Automobile dealer held liable for plying a vehicle with expired registration certificate despite subsequent purported sale.

In brief

The question

1. Whether the appellant/Hyundai agency can be held jointly liable for compensation as a "possessor" and "purchaser" of the vehicle when the registration remained in the original owner's name.

The court held

The Court held that the appellant agency failed to prove a valid transfer of liability and was responsible as the possessor of the vehicle at the time of the accident.

It also directed

The appeal was dismissed. However, noting the prior settlement with Respondent No. 5, the Court ordered the appellant to deposit 50% of the compensation amount (Rs. 6,96,086.50) plus 9% interest per annum with the Registrar General.

01Facts

The appellant (a Hyundai agency) challenged an award dated March 3, 2020, passed by the MACT, New Delhi, in MACP No. 99A/2016.

p. 1

The claim arose from a fatal motor accident on the date of the award, involving a Santro car (offending vehicle) that killed one Vinod Kumar.

p. 2

The vehicle was registered to Respondent No. 6, who had transferred it to the appellant agency in exchange for a new car on February 18, 2014.

pp. 2-3

The engine was driven by Respondent No. 5 at the time of the accident.

p. 2

The appellant claimed it had sold the vehicle to Respondent No. 5 on March 3, 2014.

p. 4

The MACT found the appellant and Respondent No. 5 jointly and severally liable for a compensation of Rs. 13,92,173.

pp. 1-2

During the pendency of this appeal, the claimants settled with Respondent No. 5 for 50% of the award amount.

p. 3

02Issues

i.1. Whether the appellant/Hyundai agency can be held jointly liable for compensation as a "possessor" and "purchaser" of the vehicle when the registration remained in the original owner's name.

pp. 2-3

ii.2. Whether the alleged sale of the offending vehicle by the appellant to Respondent No. 5 was valid and proved on record.

pp. 4-6

03Law Applied

The Court applied the principles of vicarious liability and the statutory obligations under the Motor Vehicles Act regarding the transfer of ownership.

p. 3

It emphasized the duty of care of commercial dealerships to verify the validity of a vehicle's Registration Certificate (RC) before taking possession or plying it on the road.

pp. 4-5

The court also relied on the principle of "joint and several liability" in tort law for principal tort-feasors and possessors of offending property, and the evidentiary standards required to prove a bona fide sale via Form 29 and 30 and delivery receipts.

pp. 2-3, 4-5

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 166

04Reasoning

The Court observed that the vehicle's registration had expired on January 28, 2014, yet the appellant agency took possession of it on February 18, 2014.

p. 5

The Court found it "unbelievable" that a professional car agency would fail to check the RC status before taking possession.

p. 4

Regarding the alleged sale to Respondent No. 5, the Court noted that the particulars in Form 29 and 30 were not filled at the time of signing by the registered owner, suggesting they were completed later.

p. 5

Furthermore, a comparison of signatures on the delivery receipts versus court statements showed them to be "dissimilar," leading the Court to suspect the documents were fabricated subsequently.

p. 6

Because the appellant had the responsibility to either renew the registration or ensure the vehicle was not plying on the roads, their possession and subsequent handover of an unregistered vehicle to the driver established their liability.

pp. 5-6

05Holding

The Court held that the appellant agency failed to prove a valid transfer of liability and was responsible as the possessor of the vehicle at the time of the accident.

p. 6

pp. 6-7

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