SC’s interpretation of definition of ‘owner’ under MV Act, 1988
The Hon’ble Supreme Court has very recently in a matter titled Surendra Kumar Bhilawe vs. The New India Assurance Company Limited (Special Leave Petition (C) No. 20569 of 2016) held that the person in whose name the vehicle is registered at the time of occurrence of accident, the said person will be considered to be the ‘Owner’. This appeal was against a judgment passed by the National Consumers Disputes Redressal Commission, New Delhi reversing the concurrent findings of both the District and State Commission.
FACTS OF THE CASE:
· The Appellant was the owner of Truck which was covered by a Policy of Insurance issued by the Insurer effective for the period from 2.6.2011 to 1.6.2012.
· On 11.11.2011, the said lorry, which was loaded with Ammonia Nitrate at Raipur, commenced its journey for Dhanbad, where the Ammonia Nitrate was to be unloaded. The lorry was driven by Driver, Rajendra Singh.
· On 13.11.2011, at about 1.45 p.m., while the said truck was on its journey from Raipur to Dhanbad, it met with an accident, and fell into a river by the side of the road and was extensively damaged. The Ammonia Nitrate, carried in the truck was also washed away.
· However, instead of reimbursing the loss, the Insurer issued a show cause Notice to the Appellant as to why the claim of the Appellant should not be repudiated, on the allegation that, he had already sold the said truck to the one Mohammad Iliyas Ansari. It was, however, disputed that the Appellant continued to be the registered owner of the said truck, on the date of the accident.
· Admittedly the Appellant had entered into a sale agreement with the said Mohammed Iliyas Ansari. However, ICICI Bank had not issued ‘No Objection’ to the Appellant for transfer of the said truck, as the dues of the Bank had not been repaid in full till the date of the accident.
ORDERS OF DISTRICT FORUM & STATE AND NATIONAL COMMISSION
· Aggrieved by the action of the Insurer Company in not releasing the claim of the Appellant, towards reimbursement of losses on account of the accident, the Appellant approached the District Forum.
· The District Forum allowed the complaint filed by the Appellant and directed the Insurer to pay Rs.4,93,500/- to the Appellant within a month along with interest @ 6% per annum from the date of filing of the complaint, till the date of payment and further directed the Insurer to pay the Appellant a sum of Rs.5,000/- towards compensation for mental agony and Rs.2,000/- towards cost of litigation.
· The Insurer appealed to the State Commission which was dismissed, and the Insurer challenged the same by filing revision petition before National Commission.
· The National Commission allowed the Revision Petition, set aside the orders of the District Forum and the State Commission, thereby rejecting the concurrent factual finding of both the fora, and dismissed the complaint on the ground that the Appellant had sold his vehicle to Mohammad Iliyas Ansari.
OBSERVATION
· The National Commission overlooked the definition of ‘owner’ in Section 2(30) of the Motor Vehicle Act, 1988. In Section 2(30) ‘owner’ has been defined to mean “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”. Even assuming that Mohammad Iliyas Ansari was in possession of the said truck at the time of the accident, such possession was not under any agreement of lease, hire purchase or hypothecation with ICICI Bank.
· It would also be pertinent to note the difference between the definition of owner in Section 2(30) of the Motor Vehicles Act, 1988 and the definition of owner in Section 2(19) of the Motor Vehicles Act, 1939 which has been repealed and replaced by the Motor Vehicles Act, 1988. Under the old Act ‘owner’ meant the person in possession of a motor vehicle. The definition has undergone a change. Legislature has consciously changed the definition of ‘owner’ to mean the person in whose name the motor vehicle stands.
· The National Commission also overlooked other applicable provisions of the Motor Vehicle Act 1988, particularly Sections 39 to 41, 50, 51, 66, 69, 82, 84(g), 86(c), 146, 157, 177 and 192A.
· It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws. It does not also stand to reason why a person who has transferred the ownership of the vehicle should, for over three years, benevolently go on repaying the loan for purchase of the vehicle, take out insurance policies to cover the vehicle or otherwise discharge obligations of ownership.
· The explanation to Section 157 clarifies, for the removal of all doubts that such deemed transfer would include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. There could be no reason for a transferee of an insured motor vehicle, to refrain from applying for endorsement of the transfer in the Insurance Policy Certificate when insurance covering third party risk is mandatory for using a vehicle.
· Referring to the decision like Pushpa @ Leela & Ors. vs. Shakuntala (supra) and Naveen Kumar vs. Vijay Kumar (supra) ,the bench observed; the dictum of this Court that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident.
JUDGEMENT
The National Commission erred in law in reversing the concurrent factual findings of the District Forum and the National Commission ignoring vital admitted facts such as, registration of the said truck being in the name of the Appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the Appellant of the premium for the Insurance Policy, issuance of Insurance Policy in the name of the Appellant, permit in the name of the Appellant even after three years and seven months, absence of ‘No Objection’ from the financier bank etc. and also overlooking the definition of owner in Section 2(30) of the Motor Vehicles Act with special reference to the transferability of a policy of insurance under Section 157.
In view of the definition of ‘owner’ in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari.
The Insurer was directed to pay the Appellant a sum of Rs.4,93,500/- as directed by the District Forum with interest as enhanced by this Court to 9% per annum from the date of claim till the date of payment. The Insurer was also directed to pay a composite sum of Rs.1,00,000/- to the Appellant towards costs and compensation for the agony caused to the Appellant by withholding his legitimate dues within a period of 6 weeks.
PALLAVI PRATAP
She is Managing Partner of Pratap & Co. - a litigating law firm. She is an Advocate-on-Record in Supreme Court and practices in High Court and various Tribunals including NCLT, NCLAT, NCDRC, NGT, DRT.
Qualified MBA in Finance from La Trobe University, Melbourne, Australia and LL.B from Lucknow University, she brings with her more than a decade of experience in legal affairs .