A.P. State Road Transport Corporation vs B. Gopalakrishna

U. Durga Prasad Rao, J.—Aggrieved by the Award dated 08.03.2006 in MVOP No.581 of 2004 passed by the Chairman, M.A.C.T-cum-V Additional District Judge, Tirupathi (for short the Tribunal), the 3rd respondent in the OP/APSRTC preferred the instant appeal.

The factual matrix of the case is thus:

a) The claimants case is that on 27.10.2000 at about 2:40 PM, when he was travelling in a RTC bus bearing AP 03 V 2142 from Renugunta to Tirupathi, the driver of the bus drove the same in a rash and negligent manner near Bhimas Residency Hotel and dashed against left side parapet wall of railway over bridge. The bus rolled down underneath the bridge. Due to the said accident the petitioner sustained fracture of ribs. Immediately he was admitted in SVRRG Hospital, Tirupati. It is averred that he was working as B.Ed. Teacher in P.M.High School, Renigunta and earning Rs.15,991/- per month as salary and due to accident he was forced to take voluntary retirement. It is further averred that driver of the bus was at fault. On these pleas, the claimant filed MVOP No.581 of 2004 against respondents 1 to 3, who are the owner, insurer and hirer of the offending bus and claimed Rs.6,00,000/- as compensation under different heads mentioned in the OP.

b) Respondent No.1 remained ex parte.

c) Respondent No.2/Insurance Company filed counter and opposed the claim denying all the material averments made in the claim petition and urged to put the claimant in strict proof of the same. R2 contended that fault lies on the part of driver of the RTC bus so, the owner and hirer of the bus (R1 and R3) are liable to pay compensation but not insurer and prayed to dismiss the OP.

d) Respondent No.3/ APSRTC filed counter contending that accident was occurred due to the rash and negligent driving of the driver of the bus. The first respondent being the owner of the bus is vicariously liable for the tort committed by his servant and as the bus was insured with R2/Insurance Company, respondents 1 and 2 alone are liable to pay compensation.

e) During trial, PWs.1 and 2 were examined and Exs.A1 to A15 were marked on behalf of the claimant. Copy of insurance policy filed by 2nd respondent was marked as Ex.B1.

f) A perusal of the award would show that the Tribunal having regard to the oral and documentary evidence has held that the offending bus driver was responsible for the accident. Sofaras quantum of compensation is concerned, the Tribunal granted Rs.3,32,000/- under different heads as shown below with proportionate costs and simple interest @ 7.5% per annum against 3rd respondent, while dismissing the petition against R2/Insurance Company.

Pain and suffering

Rs. 20,000-00

Loss of past earnings for 4 months

Rs. 64,000-00

Medical expenses

Rs. 48,000-00

Loss of future earnings

Rs. 2,00,000-00

Total

Rs. 3,32,000-00

Hence, the appeal by APSRTC.

Heard arguments of Sri K.V. Subba Reddy, learned counsel for appellant/APSRTC and Sri P.Ganga Rami Reddy, learned counsel for respondent No.2/claimant. No representation on behalf of 3rd respondent/ Insurance Company. Notice to R1 was returned unserved.

The parties in this appeal are referred to as they stood before the Tribunal.

Learned counsel for appellant/ APSRTC argued that the Tribunal following the judgment of Division Bench of this High Court reported in New India Assurance Co. Ltd. vs. B.G.Suma has fixed liability on APSRTC/ R.3 in the OP. However, pending this appeal, a Full Bench of this High Court in a decision reported in APSRTC vs. B. Kanakaratna bai and others has held that though the vehicle was hired to APSRTC, still the Insurance Company cannot repudiate its liability and ultimately held that the Insurance Company was liable to pay compensation. Learned counsel thus argued that in view of the latest law pronounced by the Full Bench of our High Court, the United India Insurance Co. Ltd. (R.2 in the OP) shall be held liable in the place of APSRTC. Learned counsel has drawn the attention of this Court to the Full Bench decision (vide The Andhra Pradesh State Road Transport Corporation and Others Vs. B. Kanaka Ratnabai and Others, and submitted that in the said judgment, earlier judgment of the Division Bench was also discussed.

Learned counsel for R.2/claimant in his argument expressed the same view as that of the appellant.

In the light of above rival arguments, the point for determination in this appeal is:

Whether the United India Insurance Company Limited being the insurer or the APSRTC being hirer of the crime bus is liable to pay compensation

Point: The accident, involvement of APSRTC bus bearing No.AP 03 V 2142 and injuries to the claimant are admitted facts. It is also an admitted fact that 1st respondent in the OP is the owner of the bus who insured his vehicle with United India Insurance Co. Ltd. and he hired the bus to APSRTC by the date of accident. Perusal of the award would show that while deciding the liability among the respondents, the Tribunal relied upon the decision reported in New India Assurance Co. Ltd. Vs. B.G. Suma and Others, . In that case, a Division Bench of this Court relying upon the decision of Hon''ble Apex Court reported in Rajasthan State Road Transport Corporation vs. Kailash Nath Kothari, and held that since the vehicle was in possession and control of the RTC by the date of accident, APSRTC was liable to pay compensation. Relying on the Division Bench decision in New India Assurance Co. Ltd. Vs. B.G. Suma and Others, , the Tribunal fixed liability on appellant/ APSRTC.

Now the submission of appellant/APSRTC is that pending appeal a Full Bench of this Court, considering various decisions including the Rajasthan State Road Transport Corporation Vs. Kailash Nath Kothari and other etc., of Apex Court and New India Assurance Co. Ltd. Vs. B.G. Suma and Others, , has held that even though vehicle was under the hire of APSRTC, still the Insurance Company would be liable to pay compensation and in view of the latest law, the appellant/ APSRTC may be exonerated from the liability. Hence, I perused the Full Bench judgment in The Andhra Pradesh State Road Transport Corporation and Others Vs. B. Kanaka Ratnabai and Others, . The prime point for determination in that case was whether the compensation payable in respect of claims arising out of accident involving insured buses hired by APSRTC should be borne by the owner of the vehicle, the Insurance Company, the APSRTC or by some or all of them. On a conspectus of a catena of judgments including Rajasthan State Road Transport Corporation Vs. Kailash Nath Kothari and other etc., and New India Assurance Co. Ltd. Vs. B.G. Suma and Others, , the Full Bench ultimately held thus:

Mere hiring of insured buses by the owners to the APSRTC would not in any manner limit the liability and accountability of the insurance companies, be it under the Act of 1988 or the Act of 1939, to honour passengers/ third party risks covered by the insurance policies issued by them in favour of the owners. Notwithstanding the hiring of insured buses by the owners to the APSRTC, the Insurance Companies shall be solely and exclusively liable for payment of compensation arising out of such passengers/ third party claims unless any of the grounds in Section 149(2) of the M.V Act of 1988/ Section 96(2) of the Act of 1939 are made out.

Needless to emphasize the point that the latest law of the Full Bench would be applicable to the pending appeals. In the instant case, the Insurance Company has not brought out any violation of the terms of the policy so as to exonerate it from the liability. As such, the Insurance Company in the place of APSRTC is liable to pay compensation. This point is answered accordingly.

In the result, this appeal filed by the appellant/ APSRTC is allowed and ordered as follows:

i) The United India Insurance Company Limited/ R.2 in the OP instead of APSRTC is directed to pay compensation to the claimant.

ii) Pending appeal, if any amount is paid by the APSRTC to the claimant towards compensation, it shall recover the same from the United India Insurance Company Limited but not from the claimant. In such an event, the Insurance Company will be liable to pay only the balance amount of compensation to the claimant.

iii) No order as to costs in the appeal.

As a sequel, miscellaneous applications pending, if any, shall stand closed.