RAJASTHAN ROAD TRANSPORT CORPORATION versus KAILASH NATH KOTHARI AND ORS. ETC. ETC.

Citation: [1997] SUPP. 3 S.C.R. 724 · Decided: 03-09-1997 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Dismissed

Judgment (excerpt)

A 
RAJASTHAN ROAD TRANSPORT CORPORATION 
v. 
KAILASH NATH KOTHARI AND ORS. ETC. ETC. 
SEPTEMBER 3, 1997 
B 
[DR. AS. ANAND AND K. VENKATASWAMI, JJ.] 
Motor Vehicles Act 1939-S. J IO(A)-Claim for compe11sation-
vicmious liability of the hirer is a question of fact-In Tait, when an employee 
,,-
is lent, and the effective control over him is with the him; liability to com-
c pens ate passes to the hirer even if the employee is paid by the employe1.......Plivity 
of contract of passengers was also with the Transpo1t Co1poratio11-Hence it 
is liable. 
S. 2( 19 )--Tenn "owner"--Not be restlicted to the registered owner but 
::::> 
D 
will cover the hirer of the vehicle when it in his possession and control and 
the driver operates under his direction. 
A bus, hired by the appellant - Rajasthan State Road Transport 
-.---
Corporation (RSRTC) was to ply on routes specified by them and the fares 
were collected from the passengers by the Corporation. It was washed away 
E when the driver, who was the employee of the bus owner, drove over a 
flooded bridge. The relatives of the victims filed a claim under S. 110 of 
the Motor Vehicles Act. The Tribunal found that the accident was the 
result of the negligence of the driver; that the liability of the insurance 
Company was limited to Rs. 75,000 in all; that RSRTC was liable inspite 
of condition 15 in the contract which was against 'public policy' and that 
F 
the claim was filed on time. The Tribunal therefore made a composite 
award, in favour of the claimants. 
Aggrieved, RSRTC, appealed to the High Court. The High Court 
upheld the decision of the Tribunal, relying on its earlier judgments in 
G RSRTC v. Onkar & Ors., ACC Vol. II 1990-497; Mohd. Raffia v. Mohd. Sadi 
& Ors. (U11repo1ted S.B. Civil Misc. Appeal No. 223, 270 & 237 of 1984) and 
S.B. Civil. Misc. Appeal No. 243 of 1983; RSRTC v. Muralidhar & Ors., 
Division Bench Decision reported in D.B. Spl. Appeal No. 391 of 1990 and 
RSRTC v. Rukmani Devi, decided on 4.1.1991. 
H 
The Appellant's contention before this Court was that they were not 
724 
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RAJASTHAN ROAD TPT. CORPN. v. KN. KOTHARI 
725 
the owner of the vehicle, and the driver was not their employee and A 
therefore they were not liable to pay the compensation. They also relied on 
condition 15 in the contract of hire which they said, absolved them. 
Dismissing the appeal, the Court 
HELD : 1. Both on facts and in law the liability to pay compensation 
for the accident must fall on the RSRTC. It is not disputed that the bus 
in question was hired by RSRTC and was running on route for which a 
permit had been granted in favour of RSRTC by the competent authority. 
B 
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 C 
that route except by 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 RSRTC. The fares paid by the 
passengers were received by the conductor for and on behalf of RSRTC. D 
The bus was given on hire to RSRTC along with the driver, who, however, 
was to ply the bus under the instructions of RSRTC. An agreement had 
been executed between RSRTC and the bus owner, incorporating various 
conditions of contract. The admitted facts unmistakably show that the 
vehicle in question was in possession and under the actual control of E 
RSRTC for the purpose of running on the specified route and was being 
used for carrying, on hire, passengers by RSRTC. The driver was to carry 
out instructions, orders and directions of the conductor and other officers 
of RSRTC for operation of the bus on the route specified by 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 
RSRTC to whom they had paid the fare for travelling in that bus. They 
had no privity of contract with S, the owner of the bus at all. Had it been 
a case only of the transfer of the services of the driver and not of trnasfer 
of control of the driver from the owner-to RSRTC, the matter may have 
be~n different. But on the facts of this case and in view of conditions 4 tu 

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