A Bank sanctions a loan. A tractor is bought. The tractor meets with an accident and on the date of the accident the tractor is uninsured. Can the owner of the tractor pass on his liability under Section 196 of the Motor Vehicles Act, 1988 to the Bank? In Central Bank of India v. Jagbir Singh, [Civil Appeal 3645 of 2015] (“Central Bank”) it has been held that, “the liability of such Bank to get the vehicle insured is only till the vehicle comes out on the road. In other words, the Creditor Bank is not liable to get renewed the insurance policy on behalf of the owner of the vehicle from time to time.”
It is interesting that a 230-day delay before National Disputes Redressal Commission stood condoned in Central Bank. The branch of the Appellant Bank is situated in a remote village and 230 are the number of days such Banks may take in receiving a permission to file a Revision Petition before the NCDRC. In RP/3648/2013, it was observed that the Bank has not mentioned in its condonation of delay application “the dates and the channels through which the file proceeded”. The SC, in its wisdom, however thought, “the time taken by the Appellant Bank in seeking permission to file the Revision Petition, as the matter had to be processed at various levels, cannot be said to have been not sufficiently explained for the purpose of condonation of delay.”
It is said, “condonation of delay is an exception and should not be used as an anticipated benefit for government departments”. But now you have the Magic No. 1: 230.