HDFC BANK LTD. versus KUMARI RESHMAAND ORS.

Citation: [2014] 14 S.C.R. 1007 · Decided: 01-12-2014 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2014] 14 S.C.R. 1007 
HDFC BANK LTD. 
A 
v. 
KUMARI RESHMAAND ORS. 
(Civil Appeal Nos. 10608-10609 of2014) 
DECEMBER 01, 2014 
B 
[DIPAK MISRA, ROHINTON FALi NARIMAN AND 
UDAY UMESH LALIT, JJ.] 
Motor Vehicles Act, 1988 - ss. 2(30) and 146 - Motor 
accident by uninsured motor vehicle which was hypothecated 
under hire-purchase agreement - Liability of financier - To C 
pay compensation to third party - Held: Where the motor 
vehicle is subject of hire-purchase agreement, the person in 
possession of the vehicle under the agreement would be the 
owner- In the instant case, the vehicle was not in possession 
of the financier and was plied on the road in violation of s. 
D · 
146 without the knowledge of the financier - Hence the 
financier cannot be held liable to pay compensation. 
Allowing the appeals, the.Court 
HELD: 1. On a plain reading of definition 'owner' E 
as envisaged u/s. 2(30) of Motor Vehicles Act, 1988, it is 
demonstrable that a person in whose name a motor 
vehicle stands registered is the owner of the vehicle and, 
where motor vehicle is the subject of hire-purchase 
· agreement or an agreement of hypothecation, the person F 
in possession of the vehicle under that agreement is the 
owner. The legislature has deliberately carved out the 
exception from registered owners thereby making the 
person in possession of the vehicle under the 
agreements mentioned in the dictionary clause to be the G 
owners for the purposes of this Act. [Para 10][1013-F-H; 
1014-A-C] 
2. In the present case, the vehicle was subject of 
an agreement of hypothecation and was in possession 
and control under respondent No.2. He had taken the H 
1007 
1008 
SUPREME COURT REPORTS 
[2014] 14 S.C.R. 
A 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, ifthe borrower failed to insure it. The said term 
B 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 respondent No. 2 to take the vehicle 
from the.dealer without full payment of the insurance. 
C Nothing has been brought on record that this fact was 
known to the appellant financier or it was done in 
collusion with the financier. [Paras 23 and 25][1026-A; 
1027-C-F] 
3. When the intention of the legislature is quite clear 
D 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 
respondent No.2, without the insurance plied the vehicle 
in violation of the statutory provision contained in 
E Section 146 of the Motor Vehicles Act, 1988, the High 
Court could not have mulcted the liability on the financier. 
Thus, the liability to satisfy the 'award is that of the owner, 
respondent No. 2.and not that of the financier. [Paras 25 
. 
F 
G 
H 
and 26][1027-F-H; 1028-A-B] 
National Insurance Co. Ltd. v. Deepa Devi & Ors. 
2001 (13) scR 134 : 2008 (1) sec 414 ; 
Godavari Finance Company v. 
Degala 
Satyanarayanamma and Ors. 2008 (6) SCR 231: 
20Q8 (5) SCC 107; Pushpa alias Leela and Ors. 
v. Shakuntala and Ors. 2011 (1) SCR 334 : 2011 
(2) SCC 240 ; Uttar Pradesh State Road Transport 
Coporation v. Ku/sum and Ors. 2011 (15) 
SCR 618: 2011 (8) SCC 142; Purnya Kala Devi 
v. State of Assam & Anr. 2014 (4) SCALE 586 -
relied on. 
• 
•
'"II"
HDFC BANK LTD. v. KUMAR I RESHMAAND ORS. 
1009 
Mohan Benefit Pvt. Ltd. v. Kachraji Rayamalji & 
A 
·Ors: (1997) 9 SCC 103; Rajasthan State Road 
Transport Corporation v. Kai/ash Nath Kothari & 
Ors. 1997 (3) Suppl. SCR 724 : 1997 (7) SCC 
481 - distinguished. 
Mukesh K. Tripathi v. Senior Divisional Manager 
B 
LIC 2004 (4) Suppl. SCR 127 : 2004 (8) sec 387; 
Ramesh Mehta v. Sanwal Chand Singhvi 2004 
(1) Suppl. SCR 418 : 2004 (5) SCC 409 ; State 
of Maharashtra v. Indian Medical Assn. 2001 (5) 
Suppl. SCR 474: 2002 (1) SCC 589; Pandey & 
C 
Co. Builders (P) Ltd., v. State ofBihar 2006 (8) 
Suppl. SCR 997: 2007 (1) SCC 467; National 
Insurance Co. Ltd. v. Durdadahya Kumar Sama/ 
(1988) 2 TAC 25 (Ori); Chief Officer, Bhavnagar 
Municipality v. Bachubhai Arjanbhai AIR 1996 
· D 
Guj. 51 ; T. V. Jose (Dr.) V Chacko PM. 2001 (3) 
Suppl.-SCR 366: 2001 (8) SCC 748- referred 
to. 
CASE LAW REFERENCE 
(1997) 9 sec 103 
distinguished. 
Para 11
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