The financier is not liable for compensation when the vehicle is uninsured and not in their possession, as defined by the Motor Vehicles Act.

JUDGMENT

1" August, 2022

B.P. Routray, J.

1. Present appeal by the insurer is directed against the judgment dated 21 February, 2018 passed by the learned 2™ M.A.C.T. (Southern Division), Berhampur, Ganjam in M.A.C. Case No.69/2010 (284/2008-GDC) wherein compensation to the tune of Rs.2,00,000/- has been granted along with simple interest @6% per annum from the date of filing of the claim application, i.e.24.10.2008 to the minor daughter of the claimant due to the motor vehicular accident dated 7.1.2008.

2. Since the vehicle was not insured, the learned Tribunal while directing for payment of compensation by present Appellant, i.e. Manager, ICICI Bank Ltd., Dharmanagar, Berhampur has granted liberty to the Bank to realize such amount from the Respondent No.2- owner of the offending motorcycle bearing Registration No.OR-07-N- 1942, namely, Surendra Patro.

3. Admittedly the offending vehicle was hypothecated to the present Appellant at the time-of purchase-and continued to be so on the date of accident, as the financier.

4. Learned counsel for the Appellant'submitted that in view of clear definition of ‘owner’ of the motor vehicle, the financier cannot be held liable for payment of compensation. But the learned Tribunal violating the law has directed the financier to pay the compensation with liberty to realize the same from the owner.

5. None appeared for Respondent-No:2-owner despite a set of lawyers have entered appearance for him by filing power.

6. Learned counsel for Respondent No.1-claimant submitted that considering the poor status of the claimant, the direction of the learned Tribunal to the financier to pay the compensation and recover the same from the owner cannot be faulted with.

7. Before proceeding further, it is important to look into the provisions contained in Section 2 (30) of the Motor Vehicles Act, 1988 that defines owner. It is reproduced herein below:

“2(30) “owner” means a person in whose name a motor vehicle stands registered and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.”

8. As seen from the impugned award, learned Tribunal has observed under Issue Nos.(ii) & (iii) that the hypothecation of the offending motorcycle with Respondent No.2-Bank at the time of accident causing injury to G. Hari Priya Patro has not at all been disputed/denied in the pleadings of the Respondent No.2. Before this Court also, the claimant (present Respondent No.1) does not dispute such hypothecation of the offending motorcycle» with the present Appellant-Bank as the financier. Therefore, as per the definition of owner contained in Section 2 (30) of the M.V. Act, 1988, Surendra Patro (present Respondent No.2) is the undisputed owner of the offending motorcycle being the person in possession of the offending motorcycle under the hypothecation agreement.

9. The Supreme Court in the case of HDFC Bank Ltd. vs. Reshma and others , (2015) 3 SCC 679 , adverting to the principles laid down in various earlier decisions, held as follows:

“On a careful analysis of the principles stated in the foregoing cases, it is found that there is a common thread that the person in possession of the vehicle under the hypothecation agreement has been treated as the owner. Needless to emphasise, if the vehicle is insured, the insurer is bound to indemnify unless there is violation of the terms of the policy under which the insurer can seek exoneration.

In Purnya Kala Devi (supra), a three-Judge Ben