UTTAR PRADESH STATE ROAD TRANSPORT CORPORATION versus KULSUM & ORS.

Citation: [2011] 15 S.C.R. 618 · Decided: 25-07-2011 · Supreme Court of India · Bench: DALVEER BHANDARI · Disposal: Disposed off
Cited by 2 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

(2011] 15 (ADDL.) S.C.R. 618 
A 
UTTAR PRADESH STATE ROAD TRANSPOR-:-
B 
c 
CORPORATION 
v. 
KULSUM & ORS. 
(CIVIL APPEAL NO. 5901 of 2011) 
JULY 25, 2011 
[DALVEER BHANDARI AND DEEPAK VERMA, JJ.] 
MOTOR VEHICLES ACT, 1988: 
ss. 146 and 149 rlw ss.2(30) and 103(1-A) - Insurance 
policy - Third party risk - Insured vehicle of a private owner 
plying under an agreement with State Road Transport 
Corporation - Accident - Liability to pay compensation to 
D victims - HELD: Is of the Insurance Company - 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 purpose of compulsory insurance 
in the Act has been enacted with an object to advance social 
E justice - The vehicle was given on hire by its owner - It would 
be deemed that the vehicle was transferred with its insurance 
policy - Thus, the Insurance Company cannot escape its 
liability to pay the compensation - Insurance - Vicarious 
liability - Social justice. 
F 
In the instant appeals filed by the Uttar Pradesh State 
Road Transport Corporation (the Corporation) and the 
Insurance Company, the question of law for 
consideration before the Court was: "If insured vehicle 
(in this case a mini bus) is plying under an Agreement of 
G Contract with the Corporation, on the route as per permit 
granted in favour of the Corporation, in case of an 
accident, whether the Insurance Company would be 
liable to pay compensation or would it be the 
responsibility of the Corporation or the owner?" 
H 
618 
UTIAR PRADESH STATE ROAD TRANSPORT 
619 
CORPORATION v. KULSUM 
Allowing the appeals of the Corporation and A 
dismissing the appeal of the Insurance Company, the 
Court 
HELD: 1.1. By virtue of sub-s. (1A) of s. 103 of the 
Motor Vehicles Act, 1988 the Corporation became entitled B 
to hire any vehicle which could be plied on any route for 
which permit had been issued by the Transport Authority 
in its favour. [para 15] [627 ·D] 
1.2. A critical eY.amination of both the definitions of 
the 'owner', u/s 2(19) of the Motor Vehicles Act, 1939 and C 
s.2(30) of the Motor Vehicles Act, 1988 would show that 
it underwent a drastic change in the Act of 1988. In the 
light of the distinct changes incorporated in the definition 
of 'owner' in the old Act and the existing Act, Kai/ash Nath 
Kothari's case* shall have no application to the facts of the D 
instant case. [paras 26 & 27] [632-D-E] 
*Rajasthan State Road Transport Corporation vs. Kai/ash 
Nath Kothari and others 1997 (3) Suppl. SCR 724 = (1997) 
7 sec 481 - held inapplicable. 
1.3. The Corporation and the owner had specifically 
agreed that the vehicle will be insured and a driver would 
E 
be provided by owner of the vehicle but overall control, 
not only on the vehicle but also on the driver, would be 
that of the Corporation. Thus, the vehicle was given on 
F 
hire by its owner together with the existing and running 
insurance policy. In view of the terms and conditions, the 
Insurance Company cannot escape its liability to pay the 
compensation. [para 29] [633-G-H; 634-A-B] 
1.4. There is no denial of the fact by the Insurance 
Company that at the relevant point of time the vehicle in 
question was insured with it and the policy was very 
much in force and in existence. It has also not been its 
G 
H 
620 
SUPREME COURT REPORTS (2011) 15 (ADDL.) S.C.R. 
A case that there has been violation of the terms and 
conditions of the policy or that the driver was not entitled 
to drive the said vehicle. The Tribunal has also held that 
the driver had a valid driving licence at the time of 
accident [para 29] [634-A-C] 
B 
1.5. It has been admitted on behalf of the insurance 
company that in normal circumstances, if the said vehicle 
would not have been attached with the Corporation for 
being plied by it on the route of permit granted to it, the 
Insurance Company would have no option but to make 
C the payment; that there is no difference in the tariff of 
premium for the vehicle insured at the instance of owner 
or for the vehicle which is being attached with the 
Corporation for being plied by it and it is same for both; 
that if an intimation would have been given to the 
D Insurance Company that the vehicle is being attached 
with the Corporation, the Insurance Company would have 
met the liability of compensation, in case of an accident; 
th<:t there is neither any statutory duty cast on the owner 
under the Act or
Excerpt shown. Read the full judgment & AI analysis in Lexace.