You own a vehicle and it is registered with the Regional Transport Office (RTO) in your name. Subsequently, you sell this vehicle to another person, but the vehicle continues to be shown in your name in the RTO records and is not transferred to the name of the new purchaser. In such circumstances, what if the vehicle meets with an accident? Who would be liable for compensation, if any, as the owner? Will it be you – the registered owner even though you have sold it, or the new purchaser who is using the vehicle after having purchased it (but who has not registered or transferred the vehicle in his name)?
Well, this question was answered by the Supreme Court in the case of Naveen Kumar v. Vijay Kumar, (2018) 3 SCC 1.
Firstly, let us see what is the definition of owner in the Motor Vehicles Act. Section 2(30) of the Motor Vehicles Act, 1988, defines owner (of a vehicle) as under:
“(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;”
Interpreting this clause, the Supreme Court observed that the person in whose name a motor vehicle stands registered is the owner of the vehicle for the purposes of the Act. The use of the expression “means” is a clear indication of the position that it is the registered owner whom Parliament has regarded as the owner of the vehicle.
The Court referred to the earlier Motor Vehicles Act of 1939, wherein the expression “owner” was defined in Section 2(19) as follows:
“(19) “owner” means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement.”
The Supreme Court held that the Parliament while enacting the Motor Vehicles Act, 1988 made a specific change by recasting the earlier definition. Section 2(19) of the earlier Act stipulated that where a person in possession of a motor vehicle is a minor, the guardian of the minor would be the owner and where the motor vehicle was subject to a hire-purchase agreement, the person in possession of the vehicle under the agreement would be the owner. The Court observed:
“The 1988 Act has provided in the first part of Section 2(30) that the owner would be the person in whose name the motor vehicle stands registered. Where such a person is a minor the guardian of the minor would be the owner. In relation to a motor vehicle which is the subject of an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement would be the owner. The latter part of the definition is in the nature of an exception which applies where the motor vehicle is the subject of a hire-purchase agreement or of an agreement of lease or hypothecation. Otherwise the definition stipulates that for the purposes of the Act, the person in whose name the motor vehicle stands registered is treated as the owner.”
The Court took note of Section 50 of the Act which deals with transfer of ownership of a vehicle, and also referred to various previous judgments, in particular, the following cases, which were affirmed:
- Pushpa v. Shakuntala, (2011) 2 SCC 240;
- T.V. Jose v. Chacko P.M., (2001) 8 SCC 748;
- P.P. Mohammed v. K. Rajappan, (2008) 17 SCC 624.
After considering all these aspects, the Supreme Court held:
“…in view of the definition of the expression “owner” in Section 2(30), it is the person in whose name the motor vehicle stands registered who, for the purposes of the Act, would be treated as the “owner”. However, where a person is a minor, the guardian of the minor would be treated as the owner. 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 treated as the owner. In a situation … where the registered owner has purported to transfer the vehicle but continues to be reflected in the records of the Registering Authority as the owner of the vehicle, he would not stand absolved of liability. Parliament has consciously introduced the definition of the expression “owner” in Section 2(30), making a departure from the provisions of Section 2(19) in the earlier 1939 Act. The principle underlying the provisions of Section 2(30) is that the victim of a motor accident or, in the case of a death, the legal heirs of the deceased victim should not be left in a state of uncertainty. A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the Registering Authority. To hold otherwise would be to defeat the salutary object and purpose of the Act. Hence, the interpretation to be placed must facilitate the fulfilment of the object of the law.”
Thus, it was clearly held by the Supreme Court that a person continues to be owner of the vehicle, even if he has sold his vehicle to another person, if the transfer of the vehicle is not reflected in the RTO records and if the vehicle continues to be in the name of the original owner despite the sale of vehicle. Accordingly, such original owner would continue to be liable for compensation, if any, to be paid by the owner for any accident, despite he having sold the vehicle.
It is therefore in the interest of those who sell their vehicles, to get the vehicles transferred in the name of the buyer by following the procedure laid down for transfer of vehicles, particularly in Section 50 of the Motor Vehicles Act, 1988.
I have sold my Private Car to a person after receipt of agreed money in the month of October,2021. Despite handing over the Original Registration Certificate ,Copy of my PAN Card with the required Transfer Application Form duly signed by me and the purchaser, to the concerned purchaser as per his verbal commitment, Ownership still lies in my name in the RTO records. I have contacted the purchaser over phone who only assures to transfer the Registration in his name but with no result visible till date.
Kindly advise me with the course of action in the matter. In this regard I want to bring to your kind information that I am an elderly person of 70+ and a chronic severe diabetic and heart patient who can not move from one place to another a any time always.
The vehicle is in my father’s name and my father died 3 years ago. We are three sons to my father. We have sold the vehicle to our relatives without transferring the registration of the vehicle to relative’s name. Now we want to transfer or re-register into relative’s name. But we are three brothers staying in different places except younger brother who stays at home. Is it possible for the younger brother alone to transfer the ownership work into the relative’s (purchaser) name or all three brothers have to be compulsorily be present in RTO office to transfer the ownership of the vehicle? can you kindly answer what is the common way. If one of the brothers who is present at home, can he easily do it. Otherwise it is becoming very difficult for all three brothers to present and then re-register it in relative’s name. Since younger brother tried to contact the RTO office and the officer says that all brothers are compulsorily come to RTO to transfer the vehicle, I doubt whether he is giving me right information from the authentic officer? What can be done in this case if one brother is not present at RTO to transfer the vehicle. Can it be transferred into purchaser’s name easily without one brother remaining present in the RTO? In the absence of one brother, can he declare in some way that he has no objection if younger brother transfers the vehicle to another party? Or what else can be done?
Difference between power of attorney and Affidavit sell