Registered owners of vehicles remain liable for compensation despite ownership transfer if not formally updated, and insurers must provide coverage for employees if appropriate premiums are paid.

JUDGMENT :

SANDEEP JAIN, J.

1. The instant appeal under Section 30 of the Employee's Compensation Act, 1923 has been filed by the insurer of the offending Qualis Car No.UA-07-C-6274 against the impugned judgment and award dated 03.11.2025 passed by the Employee Compensation Commissioner/Deputy Labour Commissioner, Moradabad in E.C.A. Case No. 111 of 2015 ( Ramchandrapal Singh and others vs. Nirdosh Kumar and others ), whereby for the untimely death of Dharamveer, who was employed as a driver on above vehicle, in a road accident that occurred on 26.02.2015, a compensation of Rs.8,26,495/- along with interest @ 12% per annum has been awarded to the claimants, which has been ordered to be indemnified by the insurer of the offending Qualis Car No.UA-07-C-6274.

2. Learned counsel for the appellant-Insurance Company submitted that the insurance policy of the above vehicle was taken by Rakesh but during the tenure of the policy the vehicle was sold to Nirdosh Kumar, which was also proved from the written statement submitted by them before the Commissioner. It was further submitted that the deceased was not an employee of Nirdosh Kumar, but was an employee of Rakesh, but since Rakesh sold the vehicle to Nirdosh Kumar prior to the accident, as such, there was no relationship of master and servant between the deceased and Nirdosh Kumar, hence, no compensation could have been awarded by the Commissioner to the claimants. It was further submitted that the insurance policy was not transferred in the name of Nirdosh Kumar, as such, the Insurance Company was not liable to pay any compensation to the claimants. It was further submitted that the Insurance Company has not taken any premium for insuring the driver of the above vehicle, which was proved from the insurance policy submitted before the Commissioner but still the Commissioner has held that the appellant was liable to indemnify the compensation payable to the claimants. With these submissions, it was prayed that the appeal involves substantial questions of law regarding the liability of the Insurance Company to indemnify the compensation in the absence of master and servant relationship between the deceased and the appellant, as such, it be admitted for hearing.

3. I have heard learned counsel for the appellant-insurance company and perused the impugned judgment and documents submitted with the appeal.

4. The Apex Court in the case of Pushpa @ Leela & others Vs. Shakuntala and others, (2011) 2 SCC 240 , has held that when transfer of ownership of vehicle was made prior to accident, but neither transferor nor transferee took any steps to change the name of owner in registration certificate, hence in view of the said omission transferor must be deemed to continue as the owner of the vehicle for the purposes of the Act, even though under the civil law he ceased to be its owner after its sale. It was held that the transferor was liable to pay compensation.

5. The Apex Court in the case of Brij Bihari Gupta vs. Manmet and others , 2025 SCC OnLine SC 1650 while considering the liability of registered owner and insurer in the case of transfer of ownership of offending vehicle, held as under:-

"10. There is considerable reliance placed by the insurer on the fact that the appellant had received the vehicle from the Magistrate's Court, asserting his ownership. The order directing handing over the vehicle to the appellant is produced as Annexure-R/4, in IA No. 190313/2022, where it is indicated that even at that point the registered owner's name was not changed. The registered owner was present before the Magistrate as we see from the order and while o