C. Y. SOMAYAJULU, J.

( 1 ) FIRST respondent filed a claim petition seeking compensation of rs. 8,18,000/- for the injuries sustained by her in an accident caused by the bus bearing no. TCB-7000 belonging to the second respondent and insured with the fourth respondent and hired to the appellant, allegedly due to the rash and negligent driving of the said bus by the third respondent and examined herself as PW1 and six others witnesses as PWs. 2 to 7 and got marked Exs. A1 to A44. The Tribunal having held that the accident occurred due to rash and negligent driving of the third respondent, passed an award for rs. 2,71,810/-, in favour of the first respondent against the third respondent and appellant only, and exonerated the second and fourth respondents from liability. Aggrieved by the said award exonerating the fourth respondent-insurer from its liability, this appeal is preferred by the hirer of the bus.

( 2 ) THE point for consideration is : whether fourth respondent (insurer) is liable to pay the compensation payable to the first respondent ?

( 3 ) THE contention of the learned counsel for the appellant is that in view of the ratio in Depot Manager, APSRTC, miryalaguda, Nalgonda District v. Poreddy Sujatha and others, 2003 (5) ald 586, fourth respondent also is liable to pay the compensation payable to the first respondent. The contention of the learned counsel for fourth respondent is that since third respondent was under the control of the appellant only and since the owner of the bus was exonerated from liability, fourth respondent, which is the insurer of the owner of the bus is not liable to pay the compensation payable to the first respondent, who was a passenger in the bus, in view of claim IMT 12 in Ex. B1 policy, under which fourth respondent undertook to cover the risk of the insurer only, but not that of the hirer. It is his contention that if the owner of the bus hires the bus to others, the hirer, in order to have the benefit of the insurance taken out by the owner, has to pay additional premium and since in this case no additional premium is paid either by the appellant or the owner, question of 4th respondent indemnifying the hirer, does not arise. It is his contention that since RTC buses need not have insurance as per Section 146 (3) (c) of the Motor vehicles Act, 1988, (for short the act ) question of insurer indemnifying the appellant does not arise. He further contended that the ratio in Poreddy Sujatha s case (supra) does not apply to passenger travelling in the bus.

( 4 ) I am unable to agree with the contention of the learned Counsel for fourth respondent that in view of Section 146 (3) (c) of the Act, which grants exemption to the vehicles belonging to State Road transport Corporation from being insured fourth respondent cannot be made liable to pay the compensation, because the bus involved in the accident does not belong to the appellant. Appellant, which is the Andhra pradesh State Road Transport Corporation, took the bus belonging to the 2nd respondent on hire. The benefit of Section 146 (3) (c) does not extend to buses taken on hire by the State Road Transport Corporation; It applies only to buses belonging to i. e. , owned by the State Road Transport corporation. That apart Section 146 (3) (c) grants an exemption but it is not a mandate. So that provision cannot be taken as a bar for or a prohibition, against a State Road transport Corporation insuring its vehicles. The concerned State Road Transport corporation, if it so desires, can insure its vehicles against any risk in spite of section 146 (3) (c) of the Act. If it does not insure its vehicle it cannot be visited with the penal consequences envisaged by Section 196 (1) of the Act, in view of section 146 (3) (c) of the Act.

( 5 ) THE contention that since no additional premium is paid, fourth respondent cannot be made liable, cannot be accepted because no such plea is taken in the counter of the fourth respondent and also for the reasons to b

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