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2021 Supreme(Online)(KER) 23863
HIGH COURT OF KERALA
NATIONAL INSURANCE COMPANY LTD. – Appellant
Versus
RATHEESH – Respondent
MACA 2045 2013
The registered owner of a vehicle remains liable for compensation to victims regardless of post-ownership sales if not properly registered, and standard act-only insurance policies do not cover pillion riders.
Headnote:
Liability - Motor Vehicle Accidents - MV Act 1988 Sections 2(19), 2(30) - The court interpreted the definitions of 'owner' under the MV Act and concluded that the liability to compensate victims rests with the registered owner, regardless of subsequent sale agreements.
Fact of the Case:
The petitioner, riding as a pillion on a motorcycle, sustained injuries due to negligent driving. He sought Rs.1,50,000 as compensation from the Tribunal, and the motorcycle’s registered owner contested liability citing a sale.
Finding of the Court:
The Tribunal wrongly held the insurance company liable, failing to recognize the policy did not cover pillion riders. The registered owner's liability remained intact despite the sale of the motorcycle as he was still listed as the owner.
Issues: Whether the registered owner remains liable to compensate for damages despite selling the motorcycle and whether the insurance policy covers pillion riders.
Ratio Decidendi: The court established that ownership under the MV Act is defined broadly to ensure victims are not left without recourse. The statutory policy only covered third-party risks, excluding pillion riders.
Final Decision: The appeal was allowed, the Tribunal's order imposing liability on the insurer was set aside, confirming the registered owner's liability to compensate the petitioner.
J U D G M E N T
Third respondent in O.P.(MV)No.1124 of 2006 on the file of the Motor Accidents Claims Tribunal, Perumbavoor is the appellant. The original petitioner and respondent Nos.1 and 2 (owner and driver) of the motorcycle bearing registration No.KL-
7/R-1659 are the respondents herein.
2. Heard the learned counsel on both sides.
3. Brief facts of the case are as follows:-
The petitioner, who was riding as pillion of motorcycle bearing registration No.KL-7/R-1659, met with an accident in consequence of rash and negligent driving of the motorbike by the second respondent.
4. The original petitioner, who sustained injuries, approached the Tribunal and claimed compensation to the tune of Rs.1,50,000/-.
5. R2, the driver of the motorcycle was set ex-
parte by the Tribunal.
6. R1 filed written statement contending that the motor bike was owned by him till 18.05.2004 and thereafter, the same was sold to one Reneesh as per written agreement. Therefore, the ownership and possession of the vehicle was alleged to be at the hands of the above said Reneesh.
7. Third respondent, the appellant herein filed written statement admitting valid policy to the vehicle to cover the risk of third parties alone. At the same time, the insurer contested, categorising the policy as an act only policy, that the said policy did not cover the risk of a pillion rider/the petitioner.
8. The learned Tribunal jointly tried this case along with O.P.(MV) Nos.1023 of 2006 and 1353 of 2006 and thereafter, Rs.54,223/- was granted as compensation to the original petitioner with interest at the rate of 8%, fastening liability on respondents 1 to 3 with direction to the company to deposit the same.
9. While canvassing interference in the impugned award, it is submitted by the learned counsel for the appellant, the insurance company that the contention raised by the insurance company in the written statement denying liability to the pillion rider had not been considered by the Tribunal or no issue framed in this regard. The learned counsel highlighted Ext.B1 policy with nomenclature 'liability only' policy, where no amount to cover the risk of a pillion rider, except the risk of third parties, was collected as premium. On a perusal of Ext.B1 policy, it appears that the policy is a statutory policy covering the risk of third parties alone and not covering the risk of a pillion rider. Thus, it is held that Ext.B1 is a statutory policy, which does not cover the risk of pillion rider i.e. the petitioner herein.
10. However, it is zealously argued by the learned counsel for the first respondent, the alleged RC owner of the vehicle, by asserting that the first respondent was not the owner of the vehicle and the vehicle was sold to one Reneesh as on 18.05.2004. He highlighted the evidence of the above said Reneesh, who was examined as RW2 before the Tribunal. The evidence of RW2 would show that he admitted that he had purchased the vehicle on 18.05.2004, though the carbon copy of the sale agreement attempted to be marked through the witness was refused by the Tribunal since the same was a copy. It is true that despite specific contention in this regard, no impleadment was carried out insofar as the alleged transferee of the motorcycle.
11. On perusal of the evidence of RW2, the same would go to show that Reneesh admitted purchase of the motorcycle bearing registration No.KL-7/R-1659 on 18.05.2004. During cross-examination, he had given evidence that he did not possess any properties and he was aware about the procedure for transferring ownership but, he did not transfer the ownership so far.
12. In this context, it is necessary to refer three Bench decision of the Honourable Supreme Court reported in [(2018) 3 Supreme Court Cases 1],Naveen Kumar v. Vijay Kumar and Others. In the said decision, it has been categorically held that where a motor vehicle is subject to an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement is t
