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B.P. Routray, J.
1. Present appeal by the insurer is directed against the judgment dated 21st February, 2018 passed by the learned 2nd M.A.C.T. (Southern Division),
Berhampur, Ganjam in M.A.C. Case No.69/2010 (284/2008-GDC) wherein compensation to the tune of Rs.2,00,000/-has been granted along with
simple interest @6% per annum from the date of filing of the claim application, i.e.24.10.2008 to the minor daughter of the claimant due to the motor
vehicular accident dated 7.1.2008.
2. Since the vehicle was not insured, the learned Tribunal while directing for payment of compensation by present Appellant, i.e. Manager, ICICI
Bank Ltd., Dharmanagar, Berhampur has granted liberty to the Bank to realize such amount from the Respondent No.2-owner of the offending
motorcycle bearing Registration No.OR-07-N-1942, namely, Surendra Patro.
3. Admittedly the offending vehicle was hypothecated to the present Appellant at the time of purchase and continued to be so on the date of accident,
as the financier.
4. Learned counsel for the Appellant submitted that in view of clear definition of ‘owner’ of the motor vehicle, the financier cannot be held
liable for payment of compensation. But the learned Tribunal violating the law has directed the financier to pay the compensation with liberty to realize
the same from the owner.
5. None appeared for Respondent No.2-owner despite a set of lawyers have entered appearance for him by filing power.
6. Learned counsel for Respondent No.1-claimant submitted that considering the poor status of the claimant, the direction of the learned Tribunal to
the financier to pay the compensation and recover the same from the owner cannot be faulted with.
7. Before proceeding further, it is important to look into the provisions contained in Section 2(30) of the Motor Vehicles Act, 1988 that defines owner.
It is reproduced herein below:
 “2(30) “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.â€
8. As seen from the impugned award, learned Tribunal has observed under Issue Nos.(ii) & (iii) that the hypothecation of the offending motorcycle
with Respondent No.2-Bank at the time of accident causing injury to G. Hari Priya Patro has not at all been disputed/denied in the pleadings of the
Respondent No.2. Before this Court also, the claimant (present Respondent No.1) does not dispute such hypothecation of the offending motorcycle
with the present Appellant-Bank as the financier. Therefore, as per the definition of owner contained in Section 2 (30) of the M.V. Act, 1988,
Surendra Patro (present Respondent No.2) is the undisputed owner of the offending motorcycle being the person in possession of the offending
motorcycle under the hypothecation agreement.
9. The Supreme Court in the case of HDFC Bank Ltd. vs. Reshma and others ,(2015) 3 SCC 679, adverting to the principles laid down in various
earlier decisions, held as follows:
“On a careful analysis of the principles stated in the foregoing cases, it is found that there is a common thread that the person in possession of the vehicle under
the hypothecation agreement has been treated as the owner. Needless to emphasise, if the vehicle is insured, the insurer is bound to indemnify unless there is
violation of the terms of the policy under which the insurer can seek exoneration.
In Purnya Kala Devi (supra), a three-Judge Bench has categorically held that the person in control and possession of the vehicle under an agreement of
hypothecation should be construed as the owner and not alone the registered owner and thereafter the Court has adverted to the legislative intention, and ruled that
the registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control. There is reference to 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. In the instant case, the predecessor-in-interest of the appellant, Centurion Bank, was the registered owner among with respondent no.2. The respondent
no.2 was in control and possession of the vehicle. He had taken the vehicle from the dealer without paying the full premium to the insurance company and thereby
getting the vehicle insured. The High Court has erroneously opined that the financier had the responsibility to get the vehicle insured, if the borrower failed to insure
it. The said term in the hypothecation agreement does not convey that the appellant financier had become the owner and was in control and possession of the
vehicle. It was the absolute fault of the respondent no.2 to take the vehicle from the dealer without full payment of the insurance. Nothing has been brought on
record that this fact was known to the appellant financier or it was done in collusion with the financier. When the intention of the legislature is quite clear to the
effect, a registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control and 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 realization of the amount. There shall be no order as to costs.â€
10. In the case at hand, admittedly, the offending motorcycle was not insured and also nothing is there on record to reveal that this fact was known to
the present Appellant-financier or it was done in collusion with the financier. Therefore, the liability is fastened on the owner-Respondent No.2,
namely, Surendra Patro to pay the compensation, and not on the financier.
11. Resultantly, the appeal is allowed and the direction of the learned Tribunal is modified to the effect that the compensation amount is payable by the
owner-Respondent No.2.
12. The statutory deposit made by the Insurer-Appellant with accrued interest thereon be refunded to him on proper application and on production of
proof of deposit of the award amount before the learned Tribunal.
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