15 July 2024


Supreme Court

Prakash Chand Daga Vs. Saveta Sharma and Ors.



Motor Vehicles

Owner of a vehicle who transfers it to another person is liable to pay compensation in case of an accident unless sale is reflected in Regional Transport Authority (RTA) records

Present appeal challenges the judgment passed by the High Court. The Appellant, original owner of a Santro Car sold said vehicle to Saveta Sharma, first Respondent on 11th September, 2009. According to Appellant, after receiving due consideration, possession was transferred to said first Respondent. An accident occurred on 9th October, 2009 in which one Rakesh Kumar, second Respondent, received injuries. In a claim lodged by second Respondent, Motor Accident Claims Tribunal assessed the compensation at Rs. 12.47 lakhs.

Since the liability was fastened on the driver and first Respondent, the aforesaid decision was challenged by them in the High Court. The High Court found that despite the sale of the vehicle, no transfer of ownership, in accordance with Section 50 of the Motor Vehicles Act, 1988 ('the Act') was effected and as such the Appellant continued to be the owner in terms of definition as incorporated in Section 2(30) of the Act.

In terms of Section 50 of the Act, the transfer of a vehicle ought to be registered within 30 days of the sale. Section 50(1) of the Act obliges the transferor to report the fact of transfer within 14 days of the transfer. In case the vehicle is sold outside State, the period within which the transfer ought to be reported gets extended. On the other hand, the transferee is also obliged to report the transfer to the registering authority within whose jurisdiction the transferee has the residence or place of business where the vehicle is normally kept. Section 50 thus prescribes timelines within which the transferor and the transferee are required to report the factum of transfer. As per Sub-Section 3 of said Section 50, if there be failure to report the fact of transfer, fine could be imposed and an action under Section 177 could thereafter be taken if there is failure to pay the amount of fine. These timelines and obligations are only to facilitate the reporting of the transfer. It is not as if that if an accident occurs within the period prescribed for reporting said transfer, the transferor is absolved of the liability.

The law is thus well settled and can be summarised 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. Merely because the vehicle was transferred does not mean that such registered owner 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. The High Court was therefore absolutely right in allowing the appeal. The challenge raised by the Appellant must fail. Appeal dismissed.

Tags : Compensation Accident Liability

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