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High Court Judgement: You are liable to pay compensation unless ownership is transferred after selling car

Sunil Dhawan
High Court Judgment, Motor Accident Claims Tribunal,, Motor Vehicles Act, ownership of vehicle transferred , rto, section 50 of the M.V. Act, selling a vehicle ,

After selling a vehicle you need to ensure that the ownership of the vehicle is transferred in the records of the transport department. Yes, merely by receiving the payment and handing over the delivery note to the buyer is not sufficient. In doing so, it will not absolve the seller from any accident or any other liability caused by the buyer to a third-party. Until the name of the purchaser is registered as per the Motor Vehicles Act, the seller will remain the owner of the vehicle. Any liability arising after the sale will still be that of the seller unless ownership is transferred.

The High Court of Mumbai had recently given judgment in a case involving an accident by the buyer of the vehicle wherein the court directed the seller to pay the compensation to the accident victim. This happened because the ownership was still in the name of the seller. As per Section 50 of the Motor Vehicles Act, after the sale of the vehicle, the ownership needs to be transferred within a stipulated time period.

The case

The appellant had sold the vehicle to another person and had handed over possession along with a delivery note and requisite documents to enable the buyer to transfer the vehicle in his name in the records of RTO.

However, the buyer knocked down a third-person who got admitted in the hospital. Later on, a case was filed by the accident-victim to which the Motor Accident Claims Tribunal, Mumbai held that the appellant is liable to pay compensation to the victim.

Earlier in 2012 the Motor Accident Claims Tribunal, Mumbai had held the appellant, the seller in this case, liable to pay the entire amount of compensation of Rs.1,34,000 with interest of 7.4 per cent per annum to the victim. Subsequently, the seller had approached the High Court of Mumbai which got dismissed by the latter.

High Court Judgment

High Court has held that on the day of the accident, the seller continued to be the owner of the vehicle in the records of the Regional Transport Office (RTO) and, therefore, the seller is supposed to pay the compensation. The court in its judgment copy stated that "The appellant not having reported the transfer within the time prescribed by section 50 of the M.V. Act continued to be the owner of the said vehicle on the date of accident and was thus liable to pay compensation in view of the accident having been committed during the period of ownership of the appellant."