IMPORTANT POINT
In case a vehicle is plied under control of the SRTC and it meets with an accident, the victim will have to be compensated by the registered owner, SRTC and the insurer jointly and severally.

JUDGMENT

ARUN MISHRA, J.

1. The questions involved in the appeals are whether in the wake of

lease agreement entered into by registered owner with Karnataka State Road Transport Corporation (hereinafter referred to as the ‘KSRTC’), the registered owner and insurer along with KSRTC can be fastened with the liability to make payment to the claimants and whether KSRTC can recover the amount from registered owner and its entitlement to seek indemnification from insurer?

2. The facts giving rise to Civil Appeal No.5293 of 2010 reflect that the accident in question was caused by the bus which was driven under the control of KSRTC. The bus was owned by respondent no.2, T.M. Ganeshan, insured by the New India Assurance Co. Ltd. Admittedly, an agreement dated 28.2.2002 was entered into between the KSRTC and owner respondent no.2. The MACT, Tumkur, Karnataka on 25.6.2007 allowed the claim petition preferred by the claimants and awarded a sum of Rs.4,09,000/-with interest @ 6% p.a.

3. In view of the agreement between KSRTC and the owner of the bus, the liability was fastened upon the owner and the insurer of the vehicle jointly and severally to make the payment of compensation, not on KSRTC. Aggrieved thereby, the insurer preferred an appeal before the High Court of Karnataka. The same has been allowed by the impugned judgment and order dated 20.2.2009. The High Court has allowed the appeal filed by the insurer and held that the liability to make the payment of compensation is that of KSRTC alone. Aggrieved thereby, the KSRTC has come up in the appeal before us.

4. In Civil Appeal No.6641 of 2010, the bus was plied similarly on hire agreement by the KSRTC. The Claims Tribunal has fastened the liability jointly and severally upon the KSRTC and upon Internal Security Fund, Bangalore. Aggrieved thereby, the appeal was preferred in the High Court and the same has been dismissed. Hence, Civil Appeal No.6641 of 2010 has been filed in this Court.

5. It was submitted by Shri S.N. Bhat, learned counsel for the appellant that the High Court has erred in fastening the liability upon the KSRTC. In view of the lease agreement for hire entered into between the KSRTC and the owner, the owner could not escape the liability to make the payment of compensation. As such, the insurer was liable to indemnify the owner and to make the payment of compensation. The liability could not have been fastened upon the KSRTC. Learned counsel has placed reliance on the decision of this Court in Uttar Pradesh State Road Transport Corporation v. Kulsum & Ors., (2011) 8 SCC 142.

6. Shri Vishnu Mehra, learned counsel appearing on behalf of New India Assurance Co. Ltd. contended that in view of the fact that the vehicle was plied under the complete control and supervision of KSRTC, it cannot escape from the liability to make the payment of compensation. He has relied upon the decision of this Court in Rajasthan State Road Transport Corporation v. Kailash Nath Kothari & Ors., (1997) 7 SCC 481 and the definition of the owner under Section 2(30) of the Motor Vehicles Act, 1988 (hereinafter referred to as the ‘Act’). He has consequently submitted that owner and insurer have rightly been exonerated by the High Court.

7. It was submitted on behalf of the claimants that they can recover the compensation from the KSRTC, owner and insurer jointly and severally.

8. The owner has been defined under Section 2(30) of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act of 1988). The definition in the Act of 1988 is extracted hereunder :

“2(30) “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;”

9. The definition of owner under Section 2(19) of the Motor Vehicles Act, 1939 read as under:-

“2