First Appeal No.269 of 1994

9th January, 2004

Petitioner Counsel: Mr. MASOOD SHAREEF
Respondent Counsel: Mr. A. M. BAPAT,Mr. S. R. PATHAK

Cases Cited:
Rikhiram Vs. Sukhirania (Smt.), (2003)3 SCC 97 : 2003 AIR SCW 780 [Para 4]
Pushpabai Vs. M/s. G & P Ltd., AIR 1977 SC 1735 [Para 4]
Maimuna Begum wd/o. Abdul Razzaque Vs. Taju s/o. Ahmed Khan, 1989 Mh.L.J. 352 [Para 6,9]
National Insurance Co. Ltd. Vs. Ajit Kumar, 2003(4) ALL MR 758 (S.C.)=(2003)V SLT 543 [Para 7,16]
State of Maharashtra Vs. Kanchanmala Vijaysingh Shirke, 1995 ACJ 1021 [Para 11]
I.C.I. Ltd. Vs. Shatwell, (1965) ACJ 656 [Para 12]
Ilkiw Vs. Samuels, 1958-65 ACJ 445 (CA, England) [Para 12]
London Country Council Vs. Cattermoles (Garrages) Ltd., (1953) All ER 582 [Para 12]
Ormrod Vs. Crosville Motor Service Ltd., (1953)2 All ER 753 [Para 12]
Pushpabai Purshottam Udeshi Vs. Ranjit Ginning and Pressing Co., 1977 ACJ 343 (SC) [Para 12]
Ricketts Vs. Thomas Tilling Ltd., (1915)1 KB 644 [Para 12]
Sitaram Motilal Kalal Vs. Santanuprasad Jaishankar Bhatt, 1966 ACJ 89 (SC) [Para 12]
Staveley Iron & Chemical Co. Ltd. Vs. Jones, (1956)1 All ER 403 [Para 12]
Young Vs. Edward Box and Co. Ltd., (1951)1 TLR 789 [Para 12]
New India Assurance Co. Ltd. Vs. Satpal Singh, 2000(1) ALL MR 346 (S.C.)=(2000)1 SCC 237 [Para 16]
New India Assurance Co. Ltd. Vs. Asha Rani, 2002 AIR SCW 5259 : (2002)2 SCC 223 [Para 16]

JUDGMENT

JUDGMENT :- The legal representatives of deceased Laxman have filed this Appeal being aggrieved by the common Award dated 10-12-1993 passed under Section 110-A of the Motor Vehicles Act, 1939 (for short 'the Act') by the Member, Motor Accident Claims Tribunal, Yavatmal, in Claim Petition No.7 of 1989 and other claim petitions, exonerating the respondent no.2/Truck Owner and respondent no.3/Insurance Company from the liability to pay compensation.

2. Brief facts are as under :

The accident occurred on 13-12-1988 at about 3.00 p.m. on Kalamb - Yavatmal road. On that day, deceased Laxman along with his goats, she-goats and hens was travelling in the truck bearing registration No.MTV-3512. The truck was being driven by respondent no.1 in a rash and negligent manner. When the truck reached near the spot of accident, the driver of the truck lost control of the driving and the truck had gone on the wrong side of the road and gave a dash to a tree. Consequently, Laxman and others sustained grievous injuries and Laxman succumbed to the injuries on the spot itself. The legal representatives of deceased Laxman and others had instituted the claim petitions. The learned Member of the Motor Accident Claims Tribunal passed a common Award exonerating the owner of the motor vehicle and the Insurance Company from the liability to pay compensation and directed the driver of the truck to pay the entire compensation. This Award is under challenge in this appeal.

3. On the basis of the factual background, following two points arise for determination in this appeal -

(i) Whether the owner of the motor vehicle involved in the accident is liable to pay compensation ?

(ii) Whether the Insurance Company is also liable ?

4. As to Point No.1 :

It is not in dispute that the truck in question is a goods vehicle as defined under Section 2(8) of the Act. Rule 118(1) of the Bombay Motor Vehicles Rules, 1959 (for short 'the M. V. Rules') framed under the M. V. Act prohibits carrying a passenger in a goods vehicle. The learned counsel for the claimants contended that the policy of the insurance covers all third party except the passengers who are not carried for hire or reward. In support of his submissions, he relied upon the decision of three Hon'ble Judges of the Supreme Court in the case of Rikhiram & another Vs. Sukhirania (Smt.) & others, (2003)3 SCC 97 : 2003 AIR SCW 780. The learned counsel also contended that the driver being the employee of the truck owner, was rash and negligent in driving the vehicle and, therefore, his master, i.e. truck owner, is liable for all actions of his driver. In support of his submissions, he relied on the decision of the Supreme Court in the case of Pushpabai Vs. M/s. G & P Ltd. - AIR 1977 SC 1735.

5. The learned counsel further contended that the driver allowed in the truck the carriage of goats, she-goats and hens to protect and secure the live stock and that he transported the goods along with its owner and, therefore, the Tribunal has committed an error in exonerating the Insurance Company from the liability to pay compensation. He contended that in such circumstances, the impugned Award cannot be sustained in law.

6. The learned counsel for the truck owner contended that admittedly the truck in question is a "goods vehicle" and the truck driven by the driver though was an employee of the owner, taking the passengers inside the truck was outside the scope of his employment and moreover the owner was not present in the truck at the time of the accident and, therefore, the owner cannot be held vicariously liable. In support of this submission, he relied on the Division Bench Judgment of this Court in the case of Maimuna Begum wd/o. Abdul Razzaque & Ors. Vs. Taju s/o. Ahmed Khan & Ors. - 1989 Mh.L.J. 352.

7. The learned counsel for the Insurance Company contended that the accident occurred on 13-12-1988 and, therefore, the claim petitions filed by the victims or the legal representatives of the deceased would be governed by the provisions of the M.V. Act, 1939 and not by the provisions of the M.V. Act, 1988. He contended that the amendment introduced by the Act No.54 of 1994 would not be applicable and, as such, the Insurance Company is not required to cover the statutory liability under the provisions of Section 147(1)(b)(i) of the M.V. Act, 1988, though the deceased Laxman is said to be travelling along with the goats, she-goats and hens etc. in the truck. He contended that the deceased Laxman was travelling as a passenger in the "goods vehicle" and, therefore, the Tribunal was perfectly justified in exonerating the Insurance Company from the liability to pay the amount of compensation. In support of these submissions, he relied on the decision of Supreme Court in National Insurance Co. Ltd. Vs. Ajit Kumar & others, 2003 AIR SCW 4120 : (2003)V SLT 543 : [2003(4) ALL MR 758 (S.C.)].

8. I have given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. It is not in dispute that the deceased Laxman was travelling in goods truck along with the goats, she-goats and hens etc. It is also not in dispute that the truck driver was employed by the owner/respondent no.2 for the purpose of driving the truck. It is also admitted position that the truck met with an accident and Laxman died as a result of the accident arising out of the use of the motor vehicle.

9. The Division Bench of this Court in Maimuna Begum's case, 1989 Mh.L.J. 352, cited supra, took the view that the driver was employed and the owner used to pay Bhatta to the driver whenever the driver was sent outstation and had issued instructions not to carry the passengers and in this basic factual background the Tribunal was justified in not holding the owner vicariously liable. No doubt, the driver was driving the truck in the regular course of his employment but taking passengers was not only outside the scope of his employment and/or authority but was a criminal act because the truck in question is a "goods vehicle" as defined under Section 2(8) of the M.V. Act. Rule 118(1) of the M.V. Rule, 1959 framed under the M.V. Act prohibits carrying a passenger in a "goods vehicle". No doubt, to do so is an offence punishable under Section 112 of the M.V. Act. Relying on this decision, Mr. Bapat, learned counsel for the truck owner, contended that the Tribunal in the present case was perfectly justified in exonerating the owner of the truck to pay compensation. This contention is devoid of merit and the aforesaid decision cannot be made applicable to the facts and circumstances of the present case.

10. In the present case, the owner Manohar Prabhakar Deo (Witness No.1 for N.A.2) though has stated in examination-in-chief that he had not allowed the driver to carry the passengers, he clearly admits in his cross-examination like this, "N.A. No.1 was working with me as driver since 1-1/2 months prior to the incident. There was no agreement between me and N.A. No.1 that he would not carry passengers in the truck. I had given him instructions before conductor, coolies. (Underline supplied for emphasis).

11. Thus, the situation that emerges from the evidence is that the driver on his own allowed the passengers being carried in the goods truck and his act in doing so may be illegal or unauthorised, but that does not mean that the owner can escape the liability. In this context, it may be useful to refer to the decision of the Apex Court in the case of State of Maharashtra and others Vs. Kanchanmala Vijaysingh Shirke and others - 1995 ACJ 1021, wherein in para 19 it has been held that "the crucial test is whether the initial act of the employee was expressly authorised and lawful. The employer, as in the present case the State Government, shall nevertheless be responsible for the manner in which the employee, that is, the driver and the respondent executed the authority. This is necessary to ensure so that the injuries caused to third parties who are not directly involved or concerned with the nature of authority vested by the master to his servant are not deprived from getting compensation. If the dispute revolves around the mode or manner of execution of the authority of the master by the servant, the master cannot escape the liability so far as third parties are concerned on the ground that he had not actually authorised the particular manner in which the act was done. In the present case, it has been established beyond doubt that the driver of the vehicle has been fully authorised to drive the jeep for the purpose connected with the affairs of the State and the dispute is only in respect of the manner and the mode in which the said driver performed his duties by allowing another employee of the State Government, who was also going on an official duty, to drive the jeep, when the accident took place. Once it is established that negligent act of the driver and respondent was 'in the course of employment', the appellant State shall be liable for the same".

12. In the aforesaid decision, the Hon'ble Supreme Court referred the following cases :

I.C.I. Ltd. Vs. Shatwell, (1965) ACJ 656.

Ilkiw Vs. Samuels, 1958-65 ACJ 445 (CA, England).

London Country Council Vs. Cattermoles (Garrages) Ltd., (1953) All ER 582.

Ormrod Vs. Crosville Motor Service Ltd., (1953)2 All ER 753.

Pushpabai Purshottam Udeshi Vs. Ranjit Ginning and Pressing Co., 1977 ACJ 343 (SC).

Ricketts Vs. Thomas Tilling Ltd., (1915)1 KB 644.

Sitaram Motilal Kalal Vs. Santanuprasad Jaishankar Bhatt, 1966 ACJ 89 (SC).

Staveley Iron & Chemical Co. Ltd. Vs. Jones, (1956)1 All ER 403.

Young Vs. Edward Box and Co. Ltd., (1951)1 TLR 789.

and held that it is the rule that an employer, though guilty of no fault himself, is liable for the damage done by the fault or negligence of his servant acting in the course of his employment. The employer shall be liable when an employee was doing an authorised act in an unauthorised manner but not in a prohibited way because such employee was acting within the scope of his employment and in so acting had done something negligent or wrongful. A master is liable even for acts which he has not authorised provided they are so connected with acts which has been so authorised. On the other hand, if the act of the servant is not even remotely connected with the scope of employment and is an independent act, the master shall not be responsible because the servant is not acting in the course of his employment but has gone outside.

13. In the present case, there is no evidence to show that the act of the driver is not even remotely connected within the scope of his employment and is an independent act and, therefore, the owner cannot escape the liability on the ground that the driver was not acting in the course of his employment, who has gone outside. On the contrary, it would be clear that the driver was acting within the scope of his employment and he was authorised to drive the vehicle, but did an unauthorised act of carrying the passengers in the "goods vehicle" and in such a situation it is difficult to hold that the driver was not acting within the scope of his employment. Though the owner was not in the truck at the time of the accident, he is vicariously liable.

14. As to Point No.2 :

"Section 147(1)(b) reads as under :

Requirement 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) ....

(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, including owner of the goods or his authorised representative carried in the vehicles] or damages to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place."

The words "injury to any person, including owner of the goods or his authorised representative carried in the vehicles" have been introduced by way of amendment by Act No.54 of 1994 with effect from 14-11-1994 and, therefore, this amendment cannot be made applicable retrospectively to the insurance policy obtained prior to coming into force of the amendment and, therefore, it is obvious that in the present case the Insurance Company was not required to cover the risk of third party statutorily.

15. It is not disputed that the motor vehicle involved in the accident was duly insured with the respondent no.3 and perusal of the policy would show that it was valid for the period which covered the date of the accident but it appears that by virtue of the said policy the provisions of the M.V. Act, 1939 do not enjoin any statutory liability on the owner of the vehicle to get the vehicle insured for any passenger travelling in the "goods vehicle" and the insurer would have no liability therefor.

16. The situation that emerges in the present case is that the deceased Laxman was travelling in the truck along with the goats, she-goats and hens etc. but as a passenger and, therefore, the provisions of the Act do not enjoin any statutory liability on the owner of a vehicle to get the vehicle insured for any passenger travelling in a goods carriage and the insurer would have no liability therefor. The learned counsel for the Insurance Company rightly relied on the decision of the Apex Court in the case of National Insurance Co. Ltd. Vs. Ajit Kumar - 2003 AIR SCW 4120, cited supra, wherein the Apex Court referred to the earlier decisions in New India Assurance Co. Ltd. Vs. Satpal Singh, 1999 AIR SCW 4337 : (2000)1 SCC 237 : [2000(1) ALL MR 346 (S.C.)] and the decision of Five Judges Bench in the case of New India Assurance Co. Ltd. Vs. Asha Rani, 2002 AIR SCW 5259 : (2002)2 SCC 223 and held that "the difference" in the language of "goods vehicle" as appearing in the old Act and "goods carriage" in the new Act is of significance. A bare reading of the provisions make it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression "in addition to passengers" as contained in definition of "goods vehicle" in the old Act. The position becomes further clear because the expression used is "goods carriage" "is solely for the carriage of goods". Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to clause (ii) of the proviso appended to Section 95 of the old Act prescribing requirement of insurance policy. Even Section 147 of the Act mandates compulsory coverage against death or bodily injury to any passenger of "public service vehicle". The proviso makes it further clear that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under the Workmen's Compensation Act, 1923. There is no reference to any passenger in "goods carriage".

17. Thus, it is obvious that the provisions of the Act do not enjoin any statutory liability on the owner of the vehicle to get his vehicle insured for any passenger travelling in a "goods carriage" and the insurer would have no liability therefor. The Tribunal, in such circumstances, was justified in exonerating the Insurance Company from the liability to indemnify the owner and no interference into the finding on this point is warranted.

18. In the result, the Appeal is allowed. The impugned Award is modified and the owner of the motor vehicle along with the driver is held liable to pay the entire amount of compensation jointly and severally awarded by the Tribunal to the appellant/legal representatives of the deceased with costs throughout.

Appeal allowed.