Supreme Court: Individual in Whose Name Vehicle Registered On Date Of Accident to Be Treated As Owner

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The present case arises out of a special leave petition of 2016. A Division Bench of Justice R Bhanumati and Indira Banerjee presided over the matter.

Brief Facts of the Case 

This appeal is against an order passed by the National Consumers Disputes Redressal Commission, New Delhi on 23.02.2015. This dispute arose out of the issue of an insurance claim made by Surendra Kumar Bhiwale. Mr Bhiwale, the petitioner, was the owner of an Ashok Leyland 2214 Truck.

On 11.11.2011, the said lorry, which was loaded with Ammonia Nitrate at Raipur met with an accident on its way. This accident took place on 13.11.2011 at 1.45 am near Bhakuwa Toil Police Station, Gumla in Jharkhand. The driver was trying to save a cow that had come in its way and meanwhile, he lost control over the truck. The truck fell into a river by the side of the road. The accident resulted in the extensive damage of the truck. 

Three days later on 16.11.2011, the accident was reported. And on 25.11.2011, the petitioner lodged a claim with the insurer, New India Assurance, through one Mohammad Iliyas Ansari. The insurance company repudiated the claim on the grounds that the appellant sold the truck to Mr Ansari. The petitioner approached the District Forum. It was because of the action of the insurance company, the District Forum allowed the complaint of the appellant and directed the Insurance Company to pay the claimed amount. 

The Insurance Company then approached the State Commission, which then dismissed the case. They further challenged this before the National Commission. The National Commission had allowed a revision petition and set aside the orders passed by the lower courts. 

Arguments by the Petitioner

The petitioner contended that though there was a sale agreement with Mr Ansari, there was no transfer of ownership of the vehicle. Further, the petitioner paid all the instalments towards the loan. He also submitted that the buyer had not paid him the full consideration for the said truck, even as late as on 13. 11. 2011, when the accident occurred.

Also, the vehicle is still registered under his name. He also held the permit to operate it. 

Arguments by the Respondent

The insurer issued a cause letter dated 22.03.2012 to the petitioner. He questioned the insurance claim, considering that he had already sold the vehicle. The respondents believe that they have no liability to the vehicle as he already sold it. 

Court’s Observation

The Court observed that the National Commission overlooked the definition of ‘owner’ in Section 2(30) of the Motor Vehicle Act, 1988. Further, they completely ignored the findings of the District Forum and State Commission. 

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”.

The Court in this regard said: 

“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 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. The legislature has changed the definition of ‘owner’ to mean the person in whose name the motor vehicle stands”.

The Court also questioned the fact as to why the appellant would bear all the risks of the vehicle for over three years when it has already been sold. Thus, the Court has observed that the petitioner was the owner of the truck. Considering the precedent cases, the Court gave its final verdict. 

Court’s Order

The Court allowed the appeal. The Court believed Mr. Bhiwale to be the owner of the truck. New India Assurance could not avoid the claim on the grounds of transferability of ownership. It further directed the insurance company to pay the amount within six weeks of the order.


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