Owner of Vehicle in RTO Records Liable for Accident- Supreme Court

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December 20, 2018

In this recent case (Prakash Chand Daga v. Saveta Sharma), a very remarkable observation has been made by the Supreme Court, whereby the Court has held that merely because the vehicle was transferred does not mean that such registered owner stands absolved of his liability to a third person. So long as his name continues in RTO records, he remains liable to a third person.

Also read Motor Vehicle Act: SC Decides on “Owner” of Offending Vehicle in case of Successive Transfers

In this interesting case, the Appellant who was original owner of the offending vehicle was held liable by the High Court, whereby the Court noted that despite sale of the vehicle no transfer of ownership in accordance with Section 50 of Motor Vehicle Act, 1988 was made and hence the Appellant continued to be the owner of the vehicle.

The Supreme Court in view of the prevailing law and specifically in view of it’s recent judgment in the case of Naveen Kumar v. Vijay Kumar & ors.[1], held that “Even though in law there would be a transfer of ownership of the vehicle, that, by itself, would not absolve the party, in whose name the vehicle stands in RTO records, from liability to a third person …Merely because the vehicle was transferred does not mean that such registered owner stands absolved of his liability to a third person. So long as his name continues in RTO records, he remains liable to a third person.”

Other observations made by the Apex Court in the case were:

That in terms of Section 50 of the Act, the transfer of a vehicle ought to be registered within 30 days of the sale. Section 50(1) of the Act obliges the transfer or to report the fact of transfer within 14 days of the transfer. In case the vehicle is sold outside State, the period within which the transfer ought to be reported gets extended.

That the transferee is also obliged to report the transfer to the registering authority within whose jurisdiction the transferee has the residence or place of business where the vehicle is normally kept. Section 50 thus prescribes timelines within which the transferor and the transferee are required to report the factum of transfer.

That as per Sub-Section 3 of said Section 50, if there be failure to report the fact of transfer, fine could be imposed and an action under Section 177 could thereafter be taken if there is failure to pay the amount of fine. These timelines and obligations are only to facilitate the reporting of the transfer. It is not as if that if an accident occurs within the period prescribed for reporting said

transfer, the transferor is absolved of the liability.

The entire case can be accessed here.

[1](2018) 3 SCC 1