IMPORTANT POINT
A motor vehicle dealer is not liable for compensation claims arising from accidents involving vehicles sold but not registered, as the property in the vehicle passes to the buyer upon delivery, and the registration obligation lies with the owner.

JUDGMENT :

JUSTICE N.SESHASAYEE

PRAYER : Civil Miscellaneous Appeal filed under Order 43 Rule 1 Code of Civil Procedure 1908 read with Section 173 of Motor Vehicles Act, 1988, praying to set aside the award in M.C.O.P. No.473/2019 dated 10.03.2022 on the file of the Chief Judicial Magistrate cum Motor Accidents Claims Tribunal, Krishnagiri.

1. Can a liability be fastened on the dealer of the motor vehicle for payment of compensation to a victim of a motor accident of an unregistered, uninsured motor vehicle, is the issue that engages this Court in this appeal. This issue has visited another learned single Judge of this court earlier in The Managing Director, Sakthi Auto Agencies Vs Santhi and others [2023 (1) TNMAC 584]. More about it later.

Facts

2.1 The appellant herein is a dealer of two wheelers, in Krishnagiri. On 19.01.2018, it had sold the two wheeler in question to the second respondent, and delivered it to the purchaser under Ext.R1 delivery challan. This two wheeler was then removed to Chennai. Couple of months have elapsed since the purchaser had taken delivery, still she chose not to register the vehicle.

2.2 While so, on 26.03.2018, the husband of the second respondent, the 3rd respondent herein, drove the said two wheeler negligently in a public place and dashed against the two wheeler of the claimant bearing Reg.No.TN 24 S 4320. Seeking compensation, the victim of the accident moved the MACT with MCOP 473 of 2019.

2.3 The Tribunal had determined the compensation payable at Rs.6,27,222/- and directed the appellant herein, the dealer of the said offending vehicle to pay it, and then to recover the same from its purchaser, the second respondent and its rider at the relevant time, the 3rd respondent.

3. Contending it is not liable to pay compensation as it is a mere dealer of two wheelers, the appellant has approached this Court with this appeal.

Arguments:

4. The learned counsel for the appellant submitted:

a) for any tortious liability that arises out of the use of a motor vehicle in a public place, the principal liability is on the owner of the vehicle, irrespective of whether the vehicle is insured or not. Once the vehicle is sold and delivered, the property in the good gets vested in the purchaser thereof. In the present case, the appellant has sold the vehicle, and has also delivered it to the second respondent as evidenced by Ext.R1, delivery challan, wherein after only the second respondent will be principally liable for all the consequences that may arise out of the use of the two wheeler in a public place. Indeed, the second respondent had also executed a written undertaking, taking responsibility for the same which is annexed to Ext.R1.

b) It is true, that the two wheeler sold to the second respondent was not registered at the time of the accident. But, under Sec.39 of the M.V.Act, the duty to register a motor vehicle is on the owner of the vehicle and not the dealer.

5. Per contra, the learned counsel for the claimant (the first respondent herein) made a pointed statement that while it is true that under Sec. 39 of the Sale of Goods Act, the property in the good will be transferred on delivery, it should not be read in isolation but along with Rule 42 of the Central Motor Vehicle Rules, 1989 (henceforth the CMV Rules). It mandates that no trade certificate holder (by which term it signifies a dealer of a motor vehicle), shall deliver a motor vehicle to a purchaser without a temporary or a permanent registration. Placing reliance on the ratio in Commissioner of Commercial Taxes, Thiruvananthapuram, Kerala Vs K.T.C.Automobiles [(2016) 4 SCC 82], the learned counsel argued that so far as a motor vehicle is concerned, the property in the good is transferred only upon its registration, which view was followed by this Court in The Managing Director, Sakthi Auto Agencies Vs Santhi and others. [2023 (1) TNMAC 584]. In Sakthi Auto Agencies case, this Court was confronted with an identical situation, and a learned Single Judg