SC on MVA: Person in Whose Name Vehicle Stands Registered on the Date of Accident to be Treated as ‘Owner’

By Sharvari Lohakare

On Thursday, the Supreme Court observed that, it is the person in whose name the motor vehicle stands registered, would be treated as the ‘owner’ of the vehicle, in regard to the Motor Vehicle Act (MVA). One Surendra Kumar Bhilawe made an insurance claim in the context of the concerned case. The insurance company renounced the claim for the reason that Bhilawe had already sold the said truck to one Mohammad Iliyas Ansari about three years ago. Bhilawe filed a consumer complaint in the District consumer forum which was allowed there. The State Commission dismissed the appeal filed by the insurance company in return. But the National Consumer Commission set aside both the orders stating that when an owner of a vehicle sells his vehicle and executes a sale letter without in any manner postponing passing of the title to the property in the vehicle, the ownership in the vehicle passes to the purchaser on execution of the sale letter.

The division bench comprising Justices R Banumathi and Indira Banerjee observed in appeal that the National Consumer Commission overlooked the definition of ‘owner’ in Section 2(30) of the Motor Vehicle Act, 1988. In Section 2(30) ‘owner’ has been defined as “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.”

It should also be noted that  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Motor Vehicles Act, 1988 and the definition of owner in Section 2(19) of the Motor Vehicles Act, 1939 which has been repealed and replaced by the Motor Vehicles Act, 1988.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 Bench further reiterated that, “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. . It is equally incredible that an owner of a vehicle who has paid consideration to acquire the vehicle would not insist on transfer of the permit and thereby expose himself to the penal consequence of operating a goods vehicle without a valid permit.”

Thus, the court allowed the appeal and ordered that Bhilawe remained the owner of the 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.

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