The legal effect of transferring ownership of a vehicle under the Sale of Goods Act and the subsequent liability of the new owner for damages or accidents.

M.N. Krishnan, J.

1. This appeal is preferred against the award of the Motor Accident Claims Tribunal, Palakkad in OP (MV) No. 472/95. One Vaarkey Lucca, husband of the first petitioner in the claim petition and father of claimants 2 to 4 sustained injuries in a road accident and the tribunal awarded a compensation of Rs.61,520/-. The main dispute was with respect to the ownership of the vehicle.

2. R1 admittedly is the registered owner of the vehicle. It is the case of R1 that by virtue of an agreement dated 05/03/95 in favour of the 3rd respondent in the claim petition, the 1st respondent had transferred the vehicle involved in the accident in favour of the 3rd respondent for a consideration of Rs.5,500/- and on the very same day he had handed over the registration book and sale letter etc. and the 3rd respondent had taken possession of the vehicle. It is also specifically stated in the agreement that:

(MALAYALAM)

So by recitals in the agreement the 3rd respondent has undertaken to discharge the liability that will be take place after the date of sale i.e. on 05/03/95. The said agreement has been proved by examining the 1st respondent as RW 1 and one of the attesting witness as RW 2. So Ext. B1 stands proved.

3. Then what is the legal effect of Ext. B1 is the only question that has to be considered. It is true that the ownership of the vehicle stood in the name of the1st respondent on the date of the accident. But 16 days prior to the accident the1st respondent has received consideration and parted possession of the vehicle and the 3rd respondent has undertaken to be liable for any damages or accident that takes place subsequent to 05/03/95. Being a transfer of movable property the sale is governed under the provisions of the Sale of Goods Act. Under the Sale of Goods Act, when consideration is received and possession is parted with completely then there is divestiture of title and therefore the previous person does not have any right or interest in the vehicle. In this case, more specifically the 3rd respondent has categorically undertaken to wipe out of the liability that arises on account of the usage of the vehicle subsequent to 05/03/95. There had been decision of this Court under the old provisions of Section 31 of the Motor Vehicles Act, 1939 that transfer of registration is only a subsequent procedure after the sale and it is not a condition for effecting a sale. So by the divestiture of title the right interest possession of the person had been transferred and the person who had purchased the vehicle by express terms of the contract had undertaken to discharge liability or risk that takes place subsequent to the date of the accident. Therefore the Court below committed an error in holding that just because the registration has not been transferred the registered owner is liable for the claim. By virtue of Ext. B1 agreement, R3 has undertaken to pay liability and he has become the owner of the vehicle. Therefore the finding of the tribunal that R1 is liable to pay the amount along with R3 has to be corrected and I make it clear that on the date of accident R3 was the absolute owner of the vehicle and therefore R2 and R3 in the claim petition are jointly and severally liable for the claim.

4. In the result, the MACA is allowed and the 1st respondent in the claim petition is exonerated from the liability and the claimants are at liberty to proceed against respondents 2 and 3 jointly and severally for the amount awarded.

The M.A.C.A is disposed of accordingly.