Since common questions of fact and law arise in these two proceedings, they are being disposed of by a common order.

2. CMA No. 2580 of 2004 arises out of a claim petition filed under Section 166 of the Motor Vehicles Act, 1988 (for short - 'the Act'), by the mother of Kesari Ganesh (the 7 deceased), aged about 1 V2 years, in connection with the death of the deceased on 29-04-2002 at 7.45 p.m. due to the rash and negligent driving of the driver of a bus belonging to the appellant and insured with the National Insurance Company (insurer) and hired to the Andhra Pradesh State Road Transport Corporation (APSRTC), during the subsistence of lease to APSRTC. Appellant and the driver of the bus chose to remain ex parle before the Tribunal. Both the insurer and the APSRTC filed counters inter alia contending that they are not liable to pay the compensation payable to the claimant.

In support of her case, the claimant examined herself as P.W.1 and another witness as P.W. 2 and marked Exs.A-1 to A-4. The insurer did not adduce any oral evidence but marked a copy of the policy issued by it as Ex. B-1. No evidence either oral or documentary was adduced by the APSRTC. The Tribunal held that the accident occurred due to the rash and negligent driving of the driver of the bus belonging to the appellant and that the claimant is entitled to Rs.60,000/- as compensation from the appellant and the APSRTC only but not the insurer is liable to pay the compensation payable to the claimant. Aggrieved by the order of Tribunal exonerating the insurer from the liability the owner of the bus preferred this appeal.

3. W.P.No. 5933 of 2007 is filed by the owner of the bus against the action of the APSRTC in withholding the amounts of rent payable by it to him on the ground that the claimant had obtained a decree against it on the basis of the agreement entered into by it with the owner of the bus that the owner only is liable to pay the compensation to the victims in case the bus involves in an accident, on the ground that the said condition in the agreement entered into by him with APSRTC is against public policy.

4. Heard the learned counsel for appellant, the claimant, the insurer and the standing counsel for APSRTC at length. They relied on Rajasthan State Road Transport Corporation v. Kailash Nath Kathan', District Co-operative Central Bank Limited, Mahbubnagar v. P. V. SitamahalaxmF, New India Assurance Co., Ltd., v. B.G. SumcP, Depot Manager, APSRTC, Miryalaguda, Nalgonda District v. Poreddy Sujatha4, K. Matura Bai and others v. A. Shiva Nageswar RacY, APSRTC v. Polavarapu Lakshmi Kumarf, New India Assurance Co., Ltd., Chittoor v. V. Ramachandra Naidu7, G. Govindan v. New India Assurance Co. Ltd.B, Zilla Sahakari Kendrya Bank Maryadit v. Shahjadi Begum9, General Manager, APSRTC v. B. Kanaka RatnabaPO, Rikhi Ram and another v. Sukhrania and others11, Andhra Pradesh State Road Trans.Corpn. v. K. Susheelamma12 and Morbi Taluka Panchayat v. Vikramsinh Gambhirsinh13 in support of the contentions raised by them.

5. The point for consideration in the appeal is whether the insurer is not liable to pay the compensation payable to the claimant and the point for consideration in the writ petition is whether the APSRTC is entitled to withhold the amounts of hire payable by it to the owner of the bus on the ground that the agreement between it and the owner of the bus contemplates his meeting the liability to third parties in case of an accident.

6. The contention of the learned counsel for the owner of the bus is that inasmuch as the insurance of the vehicle runs with the bus, merely because the owner hired the bus to APSRTC, the insurer cannot escape its liability as held in Kailash Nath Kothari case (1 supra), P. V. Sitamahalaxmi case (2 supra) and Poreddy Sujatha case (4 supra). The contention of the learned counsel for APSRTC is that in view of the terms and conditions of the agreement entered into between the owner of the bus and the APSRTC, the owner of th