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2012 DIGILAW 1198 (AP)

Ch. Ganga Rajam v. APSRTC, Karimnagar, Karimnagar District

2012-11-30

R.SUBHASH REDDY

body2012
ORDER In view of common questions of law on similar set of facts, all these Writ Petitions are heard together and being disposed of by this common order. 2. For the purpose of disposal, I refer to the facts arise in Writ Petition No.18777 of 2012, in which, petitioner seeks a mandamus declaring proceedings, dated 31.05.2012 issued by the second respondent - Depot Manager, APSRTC, Jagtial Depot, Jagtial, Karimnagar District, as illegal. 3. By aforesaid proceedings, the petitioner is requested to give bank guarantee for a sum of Rs.1,50,000/- and to maintain its validity till disposal of O.P.No.265 of 2012 filed by the claimant, under the Motor Vehicles Act, 1988. 4. The petitioner claims that he is the owner of bus bearing No.AP15 Y 9944, which is being run by the Andhra Pradesh State Road Transport Corporation on hire pursuant to agreement, dated 22.06.2009. The bus is covered by an insurance policy with the New India Assurance Company Limited vide Policy No.551300/31/10/6300003240. During hire period, the bus met with an accident on 30.10.2011 and one passenger in the bus suffered injuries. The said injured person filed O.P.No.265 of 2012 before the Chairman, Motor Accident Claims Tribunal, Karimnagar, claiming compensation of Rs.1,50,000/-against the petitioner, insurance company and others. It is stated that the said O.P. is pending as of now. During pendency of the said O.P., the impugned proceedings are issued by the second respondent requesting the petitioner for furnishing bank guarantee for a sum of Rs.1,50,000/-, which is equivalent to the claim made by the third party claimant in the O.P. filed under the Motor Vehicles Act, 1988. 5. It is the case of the petitioner that when the vehicle in question was being run on hire during relevant time, for such specified period, the Road Transport Corporation is to be treated as owner. It is also the case of the petitioner that in any event, the vehicle in question is insured with the insurance company as such there is no reason or justification for demanding bank guarantee equivalent to the claim made by the third party claimant in the O.P. 6. It is also the case of the petitioner that in any event, the vehicle in question is insured with the insurance company as such there is no reason or justification for demanding bank guarantee equivalent to the claim made by the third party claimant in the O.P. 6. In the counter-affidavit filed on behalf of the respondents, while denying various allegations of the petitioner and admitting that the petitioner is the owner of the vehicle in question and he hired the same to the Corporation for the period from 22.06.2009 to 21.06.2013 which is being run on Jagtial to Warangal route, it is stated that the petitioner executed agreement, dated 22.06.2009 and the bus met with the accident on 30.10.2011 at Huzurabad and in the said accident, one G.Sridhar suffered injuries and accordingly, he filed O.P.No.265 of 2012 before the Chairman, Motor Accident Claims Tribunal, Karimnagar, claiming compensation of Rs.1,50,000/-. Referring to Clause 5(iv) of the agreement, it is stated that the petitioner is responsible for all claims that may arise due to statutory violations out of the operations, as such, the impugned proceedings are issued. It is further stated that the impugned proceedings are issued demanding the petitioner for furnishing bank guarantee as per the contractual terms particularly with reference to Clause 5(iv) of the agreement. It is also stated that as the petitioner is undisputedly, owner of the vehicle in question, he is to be held responsible for any claims on account of the accidents, as such, to safeguard the interests of the Corporation, the impugned proceedings are issued. 7. Heard learned counsel for the petitioner and learned Standing Counsel for APSRTC appearing for the respondents. 8. Before proceeding further, I deem it appropriate to refer to clause 5(iv) of agreement, dated 22.06.2009. It reads as under: “The owner shall be liable for all claims that may arise due to statutory violations out of the operations, like claim due to accidents payable under the provisions of M.V. Act, 1988/Rules and APSRTC shall under no circumstances be made liable or responsible to pay compensation that may be awarded by Motor Accidents Claims Tribunal or Tribunals in respect of accidents. In the event of payment of compensation by APSRTC to the injured persons/dependents of deceased persons or to the owners of the property damaged, by any Award of the Motor Vehicle Accidents Tribunal/Order of the Court in cases involving accident to hire buses, the APSRTC shall have right to recover the said compensation from the hire bus owner. The hire bus owner hereby agrees that he shall not dispute the said recovery.” 9. In this case, it is not in dispute that the petitioner is the owner of bus bearing No.AP15 Y 9944, which is being taken on hire by APSRTC pursuant to agreement, dated 22.06.2009 for the period from 22.06.2009 to 21.06.2013 and during that period, the accident took place. It is also not in dispute that the bus in question is covered by insurance policy obtained from the New India Assurance Company Limited. 10. In identical circumstances, in the case of UTTAR PRADESH STATE ROAD TRANSPORT CORPORATION v. KULSUM AND OTHERS (2011) 8 Supreme Court Cases 142), the Hon’ble Supreme Court has considered the liability of the insurance company and held that when the owner has obtained the insurance policy and when such bus is hired to the Corporation, it shall be treated as deemed transfer of insurance policy for the vehicle to the lessee also. It also held that for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the specific period. 11. From a perusal of Clause 5(iv) of the agreement, it is clear that the owner is made liable for all claims that may arise due to statutory violations out of the operations, like claim due to accidents payable under the Motor Vehicles Act, 1988. But, in the instant case, it is to be noticed that the claim made by the petitioner is still pending as such there is no determination of liability against any of the respondents. If at all, as per clause 5(iv) of the agreement, owner is to be made liable, such liability arises only after adjudication of the claim by the competent Tribunal but not on mere filing of O.P. by the third party victim in the accident. If at all, as per clause 5(iv) of the agreement, owner is to be made liable, such liability arises only after adjudication of the claim by the competent Tribunal but not on mere filing of O.P. by the third party victim in the accident. Further, in any event, as it is not in dispute that the vehicle is covered by insurance policy and insurance company is also party in the O.P., there is no reason for issuing the impugned proceedings demanding bank guarantee from the petitioner or to recover any amount from the hire charges at this stage. 12. As this Court is of the view that in the absence of determination of any liability and also in the absence of any such power to demand the owner of the vehicle for furnishing bank guarantee even before adjudication of the claims made by the third party victims, the impugned proceedings are liable to be set aside. 13. For the aforesaid reasons, all these Writ Petitions are allowed and the impugned proceedings are set aside. It is made clear that it is open for the respondent authorities to take steps in accordance with law, after adjudication of the claims made by the third parties before the competent Tribunal under the Motor Vehicles Act, 1988. No order as to costs.