Registered owner cannot be saddled with liability after lawful transfer and intimation: HC

The Punjab and Haryana High Court has ruled that liability to pay compensation in a motor accident claim cannot be imposed on a registered owner who had already sold the vehicle and duly intimated the transport authority prior to the accident. Holding that liability could not be fastened solely on the basis of “a mere technical entry in the vehicle’s registration certificate”, Justice Virinder Aggarwal exonerated the erstwhile owner and shifted the entire liability to the actual owner, who had himself admitted the purchase.

At the onset, Justice Aggarwal observed that the controversy in the matter was confined to the limited question of fastening liability upon the appellant-previous owner solely on account of the fact that the vehicle’s registration certificate continued to stand in his name on the accident date.

Justice Aggarwal observed that the appellant sold the vehicle on August 9, 2018 — more than two years before the accident. The transferee or the new owner unambiguously acknowledged ownership at multiple stages. “The purchaser/actual owner himself in his written statement dated March 9, 2021, and interim order dated July 20, 2022, admitted the purchase of car by him from the appellant. Further, he also appeared in the witness box and proved on record the affidavit dated August 9, 2018, in support of the sale,” the Bench noted.

Referring to the statutory framework, Justice Aggarwal observed Section 50 of the Motor Vehicles Act did cast a clear obligation on a transferor or registered owner to intimate the registering authority upon sale. The appellant complied with the mandate by producing the transferee’s affidavit acknowledging the car’s purchase along with an intimation letter dated October 12, 2018, to the Regional Transport Officer, Bathinda.

“The appellant, thereby, performed the obligation cast upon him, though after about two months of sale. However, once such intimation was issued, it was incumbent either upon the transferee to complete the further formalities under the Act and the Rules, or upon the registering authority to take consequential action. Their omission cannot be used to saddle the appellant with a liability he had already divested by executing a lawful transfer and by notifying the authority in writing,” Justice Aggarwal observed.

Holding that the material on record “sufficiently indicates” that the registered owner had ceased to have any nexus with the vehicle, the court stressed that the subsequent lapse would lay entirely with the buyer. “It was respondent-buyer who was at fault in the first instance by not effecting transfer of registration after purchase from the appellant and, thereafter, by not sending any intimation of the alleged sale to respondent-driver,” the court asserted.

In his detailed judgment, Justice Aggarwal cautioned against mechanically binding registered owners when real ownership stood conclusively established. “Fastening liability solely on the basis of a technical entry in the Registration Certificate would amount to penalising a person who had no role, control or effective ownership at the relevant time. Once the transferee himself admits ownership and was in undisputed possession, the liability ought to be fastened upon the person having control and beneficial use of the vehicle.”