JUDGMENT:

This appeal is filed under Section 173 of the Motor Vehicles Act, 1988 (for brevity “the Act”) by the appellant-United India Insurance Company, challenging the award passed by the Motor Accidents Claims Tribunal-cum-V Additional District Judge, West Godavari, Eluru (for short “the Tribunal”) in M.V.O.P.No.416 of 2003, dt.08.11.2006.

2. For the sake of convenience, the parties are referred to as they are arrayed before the Tribunal.

3. The brief facts in brief of the case are as follows:

a) On 24.04.1998 at about 2.45 p.m., the APSRTC bus bearing No.AP 10 Z 1395, which is a shuttle service between Rajahmundry and Eluru, driven by its driver namely J.Srinivasa Rao, when reached the outskirts of Dommeru Village, a lorry bearing No.ABP 9119 driven by its driver i.e., the 1st respondent, at a high speed in a rash and negligent manner, came in opposite direction and dashed the RTC bus, as a result, the driver and conductor of the RTC bus and some of the passengers who were in the bus sustained injuries. The incident was reported to the Police alleging that the accident took place as a result of rash and negligent driving of the offending lorry and based on the FIR lodged by the V.A.O., Dommeru Village, a case in Crime No.47 of 1998 was registered by I Town Police, Kovvuru for the offence under Sections 304-A and 337 IPC and the matter was investigated. Due to the above accident, the Mechanical Department of APSRTC took the damaged bus to the Depot, estimated the cost of damages, and prepared a report.

b) It is due to the above accident, a claim petition was filed by the APSRTC for Rs.46,100/- towards compensation for the damages caused to the said bus, against the driver, owner, and insurer of the offending vehicle i.e., Respondents 1 to 3 respectively.

c) The 1st & 2nd respondents who are the driver and owner of the offending vehicle did not contest the matter.

d) The 3rd respondent/Insurance Company filed a written statement denying the claim of the petitioner/APSRTC and further contended that the driver of the offending lorry was not holding a valid licence. It is further contended that the offending lorry bearing No.ABP 9119 was not having a valid road permit and fitness certificate. Further, it was contended that the claim of the petitioner is excessive and the 3rd respondent/Insurance Company is not liable to pay any compensation, and the quantum of the claim was also disputed as excessive.

e) Based on the above pleadings, the Claims Tribunal framed the following issues:

1) Whether the accident had occurred due to rash and negligent driving of the lorry bearing No.ABP 9119 by its driver 1st respondent?

2) Whether the petitioner is entitled to claim compensation if so, to what amount and against which of the respondent?

3) To what relief?

f) To substantiate their respective cases, on behalf of the petitioner, the Superintendent (Mechanical), Kovvuru Division of APSRTC was examined as P.W.1, and Exs.A.1 to A.6 were marked. On behalf of the 3rd respondent/Insurance Company, one P.Phani Kumar, Assistant Administrative Officer of United India Insurance Company was examined as R.W.1, and Exs.B.1 to B.4 were marked.

g) The Tribunal, after considering the pleadings, oral and documentary evidence on record, awarded a sum of Rs.26,900/- with interest @ 7.5% per annum from the date of petition till the date of realization payable by the Respondents 1 to 3 jointly and severally.

h) Feeling aggrieved by the award, the appellant/United India Insurance Company Limited preferred this appeal before this Court stating that the Tribunal erred in fixing the compensation @ Rs.26,900/- as against the claim of Rs.46,100/-.

4. Learned counsel for the appellant/Insurance Company submitted that, on the date and time of the accident i.e., 24.04.1998 at 2.45 p.m., there was no privity of contract between the owner of the offending vehicle and the Insurance Company. It is further contended that the Tribunal failed to take the notice of the fact that there was