The liability of a finance company in a motor accident compensation case should be determined in accordance with the provisions of the Motor Vehicles Act 1988 and relevant judgments of the Hon’ble Apex Court.

JUDGMENT :

1. Instant appeal has been filed by the non-claimant/appellant against the impugned judgment and award dated 10.08.2000 passed by the Motor Accident Claims Tribunal, Jaipur (for short, ‘the Tribunal’) cum Rajasthan State Co-operative Tribunal, Jaipur in MAC Case No. 99/94, by which the claim petition filed by the claimant respondents was allowed and a direction was issued by the Tribunal to the appellant and the respondent No. 2 to pay an amount of compensation to the tune of Rs. 38,000/-.

2. Brief facts of the case are that an accident occurred on 30.11.1993 in which Radheyshyam as well as injured-Raghunath sustained certain injuries. Radheyshyam expired due to the injuries sustained by him in the accident. The matter was reported to the police where the FIR No. 422/1993 was registered against driver and the owner of the offending vehicle. Thereafter, two different claim petitions were submitted before the Tribunal, one by the dependents of the deceased Radheshyam and other by the injured claimant-respondent Raghunath. The learned Tribunal, after consolidating both the claims, passed a common judgment dated 10.08.2000 by fastening liability of making a payment of compensation upon the appellant, who is a financier of the vehicle as well as upon the registered owner of the vehicle, i.e. respondent No. 2.

3. At the outset it has been brought into the notice of this Court that two different appeals arising out of the common judgment dated 10.08.2000 were submitted before this Court. The connected appeal bearing SBCMA No. 439/2002 was decided by the Co-ordinate Bench of this Court vide order dated 11.04.2012 whereby the appeal filed by the appellant was dismissed.

4. Counsel submits that in view of the provisions contained under Section 168 of the Motor Vehicles Act 1988 (for short, ‘ the Act of 1988’), the appellant cannot be held liable to make the payment of compensation to the claimants because no such directions can be issued against the financer of the vehicle. She further submits that as per Section 168 of the Act 1988, such direction can be issued only against the insurer/owner/driver of the vehicle. She submits that the appellant is a finance company and did not fall within the definition of ‘owner’ as defined in Section 2, Sub-section 30 of the Act of 1988. Counsel submits that as per Section 146 of the Act of 1988, no person shall be allowed to use any motor vehicle in any public place unless and until the vehicle is insured. She further submits that this fact is not in dispute that the respondent No. 2 is the driver and owner of the vehicle and he used his vehicle in the public place without getting it insured as per the Section 146 of the Act of 1988. Counsel submits that after considering all these provisions, the Hon’ble Apex Court in the case of Godavari Finance Company Vs. Degala Satyanarayanamma and Ors; reported in (2008) 5 SCC 107 held that the Finance Company is not liable to pay any compensation to the claimants. She submits that reiterating the above provisions and following the aforesaid judgment, subsequently, the Hon’ble Apex Court in the case of HDFC Bank Limited Vs. Reshma and Ors.; reported in (2015) 3 SCC 679 has taken a similar view and has held that the finance company who financed the owner for the purchase of his vehicle and the owner had entered into a hypothecation agreement with the bank. The borrower had the initial obligation to insure the vehicle and if the vehicle is not insured, the Finance Company cannot be made liable to pay any amount of compensation to the claimants in the case if the vehicle meets with an accident. Counsel submits that though the submissions in this regard were made before the Coordinate Bench of this Court at the time of decision of SBCMA No. 439/2002, but these facts were not considered and the same were ignored by the Co-ordinate Bench of this Court. Counsel submits that the Hon’ble Apex Court in the case of Tribhuvandas Purshottamdas Thakur Vs. Ratilal Mot