The liability of the insurance company for compensation in cases of injury or death caused by a motor vehicle registered as a stage carriage but being used lawfully otherwise than as a stage carriage depends on the coverage of the insurance policy and the occurrence of the injury or death in a public place.

( 1 ) IN these two appeals presented under Section 110-d of the Motor Vehicles Act (for short 'the act') important question of law that arises for consideration is whether an insurance company is liable to pay compensation in respect of the injury to or death of a third party, caused by a motor accident by a motor vehicle, which is a stage carriage, while plying or being used lawfully otherwise than as a stage carriage, at a public place, even if such place does not lie on the route in respect of which it is permitted to operate as a stage carriage?

( 2 ) THE brief facts of the case necessary for appreciating the question arising for consideration in these two appeals are: a bus bearing registration No. Myn 3257 belonging to the appellant was registered as a stage carriage. On 22-4-1975, according to the appellant, he had sent the bus to k. r, nagar in Mysore district to fetch diesel as diesel was not available at k. r. pet. On the way to k. r. nagar, the driver of the bus had parked the bus at chunchanakatte. When it was so parked someone meddled with the vehicle and as a result the vehicle moved backwards and hit against a stone mantap. As a result of the impact, the stone mantap collapsed and the stones fell down causing injury to three women who were sitting in the mantap. Out of them one died and the other was injured. Two claim petitions are presented, one claiming compensation for the death of one of the women and other in respect of the injured woman.

( 3 ) THE first question for consideration by the tribunal was, as to whether the accident was caused on account of the rash and negligent manner in which the bus was handled. On the basis of the evidence on record, the tribunal answered the question in the affirmative. As regard the quantum of compensation, the tribunal awarded compensation of Rs. 15,500/- in respect of the death of one of the woman and Rs. 10,120/- in respect of the injury caused to the claimant in the connected case. This assessment and award made by the tribunal is also not in question in this appeal. On the question of liability of the insurance company the tribunal was of the view that according to the insurance policy the risk was covered subject to the condition that the vehicle was required to be used only as a stage carriage and therefore the insurance company was not liable to pay the compensation.

( 4 ) FROM the facts narrated above, it may be seen that there is no dispute about the material facts. The injured and the deceased were not passengers. They were third parties. The injury as well as death was caused on account of the negligent manner in which the bus was used in a public place. The risk which is to be answered by the insurance company in the present case is the risk in respect of third party. The Provisions contained in chapter viii of 1939 act makes insurance of motor vehicles against third party risk compulsory. Therefore in a case of this type what we have got to see is (I) whether the vehicle was covered by an insurance policy issued in conformity with chapter viii of the act; (II) whether the death or injury complained of was caused by the use of the vehicle concerned in a public place.

( 5 ) IF the answers to both the questions are in the affirmative, then there is no other alternative than to hold that the insurance company is liable.

( 6 ) SRI R. V. Vasanth Kumar, learned counsel for the insurance company however strenuously contended that according to the insurance policy the vehicle was meant to be used only as a stage carriage, in respect of which permit had been issued by the transport authorities and the insurance company is not liable to pay any compensation if it is found that at the tune of the accident the vehicle was used on a route or place which is not covered by the stage carriage permit.

( 7 ) SECTION 96 (2) of the act sets out the specific defence available to an insurer. If on the date of the accident the vehicle was being used as a stage carriag