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2009 Supreme(Kar) 138
High Court of Karnataka
THE HONOURABLE MR. JUSTICE V. JAGANNATHAN
North West Karnataka Road Transport Corporation
Versus
D. Kenchappa & Others
Miscellaneous First Appeal No. 8042 of 2006 C/w M.FA.No. 11440 of 2007 (MVC)
Decided on : 20-02-2009
For the Appellant :D. Vijaykumar & A.K. Bhat, Advocates.
For the Respondents:M.T. Jagan Mohan, M.S. Sriram, Shwetha Anand, Sundar Raj, V.B. Siddaramaiah, Advocates.
Headnote:MOTOR VEHICLES ACT, 1988 - Sections 2(30), 147 & 149(2)(a)(i)(a): [V. Jagannathan, J] Definition of "owner" - Liability of Insurer - Tribunal recorded a positive finding that accidents in question were caused on account of buses, which were driven under control of KSRTC - Buses in question belong to registered owners, KSRTC had taken on hire under an agreement - Question whether KSRTC can be said to be owner of buses in question and hence liable notwithstanding agreement entered into between KSRTC and registered owner? - Not only possession was with KSRTC pursuant to agreement it had entered into with registered owner, but entire control was with KSRTC -Driver of bus though an employee under registered owner, yet was to drive bus under instructions of KSRTC - Held, For purpose of awarding compensation, Courts will have to find out from facts of each case as to who real owner is. In terms and conditions of agreement, KSRTC has to be held as owner of bus in question in light of definition as contained under Section 2(30) of the Motor Vehicles Act. Unless there is a liability fixed on owner, question of Insurance Company indemnifying owner will not arise. KSRTC cannot avoid liability to pay compensation both on facts and in law. Notwithstanding fact that registered owner had insured his vehicle, question of Insurance Company being made liable will not arise. Question of policy covering liability arising out of contract between owner and KSRTC does not arise by virtue of Section 147 of the Motor Vehicles Act. Only where insured made seriously liable for acts of his driver that question of Insurance Company indemnifying insured will arise but not otherwise. Inevitable conclusion is that KSRTC is liable to pay compensation and not Insurance Company. Award of Tribunal fastening liability on Insurance Company was set aside and quantum of compensation modified as claimants are not dependants.
Jagannathan, J.
As common question of law arises for consideration in these two appeals, they are being disposed of by this common judgment.
2. In both the cases, the Tribunal has recorded a positive finding that the accidents in question were caused on account of the buses, which were driven under the control of the K.S.R.T.C. In both the cases, though the buses in question belong to the registered owners, the K.S.R.T.C. had taken them on hire under an agreement with the registered owners.
3. M.F.A.No. 8042/2006 is preferred by the N. W.K.R.T.C. aggrieved by the liability being put on it exclusively to satisfy the award amount and in M.F.A. No. 11440/2007, the liability was put on the Insurance Company with whom the registered owner had insured the bus. The contention of the Road Transport Corporation in both the cases is that the buses in question were owned by the registered owners, who had insured them with the Insurance Company and, therefore, the K.S.R.T.C. is not liable. Whereas, the contention of the Insurance Company, which is the appellant in M.F.A.No. 11440/2007 is that, at the relevant point of time, the buses were under the control of the K.S.R.T.C. pursuant to the agreements entered into between the K.S.R.T.C. and the registered owners and, therefore, it is the K.S.R.T.C., which is liable to satisfy the award amounts.
4. The facts, briefly stated, are that insofar as M.F.A.No. 8042/2006 is concerned, the claimant therein, who is R-1, had preferred the claim petition seeking compensation for the injuries sustained by him in the accident in question and according to him, when he was going on his motorcycle, the bus bearing No. KA-26/ B-3465 belonging to the K.S.R.T.C. came from behind and dashed to the motorcycle on account of which he sustained the injuries. The Tribunal awarded Rs.27,000/-as compensation and put the liability on the K.S.R.T.C. and in doing so, the Tribunal took note of the decision reported in 2005 ACJ 883 to hold that, on the date of the accident, the K.S.R.T.C. was deemed to be the owner of the bus and it was the K.S.R.T.C., which had full control and custody of the bus and, for this reason, it is the K.S.R.T.C. which is liable to pay the compensation.
5. Insofar as M.F.A.No. 11440/2007 is concerned, the claim petition was filed by the major sons of deceased Channaveeraiah and the said Channaveeraiah succumbed to the injuries sustained by him in the accident when the K.S.R.T.C. bus bearing No. KA-16/C-2526 dashed against him while he was going along the extreme left side of the road by towing his bicycle. The Tribunal awarded Rs.4,09,000/-as compensation to the claimants and put the liability on the Insurance Company following the terms of the agreement between the K.S.R.T.C., which is the hirer, and the registered owner, indicating that the Insurance Company will be liable.
6. I have heard learned Counsel Shri D.Vijayakumar for the K.S.R.T.C. and learned Counsel Shri A.K.Bhat for the Insurance Company and, in view of the important question of law involved, learned Counsel Shri A.N. Krishnaswamy, Shri B.C.Seetharama Rao, Shri O.Mahesh and Sri. Gangadhar Sangolli also assisted the Court.
7. Learned counsel Shri D.Vijayakumar for the K.S.R.T.C. contended that, in both cases, the buses in question were insured by the registered owners and the insurance policies were also in force as on the date of the accidents. The K.S.R.T.C. had only hired the buses from the registered owners on certain terms and conditions as per the agreements and, therefore, it is the Insurance Company, which will have to be held liable to pay the compensation and not the K.S.R.T.C.
8. Referring to the terms and conditions of the agreements, the learned Counsel pointed out that the agreements clearly specify that the owners of the buses alone shall be solely liable for any claim arising out of any accident, damage or loss or hurt caused, during the operation of the bus and that the K.S.R.T.C. shall not be liable fo
