ORIENTAL FIRE and GENERAL INSURANCE CO Ltd. REPRESENTED BY ITS MANAGER, BOMBAY vs MATA CHANDRA RAO

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1986 Supreme(AP) 417

Andhra Pradesh High Court
Judges : M.JAGANADHA RAO
ORIENTAL FIRE and GENERAL INSURANCE CO LTD.REPRESENTED BY ITS MANAGER, BOMBAY - Appellant
Versus
MATA CHANDRA RAO - Respondent
A.A.O. 486 of 1982 etc.
Decided On : 10-18-86
Advocates Appeared :
Mr. S. Hanumaiah,Mr. C. Sadasiva Reddy,G. Krishna Murthy,T. Bali Reddy,M.V. Ramana Reddy,S.V.R.S. Somayajulu,G. Krishna Murthy

Headnote:Motor Vehicles Act-Sections 95 (1) (b) proviso (ii) and 96 (2) Liability of Insurance Company in respect of passengers carried for hire or reward or gratuitously in a goods or a passenger vehicle - Explained.
       Torts:- Liability of owner of Motor Vehicle for death or injury sustained by his employee-Explained Burden of proof - Stated.
       Held : Clause (ii) of proviso to Sec. 95 [1] [b] covers also cases relating to vehicles other than passenger vehicles and cover goods vehicles and private motor cars also apart from passenger vehicles. Passengers carried for hire or reward or by reason or in pursuance of a contract of employment are covered by the Act - Policy making the Insurance Company liable.
       1985 [2] A. P. L. J. [SN] and
       1985 (3) APU 11 dissented from.
       The Insurance Company is liable under the Act Policy under Clause (ii) of the proviso to Section 95 [1] (b). The owner of the goods as a person carried under a contract of employment.
       The Act Policy in Cl. (ii) of the proviso to Section 95 [1] [b] covers the liability of the Insurance Company in respect of the employees of the hirer or owner of the goods. If in the case of a passenger vehicle - such as the one in sub-clause [b] of Cl. [i] of the proviso it is not necessary to insure the conductor and the ticket examiner, the other employees of the owner of the passenger vehicle such as the cleaner will equally fall under cl. [ii] of the proviso, making the insurance company liable.
       If the case is one covered by the Act Policy or compulsory insurance, then the policy covers "any person" so covered by the Act policy and not otherwise. The cases of "gratuitous" passengers which are not covered by the Act Policy, cannot make the Insurance Company liable.
       A. I. R. 1974 A. P. 310 and A. I. R. 1977 Orissa 112 held not good law in view of A. I. R. 1977 S. C. 1735.
       While it is sufficient for the company to show that the statutory insurance or Act Policy was available i. e., to the extent in Sec. 95 [1] [b] [i] and (ii), the Insurance Company, if it wants to disclaim the liability of satisfying the decrees against the insured, must prove that, on the date of the contract of insurance, the insured vehicle was not expressly or impliedly covered by a permit to ply for hire or reward; or that other conditions of the permit were violated. Unless this burden is discharged by the company, it will be liable.
       Violation of Rules by the insured or his driver may indeed result in such administrative or penal action, against the person owning the permit or using the vehicle, to be taken by the authority granting permit. But as between the contracting parties i.e., the owner of the vehicle and the Insurance Company it will have no bearing. Violation of rules by the owner of the vehicle or his servant does not by itself absolve the Insurance Company.

M. JAGANNADHA RAO, J.

( 1 ) SEVERAL questions relating to the liability of the Insurance Company under Section 95 of the Motor Vehicles Act, in respect of passengers carried for hire or reward, or gratuitously in a goods vehicle or a passenger vehicle and of the liability of the owner under tne Law of Torts, arise in these three appeals.

( 2 ) THE appeals relating to passengers in a goods vehicle are two and they are C. M. A. Nos. 486 and 502 of 1982. They arise respectively out of o. P. Nos. 99/1980 and 119/1980. in both the appeals, the insurance Company is the appellant and the respondents are the owner of the vehicle (the andhra Paper Mills Limited, Rajanmundry) and tne legal representatives of either the deceased (in O. P. No. 119/1980) or the injured person (in O. P. No. 99/1980 ). The goods vehicle belonging to the Andhra Paper Mills was carrying bamboo belonging to the Company. while the vehicle was passing througn the lorests, tne two police constables. the injured one as well as the deceased one:who were in charge ot the work of containing Naxalite activity in the area, were given a in the goods vehicle and soon thereafter the accident in question occurred. One countable died and the other was injured, there is a dispute as to whether the driver of the Company was prohibited from carrying any passengers in the goods vehicle and also a dispute as to whether these police constables were carried gratuitously or for hire or reward.

( 3 ) THE Court below passed decrees in these two O. Ps. against the owner of the goods vehicle i. e. , the Paper Mills as also against the Insurance company. The Company preferred these two appeals C. M. A. Nos. 486 and 502 of 1982. The Paper Mills prelerred two C. M. As. with delay condonation petitions. C. M. A. SR No. 134411 of 1983 arises out of O. P. No. 119/80 but that appeal was dismissed on 11-3-1986 consequent to the dismissal of the delay condonation application C. M. P. No. 14458 of 1983. However, the other C. M. A. SR No. 134405/83 filed by the Mills against O. P. No. 99/80 is now before me and the delay condonation petition is C. M. P. No. 14457/83. In that C. M. P. notice was served on the claimants. In these appeals the Insurance Company is represented by Sri S. Hanumaiah while the Paper Mills is represented by Sri G. Krishna Murthy and the claimants by Sn C. Sadasiva Keddi.

( 4 ) IN the other C. M. A. No. 883 of 1981, the appellant is the owner of a passenger vehicle and the deceased was a cleaner in the bus. The claimants are the legal representatives of the cleaner. They and the Insurance company are unpleaded as respondents. The appellant, owner of the vehicle is represented by Sn T. Bali Reddy while the respondent-claimants are represented by M. V. Ramana Reddi and the Insurance Company by Sri s. V. R. Somayajulu, Advocate. The claimant have also filed cross-objections for a higher sum.

( 5 ) IN the first batch of two appeals, Sri S. Hanumaiah , counsel for the appellant-Insurance Company contends that if passengers in a goods vehicle are injured or die, "there cannot be any statutory claim against the insurance Company under Sec. 95 of the MOTOR VEHICLES ACT, 1988 unless there is a special contract and further that in this case, the terms of the policy preclude any claim against the Company. In any event, it is urged that these are not passengers tor hire or reward but are gratuitous passengers. It is also also argued that in as much as there is evidence or positive prohibition by the mills 10 its driver against carrying passengers, the Mills are not liable and therefore, the Insurance Company is not liable. It is argued for the Mills by Sri G. Krishna Murthy in the C. M. As. and C. M. A. (SR) that the Mills are not liable because of the above said prohibition to their driver and that alternatively, the Insurance Company is liable, as held by the lower Court. Sn C. Sadasiva Reddi tor the claimants contends that the claimants must have a decree both against the own

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