegedly, the respondent No.6 – driver was
driving without a driving licence in his possession. He was
accordingly charge-sheeted by the police of the concerned police
station for the offence punishable under Section 3 of the Motor
Vehicles Act, apart from the offences punishable under Sections
279/304-A IPC. The residual question which arises for consideration
is whether the insured in such circumstances committed wilful breach
of the terms of the policy and thereby the insurance company is
discharged from its liability to pay the compensation amount to the
victims.
MAC. APP. 164/2010 Page 27 of 32
24. As mentioned hereinbefore, Mr. L.K. Tyagi, the learned
counsel for the Insurance Company strongly relied upon the
judgments of the Supreme Court in National Insurance Co. Ltd. Vs.
Swaran Singh & Ors. (2004) 3 SCC 297 and National Insurance
Company vs. Kusum Rai & Ors. (2006) 4 SCC 250. Both the said
decisions were adverted to by the Supreme Court in its subsequent
decision in Ishwar Chandra & Ors. Vs. Oriental Insurance Co. Ltd.
& Ors. 2007 III AD (SC) 753, paragraph 14 whereof is relied upon
by the learned counsel for the Insurance Company. It was observed
as under:
“14. This Court in Swaran Singh clearly laid
down that the liability of the Insurance
Company vis-a-vis the owner would depend
upon several factors. The owner would be
liable for payment of compensation in a case
where the driver was not having a licence at
all. It was the obligation on the part of the
owner to take adequate care to see that the
driver had an appropriate licence to drive the
vehicle. The question as regards the liability of
the owner vis-a-vis the driver being not
possessed of a valid licence was considered in
Swaran Singh stating: (SCC pp. 336-37, para89)
89. Section 3 of the Act casts an
obligation on a driver to hold an effectiveMAC. APP. 164/2010 Page 28 of 32
driving licence for the type of vehicle
which he intends to drive. Section 10 of
the Act enables the Central Government
to prescribe forms of driving licences for
various categories of vehicles mentioned
in Sub-section (2) of the said section. The
various types of vehicles described for
which a driver may obtain a licence for
one or more of them are: (a) motorcycle
without gear, (b) motorcycle with gear,(c) invalid carriage, (d) light motor
vehicle, (e) transport vehicle, (f) road
roller, and (g) motor vehicle of other
specified description. The definition
clause in Section 2 of the Act defines
various categories of vehicles which are
covered in broad types mentioned in Sub-
section (2) of Section 10. They are goods
carriage, heavy goods vehicle, heavy
passenger motor vehicle, invalid
carriage, light motor vehicle, maxi-cab,
medium goods vehicle, medium
passenger motor vehicle, motor-cab,
motorcycle, omnibus, private service
vehicle, semi-trailer, tourist vehicle,
tractor, trailer and transport vehicle. In
claims for compensation for accidents,
various kinds of breaches with regard to
the conditions of driving licences arise
for consideration before the Tribunal as
a person possessing a driving licence for
motorcycle without gear, (sic may be
driving a vehicle) for which he has no
licence. Cases may also arise where a
holder of driving licence for light motor
vehicle is found to be driving a maxi-cab,MAC. APP. 164/2010 Page 29 of 32
motor-cab or omnibus for which he has
no licence. In each case, on evidence led
before the Tribunal, a decision has to be
taken whether the fact of the driver
possessing licence for one type of
vehicle but found driving another type
of vehicle, was the main or contributory
cause of accident. If on facts, it is found
that the accident was caused solely
because of some other unforeseen or
intervening causes like mechanical
failures and similar other causes having
no nexus with the driver not possessing
requisite type of licence, the insurer will
not be allowed to avoid its liability
merely for technical breach of
conditions concerning driving licence.”(Emphasis added)
25. Mr. Tyagi, the learned counsel for the Insurance Company also
relied upon the judgments of the Supreme Court rendered in the case
of Kusum Rai (supra). In Kusum Rai’s case, it was observed:
“(12) This Court in Swaran Singh’s case, 2004
ACJ 1 (SC), clearly laid down that the liability
of the insurance company vis-a-vis the owner
would depend upon several factors. The owner
would be liable for payment of compensation in
a case where the driver was not having a
licence at all. It was the obligation on the part
of the owner to take adequate care to see that
the driver had an appropriate licence to drive
the vehicle. The question as regards theMAC. APP. 164/2010 Page 30 of 32
liability of the owner vis-a-vis the driver being
not in possession of valid licence was
considered in Swaran Singh’s case (supra).”
26. Indubitably, in the present case, the respondent No.5 was
driving the offending vehicle without any driving licence at all and
the Insurance Company cannot be mulcted with the liability to pay
compensation to the claimants. At the same time, the respondents
No.1 to 4, i.e., the claimants cannot be made to suffer for no fault of
theirs and must be held entitled to receive the compensation from the
Insurance Company in view of the fact that the vehicle was duly
insured in the name of its recorded owner on the date of the accident.
It is accordingly held that the Insurance Company shall pay the
awarded amount to the respondents No.1 to 4 in the first instance and
thereafter recover the same from the appellant and the respondent
No.6, who have been held equally liable for the tortious act of the
respondent No.5. No doubt, both the appellant and the respondent
No.6 have denied that the respondent No.5 was their driver and the
respondent No.6 has concocted a story that the vehicle purchased
from the appellant was returned to the appellant by him after he had
MAC. APP. 164/2010 Page 31 of 32
driven the same for one and a half month, but, as already discussed
above, the said version of the respondent No.6 is unworthy of
credence. The appellant also failed in his duty of ensuring that the
ownership of the vehicle was transferred to the respondent No.6 in the
records of the Registering Authority and for this lapse on his part, he
too must be held liable to pay the compensation amount.
27. Accordingly, the appeal is allowed to the limited extent that the
Insurance Company shall pay the award amount in the first instance.
The Insurance Company shall, however, be at liberty thereafter to
recover the same from the appellant and the respondent No.6, who are
both held equally liable to pay the award amount.
MAC.APP.164/2010 and CM Nos.4807/2010 and 4809/2010
stand disposed of in the above terms.
REVA KHETRAPAL
(JUDGE)
May 11, 2011
km
MAC. APP. 164/2010 Page 32 of 32