Ratnam Automobiles vs Sivagami and others

Ratnam, J.—The fourth respondent in M.C.O.P. No. 100 of 1981 on the file of the Motor Accidents Claims Tribunal (Subordinate Judge),

Tirunelveli, is the appellant in this appeal. In M. C.O.P. No. 100 of 1981 filed by respondents Nos. 1 to 3 herein against respondents Nos. 4 to 6

and the appellant herein u/s 110A of the Motor Vehicles Act (hereinafter referred to as ""the Act""), they (as the widow and minor children of the

deceased Murugan) had prayed for the award of compensation in a sum of Rs. 30,000 in respect of the death of Murugan in an accident that took

place on January 1, 1980, involving the omnibus bearing Registration No. TNR 750 belonging to the fourth respondent and insured with the sixth

respondent and entrusted to the appellant for repairs and driven by the fifth respondent in the course of test-checking the vehicle after the repairs.

Having regard to the limited scope of this appeal, it would suffice to notice the defence raised by the appellant to whom the vehicle was entrusted

by the fourth respondent for repairs. Apart from disputing that the vehicle was driven in a rash and negligent manner and that caused the accident,

the appellant pleaded that no vicarious liability could be fastened on it in respect of the accident and that the claim for compensation in a sum of Rs.

30,000 was excessive and on the high side. On a consideration of the oral as well as documentary evidence, the Tribunal found that the accident

took place only owing to the rash and negligent driving of the omnibus belonging to the fourth respondent by the fifth respondent, who was

attached to the appellant-automobile workshop, that the fifth respondent drove the vehicle as a mechanic as well as a servant of the appellant and

not an authorisedly and that he was not an employee of the owner of the vehicle, the fourth respondent, that respondents Nos. 1 to 3 were entitled

to be paid a consolidated sum of Rs. 21,000 towards compensation so determined to respondents Nos. 1 to 3. A further direction was also given

that, in respect of respondents Nos. 2 and 3, an amount of Rs. 7,000 each should be deposited in the bank in the name of the first respondent and

the first respondent, as the guardian of respondents Nos. 2 and 3, was also permitted to withdraw the interest accruing thereon to be utilised for

the benefit of respondents Nos. 2 and 3. In so far as the award so passed by the Tribunal fastened the liability on the appellant to whom the vehicle

had been entrusted for carrying out repairs, it has come forward with this appeal questioning its liability to pay the compensation amount as

awarded.

The facts are not in controversy. That the accident took place on January 1, 1980, about 1 1/2 furlongs south of Konganthanparai road

diversion in Palayamcottai-Nagercoil road involving the vehicle of the fourth respondent bearing Registration No. TRN 750 and the deceased

Murugan sustained injuries and he died on January 4, 1980, are all admitted. It is also not in dispute that the fourth respondent had entrusted the

vehicle in question to the appellant for carrying out repairs at the time when the accident took place and the vehicle was driven by the fifth

respondent who was only an employee of the appellant-automobile workshop. The vehicle in question had been insured by the sixth respondent

under the terms of the policy, exhibit B-2, in and by which it had to indemnify the insured in respect of any sum which the insured shall become

legally liable to pay in respect of the death of any person caused by or arising out of the use of the use of the motor vehicle and the limit of its

liability, as set out in the policy, is such amount as is necessary to meet the requirements of the Act. The Tribunal took the view that, as the accident

had taken place when the vehicle entrusted to the appellant for repairs was driven by its driver, the fifth respondent, who was an employee of the

appellant, the appellant would be liable to pay the compensation to respondents Nos. 1 to 3. For so holding, the Tribunal had also relied upon the

decision in Gopalakrishnan Embrandiri Vs. Krishnankutty and Others, . The question is whether the Tribunal was right in the view it took regarding

the liability of the appellant to whom the vehicle was entrusted merely for purposes of carrying out repairs, exonerating the fourth respondent, the

owner of the vehicle, and the sixth respondent, the insurance company.

Whatever doubts might have been expressed earlier on the question of the liability of the owner of the vehicle and the insurer with reference to

an accident taking place in circumstances referred to earlier, is now clearly laid down by the Supreme Court in Guru Govekar Vs. Miss Filomena

F. Lobo and Others, that implicit in the entrustment of the vehicle for repairs is that the owner of the vehicle allows any servant of the repairer to

use the vehicle for the purpose of or in connection with the work or repairs and when such work of repairs and when such work of repairs is

carried out in a public place, and a third party dies or suffers injury to his person or property owing to the negligence of either the repairer or his

employee, the insurer is liable to pay the compensation under the provisions of the Act. In that case, a car was owned by International Repairers

and it was entrusted to one Guru, proprietor of Auto Electrical Works, with instructions to carry out electrical repairs and the keys were handed

over to the repairer for that purpose. The car had been insured with Oriental Insurance Company Limited. At the time the accident took place, the

employee of the repairer was repairing the car and the injured person filed a claim petition impleading the owner of the car, the proprietor of Auto

Electrical Works, and his employee and the insurer. The plea raised to do electrical repair jobs as an independent contractor and his employee had

taken away the car without the consent of the owner of the motor vehicle and, therefore, neither the insured nor the insurance company would be

liable. The mechanic who was carrying out the repairs at the time of the involvement of the vehicle in the accident denied having driven the vehicle

and stated that the injured was negligent. The repairer to whom the vehicle was entrusted for repairs pleaded that the person who drove the vehicle

at the time of the accident was not his employee and he had never been engaged and he was also not driving the vehicle entrusted for carrying out

repairs. The Tribunal found that all the respondents to the claim petition were liable for payment of the amount determined as compensation and

aggrieved by that the insurance company and the person to whom the car was entrusted for carrying out repairs preferred appeals and it was held

by the High Court that the insurance company was liable only to the extent of Rs. 7,500 and the person to whom the vehicle had been entrusted

for carrying out repairs cannot disown liability and that the repairer of the vehicle and the mechanic were liable for payment of compensation

except to the extent of Rs. 7,500. Aggrieved by that, the repairer of the vehicle preferred appeals before the Supreme Court contending that the

owner of the vehicle was liable to pay the compensation which, in turn, should be paid by the insurance company under the terms of the policy. In

dealing with this, the Supreme Court pointed out as follows (at page 636 of 64 Comp Cas) :

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.

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 contract 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 repairs 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.

Further, the Supreme Court proceeded to examine the decisions in Monk v. Warbey [1935] 1 KB 75 (CA) McLeod (or Houston) v.

Buchanan [1940] 2 AER 179Vijayanagaram Narasimha Rao v. Ghanashyam Das Tapadia [1986] ACJ 850 (AP)Shantibai v. Govindram

Sakseria Technological Institute, Indore [1972] ACJ 354 (MP) and D. Rajapathi v. University of Madurai [1980] ACJ 113 (Mad) and finally did

not agree with the decision in D. Rajapathi v. University of Madurai [1980] ACJ 113 (Mad)to the effect 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 and laid down that, though, 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. Again, at page 640 of 64 Comp Cas, the Supreme Court reiterated its view regarding the liability of the insurer by

observing that 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 and further pointed out that any other view will expose innocent third parties

to go without compensation when they suffer injury on account of such motor accidents an insurance policy under the Act. This decision, in my

view, would squarely govern this case also. Though, in the course of arguments, a reference was made to some other decisions, in view of the clear

and categoric pronouncement of the Supreme Court already referred to, it is unnecessary to make a reference to other cases except

Gopalakrishnan Embrandiri Vs. Krishnankutty and Others, relied on by the Tribunal. In that case also, the accident had taken place when the

fourth defendant was driving the vehicle to find out whether the repairs to the vehicle had been carried out properly and it was held that he was

doing something within the scope of his employment and that defendants Nos. 1 and 2 who were his masters at the time were answerable for the

consequences and it was on this footing that the decree was modified and the owner of the vehicle as well as his brother who was in possession,

control and management of the vehicle were both made liable. That decision cannot be construed as laying down that, in all such cases, only the

master of the erring workman alone should be held liable and not the owner of the vehicle. In view of the decision of the Supreme Court referred

to earlier, the reliance placed by the Tribunal upon this decision to fasten liability on the appellant is not in order. No other point was urged and no

dispute was also raised regarding the quantum of compensation.

Thus, applying the principle of the decision of the Supreme Court in Guru Govekar v. Filomena F. Lobo [1988] 64 Comp Cas 631 referred to

earlier, it follows that the sixth respondent, as the insurer of the vehicle, would be liable to pay the compensation to respondents Nos. 1 to 3 and

not the appellant. The appeal is, therefore, allowed and the award of the Tribunal is modified holding that the sixth respondent-United India

Insurance Co. Ltd., is liable to pay respondents Nos. 1 to 3 the compensation amount of Rs. 21,000 with interest as awarded by the Tribunal.

There will be, however, no order as to costs in the appeal.