Mere Failure To Transfer Vehicle Registration Will Not Invalidate Sale/Gift Of Vehicle: Supreme Court

The Supreme Court has observed that mere failure to get a transferred vehicle registered in the name of the new owner will not mean that the sale/gift transaction will get invalidated.

The Court made this observation in the context of deciding whether the non-disclosure of three vehicles allegedly owned by the family members of Arunachal Pradesh MLA Karikho Kri in the election affidavit would amount to a 'corrupt practice' invalidating his election.

On facts, the Court found that the three vehicles in question - a scooty, a Maruti Omni car and a motorcycle- were transferred to third parties for consideration. However, their registration was not transferred in terms of the Motor Vehicles Act 1988.

So, the question was whether the vehicles would be treated as belonging to the legislator's family solely because of the non-transfer of their registration and whether it would invalidate his nomination.

The High Court, to hold that the vehicles would be still treated to be belonging to the legislator's family, relied on the Supreme Court judgment in Naveen Kumar vs. Vijay Kumar and others (2018). However, in the instant case, the Supreme Court observed that Naveen Kumar was not applicable as it related to the liability of the registered owner towards claimants of motor accident compensation when the Registration Certificate was not changed post the sale of the vehicle.

"Notably, the High Court overlooked the fact that the above judgment(Naveen Kumar) was rendered in the context of and for the purposes of the Act of 1988 and not for general application," the Court observed.

The Court stated that vehicles being goods, their sale would be covered by the provisions of the Sale of Goods Act, 1930 , and the same make it clear that conveyance of ownership of the vehicle would stand concluded upon execution of the document of sale/transfer and registration of the new owner by the authorities concerned would be a post-sale event.

Regarding the present case, the Court noted that the vehicles in question were transferred and the requisite forms, insofar as the transferor was concerned, were filled up and issued but it was the transferees who failed to get the vehicles transferred in their own names.

In this backdrop, the bench comprising Justices Aniruddha Bose and PV Sanjay Kumar observed :

"Mere failure to get registered the name of the new owner of an already registered vehicle does not mean that the sale/gift transaction would stand invalidated and such a vehicle, despite being physically handed over to the new owner, cannot, by any stretch of imagination, be treated as still being in the possession and control of the former owner."

Reversing the decision of the Gauhati High Court which had declared the election of the Independent MLA Karikho Kri from the Tezu Assembly Constituency in Arunachal Pradesh as null and void, the Judgment authored by Justice Sanjay Kumar held that the non-disclosure of vehicles formerly owned by the candidate's dependents cannot be held to be a corrupt practice as per Section 123(2) of the Representation of the Peoples Act 1951.

Finding such vehicles to be either gifted or sold before the filing of the nomination by Kri, the Court said that the vehicles could not be considered to be still owned by Kri's wife and son.

The Supreme Court noted the fact that before the filing of the nomination by Kri, the vehicles owned by the dependents of Kri were already sold/gifted to another person, hence, it is not incumbent upon the candidate to disclose the details of the vehicle formerly hold by the candidate's dependents.

“Therefore, non-disclosure of the three vehicles in question could not be held against Karikho Kri in the light of the aforestated analysis. Such non-disclosure cannot, by any stretch of imagination, be treated as an attempt on his part to unduly influence the voters, thereby inviting the wrath of Section 123(2) of the Act of 1951.”, the court observed.

Observing that the values of the vehicles previously owned by Kri's dependents were miniscule in the figure, the non-declaration of the vehicle details in the nominations wouldn't have an impact on the declaration of wealth by Kri.

"We may note that Karikho Kri had declared the value of the movable assets of his dependent family members and himself as 8,41,87,815/-. The value of the three vehicles in question, by comparison, would be a mere miniscule of this figure. In any event, suppression of the value of these three vehicles would have no impact on the declaration of wealth by Karikho Kri and such non-disclosure could not be said to amount to 'undue influence'.", the court observed.

Also from the judgment :

Counsel For Respondent(s) Dr. Sushil Balwada, AOR Mrs. Pragya Baghel, AOR Ms. Tatini Basu, AOR Mr. Boboy Potsangbam, Adv. Mr. Gamso Billai, Adv. Mr. Kumar Shashank, Adv. Mr. Byrapaneni Suyodhan, Adv.

Case Title:  KARIKHO KRI vs. NUNEY TAYANG, C.A. No. 004615 / 2023

Citation: 2024 LiveLaw (SC) 290

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