(A.K. Sikri and Ashok Bhushan, JJ.)
Uttar Pradesh State Road Transport Corporation __________ Appellant;
v.
National Insurance Company Ltd. and Others ________ Respondent(s).
Civil Appeal No(s). 3315/2018 [@ SLP(c) No. 26625 of 2016], decided on March 27, 2018
The Order of the court was delivered by
Order
1. Leave granted.
2. Heard learned counsel for the parties finally at this stage.
3. The only dispute for consideration is as to whether the Insurance Company, i.e. respondent no. 1 herein, shall be liable to pay compensation to the third party to indemnify the liability of the owner of the vehicle.
4. Undisputed facts are as follows:
5. The owner of the vehicle bearing Registration No. UP-65BT-1224 was respondent no. 2. He had entered into an agreement with the appellant herein under which the said vehicle was given at the disposal of the appellant. The arrangement, in nutshell, was that the driver, i.e. respondent no. 3, for driving the vehicle shall be that of the owner and conductor shall be provided by the appellant. Since the accident took place, respondent no. 4 filed a claim before the Motor Accident Claims Tribunal (“MACT”). Insofar as negligent driving of the vehicle in question is concerned which led to the accident, the same was established before the MACT which prompted MACT to grant compensation to respondent no. 4 who was injured in the said accident. Respondent no. 4 had impleaded the appellant, respondent no. 2 (owner) as well as respondent no. 3 (driver) of the vehicle as opposite parties. The Insurance Company/respondent no. 1 denied its liability on the ground that it was kept in dark about the agreement/arrangement that was entered into between respondent no. 2 and the appellant under which the appellant was allowed to ply the said vehicle. This contention of respondent no. 1/Insurance Company was accepted by the MACT in the following manner:
“Respondent No. 2 has not filed any such documentary evidence on record which shows that before accident respondent No. 1 had information of vehicle involved in accident being under contract with respondent no. 4. Had respondent no. 2 entered into contract with respondent no. 4 within the knowledge of respondent no. 1, then certainly liability for payment of compensation amount would have been of respondent no. 1 but without knowledge of respondent no. 1, respondent no. 2 entered into contract with respondent no. 4 for plying the vehicle involved in accident. In such circumstances, vehicle involved in accident was under the effective control of respondent no. 4 at the time of accident and in view of principle laid down by the Hon’ble High Court of Allahabad in the case of United Indian Insurance Co. Ltd. v. U.P. State Road Transport Corporation – 2010 (2) AWC 1351 (Lucknow Bench), the liability is of respondent no. 4 for payment of compensation amount.”
6. The appellant preferred an appeal against the said judgment which has been dismissed by the High Court relying upon the earlier Judgment in the case of United Indian Insurance Co. Ltd. v. U.P. State Road Transport Corporation – 2010 (2) AWC 1351 (Lucknow Bench).
7. After hearing the learned counsel for the parties we find that the issue involved is no more res-integra and it stands settled by the judgment of this Court in Uttar Pradesh State Road Transport Corporation v. Kulsum, 2011 (8) SCC 142. In the aforesaid case almost on similar facts, this Court held as under:
“30. Thus, for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the specific period. If the Corporation had become the owner even for the specific period and the vehicle having been insured at the instance of original owner, it will be deemed that the vehicle was transferred along with the Insurance Policy in existence to the Corporation and thus Insurance Company would not be able to escape its liability to pay the amount of compensation.
31. The liability to pay compensation is based on a statutory provision. Compulsory Insurance of the vehicle is meant for the benefit of the Third Parties. The liability of the owner to have compulsory insurance is only in regard to Third Party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the C.A. @ SLP(C) No. 1969 of 2008 etc. …(contd.) owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate Insurance Policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice.”
8. The principle laid down in the aforesaid judgment has been again reiterated in the case of Managing Director, Karnataka State Road Transport Corporation v. New Indian Assurance Company Ltd., (2016) 2 SCC 382 wherein the legal position was summed up as under:
“In view of the aforesaid discussion, we hold that the registered owner, insurer as well as KSRTC would be liable to make the payment of compensation jointly and severally to the claimants and KSRTC in terms of the lease agreement entered into with the registered owner would be entitled to recover the amount paid to the claimants from the owner as stipulated in the agreement or from the insurer.”
9. In view of the aforesaid authoritative pronouncements, we hold that the registered owner, Insurer (respondent no. 1) as well as the Corporation (appellant) shall be jointly and severally liable to the claimants in respect of the compensation that has been awarded by the MACT. However, insofar as the appellant is concerned, it would be entitled to recover the amount paid to the respondents from the owner in terms of the agreement which has been entered into between them.
10. The appeal is disposed of accordingly.
Civil Appeal No(s). 3315/2018
Uttar Pradesh State Road Transport Corporation __________ Appellant
v.
National Insurance Company Ltd. & Ors ______________ Respondent(s)
Date: 27-03-2018 This appeal was called on for hearing today.
(Before A.K. Sikri and Ashok Bhushan, JJ.)
For Appellant(s) Ms. Garima Prashad, AOR
For Respondent(s) Ms. Meenakshi Midha, Adv.
Mr. Kapil Midha, Adv.
Mr. Bhavya Lakhwara, Adv.
Mr. Chander Shekhar Ashri, AOR
Ms. A. Chowdhuryu, Adv.
UPON hearing the counsel the Court made the following
ORDER
11. Leave granted.
12. The appeal is disposed of in terms of the signed order.
13. Pending application(s), if any, stands disposed of accordingly.
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