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.

JUDGMENT:

1. This Miscellaneous Appeal under section 173 of the Motor Vehicles Act, 1988, APSRTC impugns the order dated 16.02.2010 of the learned Motor Vehicle Accidents Claims Tribunal - cum – III Additional District Court, Bhimavaram in MVOP.No.178 of 2007.

2. Respondent No.1 is the injured claimant. Respondent No.2 is the driver of the offending bus. Respondent No.3 is the owner of the offending bus. Respondent No.4 is the insurer of the offending bus.

3. Sri Vinod Kumar Tarlada, the learned standing counsel for the appellant/ APSRTC and Smt.S.A.V.Ratnam, the learned counsel for respondent No.4/Insurance Company and Sri A.Pavan Kumar, the learned counsel representing Sri K.Jyothi Prasad, the learned counsel for respondent No.1/claimant submitted their arguments.

4. On 02.01.2007, two persons were travelling on a motor cycle bearing registration No.AP 37 S 9538. APSRTC bus bearing registration No.AP 37 W 1939 was driven by its driver rashly or negligently and the bus dashed the motorcycle and as a consequence, the pillion rider on the bike suffered multiple fractures and he underwent surgeries. The injured was studying MBA and was also working as a sales representative in a company called Cosmos and was earning Rs.5,500/- per month. Seeking compensation for his injuries, he filed MVOP.No.178 of 2007 before learned Motor Vehicle Accidents Claims Tribunal –cum – III Additional District Court, Bhimavaram. The driver did not contest, and the owner filed a counter but thereafter did not contest. The insurance company and APSRTC put up their contest. Learned claims tribunal framed the following issues.

1. Whether the accident occurred owning to the rash and negligent driving of the bus bearing No.AP 37 W 1939 driven by its driver i.e., 1" respondent.?

2. Whether the petitioner is entitled to claim compensation and if so to for how much amount?

3. To what relief.?

5. On behalf of the claimant, PW.1 and 2 testified and Exs.A1 to A16 were marked. On behalf of respondents, no oral evidence was adduced. A copy of the insurance policy was marked as Ex.B1. After considering the material on record and considering the submissions made on both sides, the claims tribunal found that the cause of accident was rash or negligent driving of the driver of the bus bearing registration No.AP 37 W 1939. Considering the oral and documentary evidence and considering the nature of the injuries sustained by the claimant, it granted Rs.1,02,575/- as against the claim of Rs.2,00,000/-. The operative portion of the order reads as below:

“In the result, the petition is partly allowed granting a sum of Rs.102,575/- towards compensation together with interest at rate of 7.5% p.a. from the date of petition till realization. The 4th respondent is directed to deposit the same in any Nationalized Bank for a period of two years and later the petitioner is entitled to withdraw the same. It is further ordered that the 1st and 2nd and 4th respondents are jointly and severally liable to pay the said amount. It is ordered that the petitioner is entitled for proportionate costs. The advocate fee is fixed at Rs.1,500/-.”

6. One would notice from the above said order, the Insurance company/R3 before the claims tribunal was exonerated. At paragraph No.9 of the impugned order, the learned claims tribunal found that R2 owns bus bearing registration No. AP 37 W 1939 and it gave it on hire to APSRTC and therefore the liability to compensate lies on the shoulders of APSRTC and not on the Insurance company.

7. Impugning the said award, the present appeal was filed by APSRTC.

Various grounds are urged in the appeal questioning the correctness of the amount of compensation that was arrived at. However, the only point that was argued on behalf of the appellant is that exoneration of insurance company and fastening liability on APSRTC by the claims tribunal is against law and therefore the appellant shall be discharged from liability. The learned counsel for insurance company argued that the