Andhra HC (Pre-Telangana)
The A.P.S.R.T.C., Rep. By Its Managing ... vs Smt. Polavarapu Lakshmi Kumari on 28 April, 2004
Equivalent citations: III(2004)ACC904, 2006ACJ2095, 2004(4)ALD556, 2004(5)ALT457
JUDGMENT C.Y. Somayajulu, J.
1. First respondent filed a claim petition seeking compensation of Rs.8, 18,000/- for the injuries sustained by her in an accident caused by the bus bearing No. TCB-7000 belonging to the second respondent and insured with the fourth respondent and hired to the appellant, allegedly due to the rash and negligent driving of the said bus by the third respondent and examined herself as P.W.1 and six other witnesses as P.Ws.2 to 7 and got marked Exs.A.1 to A.44. The Tribunal having held that the accident occurred due to rash and negligent driving of the third respondent, passed an award for Rs.2,71,810/-, in favour of the first respondent against the third respondent and appellant only, and exonerated the second and fourth respondents from liability. Aggrieved by the said award exonerating the fourth respondent-insurer from its liability, this appeal is preferred by the hirer of the bus.
2. The point for consideration is:
Whether fourth respondent (insurer) is liable to pay the compensation payable to the first respondent?
3. The contention of the learned counsel for the appellant is that in view of the ratio in Depot Manager, APSRTC, Miryalaguda, Nalgonda District v. Poreddy Sujatha & others1, fourth respondent also is liable to pay the compensation payable to the first respondent. The contention of the learned counsel for fourth respondent is that since third respondent was under the control of the appellant only and since the owner of the bus was exonerated from liability, fourth respondent, which is the insurer of the owner of the bus is not liable to pay the compensation payable to the first respondent, who was a passenger in the bus, in view of claim I.M.T. 12 in Ex.B1 policy, under which fourth respondent undertook to cover the risk of the insurer only, but not that of the hirer. It is his contention that if the owner of the bus hires the bus to others, the hirer, in order to have the benefit of the insurance taken out by the owner, has to pay additional premium and since in this case no additional premium is paid either by the appellant or the owner, question of 4th respondent indemnifying the hirer, does not arise. It is his contention that since R.T.C. buses need not have insurance as per Section-146(3)(c) of the Motor Vehicles Act, 1988, (for short the 'Act') question of insurer indemnifying the appellant does not arise. He further contended that the ratio in Poreddy Sujatha's case (1st supra) does not apply to passenger traveling in the bus.
4. I am unable to agree with the contention of the learned counsel for fourth respondent that in view of Section - 146(3)(c) of the Act, which grants exemption to the vehicles belonging to State Road Transport Corporations, from being insured fourth respondent cannot be made liable to pay the compensation, because the bus involved in the accident, does not belong to the appellant. Appellant, which is the Andhra Pradesh State Road Transport Corporation, took the bus belonging to the 2nd respondent on hire. The benefit of Section 146(3)(c) does not extend to buses taken on hire by the State Road Transport Corporation; It applies only to buses belonging to ie. Owned by the State Road Transport Corporation. That apart Section 146(3)(c) grants an exemption but it is not a mandate. So that provision cannot be taken as a bar for or a prohibition, against a State Road Transport Corporation insuring its vehicles. The concerned State Road Transport Corporation, if it so desires, can insure its vehicles against any risk in spite of Section 146(3)(c) of the Act. If it does not insure its vehicles it cannot be visited with the penal consequences envisaged by Section 196(1) of the Act, in view of Section 146(3)(c) of the Act.
5. The contention that since no additional premium is paid, fourth respondent cannot be made liable, cannot be accepted because no such plea is taken in the counter of the fourth respondent and also for the reasons to be mentioned below. That apart the terms and conditions in Ex.B.1 do not lay down that in case the bus is hired unless additional premium is paid, the policy lapses or ceases to have force.
6. The contention that since Poreddy Sujatha's case (1-supra) does not relate to a passenger in a bus, the ratio therein does not apply to a passenger in the bus has no force, because as per Section 147 of the Act, the Act policy covers the risk of any passenger in a public service vehicle also. Similarly, the contention that IMT.12 applies only to 'the insured' but not to the 'hirer' has no force, because as per Section 146(1) of the Act, insurance as contemplated by Section 147 of the Act is compulsory. A Full Bench of this Court in M.Kondaiah Vs. Yaseen Fitima2, while considering the question whether third party risk covered by an 'Act policy' would continue even after sale of the vehicle, and the purchaser either not intimating the insurer about the transfer or failing to take out a fresh policy, held that since the insurance under the Motor Vehicles Act, 1939 is to the 'vehicle', it normally runs with the vehicle, and so the policy, as far as third party risk contemplated by the Motor Vehicles Act,1939 is concerned, does not lapse and the insurer is liable to pay compensation as per the Act policy. Since Sections 29-A, 31 and Section 94 of Motor Vehicles Act, 1939 which were considered by the Full Bench for arriving at the decision are almost similar to Section 48, Section 50 and Section 146 of the Act, the ratio in that decision continues to apply even after the coming into force of the Act. In a sale there is transfer of ownership, in case of hire there is no transfer of ownership. So hirer is in a better position than that of a purchaser and so the insurer cannot avoid its liability to a third party merely because the owner gave the vehicle on hire to another person.
7. After referring to the case law on the subject, in Poreddy Sujatha's case (1 supra) it was held that insurer also is liable to pay the compensation payable to a third party, even when the vehicle is hired to another. Insurance of the bus belonging to the second respondent with the fourth respondent is admitted in this case. So respondents-2 to 4 and appellant would jointly and severally be liable to pay the compensation payable to the first respondent. The point is answered accordingly.
8. In view of the finding on the point for consideration, the appeal is allowed and the award passed by the Tribunal is modified and an award is passed in favour of the first respondent for Rs.2,81,810/- with interest at 9% per annum from the date of petition till the date of deposit with proportionate costs against respondents-2 to 4 and the appellant, jointly and severally. Parties are directed to bear their own costs in the appeal.