SOHAN LAL PASSI versus P. SESH REDDY AND OTHERS

Citation: [1996] SUPP. 3 S.C.R. 647 · Decided: 17-07-1996 · Supreme Court of India · Bench: N.P. SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

SOHAN LAL PASSI 
v. 
P. SESH REDDY AND OTHERS 
JULY 17, 1996 
[N.P. SINGH, FAIZAN UDDIN AND SAGHIR AHMAD, JJ.] 
Motor Vehicles Act, 198&-Sections 96(1), 96(2), (b) (ii)---Compensa-
tion-Motor accident-P1inciple of vicaiious liability-Authorised diiver at-
lowillg cleaner to drive-Jn the course of employmellt-Held, lnsural!ce 
Compal!)' al!d owner jointly liable. 
The Appellant is the owner of a bus, insured with Respondent -
Insurance Company. On 8th June 1980 as a result of an accident between 
A 
B 
c 
the bus and scooter one R died on the spot. A claim was preferred by the 
legal heirs of the deceased against the Appellant and the Insurance Com-
D 
pany which contested the claim on the ground that the accident was a 
result of rash and negligent driving of the cleaner/conductor of the bus, 
the Respondent No. 4, who did not have a valid licence. 
The Appellant contended that at the time of accident the bus was 
driven by the driver who had a licence and as such the Respondent -
E 
Insurance Company was liable for compensation. 
The Insurance Company contended that since the bus was being 
driven by a cleaner who was not holding the driving licence, they were not 
liable under the terms of the policy. 
F 
The Accident Claims Tribunal held that the accident was the result 
of rash and negligent driving of the bus by the cleaner who did not have a 
licence and discharged the liability of the Insurance Company and directed 
the appellant-owner and Respondent No. 4 to pay the compensation. 
The appellant as well as the claimants preferred Ap1ieals. The High 
Court on Appeal enhanced the compensation and a\o\'arded interest. The 
High Court dismissed the appeal filed by the Appellant holding that the 
Insurance Company was not Hable. The High Court found that the driver 
had allowed the cleaner to drive the vehicle. 
647 
G 
H 
648 
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R. 
A 
On appeal, it was contendetl by the appellant that since he had 
B 
appointed a driver and it was driver who had allowed the cleaner to drive 
the vehicle without licence and in that event he shall not be liable to pay 
any compensation. 
Allowing the Appeals, this Court 
HELD : 1. The Appellant cannot escape the liability so f'ar as the 
third parties are concerned on the ground that he had not actually 
aufhorised the particular manner in which the act was done. It has been 
established that the negligent act of the driver and cleaner was in the 
C course of employment, and it was not an independent act for a purpose 
\Vhich had no nexus or connection with the business of the appellant, so 
as to absolve the appellant from the liability. [654-B-D) 
Pushpabai Pur,,/wttam Udeshi v. Ranjit Ginning and Pressing Co. (P) 
Ltd., [1977] 2 SCC 745 and State of Maharashtra and 01'. v. Kanchanmala 
D Vijaysing Shirkc and o,,., [1995] 5 sec 659, relied on. 
E 
London County Council v. Cattennoles (Garages) Ltd., [1953) 2 All 
ER 582; l/kiw v. Samuels, [1963) 2 All ER 879 and Staveley Iron and 
Chemical Co. Ltd. v. Jones, [1956) 1 All ER 403, referred to. 
Salmond's Law of Tmts (20th Edn) Page 458 and Halsbwy's Laws of 
England, Fourth Edn. Vol. 16 Para 739, referred to. 
2. Section 96 (2)(b)(ii) should not be interpreted in a technical 
manner. It only enables the insurance company to defend itself in respect 
F of the liability to pay compensation, on any of the grounds mentioned 
therein. If the person who has got the vehicle insured, has allowed the 
vehicle to be driven by a person ~'ho is not licensed then only that clause 
shall be attracted. [659-E-F) 
G 654, anirmed. 
Skandia Insurance Co. Ltd. v.Kokilaben Chandravadan, [1987] 2 SCC 
3. The Appellant bad done everything within bis power in as much 
as he has engaged a licensed driver and had placed the vehicle in his 
charge. Unless it is established that it was the insured who had wilfully 
H violated the condition of the policy by allowing a person not duly licensed 
SOl-IANLALPASS!v. P.S.REDDY[N.P.SINGH,J.] 
649 
to drive the vehicle when the accident took place, the insurer shall be A 
deemed to be a judgment-debtor in respect of the liability in view of Section 
96(1) of the Motor Vehicles Act. The Appellant shall be deemed to be liable 
to pay compensation applying the principle of vicarious liability. [660-C-D] 
Kashiram Yadav and Anr. v. Oliental Fire and General Insurance Co., 
[1989] 4 sec 128, af1irmed. 
4. The orders of the Tribunal and the'High Court are modified. The 
insurance comp

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