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2000 DIGILAW 829 (MAD)

A. R. C. PARCEL SERVICE v. POONGOTHAI

2000-08-18

K.SAMPATH

body2000
Judgment : SAMPATH, J. ( 1 ) THE respondent No. 3 in m. A. C. T. O. P. No. 168 of 1988 on the file of the Motor Accidents Claims Tribunal at pondicherry, is the appellant in the civil miscellaneous appeal Respondent Nos. 1 to 5 herein filed the said petition under section 166 (1) (c) of the Motor Vehicles act, 1988 claiming compensation in a sum of Rs. 1,75,000 for the death of one Muthu alias Muthukrishnan, husband of the respondent no. 1 and father of respondent nos. 2 to 5 against respondent Nos. 6 to 9 and the appellant herein. The respondent no. 8 was the respondent No. 4 in the m. A. C. T. O. P. being the mother of the deceased and the respondent No. 9 was the respondent No. 5 and it was alleged that she was the concubine of the deceased. ( 2 ) THE case of the claimants was as follows:muthu alias Muthukrishnan was travelling with the respondent No. 9 herein on his Jawa motor cycle along Pondicherryvillupuram Main Road on 22. 6. 1987 at about 15. 30 hours on the extreme left hand side when the vehicle bearing registration no. TNE 4020 belonging to the respondent no. 6 herein came in a rash and negligent manner, dashed against the motor cycle of the deceased and caused his death. The motor cycle was also completely damaged. The deceased was working as a Pump operator earning Rs. 1,196. 40 per month. He had 20 years of service still left and had promotional opportunities. He was 40 years old. He was the only bread-earner of the family. The claim was, therefore, made. The appellant was originally impleaded as the respondent No. 1 in the claim petition. However, the respondent No. 6 herein who was the actual owner of the vehicle was impleaded pursuant to the order passed in la. No. 1265 of 1991 and substituted in the place of the appellant and the appellant was made the respondent No. 3 before the tribunal. The respondent No. 6 contended that he was not the owner of the offending vehicle and, therefore, he was not liable to pay compensation. The respondent No. 7 insurance company, which was respondent no. No. 1265 of 1991 and substituted in the place of the appellant and the appellant was made the respondent No. 3 before the tribunal. The respondent No. 6 contended that he was not the owner of the offending vehicle and, therefore, he was not liable to pay compensation. The respondent No. 7 insurance company, which was respondent no. 2 before the Tribunal contended that the offending vehicle was neither insured nor had valid FC/rc arid the driver had no valid driving licence on the date of accident. The appellant contended that the offending vehicle belonged only to the respondent no. 6 with whom it had entered into an agreement to lend it for a period of two years from the date of the agreement, that as per the agreement, the appellant was plying the lorry on contract basis and the renewal for updating of insurance and any liability in respect of the vehicle was only that of the owner, the respondent No. 6 herein and if the owner had valid renewal of insurance, the liability of the payment of compensation was vicariously shifted to the respondent No. 7 insurance company. The appellant was not liable to pay any compensation. ( 3 ) THE Tribunal framed the following points for consideration: (1) Whether the offending vehicle belonged to the respondent No. 1 or the respondent No. 3? (2) Whether the accident took place due to rash and negligent driving of the vehicle by the driver of the respondent no. 1 or due to the negligence of the deceased? (3) Whether the petitioners are the legal heirs of the deceased? (4) Whether the offending vehicle was insured with the respondent No. 2 and the driver possessed a valid driving licence on the date of the accident? (5) Whether the claim of compensation is exorbitant? and (6) What is the quantum and payable by whom? ( 4 ) THE Tribunal found that the accident was due to rash and negligent driving by the driver of the lorry. In coming to the conclusion, the Tribunal relied on the oral evidence of the respondent No. 1 as PW 1 and also Exh. A-2 which was the copy of the accident inspection report. No appeal has been filed by the owner or the insurance company challenging this finding. The finding is, therefore, confirmed. ( 5 ) AS regards quantum, the Tribunal fixed it at Rs. A-2 which was the copy of the accident inspection report. No appeal has been filed by the owner or the insurance company challenging this finding. The finding is, therefore, confirmed. ( 5 ) AS regards quantum, the Tribunal fixed it at Rs. 1,50,000 and apportioned the amount among the claimants and the mother, the respondent No. 9 having made an endorsement that she had no objection to the award being passed and she not being given any amount. ( 6 ) THE amount, in my view, cannot be stated to be excessive. The deceased was 40 years old. He was getting a sum of rs. 1,196 as his monthly pay, the same being evidenced by Exh. A-4. Deducting a sum of Rs. 396 towards his personal expenses, his contribution to the family could be taken to be Rs. 800 and the multiplicand would come to Rs. 9,600 and for a man aged 40 years, the proper multiplier would be 15 and the total amount towards loss of earnings would come to Rs. 1,44,000 to which amount we have to add amounts towards loss of consortium, loss of love and affection, funeral expenses, transport, etc. and if so done, the amount payable would exceed the amount awarded by the tribunal. The quantum is, therefore, confirmed. ( 7 ) THE next question relates to the person or persons liable to pay the compensation. The insurance company is out of the picture, since on the date of the accident there was no valid insurance. The Tribunal found that the respondent No. 6 was the owner of the vehicle and the appellant was a hirer, but on the reasoning that the appellant had not taken care to find out whether on the date of the accident there was a valid permit for the vehicle to ply and whether there was a valid insurance coverage, held that both the owner and hirer were liable. This is under challenge by the appellant hirer. ( 8 ) MR. L. Mohan, learned counsel for the appellant, contended that the owner alone would be liable and the contract between the parties marked as Exh. B-1 in the proceedings would clearly bear this out Learned counsel strenuously argued that the agreement between the parties was clear enough to fasten the entire liability on the owner of the vehicle, namely, the respondent No. 6. B-1 in the proceedings would clearly bear this out Learned counsel strenuously argued that the agreement between the parties was clear enough to fasten the entire liability on the owner of the vehicle, namely, the respondent No. 6. The learned counsel also relied on the minority view expressed in the judgment of the Supreme Court in sitaram Motilal Kalal v. Santanuprasad jaishankar Bhatt, 1966 ACJ 89 (SC) and contended that only the owner was liable. The learned counsel also sought to distinguish the question of the Supreme Court in Rajasthan State Road Trans. Corpn. v. Kailash Nath Kothari, 1997 ACJ 1148 (SC), taking a view that the hirer would be liable to pay compensation in the case of motor accidents involving the vehicle which had been taken by them on hire. ( 9 ) PER contra, Mr. Sivasangaran, learned counsel for the claimants, submitted that the latter decision of the Supreme Court would apply on all fours to the facts of the present case. ( 10 ) IN the earlier Supreme Court case, the appellant entrusted his car to the respondent no. 2 for being plied as a taxi. He managed the taxi and was paid for it on monthly basis. He gave the taxi to the respondent no. 3, who was engaged as a cleaner, for the purpose of taking a driving test to obtain a drivers licence. While taking the test, the cleaner knocked down and injured the respondent No. 1. The trial court held that the respondent No. 3 was the servant of the respondent No. 2 and not of the appellant and that even if he was the servant of the appellant, being a cleaner of the car, he did not act within the scope of his authority in driving the car; therefore, the appellant was not liable for damages. On appeal, the High Court came to the conclusion that the entire management of the car was given to the respondent No. 2, that in discharge of his duty as manager, he appointed the respondent No. 3 as cleaner with the consent of the appellant and that by implication the appellant, in the circumstances of the case, must be regarded as having authorised the act of the respondent no: 2 in training the respondent No. 3 as a car driver and that, therefore, the appellant was liable for damages. The High Court relied upon certain admissions made by the respondent No. 3, for the above conclusion. The Supreme Court by a majority of 2:1 held that:" (I) the appellant was not liable for the tort committed by the respondent No. 3. At the time of the accident, the respondent no. 3 was not doing the appellants work nor was the respondent No. 2 acting within the scope of the appellants employment when he lent the taxi to the respondent No. 3. The taxi had been borrowed by the respondent No. 3 for a work of his own. The respondent No. 2 was not present in the taxi, so that he could be said to be in the control of the vehicle on behalf of his employer when the taxi was driven; (II) it was a settled law that a master was vicariously liable for the acts of his servant acting in the course of his employment. Unless the act was done in the course of employment, the servants act would not make the employer liable. The act must either be a wrongful act authorised by the master or a wrongful and unauthorised mode of doing some act authorised by the master; (III) the scope of employment of a servant need not of course be viewed narrowly, but the essential element that the wrong must be committed by the servant during the course of employment, i. e. , in doing the masters business ought always to be present; (IV) the law with regard to the vicarious liability of the principal for the acts of agents was the same as in the case of master and servant. It was a matter of indifference whether a person was styled a servant or agent since it was the retention of control which made the owner or the principal responsible. Just as the tort must be committed by a servant either under actual control of his master or while acting in the course of his employment, the act of the agent would only make the principal liable if it was done within the scope of his authority or under the actual control of the principal; (V) it was not essential that the act of the servant or the agent should be for the masters benefit. It was doubtful whether the extension of the principle of vicarious liability by the introduction of the doctrine of implied authority was quite correct; (VI) the admissions made by the respondent no. 3 were not admissible against the appellant. There was no provision of law making the admissions admissible against a person other than the person making them, unless such person could be said to be bound by the admission. "the minority view held that:" (I) the appellant was liable in damages to the respondent No. 1 for the accident caused by the respondent No. 3. He had entrusted the entire management of the taxi to the respondent No. 2. It could be reasonably inferred that he had given the authority to do all things necessary to keep the taxi in good condition and to run it day and night and that if for that purpose an assistant was necessary to drive the car, the respondent No. 2 could employ one. He employed the respondent no. 3 as a cleaner and instead of engaging a third party as an assistant driver trained the respondent No. 3 as such and sought to obtain a licence for him. He did not exceed the authority conferred on him by the appellant. Thus the respondent No. 3 was the employee of the appellant in his capacity as an assistant to the respondent No. 2; (II) an owner of a car would be liable in damages for an accident caused by his servant in the course of his employment. He would also be liable if the effective cause of the accident was that the driver in the course of his employment committed a breach of his duty in either not preventing another person from driving the car or neglecting to see that the said person drove it properly. " ( 11 ) IN the latter decision of the Supreme court, the bus belonging to one of the respondents before the Supreme Court was hired by the Rajasthan State Road Transport corporation (hereinafter referred to as the Corporation) and was run on the route for which a permit had been granted in favour of the Corporation by the competent authority. As a fact, it was found that the vehicle in question was in possession and under the actual control of the Corporation for the purpose of running on the specified route and was being used for carrying, on hire, the passengers by the corporation. The driver was to carry out instructions, orders and directions of the conductor and the other officers of the corporation for operation of the bus on the route specified by the Corporation. The supreme Court observed that:"the definition of owner under section 2 (19) of the Act is not exhaustive. It has, therefore, to be construed in a wider sense, in the facts and circumstances of a given case. The expression owner must include, in a given case, the person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus. "the Supreme Court further observed that:"to confine the meaning of owner to the registered owner only would, in a case where the vehicle is in the actual possession and control of the hirer, not be proper for the purpose of fastening of liability in case of an accident. The liability of the owner is vicarious for the tort committed by its employee during the course of his employment and it would be a question of fact in each case as to on whom can vicarious liability be fastened in the case of an accident. In this case, Sanjay Kumar the owner of the bus could not ply the bus on the particular route for which he had no permit and he in fact, was not plying the bus on that route. The services of the driver were transferred along with complete control to the R. S. R. T. C. under whose directions, instructions and command the driver was to ply or not to ply the ill-fated bus on the fateful day. The passengers were being carried by R. S. R. T. C. on receiving the fare from them. The services of the driver were transferred along with complete control to the R. S. R. T. C. under whose directions, instructions and command the driver was to ply or not to ply the ill-fated bus on the fateful day. The passengers were being carried by R. S. R. T. C. on receiving the fare from them. Sanjay kumar was, therefore, not concerned with the passengers travelling in that bus on the particular route on payment of fare to the R. S. R. T. C. 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 the R. S. R. T. C. for operation of the bus. " ( 12 ) MR. Mohan, learned counsel for the appellant, sought to distinguish the case of the Supreme Court and submitted that the terms of the contract between the parties in the case before the Supreme Court and the terms of the contract between the owner and the hirer in the instant case are totally different and the decision of the Supreme court would not apply to the facts of the present case. The learned counsel laid special stress on para 11 of the judgment of the Apex Court and submitted that in that case the bus was given on hire to the Corporation along with the driver, who was to ply the bus under instructions of the Corporation and the instant case is different. The services of the driver were transferred along with complete control to the Corporation under whose directions, instructions and command the driver was to ply or not to ply. It was in those circumstances, it was held by the Supreme Court that the 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 the Corporation for operation of the bus. In the instant case, the driver was not under the control or command of the appellant, but he was only discharging the command of the owner of the vehicle. ( 13 ) A reading of the agreement between the appellant and the owner, however, in my view, does not support the stand taken by the appellant. The agreement which has been marked as Exh. ( 13 ) A reading of the agreement between the appellant and the owner, however, in my view, does not support the stand taken by the appellant. The agreement which has been marked as Exh. B-1 provides that the vehicle was under the complete control and command of the appellant. Some of the clauses which have a bearing on this aspect are as follows:" (1) To ply his lorry after covering the lorry with tarpaulin and providing a back door to ensure safety of the goods carried. To run his lorry for carrying the goods of the party of the second part booked by their agents and their company and transport to all the stations to which the goods are intended for. (2) To run his lorry at the following route for hire mentioned below: route: MADRAS-PONDICHERRY rate: Rs. 2. 80 per running mile. That the party of the second part is always at liberty to change routes at their discretion and the rate of hire charges will vary according to the routes changed. (3) To provide the best driver to run the vehicle and his salary allowance, batta, etc. , will be paid by him and the driver will be instructed to act as per the instructions of the staff of the party of the second part as far as the work is concerned with lorry and its running. (5) To make necessary alterations at his/her own cost in the lorry and provide additional fittings as required by the party to the second part from time to time to suit the conveniences of the party of the second part for the safe transportation of consignments. (6) To substitute the vehicle in case of breakdown, accident or stoppage of vehicles by competent transport authorities or Central Excise Authorities or for reasons beyond human control. Instead of substituting a vehicle, the party of the second part to engage some other lorry at prevailing rate of the day and the amount thus paid towards the hire charges can be recovered from the party of the first part. Due to want of load or on any unavoidable circumstances, if the vehicle is held up then the party of the first part undertakes not to claim any hire charges or damages as the case may be. Due to want of load or on any unavoidable circumstances, if the vehicle is held up then the party of the first part undertakes not to claim any hire charges or damages as the case may be. (12) To fix the emblem of the party of the second part in his/her lorry and have the Board or painted as annamalai roadways COMPANY in the side wings and as well as in the front top and rear portion of the lorry. (16) That he/she will keep his/her lorry in the perfect condition and run it punctually as directed by the party of the second part and deliver the goods intact to the respective stations. (18) That the party of the second part is at liberty to terminate this contract and release the lorry from the Organisation by giving the party of the first part one months notice. " ( 14 ) THE above clauses clearly show that the criteria laid down by the Apex Court in the second of the decisions are fully satisfied. The appellant alone had complete control over the vehicle hired by it. ( 15 ) THE Tribunal has apportioned the liability fifty-fifty, half to be paid by the appellant and the other half by the owner, the respondent No. 6 herein. One redeeming feature, however, about the agreement is clause No. 9 which is to the following effect:" (9) That if there were to be any loss of consignments or damages or delay during transit, he/she will be taking the liability and he/she will compensate if any claim arises and the party of the first part agrees to take the entire liability and responsibility in the event of any accident and third party claims for compensation for the negligence of driver or employees of the party of the first part. In case the party of the second part settle any claims, the same may be recovered from the hire charges of the party of the first part. "the appellant and respondent No. 6 each to pay Rs. 75,000 with interest sharing equally to the claimants. It is represented by Mr. Mohan, learned counsel for the appellant that the appellants share of the liability has been deposited during the pendency of the proceedings. ( 16 ) FOLLOWING the decisions of Honble supreme Court I hold that the appeal is liable to be dismissed and accordingly it is dismissed. 75,000 with interest sharing equally to the claimants. It is represented by Mr. Mohan, learned counsel for the appellant that the appellants share of the liability has been deposited during the pendency of the proceedings. ( 16 ) FOLLOWING the decisions of Honble supreme Court I hold that the appeal is liable to be dismissed and accordingly it is dismissed. There will be no order as to costs. ( 17 ) HOWEVER, having regard to the terms of the contract between the parties, it is open to the appellant to proceed against respondent No. 6 to recover the amount which it has been made to pay. Appeal dismissed.