Change records after car sale or pay for mishaps: SC

NEW DELHI: If you sold your car and did not bother to change the ownership in registration records, you would be liable for compensation claims arising from accidents involving the vehicle even if another person owned and drove the car, the Supreme Court ruled on Tuesday.

This painful legal truth dawned upon one Vijay Kumar, who had sold his car to another person on July 12, 2007. That person further sold the car on September 18, 2008. This third owner then sold the car to one Naveen Kumar, who claimed before the Motor Accidents Claims Tribunal that he had sold it to one Meer Singh.

While the car was allegedly in possession of Meer Singh but driven by another person, an accident took place on May 27, 2009, in which one person was killed and another injured. The tribunal awarded a compensation of Rs 3.85 lakh and ordered Vijay Kumar, whose name figured in the registration certificate, to be jointly liable with the driver of the car.


Vijay Kumar challenged this order before the Punjab and Haryana High Court. A single judge bench allowed the appeal saying the original owner need not be held liable when there was clear evidence of sale of vehicle and the last owner admitting ownership. One of the successive owners, through advocate Rishi Malhotra, challenged the HC judgment in the SC and said the court could not render a decision contrary to law.

Malhotra said Section 2(30) of the Motor Vehicles Act, 1988, provides that the person in whose name a motor vehicle is registered is the owner and, hence, he alone is liable for payment of compensation.

In its judgment, a three-judge SC bench said, "In a situation such as the present where the registered owner has purported to have transferred the vehicle but continues to be reflected in the records of the registering authority as the owner of the vehicle, he would not stand absolved of liability.

"Parliament has consciously introduced the definition of the expression 'owner' in Section 2(30), making departure from the provisions of Section 2(19) in the earlier Act of 1939. The principle underlying the provisions of Section 2(30) is that the victim of a motor accident, or in case of a death, the legal heirs of deceased should not be left in a state of uncertainty.

"A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the registering authority. To hold otherwise would be to defeat the statutory object and purpose of the Act."