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Prakash Chand Daga v. Saveta Sharma & Ors.

Civil Appeal · 2018 INSC 1213Decided 14 Dec 2018
Civil Appeal No. 11369 of 2018
Justice Uday Umesh Lalit · Dr. Justice D.Y. Chandrachud

Background

The appellant sold his Santro car to the first respondent in September 2009, but the sale was never recorded with the registering authority as required by Section 50 of the Motor Vehicles Act, 1988. About a month later, the car was involved in an accident injuring a man, who won a compensation award against the driver and others. On appeal, the High Court held the appellant (the registered owner on paper) liable, applying the Supreme Court's own precedent that the person shown as "owner" in RTO records remains liable regardless of an unregistered private sale.

Decision Breakdown

The Supreme Court dismissed the appeal, holding that Section 50's reporting timelines (14/30 days) exist only to facilitate administrative reporting of a transfer and do not shield a seller from third-party liability merely because an accident happens before that paperwork is completed. Relying on its earlier ruling in Naveen Kumar v. Vijay Kumar, the Court reaffirmed that for the purposes of the Motor Vehicles Act, the person registered as "owner" remains liable to accident victims until the registration record is actually updated, irrespective of any private sale or change of possession. The Court found the High Court's reasoning correct and upheld the direction fixing liability on the registered owner (with recovery rights against the actual transferee).

Lesson Learnt

If you sell a vehicle, get the registration transferred promptly: until the RTO records are updated, you remain legally the "owner" and can be held liable for accidents involving that vehicle even after you've sold it and handed over possession.

Official source (sci.gov.in)View Judgment (PDF)

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