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TMI Blog1972 (5) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Gulzari Lal respondent No. 8 proprietor of a motor repairs garage, is refereed to as the garage man while Ram lal, who drove the motor cycle in dispute and caused the accident, is referred to as the mechanic. 2. The accident which resulted in the death of Balwant Rai deceased occurred on 16th July, 1963 and it involved motor cycle, Jawa make, 1962 model Dlo 2706. This motor cycle was registered in the name of the seller and he had taken an insurance policy from the insurance company on or about 16th October 1962 which was valid for a period of one year expiring on 15th October 1963. The policy was comprehensive and covered third party risks. on or shortly before the date of the accident, the motor cycle had been given to the buyer and he found a defect in the kick and gave it to the garage man who carried out the repairs and while it was with him, the said mechanic drove the motor cycle and caused the fatal accident. There is no dispute with regard to the liability of Ram Lal mechanic and the garage man for payment of compensation in respect of the deceased. The question for determination is whether Gurcharan Singh, the seller, or M.G. Krishan Roay purchaser is liable to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Single Judge to the contrary were not correct; (4) on the facts and circumstances of the case, Gurcharan Singh seller was not liable to pay compensation for the accident and as such the company was exonerated from the liability and (5) what should be the quantum of damages to be awarded. 6. Miss Kohli, counsel for the seller has supported the arguments of insurance company and Mr. Chopra counsel for the purchaser has stressed the point that he was not liable to make compensation and Mr. Pombra, counsel for the legal representative has prayed for enhancement of the damages while supporting the impugned judgment. 7. The judgment of the learned Single Judge has been reported as 1967 Acc. C. J. 115 and the attack of Mr. Dhanda is directed against the application of the definition of sale contained inS. 54 of the Transfer of Property act to the facts of the case and to the following passage which occurs in paragraph 10 of the report:-- There is another aspect of this matter. To my mind, the sale of a motor vehicle will not be governed by the ordinary law relating to sales of movable property. The Motor Vehicles Act, 1939 makes it compulsory for every owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusive definition of document of title to goods is given in clause (4) of Section 2. The sale is, however, defined by Section 4 to the effect that a contract of sale of gods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price and where under a contract of sale the property in the goods is transferred form the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some conditions thereafter to be fulfillled, the contract is called an agreement to sell. It is further provided by sub-section (4) that an agreement to sell becomes a sale when the time elapses or the conditions are fulfillled subject to which the property in the goods is to be transferred. Section 5 deals with formalities of the contract and provides that a contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer and the contract may provide for the immediate delivery of the goods or immediate payment of the price or both or for the delivery or payment by installments, or that the delivery or payment or both shall be po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave any bearing on the validity of the sale of motor vehicles. The motor Vehicles Act in Section 2, clauses (15), (16),(17) and (18) contains definitions of various motor vehicles. But the same are not material for decision of the case, Clause (19) of Section 2 gives the following definition of the owner:-- owner means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement, the person in possession of the vehicle under that agreement. This definition shows that although in law a minor may be the legal owner of the vehicle, his guardian has been constituted as owner for purposes of Motor Vehicles Act and in relation to a hire-purchase agreement, the person in possession of the vehicle, although not the legal owner, has been constituted the owner. Reliance has also been placed on Section 4 and 5 of the act. Section 4 prohibits minors to drive motor vehicles in a public place while Section 5says that no owner or person in charge of a motor vehicle shall cause or permit any person to drive the motor vehicle contrary to section 3 and 4 Section 22 of the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 112 Ix of the Act. It is, however, significant that there is in particular no provision of law stating that the registration of a motor vehicle is the condition precedent for any transfer of the vehicle or that in the absence of registration, the sale would be void or ineffective. On the other hand, an analysis of Section 31 of the Act shows that it presupposes a valid an subsisting transfer by the registered owner of the vehicle to another person and the transferor is enjoined upon a duty within 14 days after the transfer to report the transfer to the authority and the transferee is, within 30 days required to report the transfer to the authority. The endorsement of the transfer in the records of the registering authority is, therefore not a condition precedent to the transfer not does it deal with the legality or validity of the transfer which must be determined by other provisions of the law. Should any person in disregard of the provision of law fail to intimate the transfer to the authority or device the vehicle in a public without a certificate of registration, he runs the risk of incurring the risk of incurring the penalties provided by the Act, but his title to the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ostensibly show the owner of the vehicle who is liable to pay taxes and to perform duties and obligations under the Motor Vehicles Act, but the endorsement of transfer on the certificate is not a condition precedent and tit absence does not make an otherwise valid sale of the illegal or ineffective. 14. Mr. Dhanda counsel for the appellant has strongly contended that effect of the sale of the vehicle by the insured has the effect of causing laps of the policy. He has relied upon Shawcross on motor Insurance, page 93 for the proposition the only parties to the contract and not the transferees have rights under the contract. in Rogerson v. Scottish Automobile and General Insurance Co. Ltd., 1931 All Er 606 the House of Lords held that the covered under the policy depended on the hypothesis of an insured car and if the assured's rights in its respect had ceased when he sold it, no rights could be claimed under the policy. In this case, the assured claimed rights in respect of a new car purchased which was not covered by the policy. In Tattersall v. Drysdale, (1935) All Er 112, Goddard j. observed that where a policy insured the plaintiff in respect of the ownership and user ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor vehicle in a public place unless there is in force in relation to the vehicle by that person a policy of that vehicle by that person a policy of insurance complying with the requirements of Chapter Viii of the Act. Section 95 provides that a policy of insurance must be a policy which insures the person or classes of persons specified in the policy against any liability which may be incurred by him in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. This is what is known as the third party risk and is a compulsory requirement of driving a motor vehicle in such place. It is, therefore, a difficult to conceive if the insurance company can refuse to insure a vehicle in the case of any particular person although they have full discretion in respect of comprehensive insurance. As a result, the users of the road would be entitled to assume that a registered motor vehicle plying on the road is duly covered by a third partly risk's insurance. It would really be a misfortune if a person involved in the accident or his legal representatives should find that they lose the benefit of compulsory third party risk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. There is no oral or document evidence of any kind to support the plea that any price had been paid or has been agreed to be paid. The accident occurred on 16th July 1963 and the first intimation sent to the motor licensing officer of the alleged sale is dated 24th July 1963 (Exhibit R-3 W-1/1) and it sates that this is to certify that I sold my motor cycle to the purchaser on (date) 1st July 1936 are request was made to transfer the ownership. This was on the letter head of the Automobile Association of India. It is not possible to believe that the seller and the buyer and also the Automobile Association of India. It is not possible to believe that the seller and the buyer and also a the Automobile Association were not aware of the provision of law that information about the transfer must be communicated to the authority within 14 days as provided by clause (a) of sub-section (1) of Section 31 of the Act. Even this letter is not accompanied by any document any evidence to support the transfer or passing of the consideration . In fact it is conspicuously silent even with regard to the amount for which the vehicle had been sold. Intimation to the insurance company was also made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed to the purchaser on or before 16th July, 1963 or for that matter till 23rd July 1963. On our finding that the sale had not taken place and the accident had occurred when the seller was the owner of the vehicle the liability of the seller arises and consequently liability of the insurance company to indemnify the seller against their party risk reminder intact and subsisting in terms of the contract of insurance. 18. On the question of liability of the accident there is not much dispute between the parties. It appears to us that the seller remitted the purchaser to use his vehicle who on the date of the accident, was holding it on his behalf an the purchaser gave it to the a garage man and in the course of his employment the mechanic drove the vehicle and caused the accident. As a result the seller as well as the insurance accompany and the garage man and the mechanic would all be jointly and severally liable to pay the amount of compensation awarded by the amount of compensation awarded by the learned Single Judge, to the legal representatives of the deceased. 19. On arguments were addressed to us on the quantum of compensation. As a matter of fact the Tribunal in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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