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PETITIONER: RAJASTHAN STATE ROAD TRANSPORT CORPORATION

       Vs.

RESPONDENT: KAILASH NATH KOTHARI & ORS. ETC. ETC.

DATE OF JUDGMENT:       03/09/1997

BENCH: A. S. ANAND, K. VENKATASWAMI

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T DR. A.S. ANAND, J.      Common questions  of law  and fact are involved in this batch  of   appeals  failed  by  the  Rajasthan  State  Road Transport  Corporation   (hereinafter  referred  to  as  the ’RSRTC’) against  the (common)  judgment of  the High  Court dated 22.1.1991 upholding composite awards made by the Motor Accidents  Claim  Tribunal  (hereinafter  the  Tribunal)  on 13.3.1989 and  are, therefore,  being disposed  of  by  this common order.      Bus No.RSB 3945, besides some other buses, was hired by the RSRTC  from its owner Shri Sanjay Kumar - respondent, to ply on  the routes specified by the RSRTC.  An agreement was executed  between  the  RSRTC  and  the  owner  of  the  bus containing the terms of hiring the bus.      Bus No  RSB 3945  was, on  the fateful  day, 17.7.1981, being driven  by Gopal  and was plying on the route Kekri to jaipur, for  which route  RSRTC had  the route  permit.   At about 9.30 p.M. when the bus was near Renwal, it was noticed that water  was flowing  over the bridge of Bandi river, due to heavy  rains.   The  passengers  travelling  in  the  bus requested the  driver not  to drive  the bus over the bridge because of overflowing water but their request had no effect and the driver, despite the warning by the passengers, drive the bus  over the  bridge and  as a  result of  flood in the river, the  bus was  swept away.  As a  result 23 passengers travelling in  the ill  fated bus  died due to the accident. The legal representatives/heirs of the 23 passengers who had died as  a result  of the  accident,  filed  separate  claim petitions under  Section 110-A  of the  Motor Vehicles  Act, 1939 (hereinafter  referred to  as the  1939  Act)  claiming compensation from  the RSRTC and the insurance company.  The claim petitions  were resisted  and the RSRTC in its written statement denied  its liability on the ground that though it had hired the bus in question from Shri Sanjay Kumar and the bus was  playing on the route specified by it, the driver of the bus,  Gopal, due  to whose  negligence and  rashness the accident had  taken place,  was not an employee of the RSTRC but of  the bus  owner, Shri  Sanjay Kumar, and therefore it was not  vicariously  responsible  for  his  negligence  and

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rashness.   It  was  also  pleaded  that  liability  to  pay compensation in  case of an accident was that of the "owner" and not of the hirer.  Reliance in this behalf was placed on condition No.15  of the  agreement to  disown its liability. The insurance  company took  the plea,  in its  reply to the claim petitions,  that the  bus at  the time of the accident was under  the control  of the  RSRTC, therefore  it was the liability of the RSRTC to pay compensation and the insurance company was  not liable.   It  was further  pleaded  by  the insurance  company  that  the  liability  of  the  insurance company, any  event, was limited and its liability could not exceed Rs.  75,000/- in  respect of  all the claim petitions arising out  of one accident.  The owner of bus, Shri Sanjay Kumar, though  party to the claim petitions did not file any reply.   The following  issues were  framed by  the Tribunal from the pleadings of the parties:           "(1)   Whether    on   17.7.81      opposite party  Gopal  was  driving      bus No  R.S.B. 394  negligently and      he drove  the bus  in  the  flooded      river and  the same was swept away,      as a  result of  which Vijay Kumar,      Ram Kishori Devi, Ram Pal, Prahlad,      Galli Devi, Bhanwar Lal, Mohan Lal,      Tabalya,  Babli,   Jayana,  Kanahya      Lal, Champa  Devi, Sewa  Ram, Laxmi      Narain,   Kamal    Kishore,   Miwal      Kishore, Kumari  Seema, Vimla Devi,      Ram Pyari  Devi,  Shakuntala  Devi.      Km. Bela,  Pawan Kumar  and  Mahesh      Kumar died?           (2) Whether  on the  basis  of      the  preliminary   objections   the      insurance company opposite party is      not liable  to pay  the  amount  of      compensation?           (3) Whether  due to  the terms      and conditions of the contract, the      Rajasthan  State   Road   Transport      Corporation is not liable?           (4) Whether  petition No.51/82      having been filed beyond limitation      is not liable to be heard?           (5)  Whether   this   incident      comes  within   the  definition  of      negligence?           (6) Relief."      A number  of witnesses were examined by the parties and after considering,  both oral  and documentary evidence, the Tribunal held that the bus driver (non applicant No.3) drove Bus No.  3945 on  17.7.1981 carelessly  and negligently  and caused the  accident which  resulted  in  the  death  of  23 persons.   Issue No.1  was decided  accordingly in favour of the claim  petitioners.   issue No.2  was  also  decided  in favour of  the petitioners but it was held that in the light of the  terms  of  the  policy  of  insurance  and  relevant provisions of  the  Act,  the  liability  of  the  insurance company was  limited, in respect of the accident, to a total amount of Rs. 75,000/- only      Insofar  as  issue  No.3  is  concerned,  the  Tribunal noticed condition  No.15 of  the contract  of hire  executed between the RSRTC and the owner Shri Sanjay Kumar and joined that the  same was  against ’public  policy’  and  therefore could not  discharge the  RSRTC from  its liability.  It was noticed that  the bus  was plying  on the route specified by

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the RSRTC  and the  passengers had  paid their  fares to the conductor who  was admittedly  an employee  of RSRTC, and as such  the   RSRTC  could  not  escape  from  its  liability. Accordingly, issue  No.3 was  also decided  in favour of the claim petitioners  and the  RSRTC was  held  liable  to  pay compensation to  the claimants.   On issue No.4 the Tribunal found that  claim petitions  were filed  within time,  after condoning the  delay  which  had  been  properly  explained. Issue  No.5   was  also  decided  in  favour  of  the  claim petitioners and  different amounts  were awarded  in each of the claim  petitions by  a composite  award  while  granting relief under issue No.6.      Aggrieved, by  the composite  award dated  13.3.1989 of the Tribunal,  the appellant  filed appeals  against each of the award  in the High Court.  The High Court also negatived the plea of RSRTC that since it was only a hirer and not the owner of  the  bus,  it  could  not  be  fastened  with  any liability for  payment of  compensation,  relying  upon  its earlier judgments  in RSRTC  V. Onkar  & Ors.  (ACC Vol.  II 1990-497); Mohd.  Raffiq V. Mohd. Sadi & Ors. (unreported SB Civil Misc.   Appeal  No. 243  of 1983; RSRTC V. Murlidhar & ors. besides  a Division Bench decision reported in D.B.Spl. Appeal No.391  of 1990  RSRTC  v  Rukmani  Devi  decided  on 41.4.1991.   The High Court also rejected the plea raised on behalf of  the insurance  company that  the liability of the insurance company  could not  extend to  an accident  of the type which  had occurred  in the present case and found that the Tribunal  had rightly decided issue No.2.  The composite award made  by the  Tribunal in  respect  of  various  claim petitions was  accordingly upheld  by the  High  Court  vide common judgment  dated 221.1991.   The  RSRTC has approached this Court  by Special  Leave in all the cases.  At the time of hearing,  the controversy in this court has been confined to the  findings on issue No.3 and no other finding has been called in question.      The thrust  of argument  of  learned  counsel  for  the appellant, was that the appellant not being the owner of the bus was  not liable  to pay  any compensation arising out of the accident  because the driver, who was driving the bus at the relevant time, was in the employment of the owner of the bus, Shri Sanjay Kumar and not of RSRTC and as such it could not be  held vicariously  liable for  the rash and negligent act of  the driver.   Reference  was also  made to condition No.15 of the agreement, to urge tat the RSRTC was not liable to pay  compensation to the heirs of the deceased passengers and that  the liability  to pay  compensation to them was of the owner  of  the  bus,  Sanjay  Kumar.    Learned  counsel appearing for  the insurance  company, did  not question the finding on  issue No.2  and  submitted  that  the  specified amount had since been paid by the insurance company.  He did not dispute  the correctness of the findings recorded by the Tribunal and  the High  Court on  issue No.3.   The claimant respondents remained  unrepresented, despite  service before us.      We  have   given  our   careful  consideration  to  the submissions made  at the  bar by  learned  counsel  for  the appellant and  for what follows we are not able to appellant and for  what follows  we are not able to persuade ourselves to agree  with him  and take  a view  different than the one taken by the Tribunal and the High Court.  Let us first look at some of the relevant statutory provisions.           Section     2-c(3)     defines      "contract carriage":           "Sec.2  -   C  (3)   "contract      carriage"  means  a  motor  vehicle

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    which  carries   a   passenger   or      passengers for hire or reward under      a contract expressed or implied for      the use of the vehicle s a whole at      or for  a, (fixed or agreed rate or      sum-           (i) on a time basis whether or      not with  reference to any route or      distance or           (ii)   from   one   point   to      another, and in either case without      stopping to pick up).           or set  down along the line of      route passengers  not  included  in      the contract,  and includes a motor      cab   notwithstanding    that   the      passengers may pay separate fares;"      ............           Section 2(9)  defines an owner      in the following terms:-           "Sec.2(9)  -   "owner"  means,      where the person in possession of a      motor  vehicle   is  a  minor,  the      guardian  of  such  minor,  and  in      relation to  a motor  vehicle which      is the  subject of  a hire purchase      agreement, the person in possession      of   the    vehicle   under    that      agreement."           By Section  2(29)  the  "STAGE      CARRIAGE" has been defined as-           "Sec.2(29) -  "stage carriage"      means a  motor vehicle  carrying or      adapted to  carry more than persons      excluding the  driver which carries      passengers for  hire or  reward  at      separate   fares    paid   by   for      individual passengers,  either  for      the whole  journey or for stages of      the journey."           Section  42   deals  with  the      "necessity for  permits"  and  lays      down:           "Sec.42   -    Necessity   for      permits.  -   (1)  No  owner  of  a      transport  vehicle   shall  use  or      permit the  use of  the vehicle  in      any public  place (whether  or  not      such vehicle  is actually  carrying      any passenger  of  goods)  save  in      accordance with the conditions of a      permit granted  or countersigned by      a  Regional   or  State   Transport      Authority   (or   the   Commission)      authorising the  use of the vehicle      in that  place  in  the  manner  in      which the vehicle is being used:           Provided that a stage carriage      permit  shall,   subject   to   any      conditions that may be specified in      the permit,  authorise the  use  of      the vehicle as a contract carriage:           ...................      Section  110-A   provides  that   an  application   for compensation arising  out of  an accident may be made by the

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person who has sustained the injury or if death has resulted from  the   accident,  by   all  or   any   of   the   legal representatives of  the deceased  or by  the  owner  of  the property damaged  by the  accident  or  by  any  agent  duly authorised  by   the  person   injured  or   by  the   legal representatives of the deceased, as the case may be.      Having noticed the relevant provisions of the 1939 Act, which admittedly  apply to  the instant case, we now address ourselves to  test the  correctness of  the submission  that since the  RSRTC was  not the  owner of the vehicle, as such the liability  to pay compensation for an accident caused by the us  hired by it, cannot be fastened on the appellant and the effect  of condition  No.15 of  the agreement.   Certain admitted facts need a notice at this stage.      It is  not disputed  that the bus in question was hired by the RSRTC and was running on the route for which a permit had been  granted in  favour of  the RSRTC  by the competent authority. It  is also  not disputed  that the permit to ply the bus was in the name of RSRTC for the specified route and that the  bus could  not have  plied on that route except by the RSRTC,  which had  the permit.   It  is also an admitted position that  the conductor  of the  bus was an employee of the RSRTC and that passengers were being carried in that bus on paying  the prescribed  fare to  the bus  conductor,   an employee of  the RSRTC.   The  fares paid  by the passengers were received  by the  conductor for  and on  behalf of  the RSRTC.   The bus  was given  on hire to RSRTC along with the driver,  who,   however,  was  to  ply  the  bus  under  the instructions of  RSRTC.  That an agreement had been executed between RSRTC  and  the  bus  owner.    Shri  Sanjay  Kumar, incorporating various conditions of contract.      Conditions 4  to 7  and 15  of the  agreement  executed between the RSRTC and the owner read:           "4.  The   corporation   shall      appoint  the   conductor  for   the      operation  of   the  bus  given  on      contract by  the second  party  and      the conductor  of  the  corporation      shall  do   the  work   of  issuing      tickets  to   the  passengers,   to      receive  the   fare,  to   all  the      passengers to get in and get out of      the bus,  to help the passengers to      load and  unload  their  goods,  to      stop the  bus at the stops fixed by      the Corporation  and to operate the      bus according to time table.      5. The tickets, way-bills and other      stationery shall be supplied by the      Corporation to  the said  conductor      of the corporation."      6. The driver of the bus shall have      to follow  all such instructions of      the  conductor,   which  shall   be      necessary under  the rules  for the      operation of the bus."      7. The  driver  of  the  bus  shall      comply with  all the  orders of the      corporation  or   of  the  officers      appointed by the corporation."      15. Upon  the accident  of the  bus      taking place  the owner  of the bus      shall  be   liable  for  the  loss,      damages  and  for  the  liabilities      relating  to   the  safety  of  the

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    passengers.   The Corporation shall      not be liable for any accident.  If      the Corporation is required to make      any payment  or incur  any expenses      through some  court or  under  some      mutual compromise,  he  Corporation      shall  be   able  to  recover  such      amounts from  the owner  of the bus      after deducting  the same  from the      amounts payable to him."      The admitted  facts unmistakably  show that the vehicle in question  was in  possession and under the actual control or RSRTC  for the  purpose of running on the specified route and was  being used  for carrying, on ire, passengers by the RSRTC.   The driver,  was to  carry out instructions, orders and directions  of the  conductor and  other officers of the RSRTC for operation of the bus on the route specified by the RSRTC.      The definition  of owner  under Section 2(9) of the Act is not  exhaustive.  it has, therefore to be construed, in a wider sense, in the facts and circumstances of a given case. The expression  owner must  include, in  a given  case,  the person who  has the  actual possession  and control  of  the vehicle and  under whose  directions and commands the driver is obliged  to operate  the bus.   To confine the meaning of ’owner’ to  the registered  owner only would in a case where the vehicle  is in  the actual possession and control of the hirer  not  be  proper  for  the  purpose  of  fastening  of liability in  case of  an accident.   The  liability of  the "owner" is  vicarious for the tort committed by its employee during the  course of  his employment  and  it  would  be  a question of  fact in  each case  as to on whom can vicarious liability be  fastened in  the case of an accident.  In this case, Shri  Sanjay Kumar, the owner of the bus could not ply the bus  on the  particular route for which he had no permit and he  in fact  was not  plying the bus on that route.  The services of  the driver were transferred along with complete ’control’ to RSRTC, under whose directions, instructions and command the  driver was  to ply  or not to ply the ill fated bus on  the fateful  day.  The passengers were being carried by RSRTC on receiving fare from them.  Shri Sanjay Kumar was therefore not  concerned with  the passengers  travelling in that bus on the particular route on payment of are to RSRTC. Driver of the bus, even though an employee of the owner, was at the  relevant time  performing his duties under the order and command  of the  conductor of RSRTC for operation of the bus.   So far  as the  passengers of  the ill  fated bus are concerned, their privity of contract was only with the RSRTC to whom  they had  paid the  fare for travelling in that bus and their  safety therefore became the responsibility of the RSRTC while  travelling in  the bus.  They had no privity of contract with  Shri Sanjay  Kumar, the  owner of  the bus at all.  Had it been a case only of transfer of services of the driver and not of transfer of control of the driver from the owner  to   RSRTc,  the  matter  may  have  been  some  what different.   But on  facts in  this  case  and  in  view  of conditions 4  to 7  of the agreement (supra), the RSRTC must be held  to be  vicariously liable for the tort committed by the driver while plying the bus under contract of the RSRTC. The general  proposition of  law and the presumption arising therefrom that  an employer,  that is the person who has the right  to   hire  and   fire  the   employee,  is  generally responsible  vicariously  for  the  tort  committed  by  the concerned employee  during the  course of his employment and within  the   scope  of   his  authority,  is  a  rebuttable

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presumption, of  the original  employer is able to establish that when  the servant  was lent, the effective control over him was  also transferred  to the  hirer, the original owner can avoid  his liability  and the  temporary employer or the hirer, as  the case  may be  must be held vicariously liable for the  tort committed  by the  concerned employee  in  the course of his employment while under the command and control of the hirer not withstanding the fact that the driver would continue to  be on  the pay roll of the original owner.  The proposition based  on the general principle as noticed above is adequately rebutted in this case not only on the basis of the evidence  led by  the parties  but also  on the basis of conditions 6  and 7 (supra), which go to show that the owner had not merely transferred the services of the driver to the RSRTC but actual control and the driver was to act under the instructions, control and command of the conductor and other officers of the RSRTC.      Reliance placed  by learned counsel or the appellant on condition No.15  of the  agreement (supra)  in our  view  is misconceived.   Apart from  the fact that this clause in the agreement between  the owner and the RSRTC, to the extent it shifts the  liability for the accident from the RSRTC to the owner, may  be against  the public  policy as  opined by the High  Court,   though  we  are  not  inclined  to  test  the correctness of  that proposition of law because on facts, we find  that   RSRTC  cannot   escape  its  liability  to  pay compensation.   The second  part of condition No.15 makes it abundantly clear that the RSRTC did not completely shift the liability to  the owner  of the  bus because it provided for reimbursement to  it in  case it  has  to  pay  compensation arising out of an accident.  The words           "If   the    Corporation    is      required to  make  any  payment  or      incur  any  expenses  through  some      Court   or    under   some   mutual      compromise, the  Corporation  shall      be able  to  recover  such  amounts      from the  owner of  the  bus  after      deducting the same from the amounts      payable to him" in the  later part  of condition No.15 leave no ambiguity in that behalf  and clearly  go to  show the  intention of  the parties.   Thus, RSRTC  cannot escape  its  liability  under condition No.15  of the  agreement either.   Thus,  both  on facts and  in law  the liability to pay compensation for the accident must fall on the RSRTC.      Thus, for  the additional  reasons noticed by us above, we find that both the Motor Accidents Claim Tribunal and the High Court of Rajasthan, committed no error in fastening the liability to  pay compensation  to the heirs of the deceased passengers on  the appellant.   There  is no  merit in these appeals, which consequently fail and are dismissed but since the claimant  respondents have remained unrepresented before us, with no order as to costs.