Isabella Mariam

The High Court of Himachal Pradesh, Single Bench of Justice Vivek Singh Thakur held that a registered vehicle owner remains legally liable for an accident until ownership is formally transferred in compliance with Section 50 of the Motor Vehicles Act, 1988, even if a sale agreement has been executed beforehand. The Court, while allowing two appeals arising from a 2016 car accident that caused four deaths, found the mishap resulted from the deceased driver’s rash and negligent driving. It directed the registered owner to pay compensation to the victims’ dependents, with the insurer obligated to indemnify the owner accordingly.

The case arose from a motor vehicle accident that occurred on 28 August 2016 near Shalini Mod, Himachal Pradesh, when a car traveling from Village Darkali to Village Kotlu rolled down a deep gorge. The accident resulted in the deaths of three passengers and the driver. The deceased included a married couple and another individual, while the driver succumbed to injuries later in a hospital. The claimants, being the dependents of the deceased couple, filed two separate petitions before the Motor Accident Claims Tribunal (MACT) seeking compensation, alleging that the accident was caused by the driver’s rash and negligent driving.

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The respondents included the registered owner of the vehicle, the legal heir of the deceased driver, and the insurer. The claimants produced evidence including copies of the FIR, postmortem reports, death certificates, family register, and affidavits to support their claim. Witnesses included the investigating officer, a medical officer, and local residents who verified the details of the accident and the identities of the deceased. The respondents presented evidence regarding the vehicle’s ownership, registration certificate, driving licence, and insurance policy. The insurer contended that the claimants had failed to establish rash and negligent driving and raised standard defences about policy terms, validity of the driver’s licence, and vehicle documentation.

The MACT dismissed both petitions, holding that rash and negligent driving had not been proven. On appeal, the Court examined the documentary and oral evidence, including the FIR that attributed the accident to high speed and negligence, and the driving licence showing the driver was authorized to drive a light motor vehicle. The Court also examined Section 50 of the Motor Vehicles Act, 1988, concerning the transfer of vehicle ownership, noting that the registered owner’s liability continues until the transfer process is completed by both transferor and transferee within the statutory time limits.

The Court observed that both appeals arose from the same accident involving identical facts and issues and were, therefore, decided by a common judgment. It noted that the Motor Accident Claims Tribunal (MACT) had dismissed the petitions solely on the ground that the claimants failed to prove rash and negligent driving by the deceased driver. Justice Vivek Singh Thakur recorded that “the only ground for rejection of Claim Petitions, assigned in the impugned awards, is that claimants had failed to prove rash and negligent driving of the car by driver Gian Chand.”

It stated that “from the statement of Padam Nabh as well as on spot inspection, it was found that accident took place on account of high speed, rash and negligent driving on the part of Gian Chand (Gopal) and, therefore, offence was found to have been committed under Sections 279, 337 and 304A of the Indian Penal Code.” The Court observed that no party had disputed the contents of the FIR and that the MACT had erred in disregarding it.

Justice Thakur further noted that “this observation depicts that these findings have been recorded without noticing that Gian Chand had succumbed to injuries at CHC Karsog and it was not possible for the petitioners to summon a dead person as witness for deposing in the Court.” He held that the findings of the MACT were “perverse being contrary to record” and that “the MACT has misread the pleadings and evidence on record with respect to Issue Nos. 1 and 2.”

On the question of vehicle ownership and liability, the Court referred to Section 50 of the Motor Vehicles Act, 1988, and stated: “Section 50 of the Motor Vehicles Act provides that where ownership of any motor vehicle registered under the MV Act is transferred, transferor shall have to report the fact of transfer to Registration Authority within 14 days and transferee shall report the transfer to Registration Authority of his area of residence or place of business within 30 days thereafter.” It held that “there was no complete transfer of the vehicle from respondent No. 1 Boby Chauhan to Gian Chand and transfer was under process as prescribed under the Act.”

The Court also recorded that the driver possessed a valid licence and that “there was nothing on record to hold that Claim Petitions were bad for non-joinder or mis-joinder of necessary parties.” It concluded that the vehicle’s registered owner remained liable, while the insurer was “liable to indemnify respondent No. 1… by making payment of compensation to the claimants.”

The Court set aside the findings of the Motor Accident Claims Tribunal, stating that “findings returned by the MACT on Issues No. 1 and 2 deserve to be reversed and accordingly it is held that accident took place on account of rash and negligent driving of the car by deceased Gian Chand.” It recorded that the respondents, including the insurer, had not produced any evidence to contest the issues of liability or breach of policy conditions.

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“Respondent No. 1 Boby Chauhan, owner of the vehicle, is held liable to pay the compensation and Insurance Company is liable to indemnify respondent No. 1… for payment of compensation amount of ₹14,94,000 in FAO No. 50 of 2024 and ₹12,25,200 in FAO No. 51 of 2024. Claimants in both appeals shall be entitled for compensation in equal proportion alongwith interest in equal proportion thereon @ 6% per annum.”

The judgment mandated that the insurer discharge its indemnification obligation, stating that “respondent-Insurance Company shall indemnify respondent No. 1… by making payment of compensation to the claimants directly or by depositing the amount in the Registry of this Court on or before 31st October, 2025.” The appeals were accordingly “allowed and disposed of in aforesaid terms.”

Advocates Representing the Parties:
For the Appellants: Mr. H.S. Rangra, Advocate, for the appellants in both appeals.
For the Respondents: Mr. Jai Dev, Advocate; Mr. Gurinder Singh Parmar, Advocate; and Mr. Bhupinder Singh Pathania, Advocate.

Case Title: Kamali & Others v. Boby Chauhan & Others
Neutral Citation: 2025: HHC:33881
Case Number: FAO (MVA) Nos. 50 & 51 of 2024
Bench: Justice Vivek Singh Thakur