INTRODUCTION

In general legal terms, ownership of property may be private, collective, or common, and the property may be of objects, land or real estate, or intellectual property. Determining ownership in law involves determining who has certain rights and duties over the property.

The person who owns any property may it be movable or immovable and/or whose name is registered or mentioned in the legal documents for the records will be the owner of the property.

The definition of the term owner has been given in section 2(30) of the Motor Vehicles Act, 1988. The pure legislative intent of the parliament behind enacting the said act and specifically the said definition was given for the purpose of the insurance claim.

WHO IS “OWNER” OF MOTOR VEHICLE UNDER THE MV ACT?

Section 2(30) of the Motor Vehicles Act, 1988 is read as follows:

“2(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.”

That in view of the definition of the expression ‘owner’ in Section 2(30) of the Motor Vehicles Act, 1988, it is the person in whose name the motor vehicle stands registered who, is treated as the ‘owner’ for the purpose of the said Act. However, where a person is a minor, the guardian of the minor would be treated as the owner, who would also be registered accordingly. 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 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.

The above-noted definition states that the owner of the vehicle would be the person in whose name the vehicle is being registered but the said definition has two exceptions which are:

  1. When the person is below the age of 18 i.e., he is not major; and
  2. When the subject vehicle is under a hire-purchase relationship.

The definition of the owner has been rendered in the decisions of HDFC Bank Limited v Reshma 1, and Purnya Kala Devi v State of Assam 2. According to these cases, the apex court held that “the person in possession of the vehicle under a hypothecation agreement was to be treated as the owner”.

BACKGROUND

It is necessary to point out here that in the earlier Act of 1939, the expression ‘owner’ was defined in Section 2(19) as follows:

“‘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.”

Evidently, Parliament while enacting the Motor Vehicles Act, 1988 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 owner. The previous act highlighted the importance of possession rather than that of lawful ownership in the present case.

LEGISLATIVE INTENT BEHIND SECTION 2(30) OF THE MOTOR VEHICLES ACT, 1988

The principle underlying the provisions of Section 2(30) of the Motor Vehicles Act, 1988 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 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. Hence, the interpretation to be placed must facilitate the fulfilment of the object of the law. In case, the First Respondent to a claim was the ‘owner’ of the vehicle involved in the accident within the meaning of Section 2(30) of the Motor Vehicles Act, 1988. The liability to pay compensation stands fastened upon him.

The Apex Court has settled the legal position by holding that there can be a 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) of the Motor Vehicles Act, 1988 is liable to compensate.

Earlier the scenario was that the liability of insurer comes to end after the insured vehicle is sold by the insured person to a third-party even then the transfer is not recorded with the transport authority and the registration certificate of the vehicle continues to be in the name of the insured person.3

But many cases came up before the apex Court concerning the scope of the ownership and therefore, the Supreme Court explained the scope of the term owner under section 2(30) of the Act.

RECENT DEVELOPMENT

The Supreme Court in its judgment in the case of Naveen Kumar v. Vijay Kumar and Ors. 4, interpreted the expression ‘owner’ in Section 2 (30) of the Motor Vehicles Act, 1988, to be the person under whose name the motor vehicle stands registered. The Hon’ble Court further clarified that instances where the transfer of vehicle is not registered with an authority the original owner will be liable.

BRIEF FACTS

In brief the facts of the Supreme Court case can be summarised as follows:

On May 27, 2009, at about 7:30 pm, an accident took place, in which Smt. Jai Devi and her nephew Nitin were hit by a motor vehicle, driven by Rakesh in the reverse gear. Nitin died on the spot as he was run over by the rear wheel of the car and Smt. Jai Devi received multiple injuries. The case thereafter was raised in the Motor Accident Claims Tribunal. Two petitions were filed before the Motor Accident Claims Tribunal (hereinafter referred to as ‘the Tribunal’) by Smt. Jai Devi and by Shri Somvir and Smt. Saroj, the parents of Nitin. The vehicle involved in the accident, a Maruti-800 bearing Registration DL-3CC-3684, (hereinafter referred to as ‘the vehicle’) was registered in the name of Vijay Kumar (hereinafter referred to as ‘the 1st Respondent’).

The 1st Respondent claimed that the vehicle was sold to the 2nd Respondent on July 12, 2007 and had handed over possession of the vehicle together with relevant documents. The 2nd Respondent stated before the Tribunal that he sold the vehicle to the 3rd Respondent on September 18, 2008. Further, the 3rd Respondent, in turn, claimed before the Tribunal to have sold the vehicle to Naveen Kumar (hereinafter referred to as ‘the Appellant’).

The Appellant, 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 defense to the claim. The tribunal in its decision dated October 6, 2012, granted compensation of INR 10,000/- to Smt. Jai Devi and of INR 3,75,000/- on account of the death of Nitin, to his parents. It was noted in the decision that the registration certificate of the offending vehicle continues to be in the name of the 1st Respondent. Therefore, the 1st Respondent is jointly and severally liable together with the driver of the vehicle.

HIGH COURT OF PUNJAB AND HARYANA

o The decision of the Tribunal was challenged by the 1st Respondent before the High Court of Punjab and Haryana (hereinafter referred to as ‘the High Court’).

o The appeal was allowed on January 25, 2016, by the Single Judge Bench on the ground that there was no justification for the 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.

o Taking into consideration the judgments in HDFC Bank Limited v Reshma 5 and Purnya Kala Devi v State of Assam 6, it was held that the Tribunal ought to have passed an award only against the Appellant as the owner.

  • Aggrieved by the above mentioned order ‘Naveen Kumar’ appealed before the Supreme Court by way of a Special Leave Petition.

ISSUES

Who is the ‘owner’ under Section 2 (30) of the Motor Vehicles Act, 1988?

APPELLANTS CONTENTIONS

  • It was stated that the High Court has proceeded on a manifestly erroneous construction of the legal position.
  • Relying upon the judgements in the case of Purnya Kala Devi v State of Assam, HDFC Bank Limited v Reshma and Section 2(30) of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the act’) it was contended that the person in whose name a motor vehicle is registered is the owner.
  • Further, it was contended that the High Court was in error in holding the appellant liable, who is not the registered owner of the vehicle under the definition of s. 2(30).
  • The appellant also highlighted that in the case of Pushpa alias Leela v Shakuntala 7 the position has been clarified by holding that “where notwithstanding the sale of a vehicle, neither the transferor nor the transferee has taken any step for change in the name of owner in the certificate of registration, the person in whose name the registration stands must be deemed to continue as the owner of the vehicle for the purposes of the Act”.

RESPONDENTS CONTENTIONS

  • The Respondents submitted that the judgment of the Tribunal was correct and further contended that the Appellant as the person in physical possession and control of the vehicle was liable.
  • While discussing Section 2 (30) of the Act the Respondent also pointed out that the person in whose name a motor vehicle is registered is the owner.
  • The view of the Court in the case of P P Mohammed v K Rajappan 8 was reiterated by the Respondents. It was submitted that the person whose name continues in the record of the registering authority as the owner of the vehicle is equally liable together with the insurer.

COURT’S DECISION

  • The Court pointed out that Section 2 (30) of the Act states that it is the person in whose name the motor vehicle stands registered would be treated as the ‘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.
  • The Court also held that 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. Thus, in its judgment, the Supreme Court upholding the decision of the Tribunal directed Respondent No. 1 to pay the compensation and the judgment of the High Court was set aside. 9

CONCLUSION

After going through the judgment of the apex court with respect to the scope of the term owner under section 2(30) of the Act. The court cleared the doubts and explained the detailed scope of the owner and hence, solved the problem which arises during the insurance claims. The definition of the owner is clearly stating that the person whose name is mentioned in the vehicles’ registration certificate will be the owner and therefore, the court awarded the compensation to the victims of the accident by the first respondent as his name mentioned in the registered certificate even it was being sold the second respondent, although the transfer was not invalidated, but the ownership solely depends upon the name present in the registration certificate.

REFERENCES

  1. (2015) 3 SCC 679.
  2. (2014) 14 SCC 142.
  3. Oriental fire and general Insurance Co., Ltd. Ajmer v. Hazi Mohd., 2000 (2) TAC 572 (Raj).
  4. 2018 S.C. [Civil Appeal No. 1427 of 2018].
  5. Supra note 1.
  6. Supra note 2.
  7. ((2011) 2 SCC 240).
  8. ((2008) 17 SCC 624).
  9. Read, Retrieved on 20.05.2018.: https://www.legistify.com/blogs/view_detail/1507-supreme-court-addresses-the-scope-of-39-owner-39-under-motor-vehicles-act Retrieved on 19.05.2018.