Mohan Kanhai v. James Gada & Ors. passed by
Case Details
1 ABHIGYA SAXENA Digitally signed by ABHIGYA SAXENA 2025:CGHC:46246 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 354 of 2018 Reserved on :- 04/07/2025 Delivered on :- 10/09/2025 1 - Branch Manager, Shriram General Insurance Co. Ltd. Issue Office 10003, E-8, Riico Industrial Area, Sitapura, Jaipur, Rajasthan, Through The Branch Manager, Shriram General Insurance Co. Ltd. Maruti Height, 4th Floor, Beside R.K.Mall, Aamanaka, Raipur, District Raipur, Chhattisgarh (Insurer/respondent No.4), District : Raipur, Chhattisgarh ... Appellant(s) versus 1 - Mohan Kanhai S/o Narayan Kanhai Aged About 29 Years R/o House No.119, Atal Awas, Shivaji Nagar, Khursipar, Ward No.28, Bhilai, Tehsil And District Durg, Chhattisgarh (Claimant No.1), District : Durg, Chhattisgarh 2 - James Gada S/o Sibo Gada Aged About 32 Years R/o 1. Near Ram Mandir, Balaji Nagar Zone 2, Sector 11, Bhilai, Durg, Chhattisgarh, Through Director And Office Sanjay Agrawal, N.R.Wires, Pvt. Ltd. Transport Area, Bhilai, Durg, Chhattisgarh (Driver/non-Applicant No.1), District : Durg, Chhattisgarh 3 - Director And Office Sanjay Agrawal, N.R.Wires, Pvt. Ltd. Transport Area, Bhilai, Durg, Chhattisgarh (Present Owner/non-Applicant No.2), District : Durg, Chhattisgarh 2 4 - Ramesh Kumar Sirka S/o Jumbal Sirka R/o House No.456, Ward No.02, Ratkhar, Korba, District Korba, Chhattisgarh (Registered Owner/non-Applicant No.3), District : Korba, Chhattisgarh ... Respondent(s) For Appellant : Mr. Tessy Abraham, Advocate For Respondents No.2 & 3 : Mr. Ankit Singhal and Mr. Ashish Mittal, Advocates For Respondent No.4
Legal Reasoning
of this Court in Reshma and Purnya Kala Devi. 14. The submission of the petitioner is that a failure to intimate the transfer will only result in a fine under Section 50(3) but will not invalidate the transfer of the vehicle. InT.V. Jose (2001) 8 SCC 748, this Court 10 observed that there can be 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) is liable to compensate. The mandate of the law must be fulfilled. 21. Likewise, the relevant paragraph 14 of Pushpa Alias Leela (supra) is pertinent to quote hereinbelow :- “14. The decision in T.V. Jose (Dr.) was rendered under the Motor Vehicles Act, 1939. But having regard to the provisions of Section 2(30) and Section 50 of the Act, as noted above, the ratio of the decision shall apply with equal force to the facts of the case arising under the 1988 Act. On the basis of these decisions, the inescapable conclusion is that Jitender Gupta, whose name continued in the records of the registering authority as the owner of the truck was equally liable for payment of the compensation amount. Further, since an insurance policy in respect of the truck was taken out in his name he was indemnified and the claim will be shifted to the insurer, Oriental Insurance Company Ltd.” 22. Further, in the case of Surendra Kumar Bhilawe (supra) paragraphs 52 & 53 are relevant, and are reiterated hereinunder :- 11 “52. In our considered opinion, the National Commission erred in law in reversing the concurrent factual findings of the District Forum and the State Commission ignoring vital admitted facts as stated above, including registration of the said truck being in the name of the appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the appellant of the premium for the insurance policy, issuance of insurance policy in the name of the appellant, permit in the name of the appellant even after three years and seven months, absence of "No-Objection" from the financier bank, etc. and also overlooking the definition of "owner" in Section 2(30) of the Motor Vehicles Act, as also other relevant provisions of the Motor Vehicles Act and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 157. 53. In view of the definition of "owner" in Section 2(30) of the Motor Vehicles Act, the appellant remained the owner of the said 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.” 23. Lastly, the Hon'ble Apex Court in Firdaus (supra), has reiterated that even in the absence of intimation of transfer to the insurer, the 12 liability of insurer to pay the compensation to the third party shall not cease. The para 12 reads as under:- “12. Even if it is assumed for the sake of arguments that vehicle was transferred from defendant no. 1 to defendant no. 4, there will be no consequence with regard to liability of Oriental Insurance Co. Ltd. to pay compensation. The issue has been answered in Rikhi Ram Case (Supra) also. The vehicle involved in the accident in the aforesaid case was insured by another owner, namely M/s. Bhagwan Rai Amrit Lal, which was purchased by two other persons subsequently. No intimation of transfer was given to Oriental Insurance Co. Ltd. The question arose in the above case, as to whether in absence of intimation of transfer to the Insurer the liability to pay the compensation to the third party shall cease. This Court held that even if vehicle stand transferred to the name of another person, the liability of insurer to pay compensation to third party shall not cease.” 24. In a recent judgment passed by the Hon’ble Supreme Court in the matter of Prabhavati & Ors. vs. Managing Director, Banglore Metropolitan, Transport Corporation4, this similar issue has been dealt with by the Hon’ble Supreme Court and it has been 4 2025 SCC OnLine SC 455 13 held that the person who is in command and control of the vehicle could be treated as its owner for the purpose of fixing tortious liability. 25. Likewise, in the matter of Vaibhav Jain vs. Hindustan Motors Pvt Ltd 5 the said view has been expressed by the Hon’ble Supreme Court while deciding the issue, the Hon’ble Supreme Court has held as under:- 12. Having noticed the rival submissions, in our view, following issues fall for our consideration: - (i) Whether, as a mere dealer of M/s Hindustan Motors, the appellant could be considered owner of the vehicle and as such liable, jointly and severally with M/s Hindustan Motors, to pay the compensation as directed by the Tribunal/ High Court? (ii) Whether clauses 3 (b) and 4 of the Dealership Agreement absolved M/s Hindustan Motors of its liability to pay compensation as an owner? (iii) Whether M/s Hindustan Motors, even without preferring an appeal against the award of the Tribunal, could question its liability under the award by relying on the provisions of Order 41 Rule 33 of the CPC? Issue No.(i) 5 2024 SCC OnLine SC 2337 14 13. Before we delve into the afore-stated issues, we must have a look at the concept of 'ownership' of a vehicle as obtaining under the M.V. Act for fixing liability in respect of compensation. Section 166 of the M.V. Act enumerates the persons who may file an application for compensation before the Claims Tribunal whereas Section 168(1) of the M.V. Act speaks about the award of the Tribunal. Interestingly. Section 166, though specifies the persons who may file an application for compensation, omits to specify person(s) against whom the application is to be filed. However, sub-section (1) of Section 168 by providing that the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident, gives sufficient indication on whom the liability for compensation would fall. 14. In v. Godavari Finance Satyanarayanamma & Ors." a question arose whether a Company Degala financier would be an owner of a motor vehicle within the meaning of Section 2(30) of the M. V. Act, 1988. In that case, the accident took place on 29.5.1995 and. admittedly, the vehicle was not in control of the financier though its name was entered in the registration book of the vehicle. The extract of the registration book, however, revealed that the vehicle was registered in the name of fourth 15 respondent therein (1.e.. not the financier) and that the hire-purchase agreement with the financier had also been cancelled on 10.11.1995. In that context, while holding that financier was not liable, interpreting the definition of 'owner', as provided in Section 2(30), this Court observed: "12. Section 2 of the Act provides for interpretation of various terms enumerated therein. It starts with the phrase unless the context otherwise requires. The definition of owner is a comprehensive one. The interpretation clause itself states that the vehicle which is the subject matter of a hire purchase agreement. the person in possession of vehicle under that agreement shall be the owner. Thus, the name of financier in the registration certificate would not be decisive for determination as to who was the owner of the vehicle. We are not unmindful of the fact that ordinarily the person in whose name the registration certificate stands should be presumed to be the owner, but such a presumption. can be drawn only in the absence of any other material brought on record or unless the context otherwise requires. 13. In case of a motor vehicle which is subjected to a hire purchase agreement, the financier cannot ordinarily be treated to be the owner. The person who is in possession of the vehicle, and not the financier being the owner would be liable to pay damages for the motor accident. 15. An application for payment of compensation is filed before the Tribunal constituted under Section 165 of the 16 Act for adjudicating upon the claim for compensation in respect of accident involving the death of, or bodily injury to, persons arising out of the use of motor vehicles. or damages to any property of a third party so arising, or both. Use of the motor vehicle is a sine qua non for entertaining a claim for compensation. Ordinarily if driver of the vehicle would use the same, he remains in possession or control thereof. Owner of the vehicle, although may not have anything to do with the use of vehicle at the time of the accident, actually he may be held to be constructively liable as the employer of the driver. What is, therefore, essential for passing an award is to find out the liabilities of the persons who are involved in the use of the vehicle or the persons who are vicariously liable. The insurance company becomes a necessary party to such claims as in the event the owner of the vehicle is found to be liable, it would have to reimburse the owner in as much as a vehicle is compulsorily insurable so far as the third party is concerned, as contemplated under section 147 thereof. Therefore, there cannot be any doubt whatsoever that the possession or control of a vehicle plays a vital role. 15. In Rajasthan State Road Transport Corporation (In short RSRTC) (supra), the vehicle along with services of the driver were hired by RSRTC from its registered owner. The issue which arose for consideration by this Court was whether RSRTC, which had htred the vehicle along with services of the driver from the registered owner of the vehicle, could be held vicariously liable for the accident caused by use of that vehicle. Answering the question in the affirmative, this Court, on the principle of vicarious liability of RSRTC for the tort committed by a person under its control and command, held: 17 17. The general proposition of law and the presumption arising therefrom that an employer, that is the person who has the right to hire and Bre the employee, is generally responsible vicariously for the tort committed by the employee concerned during the course of his employment and within the scope of his authority. is a rebuttable presumption. If the original employer is able to establish that when the servant was lent, the effective control over him was also transferred to the hirer, the original owner can avoid his liability and the temporary employer or the hirer, as the case may be. must be held vicariously liable for the tort committed by the employee concerned in the course of his employment while under the command and control of the hirer notwithstanding the fact that the driver would continue to be on the payroll of the original owner............" 16. In that backdrop, this Court while construing the definition of "owner", as provided in Section 2(19) of the old Motor Vehicles Act, 1939", held that (a) the definition of "owner" under section 2 (19) of the Act is not exhaustive; (b) it has to be construed in a wider sense based on the acts and circumstances of a given case; and (c) it must include, in a given case, the person who has the actual possession and control of the vehicle and under whose direction and command the driver is obliged to operate the same. It was also observed that to confine the meaning of owner to the registered owner only would not be proper where the vehicle is in the actual possession and control of the hirer at the time of the 18 accident. 17. In National Insurance Co. Ltd. v. Deepa Devi & Ors, the question was as to who would be liable to pay compensation if the offending vehicle at the time of accident is under requisition for election. claimant's side, by relying on the decision of this Court in From the Guru Govekar v. Filomena F. Lobo, it was argued that regardless of the vehicle being in possession of some other person, the owner would be liable. Negativing this argument, this Court held that when a vehicle is requisitioned for State duty, the owner of the vehicle has no other alternative but to hand over the possession to the statutory authority and, therefore, the case would be distinguishable from the one where the owner gives the vehicle to someone else on his own free will. Holding so, it was observed: "10. While the vehicle remains under requisition, the owner does not exercise any control there over. The driver may still be the employee of the owner of the vehicle but he has to drive it as per the direction of the officer of the State, who is put in charge thereof. Save and except for legal ownership, for all intent and purport, the registered owner of the vehicle loses entire control thereover. He has no say as to whether the vehicle should be driven at a given point of time or not. He cannot ask the driver not to drive a vehicle on a bad road. He or the driver could not possibly say that the 19 vehicle would not be driven in the night. The purpose of requisition is to use the vehicle. For the period the vehicle remains under the control of the State and/or its officers, the owner is only entitled to payment of compensation therefor in terms of the Act. but he cannot exercise any control thereupon. In a situation of this nature, this court must proceed on the presumption that Parliament while enacting the 1988 Act did not envisage such a situation. If in a given situation. the statutory definitions contained in the 1988 Act cannot be given effect to in letter and spirit, the same should be understood from the common sense point of view." 18. While observing as above, this Court noticed that the clause defining "owner" is prefaced with the expression "unless the context otherwise requires and, therefore, in the light of an earlier decision of this Court in Ramesh Mehta v. Sanwal Chand Singhvi & Ors.". It was held that where the context makes the definition given in the Interpretation clause inapplicable. the same meaning cannot be assigned. 19. What is clear from the decisions noticed above, is that 'owner' of a vehicle is not limited to the categories specified in Section 2(30) of the M.V. Act. If the context so requires. even a person at whose command or control the vehicle is could be treated as its owner for the purposes of fixing tortious liability for payment of compensation. In this light. we shall now examine 20 whether at the time of accident the vehicle in question was under the command and control of the appellant (1.e., the dealer).
Arguments
: Mr. T. R. Patel, Advocate For Respondent No.1 : None. SB - Hon’ble Shri Justice Amitendra Kishore Prasad C A V Order 1. Heard. 2. This appeal is being preferred by the appellant/Insurance Company being aggrieved by the award dated 06.10.2017 passed in Claim Case No. 56/2016, Mohan Kanhai Vs. James Gada & Ors. passed by the Learned 8th Additional Motor Accident Claims Tribunal, Durg (C.G.), presided over by Shri Deepak K. Gupta, whereby the Tribunal has passed the above-stated final award. 3. A concise statement of the case facts is on 14.12.2011, at approximately 5:30 PM, near a meet tire shop situated by the canal bank in Transport Nagar, Hathkhoj, The driver/Respondent No.2 of the dumper bearing registration number CG-12/C-1279 (herein referred as ‘Offending Vehicle’), was engaged in loading old tires onto the dumper using a hydraulic jack. The Respondent No.1, who was acting as a helper, was observing from below while 3 holding onto the helper-side door of the dumper, instructing the driver not to lift the dumper’s hydraulic jack too high. However, the driver, Respondent No.2, of the said vehicle, due to sudden negligence and reckless act, lifted the hydraulic jack abruptly and to an excessive height. As a result, the dumper’s hydraulic jack came into contact with an overhead electric wire, causing an electric current to flow through the dumper and the hydraulic jack. Consequently, the Respondent No.1 the helper suffered severe electric burns. Following the accident, he was admitted to Sector- 9 BSP Hospital, where he remained hospitalized until the 27th of December, 2011. Subsequently, he was transferred and admitted to Dhanwantari Hospital from 31.12.2011 to 19.01.2012. Hence this appeal. 4. This is an admitted fact that the driver of the vehicle which caused the accident, Dumper No.-CG-12/C-1279, was Respondent No.2 (James Gada) and the registered owner of the vehicle was Respondent No.4 (Ramesh Kumar Sirka) and the present owner is Respondent No.3 (Director and Office, Sanjay Agrawal) and the said vehicle was insured with the present appellant-insurance company on the date of the incident. 5. The learned counsel appearing for the appellant–Insurance Company respectfully submits that the First Information Report (F.I.R.) of the accident was lodged with an inordinate delay of approximately 78 days. Such delay casts serious doubts on the 4 bona fides of the report, suggesting that the case was filed merely to secure compensation against the offending vehicle. The accident itself occurred due to the negligent act of Respondent No. 2/Driver, and therefore, the liability cannot be fastened upon the appellant-insurance company. 6. It is further submitted that the claim petition filed under Section 166 of the Motor Vehicles Act, 1973 (hereinafter referred to as the ‘Act of 1973’) is not maintainable in law. The appellant also contends that the driver of the offending vehicle was operating the vehicle in a negligent manner; the vehicle lacked a valid permit at the time of the incident; and the insurance policy was in the name of Respondent No. 4 (the registered owner of the offending vehicle), who had subsequently transferred the vehicle to Respondent Nos. 2 and 3 (the driver and the current owner of the offending vehicle, respectively). 7. Moreover, it is submitted that the driver was holding a licence for Light Motor Vehicles (LMV), whereas the offending vehicle falls under the category of Heavy Motor Vehicles (HMV), which is impermissible and illegal. The driver failed to exercise due care while operating the vehicle. In light of the foregoing, the liability cannot be fastened upon the appellant-insurance company. 8. Learned counsel appearing for Respondent Nos. 2 and 3 submits that since the vehicle was registered in the name of Respondent 5 No. 4, and he had failed to inform the Regional Transport Office (R.T.O.) regarding the sale of the offending vehicle, the liability to pay the compensation awarded by the Tribunal rests with the registered owner of the vehicle, namely Respondent No. 4. 9. To bolster this submission, reliance was placed upon the judgments of the Hon’ble Supreme Court in Naveen Kumar v. Vijay Kumar & Ors. 1 ; Pushpa Alias Leela & Ors. v. Shakuntala & Ors. 2 and Surendra Kumar Bhilawe v. New India Assurance Company Limited 3 . 10. In the present case, since the registration of the vehicle was not challenged and Respondent No. 4 did not exercise due diligence in filing the requisite application for transfer of ownership and updating the registration in the name of the subsequent purchaser, the Tribunal has rightly fastened the liability upon the insurance company. 11. The Respondent No. 4 has specifically stated that the dumper vehicle, bearing registration number CG-12/C-1279, was purchased by way of hire-purchase on loan from Shri Ram Transport Finance Company Ltd., Korba. However, due to the dumper vehicle not being operational, the outstanding payments could not be made within the stipulated time. Consequently, the 1 2018 3 SCC 1 2 2011 2 SCC 240 3 2020 18 SCC 224 6 finance company issued a final notice to the Respondent No.4 on 27.07.2011, repossessed the said vehicle, and auctioned it. The vehicle was subsequently handed over to Sanjay Agrawal, Director of NR Wires Pvt. Ltd., Industrial Area, Bhilai. 12. The ownership of the said vehicle was with Respondent No. 3, who had appointed Respondent No. 2 as the driver of the vehicle. The accident occurred due to the negligence of non-applicants No. 1 and No. 2, with Respondent No.1 also being at fault. 13. The accident took place on 14.12.2011, during the period from 24.03.2011 to 23.03.2012, when the vehicle was insured with the present appellant - Shri Ram General Insurance Company Ltd. In view of the above, the application filed against the applicant deserves to be dismissed. 14. I have heard the esteemed counsel appearing for the parties and examined the documents on record with the highest degree of diligence. 15. The question before this Court is whether the appellant- insurance company, which insured the offending vehicle, is liable to pay the compensation amount awarded by the trial Court, the said vehicle being registered in the name of Respondent No. 4 (the registered owner of the offending vehicle). 7 16. It is an admitted fact that on the date of the accident, the vehicle was insured in the name of Ramesh Kumar Shirka as per Policy Ex.D-1. According to Ex.D-1, the premium was paid for coverage under both the Own Damage and Liability sections of the policy. 17. From the evidence of Punit Rathore, the legal officer of the appellant-insurance company, it emerges that the vehicle was purchased under a ‘Hire Purchase Scheme.’ Due to default in repayment of the loan amount, the Shriram Transport Finance Company Limited, Korba (the financier) took possession of the offending vehicle and auctioned it, selling the same to Respondents No. 2 and 3. However, the registration certificate was never transferred to their names. It is noteworthy that Shriram General Insurance Company Ltd. and Shriram Transport Finance Company Ltd. are sister companies with distinct legal identities. As per the insurance policy, Respondent No. 4 is the registered owner of the vehicle; nevertheless, the possession was with Shriram Transport Finance Company Ltd., and the vehicle was insured by Shriram General Insurance Company Ltd. 18. From the foregoing evidence, it is clear that the registration of the vehicle was not changed in the name of Respondents No. 2 and 3 and remained registered in the name of Respondent No. 4. However, control and possession of the vehicle had passed to Shriram Transport Finance Company Ltd. 8 19. Since the vehicle was sold under the Hire Purchase Scheme and subsequently auctioned to Respondents No. 2 and 3, it was incumbent upon the appellant, Shriram General Insurance Company Ltd., and its sister company, Shriram Transport Finance Company Ltd., to inform Respondent No. 4 regarding the sale of the offending vehicle. 20. The Tribunal rightly held that since registration was not transferred, the insurance company in whose name the policy is issued remains liable for compensation. This finding aligns with the Hon’ble Supreme Court’s ruling in Naveen Kumar (supra), and the relevant para for ready reference is as under :- “13. The consistent thread of reasoning which emerges from the above decisions is that in view of the definition of the expression "owner" in Section 2(30), it is the person in whose name the motor vehicle stands registered who, for the purposes of the Act, 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. 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 9 Registering Authority as the owner of the vehicle, he would not stand absolved of liability. Parliament has consciously introduced the definition of the expression "owner" in Section 2(30), making a departure from the provisions of Section 2(19) in the earlier 1939 Act. The 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. 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 the present case, the first respondent was the "owner" of the vehicle involved in the accident within the meaning of Section 2(30). The liability to pay compensation stands fastened upon him. Admittedly, the vehicle was uninsured. The High Court has proceeded upon a misconstruction of the judgments
Decision
26. In view of the above submission and the law laid down by the Hon’ble Supreme Court, the Tribunal rightly fastened the liability to indemnify the award upon the appellant-insurance company, and such finding cannot be said to be erroneous or perverse. The Tribunal’s imposition of liability on the appellant-insurance company cannot be faulted, as the vehicle was duly insured with the insurance company and there was no breach of any conditions of the insurance policy. 27. Accordingly, having considered the submissions and the relevant facts of the case, it is held that the appeal filed by the insurance company is filed without merit and is therefore, liable to be dismissed. In the aforesaid view, the appeal is hereby Dismissed in its entirety. Further more the insurance company obligated to pay the compensation as has duly been determined and awarded by the Claims Tribunal. No order as to costs. Sd/- (Amitendra Kishore Prasad) JUDGE Saxena 21 Headnote “If a vehicle is duly insured and there is no breach of the insurance policy, the insurer remains liable to pay compensation, even if the registration has not been transferred to the subsequent purchaser who was in possession and control of the offending vehicle.”