LexU.P. STATE ROAD TRANSPORT CORPORATION versus RAJENDRI DEVI & ORS.
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A B C D E F G H 199 U.P. STATE ROAD TRANSPORT CORPORATION v. RAJENDRI DEVI & ORS. (Civil Appeal No. 2526 of 2020) JUNE 08, 2020 [R. F. NARIMAN, NAVIN SINHA AND B. R. GAVAI, JJ.] Motor Vehicle Accident – Claim under – Victim was hit by a bus, consequent to which he died – The Motor Accident Claims Tribunal found that it was a result of rash and negligent driving by the driver of the bus, which was hired by the appellant-Uttar Pradesh State Road Transport Corporation under an agreement between it and the bus owner – The total quantification of compensation by MACT was of Rs. 1.65 lakhs along with 8% interest and only the appellant-Corporation was directed to pay this entire amount and not the insurance Company – The High Court followed the judgment of Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and held that the appellant alone is vicariously liable to pay the victim’s family the amount of compensation that was ordered – On appeal, held: The judgment Kailash Nath Kothari is distinguishable since in that case the Insurance Company’s liability was limited only to Rs. 75,000/- which was paid, the Insurance Company would, on the facts of that case, not liable to pay anything more and on this count, the amount payable beyond Rs. 75,000/- was mulcted on to the Corporation – In a subsequent Supreme court judgment Uttar Pradesh State Road Transport Corporation v. Kulsum and Ors. also distinguished Kailash Nath Kothari Case and held the insurance company was liable – In the said case, it was held that once the vehicle is insured, the owner as well as any other person, can use the vehicle with the consent of the owner – s. 146 of the Motor Vehicles Act, 1988 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 – In the instant case, the law down in Kulsum’s Case squarely applies – Besides, the clause 10 under the agreement between the Corporation and bus owner, regarding ‘The Second Party (Bus Owner) shall have full responsibility for any fault, negligence, accident, or other 199 [2020] 4 S.C.R. 199 A B C D E F G H 200 SUPREME COURT REPORTS [2020] 4 S.C.R. illegal acts of the driver....in case any payment is made by the First Party (Corporation) in compliance of any order of any Court etc., the First Party shall be authorised to recover the same from the Second Party ‘ is between Corporation and the Bus owner, it does not bind anybody who is not privy to the agreement, least of all, the victim – Therefore, the sum awarded by the MACT, now only be payable by the Insurance Company with interest. Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (1997) 7 SCC 481 : [1997] 3 Suppl. SCR 724 – distinguished. Uttar Pradesh State Road Transport Corporation v. Kulsum and Ors. (2011) 8 SCC 142 : [2011] 15 SCR 618 – relied on. Case Law Reference [1997] 3 Suppl. SCR 724 distinguished Para 2 [2011] 15 SCR 618 relied on Para 5 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2526 of 2020. From the Judgment and Order dated 27.09.2016 of the High Court of Judicature at Allahabad in FAFO No. 2157 of 2005. Ms. Garima Prashad, Adv. for the Appellant. Maibam N. Singh, Pramod Dayal, Advs. for the Respondents. The Judgment of the Court was delivered by R. F. NARIMAN, J. 1. Leave granted. 2. In the present case, death occurred to a 45 year old who was on a cycle and hit by a bus on 16.08.2001. The Motor Accident Claims Tribunal (hereinafter referred to as ‘MACT’) found that it was as a result of rash and negligent driving by the driver of the bus, which was hired by the appellant-Uttar Pradesh State Road Transport Corporation under an agreement between it and the bus owner. Ultimately finding that the income would be Rs.18,000/- per year, minus one-third, and with a multiplier of 13, Rs.1.65 lakhs + 8 per cent interest was awarded by the MACT, but it was held, following Rajasthan State Road A B C D E F G H 201 Transport Corporation v. Kailash Nath Kothari (1997) 7 SCC 481 [“Kailash Nath Kothari”], that it is only for the appellant-Corporation to pay this entire amount and not the insurance company. This was held as follows: “15. The bus is a private one. It ran under the control of the UPSRTC. The ld. counsel for the Insurance Company has argued that the bus under the control of UPSRTC devolved the responsibility of payment of any compensation upon U
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