The automobile industry is growing leap and bounds and simultaneously the second hand/resale vehicle market. One can easily find various commercial websites which are selling the second hand used cars. The exchange offers wherein the value of the old car is set off from the price of a new car is also a common phenomenon.
In practice when we sell or our car to an agent, dealer or any other person usually we execute a Form 29/30 and a possession acknowledgement slip. The seller delivers all the documents and is made to understand that from the date of handover of the physical possession of the vehicle the responsibility in respect of the vehicle vests on the shoulders of the new buyer. A gullible seller buys peace of mind with possession acknowledgement slip mentioning responsibility of the buyer from the date of possession. But the legal position is absolutely contrary to it. Though the civil liability ceases technically, the liability for the purpose of the Motor Vehicle Act, 1988 continuous till the time the title is transferred.
The Motor Vehicles Act, 1988 provides the following definition of owner of vehicle:
“Section 2(30) “owner” means 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”
Section 50 of the Motor vehicles Act, 1988 mandate that where the ownership of any motor vehicle is transferred the transferor shall within fourteen days of the transfer, report the fact of transfer to the registering authority and shall simultaneously send a copy of the said report to the transferee. The Transferee shall also bound to report the transfer within thirty days to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept. The Transferee shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration.
The Supreme Court of India in case of Naveen Kumar v. Vijay Kumar, (2018) 3 SCC 1
“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 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 of this Court in Reshma [HDFC Bank Ltd. v. Reshma, (2015) 3 SCC 679 and Purnya Kala Devi [Purnya Kala Devi v. State of Assam, (2014) 14 SCC 142.
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. In T.V. Jose [T.V. Jose v. Chacko P.M., (2001) 8 SCC 748], this Court 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.”
The reason why the ‘Registered Owner’ is held liable to pay compensation under the Motor Vehicles Act, 1988 is that the legal heirs/victim of a Road accident cannot be burdened with the job of finding the trail of innumerable successive buyer who kept on transferring the vehicle without bothering to transfer the title in RC records. In case this opposite position is upheld, the victim will struggle in finding the details of successive buyers, the documents to prove the sale and purchase of vehicle which are not under his/her control and the purpose of giving expeditious compensation to the to victim/bereaved family will get defeated.
Let us understand this by an illustration. Mr. A sold the vehicle to Mr. B on 1st January and executed Form 29/30 and possession acknowledgement slip. The insurance lapsed on 1st January itself. The physical possession of the vehicle was given to Mr. B and he started using it. Both the parties did not bother to get the vehicle transferred in the RC record in the Regional Transport office in Registration Certificate (RC) records. The vehicle met with an accident on 10th January and Mr. Z die. The vehicle was uninsured. The legal heirs of Mr. Z filed a claim in Motor Accident Claims Tribunal.
In given facts, as Mr. A is continuing to be registered owner in the record of RTO he will be liable to pay compensation to the legal heirs of deceased Mr. Z. Though Mr. A may file a civil suit against the transferee Mr. B to recover the compensation paid by him.
So, next time you are planning to sell your vehicle do ensure that the name of the buyer is transferred in the RC records.
