These cases are very common in various Courts of India and Supreme Court of India. I can understand your concern in this regard.
Firstly, you need to understand the law laid down by the Hon'ble Supreme Court in this regard.
Supreme Court in the case of Naveen Kumar v. Vijay Kumar, (2018) held that:
Firstly, let us see what is the definition of owner in the Motor Vehicles Act. Section 2(30) of the Motor Vehicles Act, 1988, defines owner (of a vehicle) as under:
“(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;”
Interpreting this clause, the Supreme Court observed that the person in whose name a motor vehicle stands registered is the owner of the vehicle for the purposes of the Act. The use of the expression “means” is a clear indication of the position that it is the registered owner whom Parliament has regarded as the owner of the vehicle.
The Court referred to the earlier Motor Vehicles Act of 1939, wherein the expression “owner” was defined in Section 2(19) as follows:
“(19) “owner” means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement.”
The Supreme Court held that the Parliament while enacting the Motor Vehicles Act, 1988 made a specific change by recasting the earlier definition. Section 2(19) of the earlier Act stipulated that where a person in possession of a motor vehicle is a minor, the guardian of the minor would be the owner and where the motor vehicle was subject to a hire-purchase agreement, the person in possession of the vehicle under the agreement would be the owner. The Court observed:
“The 1988 Act has provided in the first part of Section 2(30) that the owner would be the person in whose name the motor vehicle stands registered. Where such a person is a minor the guardian of the minor would be the owner. In relation to a motor vehicle which is the subject of an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement would be the owner. The latter part of the definition is in the nature of an exception which applies where the motor vehicle is the subject of a hire-purchase agreement or of an agreement of lease or hypothecation. Otherwise the definition stipulates that for the purposes of the Act, the person in whose name the motor vehicle stands registered is treated as the owner.”
The Court took note of Section 50 of the Act which deals with transfer of ownership of a vehicle, and also referred to various previous judgments, in particular, the following cases, which were affirmed:
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Pushpa v. Shakuntala, (2011) 2 SCC 240;
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T.V. Jose v. Chacko P.M., (2001) 8 SCC 748;
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P.P. Mohammed v. K. Rajappan, (2008) 17 SCC 624.
After considering all these aspects, the Supreme Court held:
“…in view of the definition of the expression “owner” in Section 2(30), it is the person in whose name the motor vehicle stands registered who, for the purposes of the Act, would be treated as the “owner”. However, where a person is a minor, the guardian of the minor would be treated as the owner. Where a motor vehicle is subject to an agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement is treated as the owner. In a situation … where the registered owner has purported to transfer the vehicle but continues to be reflected in the records of the Registering Authority as the owner of the vehicle, he would not stand absolved of liability. Parliament has consciously introduced the definition of the expression “owner” in Section 2(30), making a departure from the provisions of Section 2(19) in the earlier 1939 Act. The principle underlying the provisions of Section 2(30) is that the victim of a motor accident or, in the case of a death, the legal heirs of the deceased victim should not be left in a state of uncertainty. A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the Registering Authority. To hold otherwise would be to defeat the salutary object and purpose of the Act. Hence, the interpretation to be placed must facilitate the fulfilment of the object of the law.”
Thus, it was clearly held by the Supreme Court that a person continues to be owner of the vehicle, even if he has sold his vehicle to another person, if the transfer of the vehicle is not reflected in the RTO records and if the vehicle continues to be in the name of the original owner despite the sale of vehicle. Accordingly, such original owner would continue to be liable for compensation, if any, to be paid by the owner for any accident, despite he having sold the vehicle.
It is therefore in the interest of those who sell their vehicles, to get the vehicles transferred in the name of the buyer by following the procedure laid down for transfer of vehicles, particularly in Section 50 of the Motor Vehicles Act, 1988.
Therefore, as per the facts you mentioned you can report the matter to the nearest police station of your area in West Bengal and also the Regional Transport Office. Also, you can issue the legal notice through Advocate in this regard to the concerned person so as to safeguard yourself.
You may contact my secretary to connect with me for clarification.
Gopal Verma
Advocate on Record
Supreme Court of India