Holding

The person whose name is recorded as the registered owner of a motor vehicle is deemed the owner for purposes of the Motor Vehicles Act, 1988 and is liable for compensation, even if the vehicle has been transferred without updating the registration.

Summary

A motor vehicle registered in the name of Vijay Kumar (the first respondent) struck two pedestrians, killing one and injuring another. The vehicle had allegedly been sold through a chain of transfers before the accident, but the registration certificate remained in Vijay Kumar's name. The Motor Accident Claims Tribunal held Vijay Kumar jointly liable with the driver, a decision upheld by the Supreme Court. The High Court had set aside the Tribunal's award, reasoning that the registered owner could escape liability if he had transferred the vehicle. The Supreme Court clarified that, under Section 2(30) of the Motor Vehicles Act, 1988, the person whose name appears on the registration is deemed the owner for liability purposes unless the vehicle is under a hire‑purchase, lease or hypothecation agreement or the owner is a minor. Consequently, the Court reinstated the Tribunal’s award, holding Vijay Kumar liable for compensation, and set aside the High Court judgment.

Issues considered

The meaning of 'owner' under Section 2(30) of the Motor Vehicles Act, 1988 in the context of unregistered transfers of a vehicle.
Whether a person who has transferred a vehicle but remains the registered owner can be exempted from liability for motor accident compensation.
The effect of non‑registration of transfer on the liability of the registered owner.

Legislation cited

Assam Requisition and Control of Vehicles Act, 1968s. 5(1)
Motor Vehicles Act, 1939s. 2(19)
Motor Vehicles Act, 1988s. 146, s. 2(30), s. 50

Subjects

Motor Vehicles Actdefinition of ownerliability for motor accident compensationvehicle registrationtransfer of ownershipuninsured vehiclestatutory interpretation

Judgment

572 [2018]REPORTS
SUPREME COURT 2 S.C.R. 572 [2018] 2 S.C.R.

A NAVEEN KUMAR
v.
VIJAY KUMAR AND ORS.
(Civil Appeal No. 1427 of 2018)
B FEBRUARY 06, 2018
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND
DR. D. Y. CHANDRACHUD, JJ.]
Motor Vehicles Act, 1988 – s.2(30) – ‘Owner’ – Motor vehicle
driven in reverse gear hit two persons – One died on the spot, while
C the other received multiple injuries – Vehicle involved in the
accident was registered in the name of First respondent – However,
before Motor Accident Claims Tribunal successive transfers of the
vehicle was put forth as a defence to the claim – Tribunal held the
First respondent liable along with the driver of the vehicle as the
D registration certificate of the offending vehicle continued to be in
his name – Appeal by First respondent before High Court, allowed
– Held: The person in whose name a motor vehicle stands
registered is the owner of the vehicle for the purposes of the Act –
Thus, in the present case where the registered owner purportedly
transferred the vehicle but continued to be reflected in the records
E as the owner of the vehicle, he would not stand absolved of
liability– Principle underlying the provisions of s.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
F a trail of successive transfers, which are not registered with the
registering authority– In the present case, admittedly the vehicle
was uninsured – Liability to pay compensation stands fastened upon
the First respondent– Judgment of High Court is set aside– Motor
Vehicles Act,1939– s.2(19)– Interpretation of Statutes.
A motor vehicle driven by one ‘R’ in the reverse gear hit
G
one ‘JD’ and her nephew ‘N’. ‘N’ was run over by the rear wheel
of the car and died on the spot while, ‘JD’ received multiple
injuries. The vehicle involved in the accident was registered in
the name of the First respondent. However, before the Motor
Accident Claims Tribunal, the First respondent claimed that he
H had sold the vehicle to the Second respondent, who stated that
572
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 573

he had sold it to the Third respondent, who in turn claimed to A
have sold the vehicle to the appellant. The appellant claimed that
he had sold the vehicle to one ‘MS’. The Tribunal held the First
respondent liable along with the driver of the vehicle. In appeal,
High Court foisted the liability to pay compensation on the
appellant. Hence, the present appeal.
B
Allowing the appeal, the Court
HELD : 1.1 The person in whose name a motor vehicle
stands registered is the owner of the vehicle for the purposes of
the Motor Vehicles Act, 1988. The use of the expression ‘means’
is a clear indication of the position that it is the registered owner C
who Parliament has regarded as the owner of the vehicle.
Evidently, Parliament while enacting the Motor Vehicles Act, 1988
made a specific change by recasting the earlier definition.
Section 2(19) of the earlier Motor Vehicles Act, 1939 stipulated
that where a person in possession of a motor vehicle is a minor,
the guardian of the minor would be the owner and where the D
motor vehicle was subject to a hire purchase agreement, the
person in possession of the vehicle under the agreement would
be the owner. The Act of 1988 has provided in the first part of
Section 2(30) that the owner would be the person in whose name
the motor vehicle stands registered. Where such a person is a E
minor the guardian of the minor would be the owner. In relation
to a motor vehicle which is the subject of an agreement of hire
purchase, lease or hypothecation, the person in possession of
the vehicle under that agreement would be the owner. The latter
part of the definition is in the nature of an exception which
applies where the motor vehicle is the subject of a hire purchase F
agreement or of an agreement of lease or hypothecation.
[Para 6][578-F-H; 579-A-B]
1.2 In a situation such as the present where the registered
owner has purported to transfer the vehicle but continued to be
reflected in the records of the registering authority as the owner G
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
H
574 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 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.
B
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.
C [Paras 12, 13][585-E-H; 586-C-D]
HDFC Bank Limited v Reshma (2015) 3 SCC 679;
Purnya Kala Devi v State of Assam (2014) 14 SCC 142
– distinguished.
Pushpa alias Leela v Shakuntala (2011) 2 SCC 240 :
D [2011] 1 SCR 334 – relied on.
Mohan Benefit (P) Ltd. v. Kachraji Raymalji (1997) 9
SCC 103; Rajasthan SRTC v. Kailash Nath Kothari
(1997) 7 SCC 481 : [1997] 3 Suppl. SCR 724;
National Insurance Co. Ltd. v. Deepa Devi (2008) 1
SCC 414 : [2007] 13 SCR 134 ; Mukesh K. Tripathi v.
E
LIC (2004) 8 SCC 387 : [2004] 4 Suppl. SCR 127 ;
Ramesh Mehta v. Sanwal Chand Singhvi (2004) 5 SCC
409 : [2004] 1 Suppl. SCR 418 ; State of Maharashtra
v. Indian Medical Assn. (2002) 1 SCC 589 : [2001] 5
Suppl. SCR 474 ; Pandey & Co. Builders (P) Ltd. v.
F State of Bihar (2007) 1 SCC 467 : [2006] 8 Suppl. SCR
997 ; Rajasthan SRTC v. Kailash Nath Kothari (1997)
7 SCC 481 : [1997] 3 Suppl.SCR 724 ; National
Insurance Co. Ltd. v. Durdadahya Kumar Samal (1988)
2 TAC 25 (Ori) ; Bhavnagar Municipality v. Bachubhai
Arjanbhai 1995 SCC OnLine Guj 167 ; Godavari
G
Finance Co. v. Degala Satyanarayanamma (2008) 5
SCC 107 : [2008] 6 SCR 231 ; T.V. Jose (Dr.) v. Chacko
P.M. (2001) 8 SCC 748 : [2001] 3 Suppl. SCR 366 ;
U.P. SRTC v. Kulsum (2011) 8 SCC 142 : [2011] 15
SCR 618 ; P. P. Mohammed v. K. Rajappan (2008) 17
H SCC 624 – referred to.
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 575

Case Law Reference A
[2011] 1 SCR 334 relied on Para 8
[2001] 3 Suppl. SCR 366 referred to Para 8
(2008) 17 SCC 624 referred to Para 8
B
(2014) 14 SCC 142 distinguished Para 9
(2015) 3 SCC 679 distinguished Para 11
(1997) 9 SCC 103 referred to Para 11
[1997] 3 Suppl. SCR 724 referred to Para 11 C

[2007] 13 SCR 134 referred to Para 11
[2004] 4 Suppl. SCR 127 referred to Para 11
[ 2004] 1 Suppl. SCR 418 referred to Para 11
D
[2001] 5 Suppl. SCR 474 referred to Para 11
[2006] 8 Suppl. SCR 997 referred to Para 11
[1997] 3 Suppl. SCR 724 referred to Para 11
(1988) 2 TAC 25 (Ori) referred to Para 11 E

[2008] 6 SCR 231 referred to Para 11
[2011] 15 SCR 618 referred to Para 11
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1427 F
of 2018.
From the Judgment and Order dated 25.01.2016 of the High Court
of Punjab & Haryana at Chandigarh in FAO No. 5310 of 2013 (O&M).
Rishi Malhotra, Adv. for the Appellant.
G
Sudhir Nandrajog, Sr. Adv., Abhishek Vikas, Paritosh Budhiraja,
Vimal Dubey, Ms. Surbhi Maheshwari, Ashwani Ahuja, Uday Pratap
Singh, Abhishek Vikas, Fanish Jain, Dr. (Mrs.) Vipin Gupta, Nandani
Gupta, Krishna Kumar, Dharmendra Kumar Sinha, Sabyasachi Bhaduri,
Pallav Mongia, Advs. for the Respondents.
H
576 SUPREME COURT REPORTS [2018] 2 S.C.R.

A The Judgment of the Court was delivered by
DR. D. Y. CHANDRACHUD, J. 1. An accident took place at
about 7:30 pm on 27 May 2009 when Smt.Jai Devi and her nephew
Nitin were walking down a street in their village. A motor vehicle driven
by Rakesh in the reverse gear hit them. Nitin was run over by the rear
B wheel of the car and died on the spot. Smt.Jai Devi received multiple
injuries. Two claim petitions were filed before the Motor Accident Claims
Tribunal (‘the Tribunal’).One of them was by Smt. Jai Devi. The second
was by Somvir and Smt.Saroj, the parents of Nitin. The vehicle involved
in the accident (a Maruti-800 bearing Registration DL-3CC-3684) was
registered in the name of Vijay Kumar, the First respondent. According
C to the First respondent, 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
D 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.
E 2. By its award dated 6 October 2012, the Tribunal granted
compensation in the amount 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
F
of the vehicle. The vehicle was uninsured on the date of the accident.
3. The award of the Tribunal was challenged by the First
respondent in appeal before the High Court of Punjab and Haryana. A
learned Single Judge of the High Court allowed the appeal on 25
January 2016 on the ground that there was no justification for the
G 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.
In coming to this conclusion the High Court relied upon two decisions of
H
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 577
[DR. D. Y. CHANDRACHUD, J.]

this Court : HDFC Bank Limited v Reshma1 and Purnya Kala Devi A
v State of Assam2.
4. On behalf of the appellant, it has been submitted that the High
Court has proceeded on a manifestly erroneous construction of the legal
position. It has been urged that Section 2(30) of the Motor Vehicles Act,
1988 indicates that the person in whose name a motor vehicle is registered B
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 decision of this Court in Purnya Kala Devi
(supra), it has been submitted, related to a situation where the offending
vehicle had been requisitioned by a state government. Similarly, the
decision in Reshma (supra) dealt with a situation where the vehicle had C
been financed against a hypothecation agreement. It was in this
background that this Court held that the person in possession of the
vehicle under a hypothecation agreement was to be treated as the owner.
Having regard to the definition contained in Section 2(30), it was urged
that the High Court was in error in foisting the liability on the appellant D
who is not the registered owner of the vehicle. Learned counsel appearing
on behalf of the appellant submitted that in Pushpa alias Leela v
Shakuntala3, 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 E
stands must be deemed to continue as the owner of the vehicle for the
purposes of the Act.
5. On the other hand, learned counsel appearing on behalf of the
First respondent supported the judgment of the Tribunal by submitting
that the appellant as the person in physical possession and control of the F
vehicle was liable. Learned counsel appearing on behalf of the First
respondent also relied on the decisions of this Court in Purnya Kala
Devi and Reshma. Learned counsel submits:
(i) “The sale of a vehicle also results in a presumable change of
physical possession and control of the vehicle from the G
vendor to the vehicle. The registered owner at the best can
be regarded as an ostensible owner of the vehicle but not the
1
(2015) 3 SCC 679
2
(2014) 14 SCC 142
3
(2011) 2 SCC 240
H
578 SUPREME COURT REPORTS [2018] 2 S.C.R.

A real owner after the sale of the vehicle, even if his name is
there on the Registration Certificate of the vehicle;
(ii) 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;
B (iii) The Court/Tribunal should apply the test whether the
registered owner has, through legitimate means, fully
relinquished his possession and control over the vehicle or
not. If the answer is in the affirmative, he cannot be made
liable and the person who is in physical possession and
C control of the vehicle should be made liable; and
(iv) Section 50 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
D over the use of vehicle should be made liable.”
6. The expression ‘owner’ is defined in Section 2(30) of the Act,
1988, thus:
“2(30) “owner” means a person in whose name a motor vehicle
stands registered, and where such person is a minor, the guardian
E 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
F 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. In the earlier Act of 1939, the expression ‘owner’ was defined
in Section 2(19) as follows:
G “11…2. (19) ‘owner’ means, where the person in possession of
a motor vehicle is a minor, the guardian of such minor, and in
relation to a motor vehicle which is the subject of a hire-purchase
agreement, the person in possession of the vehicle under that
agreement.”
H
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 579
[DR. D. Y. CHANDRACHUD, J.]

Evidently, Parliament while enacting the Motor Vehicles Act, 1988 A
made a specific change by recasting the earlier definition. Section 2(19)
of the earlier Act stipulated that where a person in possession of a motor
vehicle is a minor the guardian of the minor would be the owner and
where the motor vehicle was subject to a hire purchase agreement, the
person in possession of the vehicle under the agreement would be the
B
owner. The Act of 1988 has provided in the first part of Section 2(30)
that the owner would be the person in whose name the motor vehicle
stands registered. Where such a person is a minor the guardian of the
minor would be the owner. In relation to a motor vehicle which is the
subject of an agreement of hire purchase, lease or hypothecation, the
person in possession of the vehicle under that agreement would be the C
owner. The latter part of the definition is in the nature of an exception
which applies where the motor vehicle is the subject of a hire purchase
agreement or of an agreement of lease or hypothecation. Otherwise
the definition stipulates that for the purposes of the Act, the person in
whose name the motor vehicle stands registered is treated as the owner.
D
7. Section 50 deals with the procedure for transfer of ownership,
and provides as follows:
“50. Transfer of ownership.—(1) Where the ownership of any
motor vehicle registered under this Chapter is transferred ,—
(a) the transferor shall,— E

(i) in the case of a vehicle registered within the same State,
within fourteen days of the transfer, report the fact of transfer,
in such form with such documents and in such manner, as
may be prescribed by the Central Government to the
registering authority within whose jurisdiction the transfer is F
to be effected and shall simultaneously send a copy of the
said report to the transferee; and
(ii) in the case of a vehicle registered outside the State, within
forty-five days of the transfer, forward to the registering au-
thority referred to in sub-clause (i)— G
(A) the no objection certificate obtained under section 48; or
(B) in a case where no such certificate has been obtained,—
(I) the receipt obtained under sub-section (2) of section 48;
or H
580 SUPREME COURT REPORTS [2018] 2 S.C.R.

A (II) the postal acknowledgement received by the transferred if he
has sent an application in this behalf by registered post
acknowledgement due to the registering authority referred to in
section 48,
together with a declaration that he has not received any
B communication from such authority refusing to grant such
certificate or requiring him to comply with any direction subject to
which such certificate may be granted;
(b) the transferee shall, within thirty days of the transfer, report
the transfer to the registering authority within whose jurisdiction
C he has the residence or place of business where the vehicle is
normally kept, as the case may be, and shall forward the
certificate of registration to that registering authority together with
the prescribed fee and a copy of the report received by him from
the transferor in order that particulars of the transfer of
ownership may be entered in the certificate of registration.
D
(2) Where—
(a) the person in whose name a motor vehicle stands registered
dies, or
(b) a motor vehicle has been purchased or acquired at a public
E auction conducted by, or on behalf of, Government,
the person succeeding to the possession of the vehicle or, as the
case may be, who has purchased or acquired the motor vehicle,
shall make an application for the purpose of transferring the
ownership of the vehicle in his name, to the registering authority
F in whose jurisdiction he has the residence or place of business
where the vehicle is normally kept, as the case may be, in such
manner, accompanied with such fee, and within such period as
may be prescribed by the Central Government.
(3) If the transferor or the transferee fails to report to the
G registering authority the fact of transfer within the period
specified in clause (a) or clause (b) of sub-section (1), as the case
may be, or if the person who is required to make an application
under sub-section (2) (hereafter in this section referred to as the
other person) fails to make such application within the period
prescribed, the registering authority may, having regard to the
H
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 581
[DR. D. Y. CHANDRACHUD, J.]

circumstances of the case, require the transferor or the A
transferee, or the other person, as the case may be, to pay, in lieu
of any action that may be taken against him under section 177
such amount not exceeding one hundred rupees as may be
prescribed under sub-section (5):
Provided that action under section 177 shall be taken against the B
transferor or the transferee or the other person, as the case may
be, where he fails to pay the said amount.
(4) Where a person has paid the amount under sub-section (3), no
action shall be taken against him under section 177.
(5) For the purposes of sub-section (3), a State Government may C
prescribe different amounts having regard to the period of delay
on the part of the transferor or the transferee in reporting the fact
of transfer of ownership of the motor vehicle or of the other
person in making the application under sub-section (2). 32
(6) On receipt of a report under sub-section (1), or an application D
under sub-section (2), the registering authority may cause the
transfer of ownership to be entered in the certificate of
registration.
(7) A registering authority making any such entry shall
communicate the transfer of ownership to the transferor and to E
the original registering authority, if it is not the original registering
authority.”
8. The decision of the Bench of two judges of this Court in Pushpa
alias Leela (supra) was in a case where the offending vehicle was
registered in the name of J who had sold it to S on 2 February 1993 and F
had given possession to the transferee. On the date of the transfer the
truck was covered by a valid policy of insurance. Despite the sale of
the vehicle the change of ownership was not reflected in the certificate
of registration. The policy of insurance expired on 24 February 1993.
Subsequently S took out an insurance policy in the name of the
G
registered owner and it was valid and subsisting when the accident took
place on 7 May 1994. The Tribunal held that no liability to pay
compensation attached to J since he had ceased to be the owner of the
vehicle after its sale on 2 February 1993.S alone was held to be liable for
the payment of compensation to the claimants. On these facts the Bench
of two judges of this Court held as follows: H
582 SUPREME COURT REPORTS [2018] 2 S.C.R.

A “11. It is undeniable that notwithstanding the sale of the vehicle
neither the transferor Jitender Gupta nor the transferee Salig Ram
took any step for the change of the name of the owner in the
certificate of registration of the vehicle. 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
B
law he ceased to be its owner after its sale on 2-2-1993.” (Id at
page 244)
In the course of its decision, the two judge Bench referred to the
earlier decision in Dr T V Jose v Chacko P M4, which had arisen
under the Motor Vehicles Act 1939. In that context, this Court had held
C thus:
“12…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
D in the records of RTO as the owner. The appellant could not
escape that liability by merely joining Mr Roy Thomas in these
appeals.” (Id at page 244)
The decision in Dr T V Jose was followed in P P Mohammed v
K Rajappan5.Noticing that the decision in Dr T V Jose was rendered
E under the Motor Vehicles Act, 1939, the Court in Pushpa held that the
ratio of the decision “shall apply with equal force to the facts of the
cases arising under the 1988 Act” in view of the provisions of Section
2(30) and Section 50. Consequently, the view of this Court was that the
person whose name continues in the record of the registering authority
F as the owner of the vehicle is equally liable together with the insurer.
9. The decision of a three judge Bench of this court in Purnya
Kala Devi (supra) involved a situation where the registered owner of a
vehicle involved in an accident denied his liability to compensate the
legal heirs of the deceased victim on the ground that the state government
G had requisitioned the vehicle. On the date of the accident, the vehicle
stood requisitioned under the Assam Requisition and Control of Vehicles
Act, 1968. The state failed to establish that the vehicle was released
from requisition after service of a notice in writing to the owner, to take
delivery, as required by Section 5(1) of the state Act. Under the Assam
4
(2001) 8 SCC 748
H 5
(2008) 17 SCC 624
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 583
[DR. D. Y. CHANDRACHUD, J.]

Act, it was only upon the service of a notice to that effect that no lability A
for compensation would lie with the requisitioning authority. The High
Court absolved the state government on the basis of the definition of the
expression ‘owner’ in Section 2(30) of the Motor Vehicles Act, 1988.
Reversing the judgment, this Court held thus :
“16..the High Court, without adverting to Section 5 of the Assam B
Act, merely on the basis of the definition of “owner” as contained
in Section 2(30) of the 1988 Act, mulcted the award payable by
the owner of the vehicle. The High Court failed to appreciate that
at the relevant time the offending vehicle was under the
requisition of Respondent 1 State of Assam under the provisions
of the Assam Act. Therefore, Respondent 1 was squarely C
covered under the definition of “owner” as contained in Section
2(30) of the 1988 Act. The High Court failed to appreciate the
underlying legislative intention in including in the definition of
“owner” a person in possession of a vehicle either under an
agreement of lease or agreement of hypothecation or under a D
hire-purchase agreement to the effect that a person in control
and possession of the vehicle should be construed as the “owner”
and not alone the registered owner. The High Court further failed
to appreciate the legislative intention that the registered owner of
the vehicle should not be held liable if the vehicle was not in his
possession and control. The High Court also failed to appreciate E
that Section 146 of the 1988 Act requires that no person shall use
or cause or allow any other person to use a motor vehicle in a
public place without an insurance policy meeting the requirements
of Chapter XI of the 1988 Act and the State Government has
violated the statutory provisions of the 1988 Act. The Tribunal F
also erred in accepting the allegation of Respondent 2 that the
vehicle was released on the date of the accident at 10.30 a.m.
and the accident occurred at 10.30 a.m. without any evidence
even though in the claim petition, it was stated that the accident
had occurred at 10.15 a.m.”(Id at page 147)
G
10. The above observations would indicate that a combination of
circumstances cumulatively weighed with this Court. Significantly, for
the purposes of the present discussion, what emerges from the above
judgment is the circumstance that the motor vehicle was on the date of
the accident requisitioned by the state government. Requisitioning by its
H
584 SUPREME COURT REPORTS [2018] 2 S.C.R.

A very nature is involuntary insofar as the person whose property is
requisitioned is concerned. This Court observed that it is the person in
control and possession of a vehicle which is under an agreement of
lease, hypothecation or hire purchase who is construed as the owner
and not the registered owner. The same analogy was drawn to hold that
where the vehicle had been requisitioned, it was the state and not the
B
registered owner who had possession and control and would hence be
held liable to compensate. Purnya Kala Devi does not hold that a
person who transfers the vehicle to another but continues to be the
registered owner under Section 2(30) in the records of the registering
authority is absolved of liability. The situation which arose before the
C court in that case must be borne in mind because it was in the context of
a compulsory act of requisitioning by the state that this Court held, by
analogy of reasoning, that the registered owner was not liable.
11. The subsequent decision of a Bench of three judges of this
Court in HDFC Bank Limited v Reshma (supra)involved an
D agreement of hypothecation. The Tribunal held the financier of the
vehicle to jointly and severally liable together with the owner on the
ground that it was under an obligation to ensure that the borrower had
not neglected to get the vehicle insured. The High Court had dismissed
the appeal filed by the Bank against the order of the Tribunal holding it
liable together with the owner. In the appeal before this Court, Justice
E Dipak Misra (as the learned Chief Justice then was) adverted during the
course of the judgment to the principles laid down by this Court in
several earlier decisions, including of this Court6.
6
Mohan Benefit (P) Ltd. v. Kachraji Raymalji, (1997) 9 SCC 103 : 1997 SCC (Cri) 610;
Rajasthan SRTC v. Kailash Nath Kothari, (1997) 7 SCC 481 ; National Insurance Co.
F Ltd. v. Deepa Devi, (2008) 1 SCC 414 : (2008) 1 SCC (Civ) 270 : (2008) 1 SCC (Cri)
209; Mukesh K. Tripathi v. LIC : (2004) 8 SCC 387 : 2004 SCC (L&S) 1128, Ramesh
Mehta v. Sanwal Chand Singhvi (2004) 5 SCC 409, State of Maharashtra v. Indian
Medical Assn. (2002) 1 SCC 589 : 5 SCEC 217, Pandey & Co. Builders (P) Ltd. v. State
of Bihar (2007) 1 SCC 467 and placed reliance on Kailash Nath Kothari [Rajasthan
SRTC v. Kailash Nath Kothari, (1997) 7 SCC 481, National Insurance Co. Ltd. v.
G Durdadahya Kumar Samal : (1988) 1 ACC 204 : (1988) 2 TAC 25 (Ori) and Bhavnagar
Municipality v. Bachubhai Arjanbhai : 1995 SCC OnLine Guj 167 : AIR 1996 Guj 51;
Godavari Finance Co. v. Degala Satyanarayanamma, (2008) 5 SCC 107 : (2008) 2 SCC
(Cri) 531; Pushpa v. Shakuntala, (2011) 2 SCC 240 : (2011) 1 SCC (Civ) 399 : (2011)
1 SCC (Cri) 682; T.V. Jose [(2001) 8 SCC 748 : 2002 SCC (Cri) 94] , SCC p. 51, para
10; U.P. SRTC v. Kulsum, (2011) 8 SCC 142 : (2011) 4 SCC (Civ) 66 : (2011) 3 SCC
(Cri) 376; Purnya Kala Devi v. State of Assam, (2014) 14 SCC 142 : (2015) 1 SCC (Cri)
H 304 : (2015) 1 SCC (Civ) 251.”
NAVEEN KUMAR v. VIJAY KUMAR AND ORS. 585
[DR. D. Y. CHANDRACHUD, J.]

Noticing that the case before the court involved a hypothecation A
agreement, this Court held:
“22. In the present case, as the facts have been unfurled, the
appellant Bank had financed the owner for purchase of the
vehicle and the owner had entered into a hypothecation
agreement with the Bank. The borrower had the initial obligation B
to insure the vehicle, but without insurance he plied the vehicle on
the road and the accident took place. Had the vehicle been
insured, the insurance company would have been liable and not
the owner. There is no cavil over the fact that the vehicle was the
subject of an agreement of hypothecation and was in possession
and control of Respondent 2.”(id at page 693) C

Since the Second respondent was in control and possession of the
vehicle this Court held that the High Court was in error in fastening the
liability on the financier. The failure of the Second respondent to effect
full payment for obtaining an insurance cover was neither known to the
financier nor was there any collusion on its part. Consequently, the High D
Court was held to be in error in fastening liability on the financier.
12. 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 E
‘owner’. However, where a person is a minor, the guardian of the minor
would be treated as the owner. Where a motor vehicle is subject to an
agreement of hire purchase, lease or hypothecation, the person in
possession of the vehicle under that agreement is treated as the owner.
In a situation such as the present where the registered owner has F
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 G
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
H
586 SUPREME COURT REPORTS [2018] 2 S.C.R.

A 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 High
B
Court has proceeded upon a misconstruction of the judgments of this
Court in Reshma and Purnya Kala Devi.
13. The submission of the Petitioner is that a failure to intimate
the transfer will only result in a fine under Section 50(3) but will not
invalidate the transfer of the vehicle. In Dr T V Jose, this Court
C observed that there can be transfer of title by payment of consideration
and delivery of the car. 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.
D 14. 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. The judgment of
the High Court is set aside. In the circumstances of the case, there shall
be no order as to costs.
E

Divya Pandey Appeal allowed.

F

G

H