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PETITIONER: GURU GOVEKAR

       Vs.

RESPONDENT: MISS FILOMENA F. LOBO & ORS.

DATE OF JUDGMENT06/05/1988

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) OJHA, N.D. (J)

CITATION:  1988 AIR 1332            1988 SCR  Supl. (1) 170  1988 SCC  (3)   1        JT 1988 (2)   273  1988 SCALE  (1)834

ACT:      Motor Vehicles  Act, 1939  Whether an  insurer who  has issued an  insurance policy in respect of a person against a liability which  may be  incurred in  respect of death of or bodily injury  to any  person or damage to any property of a third party  arising out  of use  of a  motor vehicle  in  a public place,  is liable  to pay compensation when liability arises when motor vehicle is in the custody of a repairer.

HEADNOTE:      A car owned by a firm was entrusted to Guru, proprietor of M/s  Auto Electrical  Works, for  electrical repairs. The car was  insured with  M/s. Oriental  Insurance Co.  Ltd. as required under  the Motor  Vehicles Act,  1939 (’The  Act’). When  Momad  Donttach  an  employee  of  the  repairer,  was repairing the  car, the  respondent No.  1 was  knocked down when the  car dashed against the said respondent as a result whereof she had to be hospitalised and treated for injuries. The respondent  No. 1  instituted  a  claim  petition  under section 110-A  of the  Act before the Motor Accidents Claims Tribunal, impleading the firm-the owner of the car-Guru, the repairer, Momad Donttach, the mechanic, and the insurer-M/s. Oriental Insurance  Co. Ltd.-as respondents. The respondents contested the petition.      The Tribunal  passed its award, allowing a compensation of Rs.90,000  to the  respondent  No.  1  for  the  injuries suffered by  her,  payable  jointly  and  severally  by  the insurer and  all the  other respondents.  Aggrieved  by  the decision of the Tribunal, the insurer and Guru filed appeals before the  High Court,  which allowed  the  appeal  of  the insurer, however,  holding that  under section  92 A  of the Act, the  insurer  was  liable  to  pay  to  the  extent  of Rs.7,500. Guru’s  appeal was  dismissed, holding that he and his mechanic Momad Donttach alone were jointly and severally liable to  pay the compensation, i.e. the entire sum awarded minus Rs.7,500  above said. Aggrieved by the decision of the High Court.  Guru moved  this Court  for relief  by  special leave.      Allowing the appeal and modifying the order of the High Court, the Court, 171

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^      HELD:  The   only   question   of   law   arising   for consideration was  whether the insurer was liable to pay the compensation to  the claimant,  which has  to be resolved in the light of the provisions of the Act. [175 B, C]      If a policy is taken in respect of a motor vehicle from an insurer  in compliance  with the  requirements of Chapter VIII of  the Act,  the insurer is under an obligation to pay the compensation  payable to a third party on account of any injury  to   his/her  person,   property  or   to  a   legal representative of  the third  party in  case of death of the third party  caused by use of the vehicle at a public place. The liability  to pay  the said compensation arises when the insured is  using the  vehicle in  a public  place. It  also arises when  the insured  has caused  or allowed  any  other person (including  an independent  contractor)  to  use  his vehicle in  a public place and the death of or injury to the person or  property of a third party is caused on account of the use  of the said vehicle during such period, unless such other person  has himself taken out a policy of insurance to cover the liability arising out of such an accident. [176E-]      In this  case, neither  Guru Govekar, the repairer, nor his mechanic  Momad Donttach had taken a policy of insurance covering the  liability to  pay compensation  payable  to  a third party, when a motor vehicle taken for repairs from its owner has  caused the  death of  or injury to a third party. When the  owner of a Motor vehicle entrusts his vehicle to a repairer to  carry out  repairs, he is allowing the repairer to use  his vehicle  in that connection. It is also implicit in the said transaction that unless there is any contract to the contrary, the owner of the vehicle also causes or allows any servant  of the repairer, engaged in the work of repairs to use  the vehicle  in connection  with the work of repairs and when  such work  of repair  is being  carried out  in  a public place,  if on account of the negligence of either the repairer or his employee engaged in the repair work, a third party dies  or suffers injury to his person or property, the insurer becomes  liable to  pay the  compensation under  the provisions of  the Act.  While it may be true that under the Law of  Torts, the  owner may not be liable on the principle of vicarious  liability, the  insurer would be liable to pay the compensation  by virtue of the provisions of sections 94 and 95 of the Act. On the facts of the case, the insurer was liable to  pay the compensation found due to the claimant as a consequence  of the  injuries suffered  by her  due to the negligence of  the mechanic  engaged by the repairer who had undertaken  to   repair  the   vehicle,  by  virtue  of  the provisions contained  in section  94 of  the Act.  Any other view will expose the innocent third 172 parties to go without compensation when they suffer injuries on account  of such motor accidents and will defeat the very object of introducing the necessity for taking out insurance policy under the Act. [176H; 177A-C; 180F; 181F]      The Court allowed the appeal, modified the order of the High Court  and directed  the insurer to pay to the claimant the sum of Rs.90,000, etc. [181G]      Monk v. Warbey and others, [1935] 1 K.B. 75; McLeod (or Houston) v.  Buchanan, [1940]  2 All  E.R. 179; Vijaynagaram Narasimha Rao  and others  v.  Chanashyam  Das  Tapadia  and others, [1986]  A.C.J. 850;  Shantibai  and  others  v.  The Principal Govindram  C.  Sakseria  Technological  Institute, Indore  and   others,  [1972]   ACJ  354;  D.  Rajapathi  v. University of  Madurai  and  others,  [1980]  ACJ  113;  New Asiatic Insurance  Co. Ltd.  v. Pessumal Dhanamal Aswani and

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Ors., [1964] SCR 867, referred to.

JUDGMENT:      CIVIL   APPELLATE    JURISDICTION:  Civil  Appeal  Nos. 1684-85 of 1988.      From the  Judgment and  order dated  27.8.1987  of  the Bombay High Court in First Appeal No. 48 and 74 of 1986      K.J. John and Sanjay Grover for the Appellant.      S.K. Mehta,  M.K. Dua,  S.M. Sarin,  Aman Vachher, R.J. Goulay, Mrs. S.C. Dhanda and H.K. Puri for the Respondents.      The Judgment of the Court was delivered by      VENKATARAMIAH, J.  The short  question involved in this case is  whether an insurer who has issued a policy insuring any person  specified in  the policy  against any  liability which may  be incurred  by him in respect of the death of or bodily injury  to any  person or damage to any property of a third party  caused by  or arising out of the use of a motor vehicle in  a public place, is liable to pay compensation to such third  party or  to his or her legal representatives as the case  may be  when the  liability arises  when the motor vehicle is in the custody of a repairer.      One Sayed  Hussain was a partner of a firm by name M/s. International   Ship   Repairers  carrying  on  business  at Vasco-da-Gama, Goa which was the owner of an Ambassador car. He entrusted the said car 173 to Guru,  proprietor of  M/s. Auto  Electrical Works on 26th February, .1983  with instructions  to carry  out electrical repairs to  the car  and handed  over the keys of the car to the repairer  for that  purpose. The car had been insured by the owner  with M/s. Oriental Insurance Co. Ltd. as required by  the   provisions  of   the  Motor   Vehicles  Act,  1939 (hereinafter referred to as ’the Act’).      On the  evening of  February 26, 1983 Filomena F. Lobo, respondent No.  1 herein,  aged 27  years was returning home along with  her friend  and was  walking on the left side of the road.  She noticed  a car parked near Damodar Mandap and proceeded further  only to  be knocked  down by the very car which had  reversed and  dashed against  her back. The front tyre of  the car  passed over  her abdomen and she had to be treated  at   Dr.  Vernekar’s  hospital  and  thereafter  at Salgaoncar’s Medical Research Centre. After being discharged from the  hospital where  she spent  about 20  days she  was advised further treatment at Jaslok Hospital, Bombay and she was undergoing  treatment even  when she  instituted a Claim petition before  the Motor  Accidents Claims Tribunal, South Goa at Margao impleading the firm of which Sayed Hussain was a partner,  Guru, the  proprietor of  M/s.  Auto  Electrical Works, Momad Donttach, the employee of the repairer, who was repairing the  car at  the time  of  the  accident  and  the insurer M/s. Oriental Insurance Co. Ltd. as respondents. She filed the  Claim Petition  under section  110-A of  the  Act claiming  a   compensation  of   Rs.1,00,000  for   injuries sustained by  her on  account of  the motor vehicle accident referred to  above. The  respondents contested the petition. The owner  of the car, that is the insured and M/s. Oriental Insurance Co. Ltd. the insurer pleaded that the car had been entrusted to the repairer to do electrical repairs job as an independent contractor  and that  Momad Donttach attached to the garage  of the  repairer had  taken  away  the  car  for driving without  holding a valid driving licence and without the consent  of the  owner of the motor vehicle owner. Hence neither the  insurer that  is the insurance company, nor the

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insured, that  is, the  owner of  the vehicle, was liable to pay any  compensation. Momad  Donttach the  employee of  the repairer pleaded  that he did not drive the vehicle involved in the  accident at  any time,  that the  vehicle  had  been entrusted to  carry out  repairs to Guru, the repairer, that he being  a mechanic was carrying out the repairs by sitting on the  front seat,  i.e., the  seat other  than that of the driver, that  suddenly  the  vehicle  got  into  motion  and started going  in the  reverse direction  and that before he could take  the driver’s  seat  and  apply  the  brakes  the vehicle got into the ditch and stopped. He further contended that the  applicant was guilty of contributory negligence in as 174 much as  she in  exercise of due diligence ought not to have walked A  through the  very little space between the vehicle and the  wall. He,  however, did  not deny that she suffered injuries on  account of  one of  the wheels  of the  vehicle running over her body. Guru, the repairer pleaded that Momad Donttach was  not his  employee and he had never engaged him for any  work and  that it  was not true that he was driving the vehicle  when the  said vehicle  was allegedly given for electrical repairs.  On the  above  pleadings  the  Tribunal framed among  others the  following issues:(i)  Whether  the applicant proved  that the accident which caused injuries to the claimant  on 26.2.83  at Vasco,  was due to the rash and negligent driving on the part of the mechanic,; (ii) whether the applicant proved that the amount of compensation claimed was due.  reasonable and  adequate; and  (iii)  whether  the owner of  the  vehicle  and  the  insurer  proved  that  the mechanic had  driven the car without holding a valid licence and without  the consent  of the  owner The  Tribunal  on  a consideration of  the oral  and documentary  evidence placed before it  found that  the claimant had suffered injuries on 26.2.1983 on  account of  the rash and negligent handling of the motor  vehicle by  Momad Donttach; that the claimant was not guilty  of any  contributory negligence;  that  she  was entitled to  a compensation  of Rs.90,000  for the  injuries suffered by  her; that  Momad Donttach  had a  valid driving licence; that  the car  had been  entrusted by  the owner to Guru, the  repairer for carrying out repairs; Momad Donttach was an  employee of  Guru; that the accident had taken place when the  repairs were  being effected  to the car; and that the insurer and all other respondents were liable to pay the compensation  of   Rs.90,000  jointly   and  severally  with interest thereon  at six per cent per annum from the date of the claim till its complete satisfaction The Tribunal passed its award accordingly       Aggrieved  by the decision of the Tribunal the insurer M/s Oriental  Insurance Co. Ltd and Guru to whom the car had been entrusted  for carrying  out the  repairs filed appeals before the High Court of Bombay Panaji Bench. The High Court allowed the  appeal  filed  by  the  insurer  M/s.  Oriental Insurance Co.  Ltd. but  however held that under section 92A of the Act the insurer was liable to the extent of Rs. 7,500 only. The appeal filed by Guru was dismissed holding that he and his  mechanic Momad  Donttach  alone  were  jointly  and severally liable  to pay the compensation. The result of the judgment of  the High Court was that the entire compensation minus Rs.7,500  which the  insurer was  asked to  pay  under section 92A  of the  Act had to be paid by Guru the repairer of the car and his mechanic Momad Donttach. Aggrieved by the decision of  the High Court Guru has filed the above appeals by special leave. 175

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    There is  no dispute  that the  insurer  had  issued  a policy in  respect of the car in question as provided in the Act; that the claimant had suffered injury on account of the negligence of  the employee  of the  repairer, the appellant herein; and  that the car had been entrusted by the owner to the repairer  to carry out the repairs. The only question of law which  arises for  consideration in this case is whether the insurer is liable to pay compensation to the claimant.      Under the  Law of Toris the owner of a motor vehicle is no doubt  not liable  to pay compensation to any third party who suffers  any injury  on account of the negligence of the employee of  an independent  contractor, who  has taken  the vehicle  from   the   owner   for   his   own   (independent contractor’s) use.  The question  involved in this case has, however, to  be resolved  in the  light of the provisions of the Act. The material part of section 94(1) of the Act reads thus:                "94. Necessity  for insurance  against  third           party risk  (1) No  person shall  use except  as a           passenger or  cause or  allow any  other person to           use a  motor vehicle  in a  public  place,  unless           there is  in force  in relation  to the use of the           vehicle by  that person  or that  other person, as           the case  may be,  a policy of insurance complying           with the requirements of this Chapter . . ."      The above  provision requires  every person, who uses a motor vehicle  in a  public place, except as a passenger, to take  out   a  policy   of  insurance   complying  with  the requirements of  Chapter VIII of the Act. It also requires a person, who  causes or  allows any  other person, to use his motor vehicle  in a  public place  to  take  out  policy  of insurance complying with the requirements of Chapter VIII of the Act  unless there  is in  force a policy of insurance in relation to  the use of the vehicle by that other person, as required by  Chapter VIII  of the Act. Section 95 of the Act contains the  requirements of  such policies  and limits  of liability. The  relevant portion  of section  95 of  the Act reads thus:                "95. Requirements  of policies  and limits of           liability  (1)   In  order   to  comply  with  the           requirements  of   this  Chapter,   a  policy   of           insurance must be a policy which-                (a)  is   issued  by   a  person  who  is  an           authorised insurer  or by  a  cooperative  society           allowed under section 108 to transact the business           of an insurer, and 176                (b) insures  the person or classes of persons           specified in the policy to the extent specified in           sub-section (2)-                (i)  against   any  liability  which  may  be           incurred by  him in  respect of  the death  of  or           bodily injury  to any  person  or  damage  to  any           property of a third party caused by or arising out           of the use of the vehicle in a public place      The portion  of section 95 of the Act, extracted above, requires every  person, who  is the owner of a motor vehicle to take  out a  policy against  any liability  which may  be incurred by  him in respect of the death of or injury to any person or  damage to any property of a third party caused by or arising  out of the use of the vehicle in a public place, from an  authorised insurer or a cooperative society allowed under section  108 of the Act to transact the business of an insurer. Under  section 95(2)(c)  of the  Act in the case of motor vehicles  other than  those referred to in clauses (a)

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or (b) of section 95(2) the policy of insurance should cover the amount  of liability  incurred. Under section 125 of the Act whoever  drives a  motor vehicle  or causes  or allows a motor  vehicle   to  be   driven  in  contravention  of  the provisions of section 94 of the Act shall be punishable with imprisonment which  may extend to three months, or with fine which may  extend to one thousand rupees, or with both. Thus if a  policy is  taken in respect of a motor vehicle from an insurer in  compliance with the requirements of Chapter VIII of the  Act, the  insurer is  under an obligation to pay the compensation payable  to a  third party  on account  of  any injury to his/her person or property or payable to the legal representatives of  the third  party in case of death of the third party  caused by  or arising  out of  the use  of  the vehicle at a public place. The liability to pay compensation in respect  of death  of or  injury caused  to the person or property of  a third  party  undoubtedly  arises  when  such injury is  caused when the insured is using the vehicle in a public place.  It also arises when the insurer has caused or allowed  any   other  person   (including   an   independent contractor) to  use his  vehicle in  a public  place and the death of  or injury  to the  person or  property of  a third party is  caused on  account of  the use of the said vehicle during such  period, unless  such other  person has  himself taken out  a policy  of insurance  to  cover  the  liability arising out of such an accident.      In the instant case neither Guru Govekar, the repairer, nor his  mechanic Momad  Donttach  had  taken  a  policy  of insurance covering the liability to pay compensation payable to a third party, when a motor vehicle taken for repair from its owner has caused the death or 177 injury to  any third  party giving  rise to the liability to pay compensation. When the owner of a motor vehicle entrusts his vehicle to a repairer to carry out repairs he is in fact allowing the repairer to use his vehicle in that connection. It is  also implicit  in the  said transaction  that  unless there is  any cantract  to the  contrary the  owner  of  the vehicle also  causes or  allows any  servant of the repairer who is  engaged in  the work  of repairs  to use  the  motor vehicle for the purpose of or in connection with the work of repairs and when such work of repair is being carried out in a public place if on account of the negligence of either the repairer or  his employee, who is engaged in connection with the work of repair, a third party dies or suffers any injury either to his person or property, the insurer becomes liable to pay  the compensation under the provisions of the Act. In this context we may refer to the provisions of section 35(1) of the Road Traffic Act, 1930 which was in force in England, which at the relevant time read as follows:                "35(1). Subject  to the  provisions  of  this           Part of  this Act,  it shall not be lawful for any           person to  use, or  to cause  or permit  any other           person to  use, a  motor vehicle  on a road unless           there is  in force  in relation to the user of the           vehicle by  that person  or that  other person, as           the case  may be,  such a  policy of  insurance or           such a security in respect of third-party risks as           complies with  the requirements  of this  Part  of           this Act. "      The above  provision came  up for  consideration before the English  Court of  Appeal in  Monk v. Warbey and others, [1935] 1 K.B. 75. In that case the plaintiff claimed damages for personal  injuries sustained  by him  as the result of a collision between  a motor coach driven by him and motor car

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belonging to  the defendant,  Warbey. The motor car had been lent by  Warbey to  the defendant Knowles on whose behalf it was being  driven at the material time by the defendant May, and, as  the plaintiff  alleged, being  driven  negligently. Warbey, the  owner of  the car,  was insured  against  third party risks, but neither Knowles nor May was insured against those risks. The plaintiff alleged that the defendant Warbey by permitting the car to be used by Knowles and May, when no policy of  insurance was  in force in relation to such user, committed a  breach of the duty imposed by section 35 of the Road Traffic  Act, 1930.  The plaintiff further alleged that neither Knowles  nor May  was possessed  of any  means  with which to  pay any  sum in respect of the damage sustained by the plaintiff. The defendant Warbey pleaded in the course of his defence  (i) that  the action against him was based upon the alleged breach of a statutory duty and it was 178 not such  a breach  as gave  a cause of action to an injured member of  the public; (ii) that in any event the damage was too remote  in law;  and (iii)  that the  action against the defendant Warbey  was premature  in that  he  could  not  be joined with  Knowles and  May  until  the  rights,  if  any, against them had been exhausted The trial Court rejected the defence of  Warbey and  made a  decree against  him for 70. Warbey appealed  to the  Court of  Appeal. Greer. L.J in the course of  his judgment  explained the  object  of  enacting section 35  of the  Road Traffic  Act, 1930 and the basis of the liability  of the  owner of  the vehicle  at pages 80-81 thus:                "Consequently the Road Traffic Act, 1930, was           passed for  the very  purpose of  making provision           for third  parties  who  suffered  injury  by  the           negligent driving  of motor  vehicles by uninsured           persons to  whom the  insured owner  had lent such           vehicles How  could Parliament  make provision for           their protection  from such  risks if  it did  not           enable an  injured third  person to  recover for a           breach of  s. 35? That section which is in Part II           of the  Act headed  ’Provision against third-party           risks arising  out of  the use of motor vehicles’,           would indeed  be no protection to a person injured           by the negligence of an uninsured person to whom a           car had  been lent  by the  insured owner.  if  no           civil remedy  were available  for a  breach of the           section The  Act requires  every person who runs a           car to  have an  insurance on  the use of the car,           and to  provide himself with a certificate stating           the terms  of the  insurance. Section 35, sub-s. 1           says that  ’subject to the provisions of this Part           of this Act, it shall not be lawful for any person           to use,  or to cause or permit any other person to           use, a  motor vehicle on a road unless there is in           force in  relation to  the user  of the vehicle by           that person  or that other person, as the case may           be, such  a policy of insurance or such a security           in respect  of third  party risks as complies with           the requirements  of this Part of this Act.’ There           is no  dispute  that  the  appellant  committed  a           breach of  the section,  but  it  is  argued  that           taking the  Act as a whole it is clear that it was           not intended  to confer  a right  upon an  injured           third person  to claim  damages for such a breach.           It seems  to me  that  the  situation  is  exactly           within the language of A.L. Smith L.J in Groves v.           Lord Wimborne,  [1898] 2  Q.B 402 where he said at

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         page 406:  ’The Act  in question,’  the Factory  &           Workshop Act,  1878 ’which followed numerous other           Acts in pari materia, is not 179           in the  nature of  a private  legislative  bargain           between employers  and  workmen,  as  the  learned           judge seemed  to think, but is a public Act passed           in  favour   of  the   workers  in  factories  and           workshops to  compel their employers to do certain           things for their protection and benefit.’ The Lord           Justice then  said  at  page  407:  ’Could  it  be           doubted that,  if s.  5 stood  alone, and  no fine           were provided  by the Act for contravention of its           provisions, a  person injured  by a  breach of the           absolute and  unqualified  duty  imposed  by  that           section would have a cause of action in respect of           that breach? Clearly it could not be doubted. That           being  so,   unless  it  appears  from  the  whole           ’purview’ of  the Act, to use the language of Lord           Cairns  in  the  case  of  Atkinson  v.  Newcastle           Waterworks Co.,  [1877] 2  Ex. D. 441, that it was           the intention  of the  Legislature that  the  only           remedy for  breach of the statutory duty should be           by proceeding  for the  fine imposed  by s. 82, it           follows that,  upon proof of a breach of that duty           by the  employer and  injury thereby occasioned to           the workman,  a cause  of action  is established.’           The result of the above construction may be stated           as follows:  prima facie  a person  who  has  been           injured by  the breach of a statute has a right to           recover damages  from  the  person  committing  it           unless it  can be  established by  considering the           whole of  the Act  that no such right was intended           to be  given. So far from that being shown in this           case, the  contrary is  established. To  prosecute           for a penalty is no sufficient protection and is a           poor consolation  to the  injured person though it           affords a  reason why  persons should not commit a           breach of the statute."      Maugham, L.J.  and Roche,  L.J. agreed  with the  above view expressed  by Greer,  L.J. The above decision was later on approved  by the House of Lords in McLeod (or Houston) v. Buchanan, [1940]  2 All  E.R. 179. Summarising the effect of the decision in Monk v. Warbey (supra) in Shawcross on Motor Insurance, Second Edition at page 6 it is observed thus:                "(1) The  owner who  delivers his  car  to  a           repairer will  be liable  to  a  third  party  who           sustains  personal   injuries  and  is  unable  to           recover from the repairer because the repairer has           no insurance (g)."      We agree  with the  view expressed  in Monk  v.  Warbey (supra). In  India the  opinion appears to be divided on the liability of  the  insurer  of  a  motor  vehicle  when  the accident giving rise to the claim takes place 180 when the  motor vehicle  is in the custody of a repairer. In Vijayanagaram Narasimha  Rao and  Others v.  Chanashyam  Das Tapadia and  others, [1986]  ACJ 850,  Ramaswamy, J.  of the High Court  of Andhra  Pradesh held  that once the owner had entrusted the  motor vehicle  to the  licensed  mechanic  to effect repairs,  testing being  integral part  of  effecting repairs and  the accident  had taken place during the course of testing  the vehicle,  the necessary  conclusion was that the mechanic acted within his limits of authority and in the course of  the employment  for and  on behalf  of the owner.

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Therefore, the  owner should  be vicariously  liable for the acts of  the mechanic.  Accordingly, he  held that  both the owner and  the  insurance  company  were  also  jointly  and severally liable  for the payment of the compensation to the third party,  who had  suffered the  injury by virtue of the provisions of  the Act.  The decision  of the  High Court of Madhya Pradesh  in Shantibai  and others  v. The  Principal, Govindram  Sakseria   Technological  Institute,  Indore  and others, [1972] ACJ 354 is also to the same effect. G.L. Oza, J., as  he then  was, in  the course  of the  said  decision rejected the  contention of  the insurance  company based on the exemption  clause which  exempted the  insurance company from liability  arising out of an accident during the period when the  motor vehicle  was used  ’for  hire  or  used  for organised racing,  pace-making, reliability  speed-testing’, which was also one of the contentions urged before us in the present case although the said contention could not be urged in the  circumstances of this case. We do not agree with the decision in  D.  Rajapathi  v.  University  of  Madurai  and others, [1980]  ACJ 113  in which  it has been held that the doctrine of  vicarious liability  could not be extended to a case where  the accident  had taken  place on account of the negligence  of   the  driver   employed  by  an  independent contractor even  when the claim is made not under the Law of Torts but  under the  provisions of the Act. While it may be true, as  we have  observed earlier,  that under  the Law of Torts, the  owner may  not be  liable on  the  principle  of vicarious liability,  the insurer would be liable to pay the compensation by  virtue of  the provisions of section 94 and section 95 of the Act, referred to above      We may  now refer  to the decision of this Court in the New Asiatic  Insurance Co.  Ltd. v. Pessumal Dhanamal Aswani and ors.,  [1964] S.C.R.  867. In  that case  the owner of a motor car  had insured  it  with  the  appellant,  insurance company, under  a comprehensive  policy.  He  had  permitted another person,  who had  insured his  own car  with another company, to  drive it and while the other person was driving the car it met with an accident. As a result of the accident one person  died and another person sustained injuries. Both of them  were in  the car. The heirs of the man who died and the Person who sustained 181 injuries filed  suits for damages. This Court held that on a consideration of  the provisions of sections 93 to 96 of the Act the  insurer was liable to indemnify the person or class of persons  specified  in  the  policy  in  respect  of  any liability which  the policy purports to cover in the case of that person  or those  classes of  persons.  If  the  policy covers the insurer for his liability to the third party, the insurer was  bound to  indemnify the  person or  classes  of person specified  in the  policy. The same was the effect of sub-section (1) of section 96 of the Act which provided that the insurer  was bound  to pay to the person entitled to the benefit of  a decree  he had  obtained  in  respect  of  any liability covered  by the  terms of  the policy  against any person  irrespective  of  the  fact  that  the  insurer  was entitled to avoid or cancel the policy. This meant that once the  insurer  had  issued  a  certificate  of  insurance  in accordance with sub-section (4) of section 95 of the Act the insurer had  to satisfy  any decree which a person receiving injuries from  the use  of the  vehicle insured had obtained against any  person insured  by the policy. He was liable to satisfy the  decree when  he had  been served  with a notice under sub-section  (2) of  section 96  of the  Act about the proceedings in which the judgment was delivered.

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    Thus on  the facts  of the case before us we are of the view that  the insurer  is liable  to pay  the  compensation found to  be due  to the  claimant as  a consequence  of the injuries suffered by her in a public place on account of the car colliding  with her  on account of the negligence of the mechanic who  had been  engaged  by  the  repairer  who  had undertaken to repair the vehicle by virtue of the provisions contained in  section 94  of the  Act which provides that no person shall use except as a passenger or cause or allow any other person  to use  a motor  vehicle in  a  public  place, unless there  is in  force in  relation to  the use  of  the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter VIII of the Act. Any other view will expose innocent third parties  to go  without compensation  when they suffer injury on  account of  such motor  accidents and will defeat the very object of introducing ’the necessity for taking out insurance policy under the Act.      We, therefore,  allow the  appeal and  modify the order passed by  the  High  Court  and  direct  the  insurer,  the Oriental Insurance  Company Ltd. to pay to the claimant Miss Filomena F.  Lobo a sum of Rs.90,000 along with interest and costs as  directed  by  the  Tribunal.  The  parties  shall, however, bear  their own costs in this Court and in the High Court. S.L.                                    Appeal allowed 182