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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
B.V.L.N. CHAKRAVARTHI
The APSRTC, Rep. by Its M.D. Rep. by its Managing Director – Appellant
Versus
M. Kumar S/o & Others – Respondents
Motor Accident Civil Miscellaneous Appeal No.1522 of 2012
Decided on : 25-01-2024
Motor Vehicles Act - Liability of Insurance Company - Section 166 - 2013 (1) ALD 644, 2020 LawSuit (SC) 429 - The court discussed the liability of the insurance company under the Motor Vehicles Act and the principles laid down by the Hon’ble Apex Court in Uttar Pradesh State Road Transport Corporation Vs. Rajenderi Devi and others, 2020 LawSuit (SC) 429. The court held that the insurer cannot escape from its liability once the vehicle is insured and there is no violation of conditions of the policy. The liability to pay compensation is based on a statutory provision and compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice.
Fact of the Case:
The claimant filed a petition under Section 166 of the Motor Vehicles Act, 1988 claiming compensation for personal injuries sustained in a motor vehicle accident. The tribunal held that the accident was due to rash and negligent driving of the bus driver and awarded compensation against the owner of the bus and APSRTC, exonerating the insurer of the bus.
Finding of the Court:
The court found that the liability to pay compensation is based on a statutory provision and compulsory insurance of the vehicle is meant for the benefit of the third parties. The court held that the insurer cannot escape from its liability once the vehicle is insured and there is no violation of conditions of the policy.
Issues: The issues included whether the accident took place as stated in the petition, whether the petitioner is entitled to compensation, and to what relief.
Ratio Decidendi: The court relied on the principles laid down by the Hon’ble Apex Court in Uttar Pradesh State Road Transport Corporation Vs. Rajenderi Devi and others, 2020 LawSuit (SC) 429, and held that the insurer cannot escape from its liability once the vehicle is insured and there is no violation of conditions of the policy.
Final Decision: The appeal was partly allowed, modifying the Order and Decree passed by the tribunal, and the liability on the appellant/APSRTC and owner of the hired bus was fastened instead of on the Insurance Company. The rate of interest awarded by the tribunal was scaled down to 7.5% per annum from 9% per annum.
JUDGMENT :
Heard the arguments of Sri Aravala Rama Rao, learned Standing Counsel for the APSRTC/appellant/respondent No.3 and Smt. A.Jayanthi, learned counsel for the respondent No.3/Insurance Company.
2. This appeal directed by the appellant/APSRTC challenging the Order and Decree dated 03.03.2012 passed in M.V.O.P.No.402 of 2008 by the Motor Accidents Claims Tribunal-cum-I Additional District Judge, Kurnool (hereinafter referred to “Tribunal”).
3. Parties are referred to as they were arrayed in the proceedings before the learned Tribunal, for the sake of convenience.
4. The claimant/respondent No.1 filed the petition under Section 166 of the Motor Vehicles Act, 1988 (for brevity “the Act”) claiming compensation of Rs.1,00,000/- for the personal injuries sustained by the claimant in a motor vehicle accident occurred on 18.05.2006 at about 4.15 PM near Rangapur village on NH-7 road.
5. The case of the claimant is that he was travelling in APSRTC hire bus bearing registration No.AP22 U 1891 on 18.05.2006; at about 4.15 PM the bus reached a place near K.M. mile stone No.161/2 within the limits of Rangapur village on NH-7 road; the driver of the bus drove the vehicle in a rash and negligent manner; as a result, the bus dashed against the opposite coming lorry bearing registration No.AP21 X 3491; as a result, the passengers in the bus sustained injuries; the claimant was shifted to the Government Hospital, Kurnool; hence, he filed the claim petition.
6. The owner of the bus remained ex parte. The Insurance Company i.e., respondent No.2 filed counter contending that the accident was occurred not due to rash and negligent driving of the bus; the 1st respondent is the owner of the bus; he hired the same to APSRTC; therefore, liability to pay the compensation would remain as per the terms and conditions of the policy; the owner of the bus did not pay additional premium to cover the risk of the hirer and therefore, the respondent No.2/Insurance Company is not liable to pay the compensation to the claimant. The respondent No.3/APSRTC is liable to pay the compensation.
7. Respondent No.3/APSRTC filed counter contending that accident was occurred not due to rash and negligent driving of the driver of the bus, it was occurred due to negligent driving of the lorry; the owner and insurance company of the lorry are liable to pay the compensation; there is a hire agreement between the owner of the bus and APSRTC; if any claim arises on account of any accident, the insurer of the bus is liable to pay the compensation.
8. The learned Tribunal, basing on the rival contentions, framed the following issues for trial:
2. Whether the petitioner is entitled to compensation? If so, to what amount and from which of the respondents?
3. To what relief?
9. On behalf of the claimant, he examined himself as P.W.1 and four (04) documents are marked as Ex.A1 to Ex.A4. On behalf of respondents, no oral evidence was placed before the Tribunal except marking Copy of policy and copy of hire agreement as Ex.B1 and Ex.B2.
10. The learned Tribunal considering the evidence placed before it, held that the accident was occurred due to rash and negligent driving of the driver of the bus. Further, the learned Tribunal awarded a sum of Rs.37,000/- towards just compensation for the injuries sustained by the claimant in the motor vehicle accident; the learned Tribunal passed the decree fastening the liability against the owner of the bus and APSRTC and exonerated the insurer of the bus i.e., respondent No.2/Insurance Company.
11. Learned counsel for the respondent No.3/APSRTC would contend that the respondent No.2/Insurance Company is liable to indemnify the insured i.e., owner of the bus and fastening liability on the respondent No.3/APSRTC by the Tribunal is not valid in law and liable to be set-aside and that interest awarded by the Tribunal at 9% per annum is exorbitant and excessive.
12. Learned counsel for the respondent
The liability for compensation in an accident involving a hired vehicle lies with the insurer and owner, not the hirer, as established by the Motor Vehicles Act.
The insurance company and the owner of an insured vehicle are liable for compensation in accidents, while the hirer is not, as established by the Motor Vehicles Act and relevant case law.
The insurance company is liable to pay compensation for an accident involving a vehicle hired to APSRTC, as per the provisions of Section 149 of the Motor Vehicles Act, 1988.
The hirer of a vehicle is not liable for compensation claims if the insurance policy remains valid and subsisting, as established in the Motor Vehicles Act.
The insurer is liable for compensation in cases involving hired vehicles, provided the insurance policy is valid and in force, irrespective of lease agreements.
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