Surendra Kumar Bhilawe V. The New India Assurance Company Limited - Synopsis
Navoneel Karmakar 29 Jun 2020

On June 18, 2020, Supreme Court of India, passed a landmark judgement against the respondent by stating that according to the definition of “owner” under Section 2(30) of Motor Vehicles Act, 1988, a person whose name is registered on a particular motor vehicle will be treated as the owner of that vehicle. The brief facts of the case is that the petitioner claimed insurance for a truck from the respondent company that is The New India Assurance Company Limited but in return, the respondent company rejected the claim by saying that about three years ago the petitioner had sold the truck to a third person and so the insurance company is not liable to pay the compensation to the petitioner. An appeal was filed by the petitioner in the District Forum and the appeal was allowed.

Being aggrieved the respondent filed an appeal to the State Commission and the forum rejected the appeal. The appeal was again filed with the National Consumer Commission and the forum held that on the basis when the owner of a vehicle sells his vehicle and performs a letter of sale without, in any way, postponing the transfer of the title to the property in the car, the possession of the car transfers to the purchaser after the execution of the letter of sale.

Surendra Kumar Bhilawe being aggrieved by the decision of the National Consumer Forum, appealed to the Supreme Court of India. The Supreme Court is of the view that the National Consumer Forum had failed to notice the definition of “owner” which has been given in Section 2(30) of Motor Vehicles Act, 1988. According to the Act, owner means “a person in whose name a motor vehicle stands registered and, where such a 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”

The Court also observed that the definition of the “owner” is being changed. There is a difference between the definitions of the owner from Section 2(19) of Motor Vehicles Act, 1939 and Section 2(30) of Motor Vehicles Act, 1988. According to the old definition, owner means the only person who is in the possession of the vehicle, but according to the new act owner means the person whose name is being registered for a particular vehicle.

The Supreme Court had taken a reference from various cases such as “Naveen Kumar V. Vijaya Kumar” and “Leela and Ors V. Shakuntala”, there the bench observed that a registered owner continues to remain the owner when a particular vehicle is insured and the insurance company is liable to pay the compensation notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident.

By approving the appeal, the Court noted that on the date of the crash, the petitioner remained the truck's owner and the insurer could not have escaped its responsibility for the damages suffered by the owner on the basis of the transfer of ownership to any third person.     

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