important point
When a vehicle under requisition by the State meets with an accident, the State is liable to pay the compensation and not the owner.

JUDGMENT

S.B. SINHA, J.—

1.Leave granted.

2.The short question involved in this appeal arising out of a judgment and order dated 17.05.2005 passed by the High Court of Himachal Pradesh in FAO (MVA) No. 208 of 1997 is as to whether in the event a car is requisitioned by the State for the purpose of deploying the same in the election duty, who would be liable to pay compensation to the victim of the accident in terms of the provisions of the Motor Vehicles Act, 1988 (for short “the 1988 Act”).

3.Respondent No. 3 was the owner of a Maruti Gypsy bearing Registration No. HIS 6095. Appellant Company issued a policy of insurance in favour of Respondent No. 4 for the said Maruti Gypsy for the period 10.06.1993 to 9.06.1994. In regard to limitation of its use, the insurance policy provided:

“For private car IXI and Motor Cycle/Scooter IYI. Use only for social, domestic and pleasures and insured’s own purpose”

4.The car in question was requisitioned during the Assembly Elections in the year 1993 by the Sub-Divisional Magistrate Rampur through the Deputy Commissioner, Shimla. The said vehicle was in possession as also under the control of the said officer. On or about 17.11.1993 while the Sub-Divisional Magistrate Rampur was travelling in the said vehicle, an accident occurred as a result whereof a boy named Satish Kumar sustained injuries. He later on expired.

5.Respondent No. 1 Deepa Devi and Joginder being the heirs and legal representatives of the deceased filed an application for compensation in terms of Section 166 of the 1988 Act. The State of Himachal Pradesh as also the Sub-Divisional Magistrate Rampur were impleaded therein. The Motor Accident Claims Tribunal in its judgment dated 28.09.1996 upheld the contention of the Insurance Company that under the terms of the insurance policy, it was not liable to reimburse the owner of the vehicle as regards his liability to pay compensation on account of said accident. A Division Bench of the High Court, however, by reason of the impugned judgment, has set aside the said award of the Tribunal, holding:

“In view of the above discussion, the appeal is allowed and the award of the Tribunal is modified and it is held that the owner of the vehicle, the State Government and the Insurance Company are all jointly and severally liable to pay the compensation. Since the vehicle was insured with the Insurance Company it shall deposit the amount payable to the claimants–”

6.Mr. Parmanand Gaur, learned counsel appearing on behalf of the appellant, submitted that having regard to the definition of ‘owner’ as contained in Section 2(30) of the 1988 Act and as the vehicle in question was not used for the purpose for which the contract of insurance was entered into, the judgment of the High Court cannot be sustained. Strong reliance in this behalf has been placed on Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and Others1, [(1997) 7 SCC 481].

7.Mr. J.S. Attri, learned counsel appearing on behalf of Respondent Nos. 5 and 6, on the other hand, would support the judgment contending that this Court in Guru Govekar v. Miss Filomena F. Lobo and Others2, [(1988) 3 SCC 1] has categorically held that even if the vehicle remains in possession of a third party, the registered owner of the vehicle shall continue to be the owner within the meaning of the provisions of the 1988 Act and, thus, would be liable for payment of damages to the victims of an accident.

8.The 1988 Act was enacted to consolidate and amend the law relating to motor vehicles. It repeals and replaces the Motor Vehicles Act, 1939 (for short “the 1939 Act”).

9.“Owner” has been defined in Section 2(19) of the 1939 Act to mean :

“In this Act, unless the context otherwise requires,

xxx xxx xxx

(19)“owner” means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a higher purchase agreement, the person in possession of the vehicle under that agreeme