JUDGMENT:

The appeal is filed against the judgment and award of Claim Petition No. 86/2000 which was pending before MACT, Salcete, Margao. Both the sides are heard.

2. During arguments, the learned Counsel for appellant submitted that original respondent no. 5, The United India Assurance Company Ltd. was liable to pay the compensation as the vehicle was insured by the owner with this Insurance Company and if it is found that respondent no. 2 from the Claim Petition was wrongly deleted, the matter be remanded back. Other side was heard on this point also. Learned Counsel for original respondent no. 3, the dealer of the vehicle supported the appellant on the aforesaid point.

3. In short, the facts leading to the institution of the appeal can be stated as follows:

The accident took place on 2/03/2000. One Mahindra jeep bearing Temporary Registration No. MH-15-TRE-969 gave dash to the motorcycle of deceased Jose A. Dias, who was aged about 39 years. Jose A. Dias died in the accident. The Claim Petition was file by the widow and two minor issues of Jose A. Dias. The Tribunal has given the decision against respondents no. 1, 3 and 4 from the Claim Petition, who are the driver, the dealer and Insurance Company of the vehicle, respectively and they are directed to pay the compensation of Rs. 4,68,650/- (Rupees four lacs sixty eight thousand six hundred and fifty only) with interest at the rate of 9% p.a jointly and severally.

4. The decision of the Tribunal is challenged only by respondent no. 4, The New India Assurance Company Ltd. The challenge is on the ground that the vehicle was bearing Temporary Registration Number issued by R.T.O office at Nashik and so it was not open to the dealer to use Trade Certificate on the basis of which the insurance was given by the appellant. It is the case of the appellant that the vehicle bearing the aforesaid Trade Certificate Number was not covered under the policy. It is the case of the appellant that original respondent no. 6 namely, The Mormugao Port Trust (in short, MPT) was the owner of the vehicle and at the relevant time, the vehicle was not in the possession of the dealer. Submissions are also made to the effect that the vehicle was not being used for routine check up, etc. for which the cover of policy was given.

5. It is not disputed that the vehicle involved in the accident was given Temporary Registration No. MH-15-TRE-969 by Nashik R.T.O Office, Maharashtra. The vehicle was manufactured in a factory from Nashik and it was to be taken to Goa for sale. The Temporary Registration Number was obtained by the manufacturer. This vehicle was having serial no. 3153386 and chasis no. DY 48576. The original respondent no. 2, manufacturer had obtained transit insurance in respect of this vehicle for covering the period which was required to take the vehicle from Nashik to Goa.

6. Respondent No. 2 filed written statement and took defence that the vehicle was routed by it through the dealer, respondent no. 3 to the customer. It took the defence that transit insurance cover was given by the United India Assurance Company Ltd. to this vehicle and after reaching the vehicle to respondent no. 3, respondent no. 3 was expected to take steps for giving cover of insurance for further period till it was delivered to the proposed purchaser. It is the case of respondent no. 2 that accordingly respondent no. 3 had insured that vehicle with respondent no. 4, the appellant.

7. Respondent no. 5, the United India Assurance Company Ltd. filed written statement and took the defence that it had issued the policy only to cover the risk during the transit of vehicle from the place of manufacture to Goa. It took the defence that the vehicle left Nashik on 16/02/2000 and it reached Goa on 19/02/2000 and it was reached to the dealer, respondent no. 3 on the same day and so the period of policy expired on 19/02/2000. It took the defence that the respondent no. 4 had given the cover of policy to this vehicle after 19/02/2000 and it was in existence on the date of the accident.

8. Respondent no. 6, MPT took the defence that the vehicle involved in the accident was never purchased by it. It gave the numbers of the vehicle which were sold to it by respondent no. 2.

9. The remaining respondents including the dealer did not file written statement. The Tribunal deleted respondent no. 5, the United India Assurance Company Ltd. from the proceedings on its request after hearing all the sides. The aforesaid circumstances and the record was considered by the Tribunal. The order dated 5/02/2001 passed by the Tribunal in favour of the respondent no. 5 was not challenged by anybody and first time in this proceedings the grievance was expressed by the appellant against this order.

10. The record like the police papers shows that vehicle bearing Temporary Registration No. MH-15-TRE-969 was involved in the accident. It is not disputed that this vehicle had serial no. 3153386 and chasis no. DY 48576. This Temporary Registration Number was obtained by manufacturer for reaching the vehicle to its destination, Vasco-da-Gama, Goa. The Temporary Registration Certificate was issued on 16/02/2000 and it was to be valid until 16/03/2000 (Exhibit 98). Trade Certificate was issued by registering authority from Goa on 28/04/1999. Serial number of the certificate is mentioned as GDM 1005.A, B & C. The name of holder of the certificate is mentioned as DPC Motors Pvt. Ltd., Mapusa-Goa (original respondent no. 3). This certificate was having validity period from 28/04/1999 to 28/04/2000. This record is not disputed.

11. Jayaraj Shetty/AW6, an employee of manufacturing company has given evidence that booking of the vehicle was done by MPT, but vehicle was to be delivered to MPT through respondent no. 3, the dealer. His evidence shows that the vehicle reached Goa one week prior to the date of accident. He has denied the suggestion given that the vehicle was directly sold to MPT. His evidence in cross-examination shows that on the date of the incident the vehicle was in possession of respondent no. 3, DPC Motors Pvt. Ltd. His evidence further shows that as per the practice, the delivery is given to the purchaser through dealer in such cases. He has admitted that his company had insured the vehicle for the period required to reach the vehicle to DPC Motors Pvt. Ltd. and after that it was the responsibility of the dealer, DPC Motors Pvt. Ltd. to see that the vehicle was insured for further period. Copy of cover note of insurance purchased by the manufacturer shows that it was to remain in existence for the period from 16/02/2000 till the arrival of the vehicle at destination. Respondent no. 3, the dealer has examined Ratish Naik, Executive Service Promotion as AW3, though he has not filed written statement. His defence in the cross-examination shows that on 2/03/2000 i.e on the date of the accident the vehicle was in the possession of respondent no. 3, dealer. His evidence shows that the vehicle was with the dealer for pre-delivery inspection and trial. Copy of cover note issued by present appellant in respect of Trade Certificate No. GDM 1005.A is on the record. The cover note shows that insurance cover was given in respect of such vehicles by appellant for the period 30/03/1999 to 29/03/2000. The rules framed with regard to the necessity of taking such steps by the dealer are being discussed hereinafter. This record is also not disputed.

12. Central Motor Vehicles Rules, 1989 were referred by the learned Counsel for the appellant. Rules 33, 35(1), 37, 39, 41(a, c, g) and 42 were referred, which read as follows:

33. Condition for exemption from registration—For the purpose of the proviso to section 39, a motor vehicle in the possession of a dealer shall be exempted from the necessity of registration subject to the condition that he obtains a trade certificate from the registering authority having jurisdiction in the area in which the dealer has his place of business in accordance with the provisions of this Chapter.

35. Grant or renewal of trade certificate— (1) On receipt of an application for the grant or renewal of a trade certificate in respect of a vehicle, the registering authority may, if satisfied that the applicant is a bona fide dealer and requires the certificates specified in the application, issue to the applicant one or more certificates, as the case may be, in Form 17 [within thirty days from the date of receipt of such an application] and shall assign in respect of each certificate a trade registration mark consisting of the registration mark referred to in the notification made under subsection (6) of section 41 and followed by two letters and a number containing not more than three digits for each vehicle.

37. Period of validity—A trade certificate granted or renewed under rule 35 shall be in force for a period of twelve months from the date of issue or renewal thereof and shall be effective throughout India.

39. Use of trade registration mark and number—(1) A trade registration mark and number shall not be used upon more than one vehicle at a time or upon any vehicle other than a vehicle bona fide in the possession of the dealer in the course of his business or on any type of vehicle other than the one for which the trade certificate is issued.

(2) The trade certificate shall be carried on a motor vehicle in a weather-proof circular folder and the trade registration mark shall be exhibited in a conspicuous place in the vehicle.

41. Purposes for which motor vehicle with trade certificate may be used— The holder of a trade certificate shall not use any vehicle in a public place under that certificate for any purpose other than the following:—

(a) for test, by or on behalf of the holder of a trade certificate during the course of, or after completion of, construction or repair; or

(c) for a reasonable trial or demonstration by or for the benefit of a prospective purchaser and for proceeding to or returning from the place where such person intends to keep it; or

(g) for proceeding to or returning from an exhibition of motor vehicles or any place at which the vehicle is to be or has been offered for sale;

42. Delivery of vehicle subject to registration— No holder of a trade certificate shall deliver a motor vehicle to a purchaser without registration, whether temporary or permanent.

13. In view of the aforesaid rules, submission was made by the learned Counsel for the appellant that the Trade Certificate could not have been used by the dealer. The Rules show that they give procedure which is required to be followed by the dealer. The Temporary Registration Certificate is issued for different purpose and the Trade Certificate is issued for other purpose. The provisions with regard to issue of Temporary Registration Certificate are as follows:

Sections 39, 40, 43(1) & 43(2) and 146(1) of the Motor Vehicles Act

39. Necessity for registration - No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place unless the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner:

Provided that nothing in this section shall apply to a motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government.

40. Registration, where to be made - Subject to the provisions of Section 42, Section 43 and Section 60, every owner of a motor vehicle shall cause the vehicle to be registered by a registering authority in whose jurisdiction he has the residence or place of business where the vehicle is normally kept.

43. Temporary registration - (1) Notwithstanding anything contained in Section 40 the owner of a motor vehicle may apply to any registering authority or other prescribed authority to have the vehicle temporarily registered in the prescribed manner and for the issue in the prescribed manner of a temporary certificate of registration and a temporary registration mark.

(2) A registration made under this section shall be valid only for a period not exceeding one month, and shall not be renewable:

Provided that where a motor vehicle so registered is a chassis to which a body has not been attached and the same is detained in a workshop beyond the said period of one month for being fitted with a body or any unforeseen provide as under: circumstances beyond the control of the owner, the period may, on payment of such fees, if any, as may be prescribed, be extended by such further period or periods as the registering authority or other prescribed authority, as the case may be, may allow.

146. Necessity for insurance against third party risk - (1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter.

14. The aforesaid provisions show that there is no force in the defence taken by the appellant that as the vehicle was given Temporary Registration Certificate by Nashik R.T.O (Maharashtra), the Trade Certificate obtained in Goa by the dealer could not have been the base for taking policy and policy cannot be used in respect of such vehicle. The dealer had purchased the insurance from appellant on the basis of Trade Certificate and it is not disputed that the risk of the dealer in respect of such vehicle, bearing Trade Certificate Number was covered by the appellant. In view of the circumstances, it can be said that the Tribunal has not committed any error in holding the dealer and the appellant jointly and severally liable. As the manufacturing company was also the owner, it is also held jointly and severally liable along with the other two respondents. No fault can be found with the decision given by the Tribunal.

15. Another defence taken by the appellant that the dealer cannot be treated as the owner and MPT was the owner due to the Sale Certificate issued by the manufacturer has also no force. Firstly, when the Insurance Company had issued the cover note in respect of the vehicle in favour of the dealer such defence is not available. Secondly, in view of the record and provisions of law, it cannot be said that MPT had become the owner of the vehicle. It can be said that purchase order was placed by MPT, but the sale was not completed. Routine things had to be done like checking the vehicle, testing of the vehicle and only after that the proposed owner would have accepted the vehicle. Till that time, the manufacturing company remained the owner. The evidence given by the claimant shows that the vehicle was subsequently sold by the manufacturing company to other party. The word ‘owner’ is not used and the word ‘insured’ is used to describe the party in chapter XI of the Act and person like dealer who is having possession of the vehicle under agreement with the manufacturer is expected to see that vehicle is insured when it is in his possession.

16. Under Sections 19 and 21 of Sale of Goods Act, 1930 the sale becomes complete when the conditions laid down are satisfied, which read as under:

19. Property passes when intended to pass (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.

(3) Unless a different intention appears, the rules contained in Section 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.

21. Specific goods to be put into a deliverable state - Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.

In view of these provisions and the facts of the case, the ‘sale’ in favour of respondent no. 6 was not completed on the date of accident.

17. The Tribunal has referred to the case of Madras State v. G. Dunkeriey and Co. reported in AIR 1958 S.C 560. In this case, the Apex Court has discussed the conditions for transfer of property vehicle and held thus:

“To constitute a valid sale of the goods under the Sale of Goods Act, there must be cogent and convincing evidence of: (i) agreement between the competent parties, (ii) the price for the goods, and (iii) passing of the property in the goods. Unless all these ingredients of sale are duly proved, mere entry or endorsement made by the registering authority under Section 31 of the Motor Vehicles Act in the relevant record/registers showing transfer of ownership of a vehicle does not amount to sufficient proof of sale of that vehicle.”

18. The aforesaid provisions show that dealer is expected to take Trade Certificate and purchase policy in respect of the period when the vehicle remains in his custody before giving delivery to purchaser. The aforesaid provisions lead to the inference that Insurance Company cannot deny the liability on the ground that Insurance Policy was purchased on the basis of Trade Certificate but the vehicle was bearing Temporary Registration Number on the date of accident; provided that the vehicle was still in the possession of dealer at the relevant time, it was not yet delivered to the purchaser and the period of both Trade Certificate and the Insurance Policy had not expired. In such a case, it is not open to Insurance Company to deny the liability on the ground that the vehicle was given temporary registration number and the policy covered Trade Certificate.

19. In the present case, the transfer of vehicle was not completed and MPT had not become the owner. Thus, the appeal is devoid of merits. In the result, the appeal stands dismissed.