Andhra HC (Pre-Telangana)
New India Assurance Co. Ltd. vs V. Ramachandra Naidu And Ors. on 12 July, 2004
Equivalent citations: III(2005)ACC892, 2006ACJ2435, 2004(5)ALD378, AIR 2005 (NOC) 85 (AP), 2006 (1) ALL LJ EE 65, 2004 A I H C 4029, (2004) 5 ANDHLD 378, (2005) 3 ACC 892, (2006) 4 ACJ 2435
Author: L. Narasimha Reddy
Bench: L. Narasimha Reddy
JUDGMENT L. Narasimha Reddy, J.
1. This C.M.A. is filed against the order, dated 16-3-2004 passed by the Motor Accidents Claims Tribunal-cum-District Judge, Chittoor, in IA No. 1807 of 2003 in O.P. No. 257 of 2003.
2. Respondents 3 and 4 filed the O.P., claiming a sum of Rs. 1,50,000/-, as compensation, for the death of their four years son, in an accident that occurred on 26-12-2002, involving vehicle bearing No. AP-03-U-4177. They also filed I.A. No. 1807 of 2003 for awarding a sum of Rs. 50,000/-, towards 'no fault liability', under Section 140 of the Motor Vehicles Act (hereinafter referred to as 'Act'), pending adjudication to the O.P. The appellant, Insurance Company, resisted the application on the ground that the bus involved in the accident, though insured with it, was hired by A.P.S.R.T.C.-2nd respondent herein, and in that view of the matter, neither the owner of the vehicle nor its Insurance Company, can be held liable to pay any amount including the one towards 'no fault liability'. The Tribunal repelled this contention and awarded a sum of Rs. 50,000/- towards 'no fault liability' to the Respondents 3 and 4. The appellant, A.P.S.R.T.C., and the owner of the vehicle were held jointly and severally liable to pay that amount.
3. Sri C. Prakash Reddy, learned Counsel for the appellant submits that the vehicle in question was engaged by the 2nd respondent-A.P.S.R.T.C., that too under a permit issued in the name of 2nd respondent, and that neither the owner of the vehicle nor the appellant can be held liable to pay the amount in any way.
4. Sri P. Vinayaka Swamy, learned Counsel for the 2nd respondent submits that A.P.S.R.T.C., is only a hirer and that there is a specific condition in their hire agreement that it shall be the obligation of the owner of the vehicle, to insure the vehicle for third party risk and it shall be their obligation to meet any liability arising out of the accidents.
5. The appellant does not dispute the fact that the accident took place involving the vehicle AP-03-U-4177, owned by the 1st respondent and that it was insured with it. Section 140 of the Act provides for payment of a sum of Rs. 50,000/-, in case of death in an accident involving in a motor vehicle, irrespective of any neglect or default on the part of the driver or owner of the vehicle. For awarding the sum, provided for, under Section 140 of the Act, neither framing of an issue nor recording a finding as to the negligence on the part of the driver is necessary. If there is no serious dispute as to the very occurrence of the accident involving vehicle, awarding of the amount covered by Section 140, is almost a matter of course. It is for this reason that the Respondents 3 and 4 filed I.A. for awarding the amount. Before the Tribunal, there was no dispute that the son of Respondents 3 and 4 died in an accident involving the vehicle owned by the 1st respondent and insured with the appellant. Therefore, the Tribunal awarded the sum as prayed for.
6. The appellant does not dispute the power of the Tribunal to award such a sum in view of the fact that there did not exist any dispute as to the death of the boy and involvement of the vehicle. Its objection is for fastening the liability upon it. It pleaded that since the vehicle was hired with the 2nd respondent and was being plied under a permit obtained by the 2nd respondent, the liability ought to have been fastened upon that exclusively.
7. Chapter XI of the Act prescribes the procedure for insurance of motor vehicles against third party risks. Section 146 of the Act makes it obligatory on the part of any user of the vehicle, except as passenger, to take a policy of insurance in accordance with that Chapter. Section 147 of the Act delineates the requirement of the policies and limits of liability. Such insurance policies cover the liability arising out of accidents, subject to the various limits and conditions contained in the relevant provisions of Chapter XI Once a vehicle is insured in accordance with Chapter XI, any liability arising out of an accident involving that vehicle is to be met with by the insurer, subject to the provisions of Section 147 of the Act. In clear terms, this section mandates that the liability of the insurer shall be absolute and unlimited in case of death or injury to third parties, and limited to a sum of Rs. 6,000/- in case of damage to property of third party. The question as to whether the vehicle is being used by the owner himself or was given on hire, is of hardly any significance in the matter of fastening the liability on the insurer.
8. The basis for the contention of the appellant is that once the vehicle is with the 2nd respondent, on hire and completely under its control, for the purpose of the Act, the 2nd respondent becomes the owner, and the liability rests with it, to pay the amount towards no fault liability, or such compensation as may be awarded by the Tribunal. In support of this contention, reliance is placed upon the judgment of the Supreme Court in Rajasthan State Road transport Corporation v. Kailash Nath Kothari, . The facts of that case are similar to the one on hand. The bus owned by a private individual was hired by the RSRTC. The bus was swept in a river on account of flood, and as many as 23 passengers died. On claims being raised by the dependants of the deceased passengers, various amounts were awarded. The insurance coverage was limited to Rs. 75,000/-. The question arose as to whether the RSRTC is liable to pay the compensation, in the claims arising out of the accident.
9. The Supreme Court took the view that the person or agency, in whose control the vehicle is being plied, will come within the definition of 'owner' and is thereby vicariously liable for the fault committed by the employee, during the course of the employment. It was left open to the RSRTC to recover the amount paid by it, towards compensation, from the bills payable to the owner of the vehicle. Recently, this was followed by this Court in K. Matura Bai v. A. Shiva Nageswar Rao, .
10. However, the ratio laid down by the Supreme Court in RSRTC's case (supra), does not apply to the present case. The reason is that, in RSRTC's case, the accident took place on 17-7-1981 and the matter was governed by the provisions of the Motor Vehicles Act, 1939 (old Act). The case on hand is governed by the provisions of the Motor Vehicles Act, 1988 (new Act), The Supreme Court based its conclusion mainly on the definition of 'owner' in old Act. The same is evident from the following observation;
Para-17: The definition of owner under Section 2(19) of the Act is not exhaustive. It has, therefore to be construed, in a wider sense, in the facts and circumstances of a given case. The expression owner must include, in a given case, the person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus. To confine the meaning of 'owner' to the registered owner only would in a case where the vehicle is in the actual possession and control of the hirer, not be proper for the purpose of fastening of liability in case of an accident. The liability of the 'owner' is vicarious for the tort committed by its employee during the course of his employment and it would be a question of fact in each case as to on whom can vicarious liability be fastened in the case of an accident...."
11. The accident in the present case took place on 26-12-2002. It is governed by the provisions of the new Act. The word owner is defined under Sub-section (30) of Section 2 of the new Act.
12. If the definition of the term 'owner', under both the Acts, is one and the same, there should not be any difficulty in applying the ratio laid down by the Supreme Court in Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (supra). However, the definition of 'owner' in the new Act, is radically different from the one under the old Act. A comparison of the relevant provisions of both the Acts would demonstrate the difference:
Section 2(19) of the old Act: "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;"
Section 2(30) of the new Act: "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;"
13. Change of definition of owner in the new Act is not without significance. Under the new Act, the registered owner is the person, who is to be treated basically as the owner of the vehicle. The other contingencies, provided for in the definition can be construed as devices to identify the owner, if there is any ambiguity, as to the registered owner of the vehicle. That being the case, the question as to whether the vehicle was being used by the registered owner himself, or was given on hire to a different person, pales into insignificance. Absence of reference to "person in whose name a motor vehicle stands registered, in the definition of owner, under the old Act, made a substantial difference. Such absence, as pointed out by the Hon'ble Supreme Court, rendered the definition not an exhaustive one. Hence, the ratio laid down by the Supreme Court in the above case does not apply to the facts of this case.
14. Further Chapter XI of the new Act provides for compulsory insurance of the vehicles against 3rd party risks. It was in compliance with this, that the 3rd respondent insured his vehicle with the appellant. Even assuming that there can be registered owner as well as an owner under an agreement of lease in respect of the same vehicle, the new Act does not provide for taking out of insurance coverages by both of them independently, A policy coverage taken by one would cover the liability.
15. If the contention of the appellant is to be accepted, the owner and insurer of a taxi vehicle can plead that they are not liable in the event of an accident taking place, when the vehicle is under hire. With impunity, they can plead that it is the person who hired the vehicle either for a short period or a longer duration that is liable to compensate for the death or injuries caused due to accidents. Similarly, the owner of a goods vehicle and its insurer can plead that the liability to pay the compensation arising out of an accident involving the vehicle, has to be met by the person or agency whose goods are being transported. This is not the purport of the Motor Vehicles Act or the concept of insurance against third party risk. The possibility of such interpretations is ruled under the new Act. Such a course of action would defeat the very purpose of enactment of the relevant provisions, to cover third party risks. Hence, this Court is not inclined to interfere with the order under appeal,
16. The appeal is accordingly dismissed.