Vehicle Owner As Per RTO Records Liable For Accident Even If It Occurred Within Prescribed 30 Days For Reporting Transfer: SC [Read Judgment]

“These timelines and obligations are only to facilitate the reporting of the transfer. It is not as if that if an accident occurs within the period prescribed for reporting said transfer, the transferor is absolved of the liability.”

It may be better to be late than never. But it is always safe and best to be at the earliest.

The Supreme Court held that, if an accident occurs within the period prescribed for reporting transfer of a vehicle, the transferor is not absolved of the liability, so long as his name continues in RTO records.

Prakash Chand Daga sold his santro car to Saveta Sharma on 11.09.2009. On 09.10.2009, one Rakesh was injured hit by the said car. Motor Accident Claims Tribunal, allowing the claim petition, directed Saveta Sharma and the Insurance company to pay compensation at Rs.12.47 lakhs to Rakesh.

On appeal filed by Saveta Sharma, the Punjab and Haryana High Court held that, despite the sale of the vehicle on 11.09.2009, no transfer of ownership, in accordance with Section 50 of the Motor Vehicles Act, 1988 was effected and thus Prakash Chand continued to be the owner in terms of definition as incorporated in Section 2(30) of the Act. This order was assailed before the Apex court.

Before the Apex court, it was contended that, since the accident had occurred within thirty days of the transfer when the statutory period as prescribed under Section 50(1)(b) of the Act had not expired and as such the liability could not be fastened on Prakash.

But the bench comprising of Justice Uday Umesh Lalit and Justice Dhananjaya Y. Chandrachud disagreed with this contention and said that timelines and obligations given in the Act are only to facilitate the reporting of the transfer and if an accident occurs within the period prescribed for reporting said transfer, the transferor is not absolved of the liability. It also said that, for the purposes of fixing liability, the concept of ownership has to be understood in terms of specific definition of ‘owner’ as defined in Section 2(30) of the Act.

The court said: “It is true that in terms of Section 50 of the Act, the transfer of a vehicle ought to be registered within 30 days of the sale. Section 50(1) of the Act obliges the transferor to report the fact of transfer within 14 days of the transfer. In case the vehicle is sold outside State, the period within which the transfer ought to be reported gets extended. On the other hand, the transferee is also obliged to report the transfer to the registering authority within whose jurisdiction the transferee has the residence or place of business where the vehicle is normally kept. Section 50 thus prescribes timelines within which the transferor and the transferee are required to report the factum of transfer. As per Sub-Section 3 of said Section 50, if there be failure to report the fact of transfer, fine could be imposed and an action under Section 177 could be taken if there is failure to pay the amount of fine. These timelines and obligations are only to facilitate the reporting of the transfer. It is not as if that if an accident occurs within the period prescribed for reporting said transfer, the transferor is absolved of the liability.”

The bench upheld the high court order and quoted the following observation made by the apex court in Naveen Kumar vs. Vijay Kumar.

“Even though in law there would be a transfer of ownership of the vehicle, that, by itself, would not absolve the party, in whose name the vehicle stands in RTO records, from liability to a third person … … … Merely because the vehicle was transferred does not mean that such registered owner stands absolved of his liability to a third person. So long as his name continues in RTO records, he remains liable to a third person.”

Read the Judgment Here