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When the vehicle was taken on road before paying the full insurance and committed accident – the financier holds no liability as the borrower took the vehicle from the Dealer before payment of full insurance – 2015 S.C.(2014) msklawreports

M.V.Act – sec.146 – Owner definition – Hypothecation agreement – Hire purchase agreement -the Motor Cycle  belonging  to  2nd  respondent  and driven by the respondent No.3 herein, in a rash and negligent manner  dashed against the scooter as a consequence of which she sustained  a  fracture  in
the right  hand  superacondylar  fracture  and  humerus  bone  fracture  and certain other injuries. -she filed claim petition – Tribunal awarded compensation directing to pay compensation jointly and severally – the  stand  and  stance  put forth by the predecessor-in-interest the appellant bank  that  it  had  only advanced a loan and the hypothecation agreement was  executed  on  1.11.2002 by it.   As per the terms of the agreement, the owner  of  the  vehicle  was responsible to insure the vehicle at his own costs.  Reliance was placed  on Clause 16 and 17 of the loan agreement which stipulated that  the  bank  was required to get the vehicle insured if the borrower failed to  or  neglected to get the vehicle insured.  The   accident  as  stated  earlier  had  taken place on 20.12.2002 and the vehicle was insured by the owner  on  16.1.2003. It was further put forth by the bank that  the  owner  deposited  Rs.6,444/- with the dealer of the motor cycle i.e. Patwa Abhikaran Pvt.  Ltd.,  whereas
it was required to pay  Rs.9,444/-.   Despite  the  same,  he  obtained  the possession of the vehicle on the same day itself which was not  permissible. – High court dismissed the appeal of the Bank on this point – Apex court held that Section 146 of the Act that no person shall  use  or  cause  or allow any other person to use a motor vehicle  in  a  public  place  without insurance as that is the mandatory  statutory  requirement  under  the  1988 Act.-  “owner”  means  a  person  in  whose  name  a  motor  vehicle  stands registered, and where such person is a minor, the guardian  of  such  minor, and in relation to a motor vehicle which is the subject of  a  hire-purchase agreement, or an agreement of lease or an agreement  of  hypothecation,  the person in possession of the vehicle under that agreement.” – He  had taken the vehicle from the dealer without paying the  full  premium  to  the insurance company and thereby getting the vehicle insured.-The person who is in possession of the  vehicle, and not the financer being the owner would be liable to pay damages for  the
motor accident. -there is evidence on record that the respondent no.2, without the insurance  plied
the vehicle in violation of the statutory  provision  contained  in  Section 146 of the 1988 Act, the High Court could not have mulcted the liability  on the financier.  The appreciation by the  learned  Single  Judge  in  appeal, both in fact and law, is wholly unsustainable. In view of the aforesaid premises, we allow the appeals and  hold  that  the liability to satisfy the award is that of the owner, the  respondent  no.  2 herein and not that of the  financier  and  accordingly  that  part  of  the
direction in the award is set aside.   However, as has been conceded  to  by the learned senior counsel for the appellant, no steps shall  be  taken  for realisation of the amount.  There shall be no order as to costs. -2015 S.C.(2014) msklawreports

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