Motor-accident liability rests with the registered owner on the accident date, not the former owner.

Bachubhai Prabhubhai Rathod died after a tanker allegedly struck him while he was riding a bicycle.

His legal representatives claimed compensation under Section 166 of the Motor Vehicles Act, 1988.

The Tribunal awarded ₹1,07,000 with 9% interest, held opponents Nos. 1, 2 and 4 liable, and exonerated the insurer after finding that the premium cheque had been dishonoured and the policy cancelled before the accident.

The claimants appealed for enhancement; Diwakar Giri, opponent No. 4 and the vehicle’s former owner, appealed against liability.

The High Court record gives inconsistent accident dates: 5 December 2005 in the factual account, but 5 December 2003 in the Tribunal’s reproduced findings.

1. Whether the compensation awarded by the Tribunal required enhancement, including reassessment of dependency and conventional heads.

2. Whether the insurer was liable despite dishonour of the premium cheque and pre-accident cancellation of the policy.

3. Whether the former owner, Diwakar Giri, could be held liable when the vehicle had been transferred and registered in another person’s name before the accident.

Section 166 of the Motor Vehicles Act provides the basis for a claim for compensation arising from a motor-vehicle accident.

Under Section 2(30), the person in whose name the vehicle stands registered is its “owner” for the purposes of the Act; Naveen Kumar v. Vijay Kumar, (2018) 3 SCC 1, applies that rule to fix liability on the registered owner and protect claimants from uncertainty arising from unregistered transfers.

The Court also relied on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, in reassessing consortium and conventional heads.

On the evidence in this case, the Court treated the policy as cancelled before the accident because the premium cheque was dishonoured and cancellation was communicated to the insured and the RTO.

For dependency, the Court substituted monthly income of ₹2,400, deducted one-third for personal expenses, and applied a multiplier of 7, producing ₹1,34,400.

It awarded consortium of ₹48,400 to each claimant and ₹18,150 each for loss of estate and funeral expenses.

It upheld the insurer’s exoneration on the evidence of dishonour and prior cancellation.

Conversely, because the registration record showed Ajay Ramprakash Chaudhary as owner before the accident, the Court held that liability could not remain with Giri, applying Section 2(30) and Naveen Kumar.

It allowed Giri’s appeal and exonerated him, and stated that opponents Nos. 1 and 2 were jointly and severally liable.

The judgment also directs the insurer to deposit the enhanced amount within twelve weeks, despite affirming its exoneration and later assigning liability to opponents Nos. 1 and 2; these directions are internally inconsistent.