Himachal Pradesh High Court
New India Assurance Co. Ltd. vs Lachhmi Devi And Ors. on 8 September, 1995
Equivalent citations: II(1996)ACC134, 1996ACJ496
Author: S.N. Phukan
Bench: S.N. Phukan
JUDGMENT Bhawani Singh, J.
1. All these cases are proposed to be decided by a common judgment since the question for determination in all of them is the same. Material facts are being mentioned for the purpose of dealing with the question.
2. On 2.3.1987 at about 3.15 p.m., truck HPM 698, owned by Manjit Singh Rathore, driven by driver Bhikham Ram and insured with the New India Assurance Co. Ltd., met with an accident. According to the claimants, the accident was the result of rash and negligent driving by the driver. The accident took place at village Ropari on Sarkaghat-Baroti Road. There was a marriage function at the house of some of the claimants' relation at village Chamoh, Tehsil Bhoranj, where the deceased had gone to attend the marriage ceremony on 1.3.1987. The marriage party boarded the truck from village Chamoh to village Ropari. Since the truck was being driven rashly and negligently, it fell about 100 feet, below the road as a result of which some persons died while others sustained injuries.
3. Manjit Singh Rathore has admitted the ownership of the truck but states that the truck was hired by the parents of the newly wedded couple for the carriage of dowry articles. He had directed driver Bhikham Ram to carry only the dowry articles. He had not been instructed or empowered to give lift to any passenger and in case he did so, he not only exceeded his authority but also acted negligently in allowing the passengers to board it. Therefore, loss of lives or injuries to the unauthorised claimants was due to the negligent act of the driver for which he was not responsible.
4. On behalf of the insurance company, it has been stated that the deceased/injured were gratuitous passengers, therefore, by virtue of Sections 95 and 96 of the Motor Vehicles Act, the insurance company was not liable. Further, the driver did not possess a valid driving licence nor had a valid route permit, fitness certificate and registration certificate for driving the truck. In case it is found that the accident took place due to the negligence of the owner and driver, the insurance company was not liable to pay the compensation since they were gratuitous passengers and were not covered by the insurance policy. Driver Bhikham Ram has not filed any reply.
5. The issues framed by the Motor Accidents Claims Tribunal are almost common. After hearing the parties, the Motor Accidents Claims Tribunal found that the accident was the result of rash and negligent driving by driver Bhikham Ram. The truck was held insured with the New India Assurance Co. Ltd. and was being run validly and the claimants were entitled to compensation from the New India Assurance Co. Ltd.
6. The Motor Accidents Claims Tribunal dealt with the plea of the insurance company that the deceased were gratuitous passengers. It was rejected since the insurance company did not lead any evidence to establish it. On the other hand, Manjit Singh Rathore has stated that the truck was hired for carrying dowry articles against payment of hire charges. The fact remains that the truck was hired for the marriage and it was obvious that the members of the marriage party would use it for transport. This feature is quite well-known and it is difficult to accept the statement of Manjit Singh Rathore that it was to be used only for dowry articles and driver Bhikham Ram allowed the members of the marriage party to use it unauthorisedly. Driver Bhikham Ram has not filed any reply.
7. In Shingara Ram v. Balak Ram Walia 1988 ACJ 176 (HP), the truck had been requisitioned and utilised for carrying persons to attend an election meeting. It was held that insurance company was liable to satisfy the award. It was observed that:
The law is well settled that if a breach of a term of contract permits a party to the contract not to perform the contract, the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract. The test in such a situation would be who would fail if no evidence is led. The claimant or the insured is under no obligation to furnish evidence so as to enable the insurance company to wriggle out of its liability under the contract of insurance. It is the insurance company which must lead evidence to substantiate its allegation that there has been a breach of the terms of the contract of insurance. The only statutory defence purported to be pleaded herein was that the deceased was a gratuitous passenger. No evidence has, however, been led in support of the case.
8. The Tribunal has very appropriately held that the insurance company has not led any evidence to prove that the persons were gratuitous passengers except raising a frail plea. Consequently, raising of this plea again at this level hardly tilts the scales in its favour. Apart from this conclusion, we find from evidence that the truck had been hired for the marriage against payment of charges. This way, the deceased could not be called gratuitous passengers. It has been held by five Judge Bench of the High Court of Gauhati that gratuitous passengers are entitled to get compensation from the insurance company in view of statutory instructions of the Tariff Advisory Committee, dated 25.3.1977, to cover such passengers. [See New India Assurance Co. Ltd. v. Satya-nath Hazarika 1989 ACJ 685 (Gauhati)]. This view has been accepted by various High Courts and also approved by the Apex Court. We have taken the same view in the latest decision in New India Assurance Co. Ltd. v. Bhajnoo 1996 ACJ 367 (HP).
9. Now, we turn to the question whether the owner is liable for the act of the driver, if so, to what extent? The appellant has placed reliance on Oriental Fire & General Ins. Co. Ltd. v. Gurdev Kaur 1967 ACJ 158 (P&H); Ambaben v. Usmanbhai Amirmiya Sheikh 1979 ACJ 292 (Gujarat); National Insurance Co. Ltd. v. Nathibai Chaturabhuj 1982 ACJ 153 (Gujarat); Pirthi Singh v. Binda Ram 1987 ACJ 167 (P&H); New India Assurance Co. Ltd. v. Kanchan Bewa 1994 ACJ 138 (Orissa); New India Assurance Co. Ltd. v. Kamalabai 1994 ACJ 519 (Bombay); Madhya Pradesh State Road Trans. Corpn. v. Praveer Kumar Bhatnagar 1994 ACJ 579 (MP); New India Assurance Co. Ltd. v. Tarawati 1994 ACJ 822 (P&H); Ramadoss Motor Transport v. New India Assurance Co. Ltd. 1993 ACJ 1060 (Madras); Oriental Insurance Co. Ltd. v. Milkhi Ram 1994 ACJ 380 (HP).
10. The respondents drew assistance from New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani 1958-65 ACJ 559 (SC); Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. 1977 ACJ 343 (SC); National Insurance Co. Ltd. v. Nathibai Chaturabhuj 1982 ACJ 153 (Gujarat); Narcinva V. Karnat v. Alfredo Antonio Doe Martins 1985 ACJ 397 (SC); Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC); Shingara Ram v. Balak Ram Walia 1988 ACJ 176 (HP); Bhagwandas v. National Insurance Co. Ltd. 1990 ACJ 495 (MP); Bhagwan Das v. National Insurance Co. Ltd. 1991 ACJ 1137 (MP); and Oriental Insurance Co. Ltd. v. Puni Devi 1995 ACJ 486 (HP).
11. Except for the bare statement of Manjit Singh Rathore that the driver had no authority to allow the members of the marriage party to board the truck and the driver had been instructed not to allow anyone to board it, there is no other evidence. It can, therefore, be legitimately concluded that the truck had been hired for the marriage party and was to be used for transport of not only dowry articles but also the members of the marriage party. Had the driver been instructed as stated by Manjit Singh Rathore, the driver would not have carried members of the marriage party in the truck. It is not necessary to refer to the judgments relied upon by the appellant for two reasons, namely, (i) it did not lead any evidence to substantiate the plea that the persons were gratuitous passengers and the Motor Accidents Claims Tribunal has rejected the case of the appellant on this point; (ii) no cogent reason was brought to our notice for setting aside this finding and we are taking the line that the owner is responsible for the act of the driver who was not only acting in the course of his employment for owner's business but had also his ostensible authority to conduct the business and it included even the unauthorised act assuming that the owner had instructed him not to allow the passengers to board the truck. We may refer to some of the paras of Full Bench decision of Punjab & Haryana High Court in Pirthi Singh v. Binda Ram 1987 ACJ 167 (P&H), since it supports the line we are taking in this case (paras 2 and 3):
In Pushpabai Purshottam Udeshi's case, 1977 ACJ 343 (SC), Purshottam Tulsidas met with his death in a motor car accident when he was travelling in the car which was driven by Madhavji-bhai, manager of the opponent company, Ranjit Ginning and Pressing Co. Private Limited, in a rash and negligent manner. The heirs of the deceased claimed compensation from the owner as well as the insurance company. One of the pleas raised in defence was that the deceased was travelling in the said vehicle on his own responsibility, for his own purpose and absolutely gratis and not on behalf of or at the instance of the owner or the driver of the vehicle and, therefore, the respondents could not be made vicariously liable for any negligence on the part of the driver. The High Court found that the car was going on the business of the company and so was Madhavjibhai but further held that there being no pleading or the material on the record to establish that Purshottam Tulsidas was travelling in the vehicle either for some business of the owner or under any ostensible authority from them, the accident could not be said to have taken place in the course of the employment of Madhavjibhai or under the authority of the company. Relying on the statement of law expressed by Lord Justice Denning in Young v. Edward Box & Co. Ltd. (1951) 1 TLR 789, the Supreme Court reversed the judgment of the High Court observing thus:
'Lord Justice Denning concluded by observing that the passenger was, therefore, a trespasser, so far as the employers were concerned; but nevertheless the driver was acting in the course of his employment, and that is sufficient to make the employers liable, It will thus be seen that while two of the learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman and the plaintiff was entitled to rely on that authority as a licensee, Lord Denning based it on the ground that even though the plaintiff was a trespasser so far as the defendants were concerned, as the driver was acting in the course of his employment in giving the plaintiff a lift it was sufficient to make the defendants liable. Applying the test laid down there can be no difficulty in concluding that the right to give leave to Purshottam to ride in the car was within the ostensible authority of the manager of the company who was driving the car and that the manager was acting in the course of his employment in giving leave to Purshottam. Under both the tests the respondents would be liable'.
After discussing the case-law, Kaila-sam, J. who spoke for the Bench in Pushpabai Purshottam Udeshi's case, 1977 ACJ 343 (SC), summed up the law concerning the vicarious liability of the master for the acts of the servant as under:
'Before we conclude we would like to point out that the recent trend in law is to make the master liable for acts which do not strictly fall within the term 'in the course of the employment' as ordinarily understood. We have referred to Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt 1966 ACJ 89 (SC), where this court accepted the law laid down by Lord Denning in Ormrod v. Crosville Motor Service Ltd. (1953) 2 All ER 753, that the owner is not only liable for the negligence of the driver if that driver is his servant acting in the course of his employment but also when the driver is, with the owner's consent, driving the car on the owner's business or for the owner's purposes. This extension has been accepted by this court. The law as laid down by Lord Denning in Young v. Edward Box & Co. Ltd. (1951) 1 TLR 789, already referred to, i.e., the first question is to see whether the servant is liable and if the answer is yes, the second question is to see whether the employer must shoulder the servant's liability, has been uniformly accepted as stated in Salmond: Law of Torts, 15th Edn., p. 606 in Crown Proceeding Act, 1947 and approved by the House of Lords in Staveley Iron & Chemical Co. Ltd. v. Jones (1956) AC 627 and I.C.I. Ltd. v. Shatwell (1965) AC 656. The scope of the course of employment has been extended in Navarro v. More-grand Ltd. (1951) 2 TLR 674, where the plaintiff who wanted to acquire the tenancy of a certain flat, applied to the second defendant, a person with ostensible authority to conduct the business of letting the particular flat for the first defendant, the landlord. The second defendant demanded from the plaintiff a payment of £ 225 if he wanted the flat and the plaintiff paid the amount. The plaintiff sought to recover the sum from the landlord under the Landlord and Tenant (Rent Control) Act, 1949. The Court of Appeal held that the mere fact that the second defendant was making an illegal request did not constitute notice to the plaintiff that he was exceeding his authority and that, though the second defendant was not acting within his actual or ostensible authority in asking for the premium as the landlord had entrusted him with the letting of the flat and as it was in the very course of conducting that business that he committed the wrong complained of; he-was acting in the course of his employment. Lord Denning took the view that though the second defendant was acting illegally in asking for and receiving a premium and held no actual or ostensible authority to do an illegal act, nevertheless he was plainly acting in the course of his employment, because his employers, the landlords, had entrusted him with the full business of letting the property, and it was in the very course of conducting that business that he did the wrong of which complaint is made. This decision has extended the scope of acting in the course of employment to include an illegal act of asking for and receiving a premium though receiving a premium was not authorised. We do not feel called upon to consider whether this extended meaning should be accepted by this court. It appears Lord Goddard, C.J., had gone further in Barker v. Levinson 66 TLR (Pt. 2) 717 and stated that the master is responsible for a criminal act of the servant if the act is done within the general scope of the servant's employment. Lord Justice Denning would not go to this extent and felt relieved to find that in the authorised Law Reports (1951) 1 KB 342, the passage quoted above was struck out. We respectfully agree with the view of Lord Denning that the passage attributed to Lord Chief Justice Goddard went a bit too far'.
The ambit of the vicarious liability of the owner for the acts of the servant committed in the course of the employment was further enlarged by the Supreme Court in State Bank of India v. Shyama Devi 1979 ACJ 22 (SC) and the law laid down by the Privy Council in United Africa Co. Ltd. v. Saka Owoade (1955) AC 130, that a master is liable for his servant's fraud perpetrated in the course of master's business, whether the fraud was for the master's benefit or not, if it was committed by the servant in the course of his employment, approved. There is no difference in the liability of a master for wrongs whether for fraud or any other committed by a servant in the course of his employment, and it is a question of fact in each case whether it was committed in the course of his employment. In the case before the Privy Council the appellant company had expressly committed to servants of the respondent, a transport contractor, at his request goods for carriage by road, and the servants stole the goods. From the evidence it was established that the conversion took place in the course of their employment. The respondent on these facts was held liable to the appellant for the value of the goods. From the principle enunciated in the above-noted two decisions of the Supreme Court on the question of vicarious liability of the master, it is evident that it does not depend on the lawful or unlawful nature of the acts of the servant and the master would be liable for the alleged act of the servant which had taken place in the course of his employment even though the servant may have acted in contravention of some of the provisions of the statute or the Rules made thereunder. Relying on Pushpabai Purshottam Udeshi's case, 1977 ACJ 343 (SC), the Full Bench of the Madhya Pradesh High Court in Narayanlal v. Rukhmanibai 1979 ACJ 261 (MP), took a similar view and overruled the previous Division Bench decision of that court holding thus:
'Now, a statutory rule providing that no person should be carried in a goods vehicle other than a bonafide employee of the owner or hirer of the vehicle deals with the conduct of the driver within the sphere of employment. The sphere of employment of appellant No. 2 is to drive the vehicle in execution of the master's business from Udaigarh to Indore. That sphere is not in any manner limited by the prohibition contained in the statutory rule in question.
For all these reasons, it must be held that the proposition enunciated in Bhaiyalal Godre v. Rajrani 1958-65 ACJ 37 (MP), does not lay down correct law and, in our opinion, the answer to the question referred to us is that the act of a servant employed to drive a vehicle, in giving lift to a person in disregard of a statutory rule or prohibition while driving the vehicle in execution of the owner's business is an act for which the owner is vicariously liable'.
The view expressed in Jiwan Dass Roshan Lal's case, 1980 ACJ 445 (P&H), that acting in direct contravention of a statutory provision which is made an offence by an employee cannot be easily conceived as in the normal course of employment because no employer can be deemed or assumed to authorise the contravention of law or the commission of an offence, therefore, cannot be sustained and has to be overruled. Moreover, though the contravention of the Rules framed under the Act is punishable with fine but such a contravention cannot be termed a criminal offence. Under a large number of statutes the contravention of the Rules of the provisions of the statute is punishable with fine but such a contravention has never strictly been taken to be a criminal act or offence. Again, suppose a driver of the vehicle disobeys the driving regulations contained in the Tenth Schedule and thereby causes an accident resulting in the death of some person lawfully travelling in the truck, can in such a case it be said that the owner of the vehicle would not be liable vicariously because the accident was caused by disobeying the traffic regulation which is punishable under Section 112 of the Act? The answer obviously has to be in the negative.
(3) Now, we may notice the decisions relied upon by the learned counsel for the respondents. In Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt 1966 ACJ 89 (SC), the Supreme Court referred to the English case, Britt v. Galmore and Nevill (1927-28) 44 TLR 294, in para 27 and pointed out that the owner of the car will not be liable for the accident caused by his employee if it was caused outside the master's employment. What happened there was that the owner lent the van to his driver after day's work was over to take his friends to a theatre and the driver by his negligent driving injured the plaintiff. On these facts it was held that the journey was not on the master's business and, therefore, he was not liable for the servant's act. The rule laid down in this case, obviously, is of no help to the respondents. In Krishna Ramayya Gouda v. C.P.C. Motor Co. 1983 ACJ 283 (Karnataka), the Bench relying on observations quoted above from the Supreme Court judgment in Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. 1977 ACJ 343 (SC), held that the owner was not vicariously liable because the deceased was carried in the truck in direct contravention of rule 161. The Supreme Court in Pushpabai Purshottam Udeshi's case (supra) only disapproved the observation of Lord Goddard, C.J., in Barker v. Levinson 66 TLR (Pt. 2) 717, to the effect that the master is responsible for the criminal act of the servant if the act is done within the general scope of the servant's employment. The disapproval of the said observation cannot be interpreted to mean that the master would not be liable for the civil consequences of the act of his employee done in the course of his employment because in doing so, he has contravened some rule or the provision of the Act. Causing the death by rash and negligent driving by an employee of the master is also a criminal act punishable under the law of crimes. Even though the act of the employee amounts to a criminal act still the master is liable for the civil consequences of the act of his employee. With due respect to the learned Judges, we feel that the observations of the Supreme Court in Pushpabai Purshottam Udeshi's case (supra) were not correctly interpreted in Krishna Ramayya Gouda's case (supra) and are, therefore, unable to subscribe to the rule laid down therein. In United India Insurance Co. Ltd. v. Abdul Munaf Majur Hussain Momin 1984 ACJ 653 (Bombay), the Bombay High Court on appreciation of the evidence took the view that the driver was expressly prohibited from taking the passengers in the vehicle and as such it was held that the conveyance of the passengers by the driver was not during the course of his employment. With due respect to the learned Judges we are unable to accept the proposition that if the driver had been expressly prohibited not to take passengers in the truck, the owner would be absolved of this liability. The express prohibition by the master cannot have better sanction than the provisions of the rule framed under the Act which prohibits the carrying of passengers in a truck. The determining fact as already stated above so far as the liability of the owner is concerned is whether the act was committed by the driver in the course of his employment or not, If the driver was acting in the course of his employment then the owner would be liable even though he acted against the express instructions of the owner or in violation of the Rules framed under the statute.
12. No other point was urged by the learned counsel for the parties.
13. Consequently, we do not find any substance in the plea of the appellant and proceed to reject it. All these appeals are dismissed, however, leaving the parties to bear their own costs.