“Owner” under Section 2(30) of the Motor Vehicle Act, 1988 interpreted

Supreme Court: The questions that came before the bench of H.L. Dattu, CJ and Arun Mishra, J were whether in the wake of lease agreement entered into by registered owner with Karnataka State Road Transport Corporation (KSRTC), the registered owner and insurer along with KSRTC can be fastened with the liability to make payment to the claimants and that whether KSRTC can recover the amount from registered owner and its entitlement to seek indemnification from insurer.
Taking note of the definition of the term ‘owner’ as defined under Section 2(30) of the Motor Vehicle Act, 1988, the Court said that under the MV Act, the owner means a registered owner and where the agreement on hire-purchase or an agreement of hypothecation has been entered into or lease agreement, the person in possession of the vehicle is treated as an owner. It was held that the KSRTC being in actual control of the vehicle would also be liable to make the compensation, however, it can recover the amount from the registered owner or insurer, as the case may be. Regarding the liability of the insurer, it was held that the insurer cannot escape the liability, when ownership changes due to the hypothecation agreement It was further held that In the case of hire also, it cannot escape the liability, even if the ownership changes. Even though, KSRTC is treated as owner under Section 2(30) of the MV Act, the registered owner continues to remain liable as per terms and conditions of lease agreement lawfully entered into with KSRTC.
The Court, after referring to many decisions of this court, held that registered owner, insurer as well as KSRTC would be liable to make the payment of compensation jointly and severally to the claimants and the KSRTC in terms of the lease agreement entered into with the registered owner would be entitled to recover the amount paid to the claimants from the owner as stipulated in the agreement or from the insurer.[ Managing Director, K.S.R.T.C. v. New India Assurance Co.Ltd.,2015 SCC OnLine SC 1044, decided on 27.10.2015]

Source: Legal news India

1 Comment

  1. Respected Sir/Madam,
    i had given my 14.6 years old bike in exchange scheme at honda showroom in delhi and purchased a new bike in December, 2015. They had given a receipt in which the old bike no was mentioned stating that the same has been purchased by them and they are responsible in case of any misuse of the old bike. the receipt was also carrying a authorised dealer stamp but the receiipt was not on their letter head it was simply a printed format mentioning all the details. I thought the person who was sitting in the authorised dealer showroom who evaluated the vehicle cost is the showroom employee and assured that my old bike will not be misused. but i was shocked when i received a traffic challan of the same old bike which i given in exchange scheme in dec, 2015 and also the police personnel came to my house at 12.00 hrs in night carrying a handwritten note and instructed me to appear in the police station next day. i was extremely shocked what has happening with me. next day when i approached the honda dealer they simply told me to contact only to that person who has purchased the old bike as he only sits in the showroom and the receipt is not being issued by the honda itself. the person was still sitting there and assured me that he will solve the matter but nothing was done by him as he already sold the vehicle to another guy without completing the documents of transfer and the same was again sold to another guy who made a crime on my old bike. i have somehow or other sorted out that matter with police but the bike is sill in the police station i don’t want that bike but please advise me what steps i should take to save myself for any future problem. i have also given an intimation in the RTO office alongwith the copy of the receipt stating that the old bike has been sold out in december, 2016 and also deposited the challan which i received.

    it is my humble request to please guide me the precautionary measures to be taken.

    highly appreciate for your kind help in this matter

    thanx and regards

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