APSRTC Held Liable for Fatal Accident by Outsourced Driver in Depot; High Court Affirms Depot as 'Public Place'

Hyderabad, AP | June 20, 2025 – The High Court of Andhra Pradesh, in a significant ruling, has held the Andhra Pradesh State Road Transport Corporation (APSRTC) vicariously liable for a fatal accident caused by an outsourced driver operating an APSRTC bus within its Salur depot premises. Justice A. Hari Haranadha Sarma , delivering the judgment in MANEPALLI AMMALU & ANR vs KADA HAREESH KUMAR & 3 ORS (MACMA 537 / 2017) , overturned the Motor Accidents Claims Tribunal's (MACT) decision, affirming that an RTC depot can be considered a 'public place' under the Motor Vehicles Act, 1988, for an ex-employee visiting for legitimate purposes. The court also enhanced the compensation awarded to the deceased's family.

Case Background: A Tragic Visit to the Depot

The case arose from a claim petition filed by Manepalli Ammalu and her son, the wife and son of the deceased, Manepalli Annaji Rao . Mr. Rao , a 58-year-old former APSRTC driver who was out of service due to medical reasons, visited the Salur RTC depot on December 3, 2013, to inquire about his retirement benefits. While inside the depot complex, he was struck by an APSRTC bus driven by Kada Hareesh Kumar (Respondent No.1), an outsourced 'Shramik'. Mr. Rao succumbed to his injuries.

The MACT, Parvatipuram, had initially dismissed the claim petition (M.V.O.P.No.276 of 2015) on December 15, 2016. While it found the driver negligent and calculated a compensation of Rs.3,94,000, it dismissed the claim primarily because the outsourcing agency, M/s. K.L. Facility Management Services ( KLFM ), which had supplied the driver to APSRTC, was not impleaded as a party.

Contentions of the Parties

Claimants' Appeal: The appellants (claimants) argued before the High Court that the MACT erred in dismissing the claim on the grounds of non-joinder of the outsourcing agency. They contended that APSRTC, as the owner of the bus, was liable. They also sought an enhancement of the compensation.

APSRTC's Defense: APSRTC maintained that it was not liable. Its arguments centered on: 1. The driver was not its direct employee but supplied by KLFM , making KLFM liable. 2. The RTC depot/garage was a private, restricted area, and the deceased was a trespasser. 3. The petition was bad for non-joinder of KLFM , the outsourcing agency. 4. The driver (R1) operated the bus without authorization.

High Court's Key Findings and Reasoning

Justice A. Hari Haranadha Sarma meticulously examined several crucial legal points before allowing the appeal.

Negligence of the Driver

The High Court upheld the MACT's finding that the accident occurred due to the rash and negligent driving of Respondent No.1. This was supported by the eyewitness testimony of P.W.2 (another APSRTC driver), the FIR (Cr.No.119 of 2013, Salur Town Police Station), and the charge sheet laid against the driver, who notably remained ex-parte throughout the proceedings.

RTC Depot as a 'Public Place'

A pivotal issue was whether the RTC depot, where the accident occurred, could be considered a 'public place' under Section 2(34) of the Motor Vehicles Act, 1988. APSRTC argued it was a private, restricted area. The High Court disagreed, stating:

"It is natural for an employee either serving or retire for certain office and administrative purposes to visit the office. There is no denial that the office is situated within the depot or garage. Therefore, the contention that the entry of the deceased into the premises is unauthorized and that he is a trespasser is found not acceptable ex-facie." (Para 28)

The Court referred to several precedents from the Supreme Court and other High Courts (Gujarat, Karnataka, Rajasthan, Orissa), which advocate for a broad interpretation of 'public place'. These judgments establish that a place accessible to the public, even if privately owned or with restricted access, can fall under the definition, particularly when individuals have a legitimate reason for access. The deceased, visiting to inquire about retirement benefits, had such a reason.

APSRTC's Vicarious Liability for Outsourced Driver

The Court firmly rejected APSRTC's attempt to disown liability by shifting blame to the outsourcing agency ( KLFM ) or claiming the driver was unauthorized. The judgment emphasized the owner's responsibility:

"Entrustment of the vehicle to proper driver is the obligation of any and every owner of a motor vehicle in terms of the Motor Vehicles Act." (Para 38)

"APSRTC cannot simply say that somebody has entered into the premises without its knowledge, somebody has driven the bus without its permission or knowledge and that some unauthorized person has driven the vehicle. Such kind of loose and irresponsible pleas from a responsible institution like a APSRTC cannot be appreciated." (Para 39)

The Court clarified that the internal agreement (Ex.B1) between APSRTC and KLFM was a private contractual matter and did not absolve APSRTC of its liability towards third-party victims. APSRTC is at liberty to seek recourse from KLFM under their contract.

Non-Joinder of Outsourcing Agency Not Fatal

Addressing the MACT's primary reason for dismissal, the High Court ruled that the non-joinder of KLFM was not fatal to the claim. It held that KLFM was, at best, a 'proper party' but not a 'necessary party' whose absence would warrant dismissal.

"Liability to a claimant cannot be disowned on the ground of private contract between the owner of the vehicle and a third-party agency. The claimants have no privity of contract with the third party agency..." (Para 42) The Court cited Order I Rule 9 of the Code of Civil Procedure, which states that no suit shall be defeated by reason of misjoinder or non-joinder of parties.

Enhanced Compensation

The High Court re-evaluated the compensation. While upholding the MACT's assessment of the deceased's notional income (Rs.4,500/- per month) and the 1/3rd deduction for personal expenses (as the deceased was 58, and future prospects were not added), it revised the amounts under conventional heads in line with Supreme Court guidelines in National Insurance Company Ltd. v. Pranay Sethi and Magma General Insurance Company Ltd. v. Nanu Ram .

The revised compensation was calculated as follows:

- Loss of dependency: Rs.3,24,000/-

- Transport expenditure: Rs.5,000/-

- Funeral Expenditure: Rs.15,000/-

(Revised from MACT's Rs.25,000/-)

- Loss of estate: Rs.15,000/-

(Revised from MACT's Rs.10,000/-)

- Loss of consortium: Rs.80,000/-

(Spousal consortium for wife: Rs.40,000/-;

Parental consortium for son: Rs.40,000/-.

Revised from MACT's total Rs.30,000/-)

- Total Compensation: Rs.4,39,000/-

(Enhanced from MACT's Rs.3,94,000/-)

The Court also reiterated the principle that tribunals can award compensation higher than claimed if deemed just, citing Nagappa Vs. Gurudayal Singh and other cases.

Final Judgment and Implications

The High Court allowed the appeal, setting aside the MACT's order. It directed all respondents, including APSRTC, to jointly and severally pay the enhanced compensation of Rs.4,39,000/- with interest at 9% per annum from the date of the petition till realization. The amount was apportioned between the wife (Rs.3,00,000/-) and the son (Rs.1,39,000/-).

This judgment serves as a significant reminder to organizations, especially public sector undertakings like APSRTC, about their non-delegable duties as vehicle owners and their vicarious liability for the actions of outsourced personnel performing tasks integral to their operations. It also reinforces a broader, more practical interpretation of 'public place' under the Motor Vehicles Act, prioritizing the rights of individuals accessing such premises for legitimate purposes.