Supreme Court Finds Registered Vehicle Owners Liable For Compensation Even After Changing Hands
Supreme Court Finds Registered Vehicle Owners Liable For Compensation Even After Changing Hands

The Supreme Court has ruled that a person continues to be liable for compensation claims from accidents involving a vehicle owned by him or her and later sold to others if the registration papers have not been changed to reflect the new owner’s name.


The ruling was given out in a plea filed by Vijay Kumar who had sold his car on July 12, 2007 but failed to change the ownership in the registration papers.


The person who purchased the car from Kumar resold it to someone else on September 18, 2008. The car’s third owner sold the car to one Naveen Kumar who said while appearing before the Motor Accidents Claims Tribunal that he had sold it to one Meer Singh


When the car was in Meer Singh’s possession but driven by someone else, an accident occurred on May 27, 2009, which led to the death of one person and another person being injured


The tribunal ruled that a compensation of Rs 3.85 lakh was to be paid in the case, and also ordered Vijay Kumar, whose name was included in the registration certificate, to be jointly liable with the driver of the car.

This ruling was challenged by Vijay Kumar in the Punjab and Haryana High Court.


SC Ruling Overturns HC Stance


A single judge HC bench ruled in Vijay Kumar’s favour stating that the original owner may not be held liable in cases where there was clear evidence of the vehicle being sold and the last owner admitting ownership.


One of the later owners challenged the HC judgment in the SC where advocate Rishi Malhotra appearing for him, said the court could not render a decision contrary to law.

Malhotra pointed out that under Section 2(30) of the Motor Vehicles Act, 1988, the person in whose name a motor vehicle gets registered remains the owner and therefore is alone liable for payment of compensation.


Registration Records Defines Ownership


Ruling on the appeal, a three-judge SC bench stated that if a vehicle owner continues to be “reflected in the records of the registering authority” as the owner, then the person would “not stand absolved of liability.”


The ruling also stated that the Parliament has “consciously” added “the expression ‘owner’ in Section 2(30)” so as to ensure that any one affected by a motor accident must not “be left in a state of uncertainty”.

The bench said that any claimant for compensation should not be required to follow “a trail of successive transfers” that are not registered with the registering authority, and that to “hold otherwise” would defeat “the statutory object and purpose of the Act.”




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