Justice K. Vinod Chandran, Justice NV Anjaria, Supreme Court
Registered Owner Liable To Compensate Victims Of Motor Accident, Same Has To Be Indemnified By Insurer: Supreme Court
|The appeals before the Supreme Court arose from the orders of the Chhattisgarh High Court, wherein the order of the Motor Accidents Claims Tribunal granting compensation was challenged.
The Supreme Court has held that when the ownership was with the registered owner at the time of the accident, it is his liability to compensate the victims in the accident, and the same has to be indemnified by the insurer.
The appeals before the Apex Court arose from the orders of the Chhattisgarh High Court, wherein the order of the Motor Accidents Claims Tribunal granting compensation with respect to the death/injuries suffered in a motor vehicle accident was challenged by both the insurance company and the claimants.
The Division Bench of Justice K. Vinod Chandran and Justice N. V. Anjaria stated, “The transfer of the registration as per Section 50 of the Motor Vehicle Act, 1988 requires the transferee to report the fact of transfer in the prescribed form to the Registering Authority within whose jurisdiction the transfer is affected within 14 days of the transfer. There is no contention raised by the registered owner that he made such a report as required under Section 50(1)(a)(i) of the Act. Hence the ownership was with the registered owner even at the time of the accident and it is his liability to compensate the victims in the accident, which also has to be indemnified by the insurer.”
AOR Kaustubh Shukla represented the Appellant while AOR Vikrant Singh Bais represented the Respondent.
Factual Background
There were 11 claim petitions before the Tribunal, and the insurance company challenged the award in a few of such claim petitions. The challenge was on the ground of there being no liability to indemnify, since the injured were gratuitous passengers in the goods vehicle and the driver was in possession and ownership of the vehicle on the strength of an agreement with the registered owner, while the policy was in the name of the registered owner. The Tribunal awarded compensation. The registered owner, the driver alleged to be the ostensible owner and the insurance company were made jointly and severally liable.
The claimants and the insurance company filed appeals before the High Court in which the company’s appeals were allowed, finding the insurer absolved of its liability. In the claimant’s appeals, in two cases, the compensation was enhanced, and the other appeal was dismissed, affirming the Tribunal’s award insofar as the compensation was concerned. The appeals before the Apex Court were filed by the ostensible owner who was also the driver of the vehicle, who had also unsuccessfully sought a review insofar as a liability was cast on him personally, to satisfy the award.
Reasoning
The Bench took note of the fact that the vehicle had a valid insurance policy in the name of the registered owner and that the driver had a valid driving license. The Insurer claimed no liability to indemnify the registered owner because at the time of the accident, even according to the registered owner, by an agreement, the possession and ownership of the vehicle was handed over to the appellant, who was also driving the vehicle. The appellant did not transfer the registration, nor did he take out a policy in his name. It was also argued before the High Court that the injured claimants and the deceased were gratuitous passengers.
As per the Bench, the contention raised by the insurer that the deceased/injured in the accident were gratuitous passengers in the vehicle remained in the realm of mere assertion without substantiation. Reference was made to Section 147 which has the nominal heading “Requirements of policies and limits of liability” and whereby sub-section (1)(b)(i) enables indemnification by the insurer, any liability with respect to the death or bodily injury to third parties and any person including owner of the goods or his authorized representative carried in the motor vehicle.
The Bench next dealt with the issue of transfer of ownership to the appellant, which even the registered owner asserted. Reference was made to an agreement which only indicated that the sale consideration was fixed at Rs 90,000, and on payment of Rs 80,000, there was a transfer of possession. The recital in the agreement indicated that the balance of Rs 10,000 should be paid within two months, and only after the balance is paid, the registration of the vehicle would be transferred. The recitals also indicated that there was no transfer of ownership of the vehicle, and the appellant merely had possession of the same.
The Bench negatived the grounds raised by the insurer to absolve itself of the liability. Thus, allowing three appeals, the Bench ordered, “Awards impugned in the appeals, other than that dismissed shall be satisfied by the insurer.”
Cause Title: Brij Bihari Gupta v. Manmet & Ors. (Neutral Citation: 2025 INSC 948)
Appearance
Amicus Curiae: Advocates Shubhranshu Padhi, Jay Nirupam, D. Girish Kumar, Pranav Giri, Ekansh Sisodia
Appellant: AOR Kaustubh Shukla, Advocates Praveen Kumar Singh, Pushpanjali Singh, Lakshmeesh S Kamath, Samriti Ahuja, Aditi Prakash, Parijat Kishore, Parjiat Kishore, Rahul Bhandari
Respondent: AOR Vikrant Singh Bais, Advocates Neema, Abhinav Parihar, Yogesh Tiwari, Utkarsh Singh, Dushyant Singh Chauhan, AOR Rajesh Kumar Gupta