STATE BANK OF INDIA Vs. MOHD. AASIF

JUDGEMENT

(1.) IT is an admitted position by the claimant as well as by the appellant -State Bank of India -that the vehicle in question jeep No. MBJ 9388 was hypothecated with the State Bank of India. If a property is hypothecated to the creditor it is given as security or collateral for a debt without physical transfer thereof to the creditor. The title to the property does not pass to the creditor but the creditor gets a right to sell the property hypothecated in the eventuality of non -payment of the debt. The Bank hypothecating does not step into the shoes of the owner and does not become the owner of the property hypothecated. I am supported in my view by a decision of the Division Bench of the Gujarat High Court reported in Bank of Baroda v. Rabari Bachubhai Hirabhai and others (AIR 1987 Guj. 1).

(2.) COMPENSATION for a motor accident claim can be awarded against the owner of a vehicle or the Insurance Company. The Bank having not acquired title to the jeep which met with the accident, no liability could be fastened on the Bank. Therefore, the appeal is allowed and the award of compensation so far it is against the appellant State Bank of India is set aside.

(3.) AS a result thereof, the cross -objection is allowed and the award of compensation is modified to Rs. 3700/ - to be paid by the respondent No. 2 Bharat Bhushan alone. In the circumstances of the case, the parties shall bear their own costs. AIR 1987 Guj. 1 relied on.