In motor accident claims involving vehicles hired by a Transport Corporation, the insurer remains liable for third-party risks if the policy is valid, as mere hiring without intimation does not absolve the insurer unless a fundamental breach of policy terms is proven.

JUDGMENT

This appeal is filed by the APSRTC (now TSRTC) challenging the judgment and decree dated 04.05.2011 passed in O.P.No.88 of 2008 by the Chairman, Motor Accidents Claims Tribunal–cum– Principal District Judge, Ranga Reddy District at L.B. Nagar (for short, “the Tribunal”), whereby the Tribunal awarded compensation of Rs.4,50,000/- with interest at 7.5% per annum from the date of petition till realization, fastening liability solely on the appellant– Corporation.

2. The brief facts of the case are that respondent Nos.1 to 5/ claimants, who are the wife and children of the deceased Pochaiah, filed the claim petition under Section 166 of the Motor Vehicles Act seeking compensation of Rs.5,00,000/- for his death in a motor vehicle accident that occurred on 18.09.2007. It is their case that while the deceased was proceeding on the road, the bus bearing No.AP 29 T 0426, driven in a rash and negligent manner, dashed against him, resulting in injuries, to which he succumbed while undergoing treatment. The said bus admittedly belongs to respondent No.6 herein, insured with respondent No.7 herein, and was under hire to the appellant–Corporation at the relevant point of time. The Tribunal, on appreciation of the evidence, came to the conclusion that the accident occurred due to rash and negligent driving by the driver of the offending bus and awarded a total compensation of Rs.4,50,000/-. However, the Tribunal fastened the entire liability on the appellant–APSRTC, by exonerating the owner and insurer of the offending vehicle. Assailing the same, the appellant–Corporation filed the present appeal.

3. Learned Standing Counsel appearing for the appellant- Corporation would contend that the appellant is only a hirer of the vehicle and not the owner; that the vehicle was admittedly insured; and that in view of the law laid down by the Hon’ble Supreme Court in Uttar Pradesh State Road Transport Corporation vs. Kulsum and others ¹(2011) 8 SCC 142, the insurer alone is liable to indemnify the claim. It is further contended that fastening entire liability on the appellant is contrary to law.

4. On the other hand, learned Standing Counsel for respondent No.7/Insurance Company argued that the vehicle in question was given on hire to the appellant–Corporation without due intimation to the insurer and in violation of the terms and conditions of the policy, and therefore, the insurer is not liable to indemnify the insured. It is further contended that since the vehicle was under the control of the appellant–Corporation at the time of the accident, the liability, if any, has to be borne by the appellant alone.

5. Learned counsel appearing for respondent Nos.1 to 5/ claimants would contend that the compensation awarded by the Tribunal is just and reasonable and the same does not require any interference.

6. There is no dispute with regard to the occurrence of the accident and the finding of negligence recorded by the Tribunal. The evidence of PW2, coupled with Exs.A1 and A2, clearly establishes that the accident occurred due to rash and negligent driving by the driver of the offending vehicle. The said finding, being based on evidence, does not warrant interference.

7. Insofar as the quantum of compensation is concerned, this Court finds that the Tribunal has awarded just and reasonable compensation of Rs.4,50,000/- and the same does not call for any interference.

8. The only issue that req