Sanjay Karol, J.
1. Shri Vinod Kumar, driver and his father Shri Ram Chand, transferee of the vehicle in question have filed the present appeal invoking the Appellate jurisdiction of this Court under Section 173 of the Motor Vehicles Act, 1988 (for short 'the Act'), challenging the legality, validity, propriety and the correctness of the Award dated 30.9.2004 passed by the Motor Accident Claims Tribunal (II), Una, H.P. in M.A.C. Petition No. 59 of 2001 titled as Nirmala Devi v. Vinod Kumar and Ors.
2. Smt. Nirmala Devi, respondent No. 1 herein (in short claimant), filed a petition under Section 166 of the Motor Vehicles Act, claiming compensation for the death of her daughter Ms. Sharmila Devi, aged 17 years, who died in an accident with Maruti Car No. DAQ-1638 on 7.5.2001. Compensation of Rs. 10 lacs was claimed.
3. Shri Vinod Kumar (in short the driver) while admitting that he was driving the vehicle in question at the relevant time denied any negligence and further pleaded that he was engaged as driver by the transferor Shri Iqbal Singh (in short the transferor), respondent No. 2 herein.
4. Shri Ram Chand, (in short the transferee), vide separate reply denied any liability for the reason that as on the date of the accident the vehicle in question was neither owned nor possessed by him. In any event, the vehicle was not transferred by the transferor in his favour.
Shri Iqbal Singh, transferor, filed reply pleading sale of the vehicle to the transferee and thus disputing the liability.
5. Based on the pleadings of the parties, the Tribunal framed the following issues:
1. Whether Ms. Sharmila Devi @ Sheela died on account of the injuries sustained by her in an accident and being hit on account of Maruti Car No. DAQ-1638 allegedly driven by respondent No. 1 in a rash or negligent manner as alleged? .OPP
2. If issue No. 1 is proved in affirmative to what amount of compensation the petitioners are entitled to and from whom?...OPP
3. Whether respondent No. 3 is the owner of the vehicle involved in the accident as alleged? ...OPP
4. If respondent No. 3 is proved to be the registered owner of the car involved in the accident whether he had sold the same to respondent No. 2 as alleged? ...OPP
5. Relief.
The Tribunal examined the entire material (oral and documentary) and found the driver to have negligently driven the vehicle which was the cause of the accident in which deceased Ms. Sharmila Devi died. Issue No. 1 was decided accordingly.
6. On the question of compensation, considering the age of the deceased.her income was taken to be Rs. 1000 per month and by deducting 1/3rd, the loss of dependency was worked out to be Rs. 8000 per annum. A multiplier of 16 was applied and thus a total sum of Rs. 1,28,000 was determined as compensation as loss of dependency. Rs. 10,000 towards love and affection and Rs. 5000 as funeral charges were also awarded. Thus, a total sum of Rs. 1,43,000 along with interest at the rate of 9% pendente lite and future was awarded. Issue No. 2 was decided accordingly.
7. While deciding issues No. 3 and 4, the Tribunal held the transferee to be the owner and the driver to have driven the vehicle negligently and, as such, both were jointly and severally held liable to pay the awarded compensation. What weighed with the Tribunal was the fact that the transferee himself had moved an application (Ext. PW-5/A) for release of the vehicle on spurdari before the Court of Chief Judicial Magistrate claiming himself to be the owner. Issues No. 3 and 4 were decided accordingly.
8. Mr. Sanjeev Kuthiala, learned Counsel for the appellants has argued that there was no valid transfer of ownership asenvisaged under Sections 41, 48 and 50 of the Act therefore, the Tribunal has erred in returning the findings on issues No. 3 and 4. In support, he has referred to and reliedupon the decisions of the Apex Court and this Court in Aditya Khare v. Jamuna Prasad Kahar and Ors. , Dr. T.V. Jose v. Chacko P.M. and Ors. (2001 (8) SCC 748), P.P. Mohammed v. K. Rajappan and Ors. 2003 ACJ 1595, Shiv Lal v. Kahnu Ram and Ors. and a decision of the Division Bench of this Court in FAO (MV) No. 43/1994, titled as Ishxvar Lal Chaudhary and Anr. v. National Insurance Co. and Ors. decided on 18.6.2008.
9. Mr. Ajay Sharma, learned Counsel for the transferor has supported the Award for the reasons set out therein and has further referred to and relied upon the decisions of the Apex Court and the Karnataka High Court in Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and Ors. : AIR1997SC3444 , G. Govindan v. New India Assurance Co. Ltd. and Ors. : [1999]2SCR476 and New India Assurance Company Ltd. v. B.C. Suma and Ors. (2003 (1) ACC 287).
10. Mr. Jagdish Thakur, learned Counsel appearing for the claimant has supported the Award for the reasons set out therein.
11. The appellants have confined their submissions only with regard to the inter se liability between the transferor and the transferee. Therefore, the negligence of the driver, death of the deceased, the dependency of the claimant and the amount of compensation awarded are not in dispute.
12. For the purpose of ascertaining the liability of the transferor and the transferee, the pleadings and the relevant evidence on record needs to be examined.
13. In the claim petition in para No. 15, the claimant has pleaded as under:
As per information the respondent No. 3 is the registered owner and it is learnt from respondent No. 3 has transferred the vehicle Maruti Car No. DAQ-1638 therefore respondent No. 2 has also been made party to the proceedings as detailed in the head note.
In response thereto, the transferee has pleaded as under:
That para No. 15 of the petition is not denied to the extent that respondent No. 3 is the registered owner of the vehicle. However, it is submitted that the replying respondent was never aware nor it was ever disclosed by the respondent 3 that the said vehicle had met with accident on 3.5.2001. The answering respondent is not owner of the vehicle. The papers prepared by respondent No. 3 has been procured mischievously just to shift the liability of accident upon respondent No. 2. The respondent No. 2 never purchased any stamp paper for the execution of the agreement nor it was ever presented by him before the NOTARY PUBLIC. The respondent No. 3 procured these papers in connivance with the NOTARY PUBLIC which were got attested on 29.5.2001. The subsequent papers of transfer though does not bind the answering respondent for any liability of compensation. It is also submitted that neither the vehicle was delivered nor the papers of the vehicle were ever given to the answering respondent by the proposed vendor. As such the answering respondent is not owner of the vehicle nor respondent No. 1 was ever employed as driver by answering respondent. The answering respondent is not liable to pay any kind of compensation since there is no relationship of ownership and alleged driver of the vehicle.
14. The transferee's son Shri Vinod Kumar, driver has filed his reply more or less on the same lines.
The transferor filed reply simply pleading that he had sold the car to the transferee at the time of the alleged accident.
On the issue of sale and transfer of the vehicle in question, the driver examined himself as RW-4 and S/Shri Yogesh Kumar (RW-1), Sanjay Kumar (RW-2), Dharam Singh (RW-3) and the transferor Shri Iqbal Singh examined himself as RW-6 and Shri Tarlok Chand (RW-5).
Importantly, no evidence was led by the transferee. He did not step into the witness box.
15. From the statements of the aforesaid witnesses, the following undisputed facts emerge:
(1) That as on 7.5.2001, the date of the accident, the vehicle continued to be registered in the name of its original owner the transferor Shri Iqbal Singh. It is so proved by RW-2.
(2) Judicial Stamp paper for executing certain documents (affidavits) with regard to the sale of vehicle stood purchased both by the transferor and transferee.
(3) The stamp paper for execution of the affidavit of the transferee (Ext.RW-3/A) was purchased by him on 3.5.2001. Stamp papers, two in number bearing SI. Nos. 2079 and 2080 were also purchased in the name of Shri Iqbal Singh on the said date. This stands proved by RW-1.
(4) Ext.RW-3/A was notarized vide entry No. 2471 dated 29.5.2001. Affidavit Mark 'A' executed by Shri Iqbal Singh was notarized on 4.5.2001. RW-3 has proved the same.
(5) The transferee filed an application dated 29.5.2001 (Ext.RW-5/A) for release of the vehicle on spurdari claiming himself to be the owner of the car being a bona fide purchaser which was released in favour of the transferee on spurdari in terms of order dated 31.5.2001 (Ext.RW-5/B).
16. The defence taken by the driver that he was employed by the transferor and the defence taken by the transferee that neither the vehicle in question was sold nor possessed by him as on the date of the accident was rejected by the Tribunal and, in my view, rightly so, keeping in view the deposition of RW-6, who has categorically deposed that the vehicle stood sold and possession handed over to the transferee on 14.1.2001 when the entire sale consideration was received by him. Importantly, there is no challenge to his deposition. He has not been cross-examined at all. The transferee chose not to lead any evidence documentary or oral, therefore, adverse inference has to be drawn against him. The driver and the transferee are son and father. They obviously are in collusion with each other.
17. That necessary documents for transfer of vehicle were purchased is evident not only from Ext.RW-3/A filed by the driver, but also from the statement of the Stamp Vendor (RW-1). Ext.RW-3/A was definitely typed on 3.5.2001 and either executed on the same date or 11.5.2001. It records that the transferee had purchased the vehicle from the transferor and the entire ale consideration stood paid. The date of verification is typed as 3.5.2001. Even though the Tribunal disbelieved the date of notarization (29.5.2001) for the reason that the Notary Public (RW-3) had not maintained the records correctly, but in my view, even notarization of a subsequent date, in law, would not have made any difference as RW-6 had deposed that all documents were handed over prior to the incident. Necessary formalities, including notarization was to have been got done by the transferee as the document was with him. Transferee has not led any evidence to show when and where the documents were executed and handed over by the transferor after the date of the accident. The Tribunal had much, to say about the manner in which the Notary-Public had been maintaining the record as the authenticity of the date of notarization itself doubted. An affidavit similar to the one executed by the transferee was also executed by the transferor which is on record and marked as mark 'A'. Even if the same is to be ignored, the fact that the transferor had executed a document similar to the document executed by the transferee Ext.RW-3/A is evident from not only from the statement of the transferor but also the statements of the Stamp Vendor (RW-1) and the Notary Public (RW-3).
18. Therefore, from the facts so emerged, it is evident that the documents, for the purposes of carrying out the assignment of the registration were executed between the parties before the date of the accident. That the possession of the vehicle was also handed over is evident not only from the unrebutted statement of RW-6, but also Ext.RW-5/A & Ext.RW-5/B, whereby the vehicle was released on spurdari to the transferor as owner thereof. No doubt documents are dated 29.5.2001 and 31.5.2001 but in the absence of any other evidence the version of the transferor is to be believed.
19. The transferor received the sale consideration and handed over the possession of the vehicle to the transferee and pursuant to the sale also executed the papers of transfer.
20. Whether the transferor whose name, even after the sale continues to be reflected as owner in the registration certificate would be liable for any subsequent liability arising out of an accident or hot is to be considered.
21. Under Motor Vehicles Act, 1939, the word 'owner' was defined as under:
(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.
However, under the Act, the definition of 'owner' was radically changed to read as under:
(30) 'Owner' means 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.
Section 41 of the Act prescribes the procedure and the manner in which the registration of the Motor Vehicles is to be effected. The application has to be by or on behalf of the 'owner' in such form accompanied by such document as may be prescribed by the Government.
Section 50 of the Act provides the procedure for effecting the transfer of ownership of the registered vehicle. The Act mandates the transferor to report the fact of transfer to the Registering Authority, within 14 days of the transfer, in such form and with such documents and in such manner as is prescribed under the law. Thereafter the transferee, within 30 days of the transfer is to report the transfer to the Registering Authority requesting for effecting the necessary changes in the certificate of registration. Failure to comply with the mandatory requirements entails penalty.
Therefore, from the scheme of the Act as also the definition, it is evident that the transfer is not effected till the time the requirements of law are complied with.
22. Importantly, there is nothing on record to show that either the transferor or the transferee had taken any steps for effecting the transfer in accordance with law.
23. The definition under the new Act is exhaustive whereas under the old Act, the definition being inclusive the word 'owner' included the registered owner as well as the unregistered owner or transferee of a vehicle. The definition under the new Act carves out only three exceptions and does not cover a case of sale of vehicle where the price is paid and the possession of the vehicle is delivered to the purchaser/transferee. Even if sale is effectuated in the absence of compliance of mandatory requirements of law, transfer does not take place and the transferor continues to be the registered owner. Therefore, the registered owner cannot be absolved of liability qua third party. Importantly, the person in whose name the vehicle is registered is considered to be the owner and unless the name of the transferee is registered he does not become the owner thereof.
24. In fact the question is no longer res integra. The liability to pay the compensation in a claim petition filed under Section 166 of the Act, is both on the transferor and the transferee has been specifically held by this Court in Shiv Lal (supra). After taking into account the various decisions rendered by the Apex Court in Dr. T.V. Jose (supra), P.P. Mohammed (supra) and Rajasthan State Road Transport Corporation (supra), this Court held that the law is clear to the effect that both the de facto owner as well as the owner shown as such in the registration certificate are liable so far as the third parties are concerned.
25. While dealing with the corresponding provisions of Section 31 of the 1939 Act, this view was further reiterated by the Division Bench of this Court in Ishivar Lal Chaudhary and Anr. (supra), wherein it was observed as under:
In G. Govindan v. Nexo India Assurance Company Ltd. and Ors. : [1999]2SCR476 , the Supreme Court has approved following ratio of the Andhra Pradesh High Court in Madineni Kondaiah v. Yaseen Fatirna AIR 1986 AP 62 (FB):
It is incorrect to assume that the moment the title of the vehicle passes to the transferee the statutory obligation under Section 94 ceases and the original owner is no longer guilty of cause or allowing the purchaser to use the vehicle. The question is when does the statutory liability cease? The mere passing of title in the vehicle to the transferee will not put an end to this liability. For this purpose we must examine two more provisions of the Act. Under Section 31 the transferor shall within 14 days of the transfer report the fact of transfer to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee and within forty-five days of the transfer forward to the registering authority no objection certificate obtained by him under Section 29-A. Section 29-A contemplates issuing of no objection certificate both on the occasion of assignment of a new registration mark and also while transferring the motor vehicle. The registering authority is enjoined to issue a certificate within a period of thirty days and if no orders are passed the registering authority shall be deemed to have granted the no objection certificate. The failure to comply with Section 31 is made punishable under Section 112. However, as an alternative measure it also provided under Section 31 (1-A) that if the transferor or transferee fails to comply with the requirements of Section 31 they have to pay a fine of Rs. 100 or the prescribed amount considering the period of delay on their part by way of penalty. It is pertinent to note that Section 31 was amended by Act 100 of 1956. Under Section 31 as it stood prior to this amendment in 1956 only the transferee was required to report the transfer of the ownership and was expected to forward a certificate of registration to the registering authority within thirty days of the transfer. Prior to this amendment there was no statutory obligation on the transferor as is now provided in Sub-clause (a) of Sub-section (1) of Section 31 to notify the transfer to the registering authority within whose jurisdiction the transfer is effected. Thus we see till the transferor fulfils the statutory obligation under Section 31 his liability continues. Further he is the ostensible owner of the vehicle so long the registration is not changed. The liability to pay tax continues irrespective of his rights against the transferee for reimbursement. In fact it was ruled in Northern India General Insurance Co. Ltd v. Kamvarjit Singh that a registered owner would have sufficient interest to effect insurance because he is the ostensible owner. The question raised in that case was whether the registration in favour of benamidar is valid when the registered owner of the vehicle is only benamidar when the real owner never obtained the insurance. It vas held that the registered owner has sufficient interest to effect insurance because he is ostensible owner and there is nothing in Section 94 which could be interpreted to mean that it is only the real owner who could effect the insurance. Any person who uses the vehicle or allows any other person to use the vehicle could also get the insurance effected. Thus, it is seen the public liability to notify the transfer and secure no objection certificate under Section 31 read with Section 94, would make the original owner retain the insurable interest.
14. It is thus clear that till the transferor fulfils the statutory obligation under Section 31 his liability continues.
26. At this juncture, I may also point out that while dealing with a definition of the owner under the old Act, a divergent view has been taken by an earlier Division Bench of this Court in Oriental Insurance Co. Ltd. v. Maheshwari and Ors. . The decision was primarily based on the decision of the Apex Court in Panna Lal v. Chand Mal and Ors. : AIR1980SC871 . Subsequently following the same, the learned Single Judge of this Court in FAO No. 117/2001, titled as New India Assurance Company v. Amar Chand and Ors. decided on 24.6.2004, also held that the transferee becomes the owner of the vehicle on the same being delivered and handed over to him by the transferor. However, I am bound by a decision of a Division Bench and a Co-ordinate Bench of this Court which is later in point in time.
27. In New India Assurance Company Ltd. v. B.G. Suma and Ors. (supra), the Division Bench of the Andhra Pradesh High Court, relying upon the decision of the Apex Court in Rajasthan State Road Transport Corporation (supra) and G. Govindan (supra) has held that where the vehicle was given on hire to the SRTC, it would be deemed to be the owner as the Motor Vehicle was subjected to the hire purchase agreement. These are not the facts in the present case. Therefore, decision is distinguishable.
28. The Apex Court in Panna Lal (supra) was dealing with the case where there was an inter se dispute between the transferor and the transferee. It was in this background the Court held that it was not open for the transferee to assail the sale once the documents stood executed and handed over to him by the transferee. In the present case, however, the facts and the controversy is totally different. Here we are dealing with a case of an inter se dispute between the transferor and the transferee with respect to third party liability arising out of an accident in which the vehicle in question was involved.
29. The Madhya Pradesh High Court in Aditya Khare (supra), took a view that only the transferor would be held liable but, however, in view of the latest decision of this Court, I am not inclined to hold so.
30. In my view, the transferor and the transferee would be liable, along with the driver, to pay the compensation to the third party.
The appeal is accordingly allowed.