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M/s. Godavari Finance Co Versus Degala Satyanarayanamma

(2008) 5 SCC 107 - Civil Appeal No. 2725 of 2008 - Dated:- 10-4-2008 - S.B. SINHA AND V.S. SIRPURKAR JJ. JUDGMENT: 1. Leave granted. 2. Whether a financer would be an owner of a motor vehicle within the meaning of Section 2(30) of the Motor Vehicles Act, 1988 (for short the Act) is the core question involved herein. 3. Ch. Praveen Kumar, fourth respondent, was the owner of a vehicle being a mini truck of 'Mahendra Nissan' make purchased by him having been financed by the appellant for a .....

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ed in the proceeding on the premises that it was the financer of the said vehicle. 6. The name of the appellant as a financer indisputably was incorporated in the Registration Book of the vehicle. However, the extract of Registration Book revealed that the vehicle was registered in the name of the 4th respondent only w.e.f. 3rd June, 1992. It further revealed that the said vehicle was held under a Hire Purchase Agreement with the appellant w.e.f. 6th February, 1995 which was cancelled on 10th No .....

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mpany was rejected by the Tribunal stating:- "In the light of the decisions cited above, the legal position that emerges is that it is the person who is in actual possession and control of the vehicle, who can be brought under the definition of owner, under the Act in order to make him tortuously liable for the acts of the servant and the burden lies upon the party, who asserts it and on their failure adverse inference can be drawn and the financier can also fastened with liability alongwit .....

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and a third party cannot be attributed with knowledge of control over the vehicle and the actual contract between the parties. Thus, it is quite evident that R-2 and R-4 did not place any material to show as to who is in actual control of the vehicle and what are the rights of R-4 over it." 8. An appeal preferred thereagainst by the appellant herein, by reason of the impugned judgment, dated 8th August, 2006 has been dismissed. 9. Ms. Bina Madhavan, appearing on behalf of the appellant, wo .....

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t that appellant as a registered owner was liable for payment of compensation is wholly unsustainable. 10. Indisputably, as on November 10, 1995 the Hire Purchase Agreement was cancelled and an information thereabout was sent to the Deputy Transport Commissioner, Kakinada. 11. Appellant admittedly was the financer. As the vehicle was the subject matter of Hire Purchase Agreement, the appellant's name was mentioned in the Registration Book. 12. Section 2 of the Act provides for interpretation .....

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icle. We are not unmindful of the fact that ordinarily the person in whose name the Registration Certificate stands should be presumed to be the owner but such a presumption can be drawn only in the absence of any other material brought on record or unless the context otherwise requires. 13. In case of a motor vehicle which is subjected to a hire purchase agreement, the financer cannot ordinarily be treated to be the owner. The person who is in possession of the vehicle, and not the financer bei .....

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e under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims .....

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dance with the provisions of Chapter X." 15. In terms of the aforesaid provisions, the Tribunal is required to issue a notice to the insurer and after giving the parties, including the insurer, an opportunity of being heard, it must hold an inquiry into the claims and determine the person who would be liable therefor. It can make an award and while doing so it can specify the amount which could be paid by the insured or owner or driver of the vehicle involved in the accident or by all or an .....

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e would use the same, he remains in possession or control thereof. Owner of the vehicle, although may not have anything to do with the use of vehicle at the time of the accident, actually he may be held to be constructively liable as the employer of the driver. What is, therefore, essential for passing an award is to find out the liabilities of the persons who are involved in the use of the vehicle or the persons who are vicariously liable. The insurance company becomes a necessary party to such .....

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) 7 SCC 481where the owner of a vehicle rented the bus to Rajasthan State Road Transport Corporation. It met with an accident. Despite the fact that the driver of the bus was an employee of the registered owner of the vehicle, it was held :- "Driver of the bus, even though an employee of the owner, was at the relevant time performing his duties under the order and command of the conductor of RSRTC for operation of the bus. So far as the passengers of the ill-fated bus are concerned, their p .....

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onditions 4 to 7 of the agreement (supra), the RSRTC must be held to be vicariously liable for the tort committed by the driver while plying the bus under contract of the RSRTC. The general proposition of law and the presumption arising therefrom that an employer, that is the person who has the right to hire and fire the employee, is generally responsible vicariously for the tort committed by the employee concerned during the course of his employment and within the scope of his authority, is a r .....

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e payroll of the original owner. The proposition based on the general principle as noticed above is adequately rebutted in this case not only on the basis of the evidence led by the parties but also on the basis of Conditions 6 and 7 (supra), which go to show that the owner had not merely transferred the services of the driver to the RSRTC but actual control and the driver was to act under the instructions, control and command of the conductor and other officers of the RSRTC." 18. The quest .....

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4 Page 4561 continued to be the registered owner of the vehicle despite the fact that the same was requisitioned by the District Magistrate in exercise of its power conferred upon it under the Representation of People Act. A vehicle is requisitioned by a statutory authority, pursuant to the provisions contained in a statute. The owner of the vehicle cannot refuse to abide by the order of requisition of the vehicle by the Deputy Commissioner. While the vehicle remains under requisition, the owne .....

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