IMPORTANT POINT
If in case of financing and hypothecation the owner drives the vehicle without statutory insurance in violation of the M.V. Act and terms of hypothecation and meets with accident, the financier even though registered as owner shall not be liable and responsible.

JUDGMENT

Dipak Misra, J.

Leave granted in both the Special Leave Petitions.

2. In these appeals, by special leave, the assail is to the judgment and order dated 22.10.2013 passed by the learned Single Judge of the High Court of judicature of Madhya Pradesh Bench at Indore in Misc. Appeal No. 2261 of 2005 preferred by the Centurion Bank Limited, the predecessor-in-interest of the appellant herein, and Misc. Appeal No. 3243 of 2005 preferred by the claimants, the 1st respondent herein, whereby the High Court has dismissed the appeal preferred by the appellant herein and allowed the appeal of the claimants by enhancing the awarded sum to Rs. 3 lacs opining that the said amount would be just and equitable compensation for the injuries sustained by her. The High Court also dismissed the review petition no. 619/2013 vide order dated 13.05.2014 preferred by the appellant herein. Be it stated, the Additional Member, Motor Accident Claims Tribunal, Indore had awarded Rs.1,75,000/- in Claim Case No.181/2003.

3. Filtering the unnecessary details, the facts which are requisite to be stated are that on 20.12.2002 about 12.30 p.m. the claimant was going on a scooter bearing registration No. MP09Q92 from Shastri Bridge to Yashwant Square and at that time the Motor Cycle belonging to 2nd respondent and driven by the respondent No.3 herein, in a rash and negligent manner dashed against the scooter as a consequence of which she sustained a fracture in the right hand superacondylar fracture and humerus bone fracture and certain other injuries. She availed treatment at various hospitals as she had to undergo an operation and thereafter advised to take physiotherapy regularly. Keeping in view, the injuries suffered and the amount she had spent in availing the treatment, she filed a claim petition putting forth the claim for Rs.4,50,000/-. The tribunal as stated earlier awarded a sum of Rs.1,75,000/- with 6% interest and opined that all the non-applicants to the claim petition were jointly and severally liable to pay the compensation amount. It is apt to state here the stand and stance put forth by the predecessor-in-interest the appellant bank that it had only advanced a loan and the hypothecation agreement was executed on 1.11.2002 by it. As per the terms of the agreement, the owner of the vehicle was responsible to insure the vehicle at his own costs. Reliance was placed on Clause 16 and 17 of the loan agreement which stipulated that the bank was required to get the vehicle insured if the borrower failed to or neglected to get the vehicle insured. The accident as stated earlier had taken place on 20.12.2002 and the vehicle was insured by the owner on 16.1.2003. It was further put forth by the bank that the owner deposited Rs.6,444/- with the dealer of the motor cycle i.e. Patwa Abhikaran Pvt. Ltd., whereas it was required to pay Rs.9,444/-. Despite the same, he obtained the possession of the vehicle on the same day itself which was not permissible.

4. It was urged before the tribunal the financer was not liable to pay the compensation and it was the exclusive liability of the borrower. The tribunal on scrutiny of the clauses opined that as the financer had a duty to see that borrower does not neglect to get the vehicle insured, it was also liable along with the owner and accordingly fastened the liability both jointly and severally.

5. In appeal, it was contended that the financer could not have been fastened with the liability to pay the compensation. The High Court referred to the definition clause in Section 2 (30) of the Motor Vehicles Act, 1988 (for brevity “the Act”), took note of the language employed in Clause 16 of the agreement that if the owner neglects to get the vehicle insured the bank was required to get it insured, and the fact that the financer and the borrower were the registered owners and, accordingly opined that the bank was liable to pay. Being of this view the learned Judge dismissed the appeal preferred by the bank and partl