In this case, a 45 years old was hit by a bus, which was hired by the appellant-Uttar Pradesh State Road Transport Corporation (UPSRTC) due to which he died. The Motor Accident Claims Tribunal found that it was as a result of rash & negligent driving and awarded Rs.1.65 lakhs + 8 per cent interest to UPSRTC by relying upon the Rajasthan State Road Transport Corporation v. Kailash Nath Kothari [(1997) 7 SCC 481]. In the High Court, the same judgment of Kailash Nath Kothari was referred to and followed, making it clear,therefore, that the appellant alone is vicariously liable to pay the victim’s family the amount of compensation. Against this SLP was filed by the UPSRTC in S.C.

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Whether the Insurance Company would be liable to pay compensation or would it be the responsibility of the Corporation or the owner, in case of an accident?

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It said that the Kailash Nath's case has no application to the facts of this case as Court was dealing with regard to earlier definition of “owner” as found in Section 2(19) of the old Act. The driver was supposed to drive the bus under the instructions of the conductor who was appointed by the Corporation according to clause 4.4 of the agreement. Thus, according to section 2(30) of the Motor Vehicles Act, 1988 corporation is liable. It also observed the vehicle Clause 10 of the agreement between the appellant and the owner to wriggle out of its responsibility to make payment of compensation, it is only between the appellant and the owner and shall not affect the rights of the claimants to receive compensation flowing from the provisions of the Act.

It observed that the vehicle having been insured at the instance of original owner, it will be deemed that the vehicle was transferred along with the insurance policy in existence to the Corporation and thus the Insurance Company would not be able to escape its liability to pay the amount of compensation.Section 146 of the Act 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.”

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The appeal is allowed and the sum awarded by the MACT will now be payable only by the Insurance Company with interest at the stated rate, within a period of three months from today.

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"-Sai Sri"

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