Kerala High Court: Registered Owner Liable To Pay Compensation For Accident If Transfer Of Vehicle Is Not In Terms Of MV Act

The Kerala High Court has held that registered owner of a vehicle will be liable to pay compensation even after transfer of the vehicle, if the transfer did not happen in terms of the Motor Vehicles Act and the records do not reflect the transferee's name.

The Court was considering an Appeal filed by registered owner of the offending vehicle against an order of the Motor Accident Claims Tribunal fastening liability of claim on him in an accident case involving a vehicle he allegedly sold.

The Bench of Justice Shoba Annamma Eapen held, "Section 50 of the Act deals with the procedure for transfer of ownership. It is an admitted fact that the ownership was not transferred and in the registration certificate, the appellant's name is shown as the owner of the vehicle. The transfer of ownership did not come into effect, though, it is alleged that the vehicle was transferred to the additional fifth respondent and thereafter to a third person."

 The Appellant was represented by Advocate T.N. Manoj, while the Respondent was represented by Advocate Mansoor B.H. 

Facts of the Case 

The Tribunal had found that the first Respondent is the owner of the offending motorcycle, since the registration certificate was in his name and there was no change of ownership. It was also held that the Insurer was liable to pay compensation to the Claimants and on such payment, he was allowed to recover the amount from the owner and driver.

Counsel for the Appellant submitted that he was the previous owner of the offending vehicle. It was also submitted that the vehicle was transferred to additional fifth respondent by the Insurer and he had produced before the tribunal an indemnity bond, jointly executed by the additional fifth respondent along with rider in favour of the Appellant, undertaking to indemnify the liability of compensation which may be awarded.

It was his case that the Tribunal did not consider the indemnity bond produced and passed an award directing the Appellant to compensate the Claimants for the injuries sustained, for violation of policy conditions that the Second Respondent rider was not having a valid driving licence. The Counsel for the Appellant further submitted that the additional fifth respondent (transferee) filed a written statement before the Tribunal admitting that the Appellant (owner) had transferred the vehicle to his name and hence, it was the liability of the transferee to compensate the claimant and not the Appellant.

On the other hand, Standing Counsel for the insurer submitted that the registration certificate was still in the name of the Appellant, and he relied on the decision of the Apex Court in Naveen Kumar v. Vijay Kumar & Ors. (2018), wherein it was held that the person whose name is reflected in the records of the registering authority is the owner and he is liable to compensate.

Reasoning By Court

The Court noted that the person in whose name a motor vehicle stands registered is the owner of the vehicle for the purpose of the Motor Vehicles Act and principle underlying the provisions of Section 2(30) 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. 

"In Naveen Kumar (supra), it was held that for the purpose of the Motor Vehicles Act, the person whose name is reflected in the records of the registering authority is the owner and he is liable to compensate. However, the tribunal has found that since there was no valid driving licence for the rider of the motor cycle, the tribunal has fastened the liability on the registered owner and the rider of the motorcycle. I do not find any reason to interfere with the same", the Court observed.

It concluded that the Tribunal has rightly found that the insurer should pay the amount and then recover the said amount from the registered owner and driver.

The Appeal was accordingly dismissed.

Cause Title: Abdul Khader v. Arumugan (2025:KER:50546)

Appearances:

Petitioner- Advocate T.N. Manoj

Respondent- Advocate Mansoor B.H., Advocate Roy Mathew, Advocate N.S. Najeeb

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