Rajasthan
State Road Transport Corporation Vs. Kailash Nath Kothari & Ors [1997] INSC
704 (3 September 1997)
A. S.
ANAND, K. VENKATASWAMI
ACT:
HEADNOTE:
DR.
A.S. ANAND, J.
Common
questions of law and fact are involved in this batch of appeals failed by the
Rajasthan State Road Transport Corporation (hereinafter referred to as the
'RSRTC') against the (common) judgment of the High Court dated 22.1.1991
upholding composite awards made by the Motor Accidents Claim Tribunal
(hereinafter the Tribunal) on 13.3.1989 and are, therefore, being disposed of
by this common order.
Bus No.RSB
3945, besides some other buses, was hired by the RSRTC from its owner Shri
Sanjay Kumar - respondent, to ply on the routes specified by the RSRTC. An
agreement was executed between the RSRTC and the owner of the bus containing
the terms of hiring the bus.
Bus No
RSB 3945 was, on the fateful day, 17.7.1981, being driven by Gopal and was
plying on the route Kekri to jaipur, for which route RSRTC had the route
permit. At about 9.30 p.M. when the bus was near Renwal, it
was noticed that water was flowing over the bridge of Bandi river, due to heavy rains. The
passengers travelling in the bus requested the driver not to drive the bus over
the bridge because of overflowing water but their request had no effect and the
driver, despite the warning by the passengers, drive the bus over the bridge
and as a result of flood in the river, the bus was swept away. As a result 23
passengers travelling in the ill fated bus died due to the accident.
The
legal representatives/heirs of the 23 passengers who had died as a result of
the accident, filed separate claim petitions under Section 110-A of the Motor
Vehicles Act, 1939 (hereinafter referred to as the 1939 Act) claiming
compensation from the RSRTC and the insurance company. The claim petitions were
resisted and the RSRTC in its written statement denied its liability on the
ground that though it had hired the bus in question from Shri Sanjay Kumar and
the bus was playing on the route specified by it, the driver of the bus, Gopal,
due to whose negligence and rashness the accident had taken place, was not an
employee of the RSTRC but of the bus owner, Shri Sanjay Kumar, and therefore it
was not vicariously responsible for his negligence and rashness. It was also
pleaded that liability to pay compensation in case of an accident was that of
the "owner" and not of the hirer. Reliance in this behalf was placed
on condition No.15 of the agreement to disown its liability.
The
insurance company took the plea, in its reply to the claim petitions, that the
bus at the time of the accident was under the control of the RSRTC, therefore
it was the liability of the RSRTC to pay compensation and the insurance company
was not liable. It was further pleaded by the insurance company that the
liability of the insurance company, any event, was limited and its liability
could not exceed Rs. 75,000/- in respect of all the claim petitions arising out
of one accident. The owner of bus, Shri Sanjay Kumar, though party to the claim
petitions did not file any reply. The following issues were framed by the
Tribunal from the pleadings of the parties:
"(1)
Whether on 17.7.81 opposite party Gopal was driving bus No R.S.B. 394
negligently and he drove the bus in the flooded river and the same was swept
away, as a result of which Vijay Kumar, Ram Kishori Devi, Ram Pal, Prahlad, Galli
Devi, Bhanwar Lal, Mohan Lal, Tabalya, Babli, Jayana, Kanahya Lal, Champa Devi,
Sewa Ram, Laxmi Narain, Kamal Kishore, Miwal Kishore, Kumari Seema, Vimla Devi,
Ram Pyari Devi, Shakuntala Devi.
Km. Bela,
Pawan Kumar and Mahesh Kumar died? (2) Whether on the basis of the preliminary
objections the insurance company opposite party is not liable to pay the amount
of compensation? (3) Whether due to the terms and conditions of the contract,
the Rajasthan State Road Transport Corporation is not liable? (4) Whether
petition No.51/82 having been filed beyond limitation is not liable to be
heard? (5) Whether this incident comes within the definition of negligence? (6)
Relief." A number of witnesses were examined by the parties and after
considering, both oral and documentary evidence, the Tribunal held that the bus
driver (non applicant No.3) drove Bus No. 3945 on 17.7.1981 carelessly and
negligently and caused the accident which resulted in the death of 23 persons.
Issue No.1 was decided accordingly in favour of the claim petitioners. issue
No.2 was also decided in favour of the petitioners but it was held that in the
light of the terms of the policy of insurance and relevant provisions of the
Act, the liability of the insurance company was limited, in respect of the
accident, to a total amount of Rs. 75,000/- only Insofar as issue No.3 is
concerned, the Tribunal noticed condition No.15 of the contract of hire
executed between the RSRTC and the owner Shri Sanjay Kumar and joined that the
same was against 'public policy' and therefore could not discharge the RSRTC
from its liability. It was noticed that the bus was plying on the route
specified by the RSRTC and the passengers had paid their fares to the conductor
who was admittedly an employee of RSRTC, and as such the RSRTC could not escape
from its liability.
Accordingly,
issue No.3 was also decided in favour of the claim petitioners and the RSRTC
was held liable to pay compensation to the claimants. On issue No.4 the
Tribunal found that claim petitions were filed within time, after condoning the
delay which had been properly explained.
Issue
No.5 was also decided in favour of the claim petitioners and different amounts
were awarded in each of the claim petitions by a composite award while granting
relief under issue No.6.
Aggrieved,
by the composite award dated 13.3.1989 of the Tribunal, the appellant filed
appeals against each of the award in the High Court. The High Court also negatived
the plea of RSRTC that since it was only a hirer and not the owner of the bus,
it could not be fastened with any liability for payment of compensation,
relying upon its earlier judgments in RSRTC V. Onkar & Ors. (ACC Vol. II
1990-497); Mohd. Raffiq V. Mohd. Sadi & Ors. (unreported SB Civil Misc.
Appeal No. 243 of 1983; RSRTC V. Murlidhar & ors. besides a Division Bench
decision reported in D.B.Spl.
Appeal
No.391 of 1990 RSRTC v Rukmani Devi decided on 41.4.1991. The High Court also
rejected the plea raised on behalf of the insurance company that the liability
of the insurance company could not extend to an accident of the type which had
occurred in the present case and found that the Tribunal had rightly decided
issue No.2. The composite award made by the Tribunal in respect of various
claim petitions was accordingly upheld by the High Court vide common judgment
dated 221.1991. The RSRTC has approached this Court by Special Leave in all the
cases. At the time of hearing, the controversy in this court has been confined
to the findings on issue No.3 and no other finding has been called in question.
The
thrust of argument of learned counsel for the appellant, was that the appellant
not being the owner of the bus was not liable to pay any compensation arising
out of the accident because the driver, who was driving the bus at the relevant
time, was in the employment of the owner of the bus, Shri Sanjay Kumar and not
of RSRTC and as such it could not be held vicariously liable for the rash and
negligent act of the driver. Reference was also made to condition No.15 of the
agreement, to urge tat the RSRTC was not liable to pay compensation to the
heirs of the deceased passengers and that the liability to pay compensation to
them was of the owner of the bus, Sanjay Kumar. Learned counsel appearing for
the insurance company, did not question the finding on issue No.2 and submitted
that the specified amount had since been paid by the insurance company. He did
not dispute the correctness of the findings recorded by the Tribunal and the
High Court on issue No.3. The claimant respondents remained unrepresented,
despite service before us.
We
have given our careful consideration to the submissions made at the bar by
learned counsel for the appellant and for what follows we are not able to
appellant and for what follows we are not able to persuade ourselves to agree
with him and take a view different than the one taken by the Tribunal and the
High Court. Let us first look at some of the relevant statutory provisions.
Section
2-c(3) defines "contract carriage":
"Sec.2
- C (3) "contract carriage" means a motor vehicle which carries a
passenger or passengers for hire or reward under a contract expressed or
implied for the use of the vehicle s a whole at or for a, (fixed or agreed rate
or sum- (i) on a time basis whether or not with reference to any route or
distance or (ii) from one point to another, and in either case without stopping
to pick up).
or set
down along the line of route passengers not included in the contract, and
includes a motor cab notwithstanding that the passengers may pay separate
fares;" ............
Section
2(9) defines an owner in the following terms:- "Sec.2(9) -
"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." By Section 2(29) the "STAGE
CARRIAGE" has been defined as- "Sec.2(29) - "stage
carriage" means a motor vehicle carrying or adapted to carry more than
persons excluding the driver which carries passengers for hire or reward at
separate fares paid by for individual passengers, either for the whole journey
or for stages of the journey." Section 42 deals with the "necessity
for permits" and lays down:
"Sec.42
- Necessity for permits. - (1) No owner of a transport vehicle shall use or
permit the use of the vehicle in any public place (whether or not such vehicle
is actually carrying any passenger of goods) save in accordance with the
conditions of a permit granted or countersigned by a Regional or State
Transport Authority (or the Commission) authorising the use of the vehicle in
that place in the manner in which the vehicle is being used:
Provided
that a stage carriage permit shall, subject to any conditions that may be
specified in the permit, authorise the use of the vehicle as a contract
carriage:
...................
Section
110-A provides that an application for compensation arising out of an accident
may be made by the person who has sustained the injury or if death has resulted
from the accident, by all or any of the legal representatives of the deceased
or by the owner of the property damaged by the accident or by any agent duly authorised
by the person injured or by the legal representatives of the deceased, as the
case may be.
Having
noticed the relevant provisions of the 1939 Act, which admittedly apply to the
instant case, we now address ourselves to test the correctness of the
submission that since the RSRTC was not the owner of the vehicle, as such the
liability to pay compensation for an accident caused by the us hired by it,
cannot be fastened on the appellant and the effect of condition No.15 of the
agreement. Certain admitted facts need a notice at this stage.
It is
not disputed that the bus in question was hired by the RSRTC and was running on
the route for which a permit had been granted in favour of the RSRTC by the
competent authority. It is also not disputed that the permit to ply the bus was
in the name of RSRTC for the specified route and that the bus could not have
plied on that route except by the RSRTC, which had the permit. It is also an
admitted position that the conductor of the bus was an employee of the RSRTC
and that passengers were being carried in that bus on paying the prescribed
fare to the bus conductor, an employee of the RSRTC. The fares paid by the
passengers were received by the conductor for and on behalf of the RSRTC. The
bus was given on hire to RSRTC along with the driver, who, however, was to ply
the bus under the instructions of RSRTC. That an agreement had been executed
between RSRTC and the bus owner. Shri Sanjay Kumar, incorporating various
conditions of contract.
Conditions
4 to 7 and 15 of the agreement executed between the RSRTC and the owner read:
"4.
The corporation shall appoint the conductor for the operation of the bus given
on contract by the second party and the conductor of the corporation shall do
the work of issuing tickets to the passengers, to receive the fare, to all the
passengers to get in and get out of the bus, to help the passengers to load and
unload their goods, to stop the bus at the stops fixed by the Corporation and
to operate the bus according to time table.
5. The
tickets, way-bills and other stationery shall be supplied by the Corporation to
the said conductor of the corporation."
6. The
driver of the bus shall have to follow all such instructions of the conductor,
which shall be necessary under the rules for the operation of the bus."
7. The
driver of the bus shall comply with all the orders of the corporation or of the
officers appointed by the corporation."
15.
Upon the accident of the bus taking place the owner of the bus shall be liable
for the loss, damages and for the liabilities relating to the safety of the
passengers. The Corporation shall not be liable for any accident. If the
Corporation is required to make any payment or incur any expenses through some
court or under some mutual compromise, he Corporation shall be able to recover
such amounts from the owner of the bus after deducting the same from the
amounts payable to him." The admitted facts unmistakably show that the
vehicle in question was in possession and under the actual control or RSRTC for
the purpose of running on the specified route and was being used for carrying,
on ire, passengers by the RSRTC. The driver, was to carry out instructions,
orders and directions of the conductor and other officers of the RSRTC for
operation of the bus on the route specified by the RSRTC.
The
definition of owner under Section 2(9) 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. In this case, Shri
Sanjay Kumar, the owner of the bus could not ply the bus on the particular
route for which he had no permit and he in fact was not plying the bus on that
route. The services of the driver were transferred along with complete
'control' to RSRTC, under whose directions, instructions and command the driver
was to ply or not to ply the ill fated bus on the fateful day. The passengers
were being carried by RSRTC on receiving fare from them. Shri Sanjay Kumar was
therefore not concerned with the passengers travelling in that bus on the
particular route on payment of are to RSRTC.
Driver
of the bus, even though an employee of the owner, was at the relevant time
performing his duties under the order and command of the conductor of RSRTC for
operation of the bus. So far as the passengers of the ill fated bus are
concerned, their privity of contract was only with the RSRTC to whom they had
paid the fare for travelling in that bus and their safety therefore became the
responsibility of the RSRTC while travelling in the bus. They had no privity of
contract with Shri Sanjay Kumar, the owner of the bus at all. Had it been a
case only of transfer of services of the driver and not of transfer of control
of the driver from the owner to RSRTc, the matter may have been some what
different. But on facts in this case and in view of conditions 4 to 7 of the
agreement (supra), the RSRTC must be held to be vicariously liable for the tort
committed by the driver while plying the bus under contract of the RSRTC.
The
general proposition of law and the presumption arising therefrom that an
employer, that is the person who has the right to hire and fire the employee,
is generally responsible vicariously for the tort committed by the concerned
employee during the course of his employment and within the scope of his
authority, is a rebuttable presumption, of the original employer is able to
establish that when the servant was lent, the effective control over him was
also transferred to the hirer, the original owner can avoid his liability and
the temporary employer or the hirer, as the case may be must be held
vicariously liable for the tort committed by the concerned employee in the course
of his employment while under the command and control of the hirer not
withstanding the fact that the driver would continue to be on the pay roll of
the original owner. The proposition based on the general principle as noticed
above is adequately rebutted in this case not only on the basis of the evidence
led by the parties but also on the basis of conditions 6 and 7 (supra), which
go to show that the owner had not merely transferred the services of the driver
to the RSRTC but actual control and the driver was to act under the
instructions, control and command of the conductor and other officers of the
RSRTC.
Reliance
placed by learned counsel or the appellant on condition No.15 of the agreement
(supra) in our view is misconceived. Apart from the fact that this clause in
the agreement between the owner and the RSRTC, to the extent it shifts the
liability for the accident from the RSRTC to the owner, may be against the
public policy as opined by the High Court, though we are not inclined to test
the correctness of that proposition of law because on facts, we find that RSRTC
cannot escape its liability to pay compensation. The second part of condition
No.15 makes it abundantly clear that the RSRTC did not completely shift the
liability to the owner of the bus because it provided for reimbursement to it
in case it has to pay compensation arising out of an accident. The words
"If the Corporation is required to make any payment or incur any expenses
through some Court or under some mutual compromise, the Corporation shall be
able to recover such amounts from the owner of the bus after deducting the same
from the amounts payable to him" in the later part of condition No.15
leave no ambiguity in that behalf and clearly go to show the intention of the
parties. Thus, RSRTC cannot escape its liability under condition No.15 of the
agreement either. Thus, both on facts and in law the liability to pay
compensation for the accident must fall on the RSRTC.
Thus,
for the additional reasons noticed by us above, we find that both the Motor
Accidents Claim Tribunal and the High Court of Rajasthan, committed no error in
fastening the liability to pay compensation to the heirs of the deceased
passengers on the appellant. There is no merit in these appeals, which
consequently fail and are dismissed but since the claimant respondents have
remained unrepresented before us, with no order as to costs.
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