The liability of the original owner of a vehicle to a third person is not absolved by the transfer of ownership, as long as their name continues in the RTO records.

ORDER :

S.N. Variava, J. - These appeals are filed against the judgment of the High Court of Kerala dated 13-11-1997.

2. Briefly stated, the facts are as follows: on 21-6-1977, an accident took place which resulted in an injury to the first respondent. The first respondent filed a claim before the Motor Accidents Claims Tribunal wherein the person in whose name the car was registered i.e. the appellant (herein) was the first respondent, the driver of the vehicle was the second respondent and the insurance company was the third respondent. An ex parte decree came to be passed in that matter. However, the same was set aside and thereafter the appellant and the driver filed written statements. The appellant claimed in his written statement that he had already sold off the vehicle to the 4th respondent herein. The driver in his written statement stated that the vehicle was owned by the 5th respondent (herein) and he was in the employment of the 5th respondent. The claimant, therefore, made an application to join the 4th and 5th respondents to his petition. By an order dated 12-11-1986 they were impleaded as Respondents 4 and 5 to the original petition. The trial then proceeded. Having considered the evidence led by the parties, the Motor Accidents Claims Tribunal came to the conclusion that the accident was due to the negligence of the driver and awarded compensation. It, however, held that the appellant was not liable as he had already transferred the vehicle to Respondent 4 who, in turn, transferred it to Respondent 5. The Tribunal, therefore, fastened the liability on the driver and Respondent 5 but also held Respondent 4 liable to pay compensation. The Tribunal absolved the insurance company on the ground that the sale of the vehicle was not intimated to it and that, therefore, it was not liable to pay compensation.

3. The appeals were filed by Respondents 4 and 5 before the High Court. The High Court has by the impugned judgment held that the appellant alone was liable to pay the compensation because the name of the appellant continued in the records of RTO. The High Court held that the appellant continued to be the owner of the vehicle. The High Court has also held that as the appellant was liable, he was entitled to be indemnified by the insurance company in terms of the insurance policy.

4. These appeals are filed by the appellants. The insurance company has chosen not to file any appeal. The question before this Court is whether by reason of the fact that the vehicle has been transferred to Respondent 4 and thereafter to Respondent 5, the appellant got absolved from liability to the third person who was injured. This question has been answered by this Court in T.V. Jose (Dr.) v. Chacko P.M., (2001) 8 SCC 748 , wherein it is held that even though in law there would be a transfer of ownership of the vehicle, that, by itself, would not absolve the party, in whose name the vehicle stands in RTO records, from liability to a third person. We are in agreement with the view expressed therein. Merely because the vehicle was transferred does not mean that the appellant stands absolved of his liability to a third person. So long as his name continues in RTO records, he remains liable to a third person.

5. The question then arises whether Respondents 4 and 5 get absolved and/or not liable to pay compensation as held by the High Court. This question has also been answered by this Court in Rajasthan SRTC v. Kailash Nath Kothari, (1997) 7 SCC 481, wherein it has been held that the person who is in actual possession of the vehicle would be liable to pay the compensation.

6. On behalf of the appellants it was submitted that the authority of Rajasthan SRTC case, (1997) 7 SCC 481 lays down that the owner gets absolved of liability. In support of this contention, the following observations, in para 17, are relied upon: (SCC p. 488)

"17. ... If the original employer is able to establish that when the servant was lent, the effective control over him