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2023 Supreme(Online)(MAD) 34880
MADRAS HIGH COURT
M/s.Chinnasamy Agencies – Appellant
Versus
Amala Jesudas – Respondent
CMA 1066 2022
A dealer of a motor vehicle is not liable to pay compensation to the third party for the negligence of the buyer of the motor vehicle, merely because the vehicle was unregistered at the time when the dealer delivered the vehicle to the purchaser in violation of Rule 42 of the CMV Rules.
Headnote:
MOTOR VEHICLE - LIABILITY - DEALER - THIRD PARTY CLAIM - REGISTRATION - MV ACT, 1988 - SALE OF GOODS ACT, 1930 - CMV RULES, 1989 - Rule 42 of the CMV Rules, 1989, which prohibits a dealer from delivering a motor vehicle to a purchaser without registration, does not postpone the vesting of property in the motor vehicle, but only imposes certain restriction on the dealer to deliver it to the purchaser. - Rule 44 of the CMV Rules, 1989, which provides for suspension or cancellation of trade certificate for breach of Rule 42, does not state anything about the vesting or divesting of property which had vested in a buyer. - Sec.140 of the MV Act, 1988, states that only an owner of a motor vehicle will be liable to pay compensation to the third parties. - Rule 47 of the CMV Rules, 1989, which enables registration within one week after delivery of a motor vehicle, reduces Rule 42 proscription to a directory requirement. - Therefore, the statutory intent behind violation of Rule 42 is penalising the dealer with cancellation or suspension of trade certificate, and not mulcting it with any liability which the buyer of a motor vehicle is principally required to meet.
Fact of the Case:
The appellant, a dealer of two wheelers, sold a two wheeler to the second respondent and delivered it to her under Ext.R1 delivery challan. The two wheeler was then removed to Chennai. A couple of months later, the husband of the second respondent 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. 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.
Finding of the Court:
The Court held that the appellant, the dealer of the motor vehicle, is not liable to pay compensation to the third party for the negligence of the buyer of the motor vehicle, merely because the vehicle was unregistered at the time when the dealer delivered the vehicle to the purchaser in violation of Rule 42 of the CMV Rules.
Issues: Whether a dealer of a motor vehicle would be tortiously liable for the negligence of the purchaser merely because the vehicle was unregistered at the time when the dealer delivered the vehicle to the purchaser in violation of Rule 42 of the CMV Rules.
Ratio Decidendi: The Court held that: - Rule 42 of the CMV Rules, 1989, which prohibits a dealer from delivering a motor vehicle to a purchaser without registration, does not postpone the vesting of property in the motor vehicle, but only imposes certain restriction on the dealer to deliver it to the purchaser.- Rule 44 of the CMV Rules, 1989, which provides for suspension or cancellation of trade certificate for breach of Rule 42, does not state anything about the vesting or divesting of property which had vested in a buyer.- Sec.140 of the MV Act, 1988, states that only an owner of a motor vehicle will be liable to pay compensation to the third parties.- Rule 47 of the CMV Rules, 1989, which enables registration within one week after delivery of a motor vehicle, reduces Rule 42 proscription to a directory requirement.- Therefore, the statutory intent behind violation of Rule 42 is penalising the dealer with cancellation or suspension of trade certificate, and not mulcting it with any liability which the buyer of a motor vehicle is principally required to meet.
Final Decision: The appeal was allowed, and the appellant was relieved of the obligation to pay the compensation as awarded by the Tribunal, and the first respondent, the claimant, was at liberty to realise the compensation from the second respondent.
C.M.A.No.1066 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 15.12.2023
Pronounced on : 22.12.2023
CORAM : JUSTICE N.SESHASAYEE
C.M.A.No.1066 of 2022
and CMP.No.7829 of 2022
M/s.Chinnasamy Agencies
Authorised Main Dealer
TVS Motor Company Ltd.,
276, Bangalore Road
Krishnagiri - 635 001.
... Appellant / 3rd Respondent
Vs
1.Amala Jesudas
2.Suganthi
3.Gopi
... Respondents / Petitioner ,
Respondents 1 & 2
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.
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C.M.A.No.1066 of 2022
For Appellant
: Ms. B.S.Mitraneshaa for
Mrs.V.Srimathi
For Respondents
: Mr.C.Prabakaran for R1
R2, R3 - No Appearance
JUDGMENT
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
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C.M.A.No.1066 of 2022
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,
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C.M.A.No.1066 of 2022
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
