JUDGMENT : Mr. Deepak Maheshwari, J. 1. This appeal has been preferred by the plaintiff appellant – Rajasthan State Roadways Transport Corporation (to be referred as “RSRTC”, for short) against the judgment and decree dated 21.12.1996 passed by learned Add. Sessions Judge, Sikar in civil original suit No.16/94 whereby the learned trial Court dismissed the suit filed by the plaintiff for recovery of compensation amount from defendants in the sum of Rs.1,69,800/- along with interest. 2. Brief facts giving rise to this appeal are that the defendant No.1 Shivji Ram was plying a bus number RSB-1956 owned by him under the control of the appellant Corporation as a contract carriage bus. An agreement was executed between appellant and respondent No.1 on 23.7.1979 to the effect that the said vehicle will ply under the control of RSRTC. As per condition No.15 of the said agreement, in case of any accident, liability of loss, compensation etc. will be of the owner of the vehicle. It was further provided that the RSRTC would be entitled to recover such amount from the owner of the vehicle if paid by it on account of court order or compromise. On 13.3.1980, the said bus met with an accident at about 10 am near village Babri wherein one Sawai Khan died. Legal representatives of the deceased filed a motor accident claim petition before the Motor Accident Claim Tribunal, Sikar against the owner and driver of the bus as also against RSRTC and insurer company of the vehicle, which was New India Assurance Company Limited. Learned Tribunal passed an award for Rs.1,20,000/- with 12% interest per annum against all the non-claimants jointly and severally. In compliance of said award, plaintiff RSRTC deposited a sum of Rs.1,50,937/- through cheque in favour of the claimants. Pursuant to the condition No.15 mentioned in agreement dated 23.7.1979, appellant filed a suit for recovery of Rs. 1,69,800/- including the interest amount along with further interest against the bus owner i.e. Shivji Ram and the insurance company. 3. Respondent No.1 by way of filing the written statement admitted the agreement dated 23.7.1979 and also the fact that the amount of award was paid by RSRTC to the claimants. However, he denied his financial liability on account of such award. 3. Respondent No.1 by way of filing the written statement admitted the agreement dated 23.7.1979 and also the fact that the amount of award was paid by RSRTC to the claimants. However, he denied his financial liability on account of such award. Respondent No.2 i.e. Insurance Company also contested the claim stating that the plaint is barred by limitation and the trial Court has got no jurisdiction to try the suit. 4. On the basis of the pleadings, following issues were framed by learned trial Court :- “1. Whether pursuant to the agreement mentioned in para-2 of the plaint, defendant No.1 was liable for any loss or damages arising out of the accident caused by bus number RSB 1956 ? 2. Whether defendant No.2 was liable to compensate or make good the liability created against defendant No. 1 ? 3. Whether plaintiff was entitled to realize a sum of Rs. 1,69,800/- along with interest @ 18% per annum ? 4. Whether the civil court has got no jurisdiction to try the suit. 5. Whether the suit is barred by limitation. 6. Reliefs.” 5. After recording evidence and affording opportunity of hearing to both the sides, learned trial Court proceeded to decide the suit vide judgment impugned dated 21.12.1996 whereby issues No.1 and 2 were decided by the trial Court against plaintiff appellant. Issue no.3 was also decided against appellant on the basis of the result of issue No.1. However, Issues No.4 and 5 have been decided in favour of the plaintiff. 6. Main thrust of the arguments advanced by learned counsel for the appellant is that learned trial Court has failed to differentiate between the liability arising out of the contract dated 23.7.1979 entered into by appellant RSRTC and defendant No.1 and the statutory liability arising under the provisions of the Motor Vehicles Act, on account of the accident caused by motor vehicle. It has been contended that the learned trial Court, under misconception, has concluded that the liability arising out of the contract between appellant and respondent No.1 is against the public policy and thus, the said agreement is not enforceable. It has also been contended that contrary findings have been given by learned trial Court while deciding issue No.4. It has been contended that the learned trial Court, under misconception, has concluded that the liability arising out of the contract between appellant and respondent No.1 is against the public policy and thus, the said agreement is not enforceable. It has also been contended that contrary findings have been given by learned trial Court while deciding issue No.4. On one hand, it has been stated by the trial Court that the cause of action arises in favour of the plaintiff on the basis of the agreement entered by him with defendant No.1 and on the other hand, it has also been stated that the said agreement, which is contract of indemnity, is against the public policy. Learned counsel for the appellant has stated that in view of the provisions contained in Section 124 of the Indian Contract Act, 1872, contract of indemnity has been recognised by the law and thus, the agreement entered into by appellant and defendant No.1 on 23.7.1979 cannot be termed against the public policy. He has thus submitted that the conclusion arrived at by learned trial Court is erroneous and cannot be sustained in the eye of law. He, thus, prayed that the appeal be allowed while quashing and setting aside the judgment and decree dated 21.12.1996. 7. Learned counsel appearing for the respondents No.1 and 2 have separately argued the matter and while supporting the judgment impugned have prayed that the appeal be disallowed. 8. As per the pleading and evidence available on record, it is an admitted position that on the basis of the agreement entered between the appellant RSRTC and defendant No.1 Shivji Ram on 23.7.1979, bus number RSB-1956 was being plied by them jointly. It is also an admitted position that the said bus caused a motor accident for which claim was preferred by the legal representatives of deceased and the same was allowed for the sum of Rs. 1,20,000/- along with interest. Pursuance thereto, sum of Rs. 1,50,937/- was deposited by the appellant RSRTC in favour of the claimants. 9. In light of the arguments advanced by rival sides, the crux of the matter is whether clause No.15 of the agreement dated 23.7.1979 is against the public policy, and thus, cannot be enforced by the appellant. 10. 1,20,000/- along with interest. Pursuance thereto, sum of Rs. 1,50,937/- was deposited by the appellant RSRTC in favour of the claimants. 9. In light of the arguments advanced by rival sides, the crux of the matter is whether clause No.15 of the agreement dated 23.7.1979 is against the public policy, and thus, cannot be enforced by the appellant. 10. For the sake of convenience and ready reference, condition No.15 of the agreement dated 23.7.1979 is reproduced hereunder verbatim : ^^15- cl ekfyd cl ds nq?kZVukxzLr gksus ij uqdlku] gtkZus o ;k=h lqj{kk lEcU/kh nkf;Roksa ds fy;s ftEesankj gksxkA nq?kZVuk lEcU/kh dksbZ nkf;Ro fuxe ij ugha gksxkA ;fn fdlh U;k;ky; }kjk ;k fdlh vkilh le>kSrs ds tfj;s fuxe dks dksbZ Hkqxrku o [kpkZ djuk iM+k rks ,slh /kujkf'k cl ds ekfyd ls mlds ns;dksa ls dVkSrh dj fuxe olwy dj ldsxkA^^ 11. For proper appreciation of the matter, other conditions of the agreement are also relevant to be referred. Vide condition No.1, it has been agreed that the bus owner will appoint the driver of the bus and will pay all the expenses including salary to him. The driver, however, was to follow instructions of Conductor necessary for operation of the bus. Besides this, all the expenses relating to operation of the bus viz. cost of diesel, oil, repairs, maintenance, insurance and liabilities relating to security of passengers etc. will be borne by the bus owner. As per condition No.2, it was enjoined upon the bus owner to get the bus insured for third party claims. Road Tax was also liable to be paid by the bus owner. Besides this, Conductor deputed on the bus was required to be appointed by RSRTC and all the liabilities arising out of his duty and conduct will be owned by the RSRTC. As per condition No.34, the permit fees of the contracted bus was to be paid by the RSRTC. 12. Having considered the implication of these clauses mentioned in the agreement, this Court is of the firm opinion that all the expenses and liabilities arising out of the operation of the bus on the permitted route were required to be borne by the bus owner including the expenses to get the bus insured for third party claims. He was also required to indemnify RSRTC for any payment or expenses incurred by it on account of some Court order or mutual compromise. 13. He was also required to indemnify RSRTC for any payment or expenses incurred by it on account of some Court order or mutual compromise. 13. It is not the case of the respondent No.1 that this agreement was got signed from the respondent No.1 by RSRTC under coercion, fraud or undue influence. It is also not the case that the said agreement was without any consideration or for any other purpose unlawful. Apparently, it appears that the agreement was entered into by both the parties under their free will after having considered the implications of all the conditions. 14. As regards issue No.1, it is found that the conclusion of learned trial Court is that the plaintiff RSRTC was trying to get rid of its independent statutory liability by shifting it to the bus owner. It has been inferred by trial Court that any such agreement is not in accordance with law being against public policy. The said inference has been supported by the trial Court with the help of condition No.34 of the agreement by which the permit fees was required to be paid by RSRTC. It has also been inferred that since RSRTC was having the authority to ply the bus on the permitted route, liability arising out of the operation of the bus will be owned by it only. 15. In my considered opinion, this does not appear to be a correct inference in light of the relevant legal provisions. Learned trial Court has referred to Section 25 of the Indian Contract Act while holding the agreement dated 23.7.1979 against the pubic policy. On perusal of Section 25 of the said Act, it is found that there is no reference of the public policy in this Section. Relevant part of Section 25 is as follows :- “25. Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law. An agreement made without consideration is void, unless- (1) … … … … … (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless. (3) … … … … … In any of these cases, such an agreement is a contract.” 16. (3) … … … … … In any of these cases, such an agreement is a contract.” 16. It is an admitted case that the Motor Accident Claim Tribunal had passed the award against all the non-claimants i.e. RSRTC, bus owner, bus driver and the insurer company. Thus, amount of the award was required to be paid by any of them jointly or severally. It is crystal clear that all these non-claimants were under obligation to satisfy the award passed by Motor Accident Claim Tribunal. It is also an admitted case that an amount of Rs. 1,50,937/- was paid by RSRTC to the claimants in compliance of the said award. Thus, the liability imposed upon the bus owner, bus driver as also insurance company was cleared off by RSRTC at the first instance. 17. Pursuant to condition No.15 of the agreement dated 23.7.1979, the said amount was required to be reimbursed to RSRTC by the bus owner. This condition to indemnify RSRTC is recognised under the provisions of Section 124 coupled with subsection (2) of Section 25 of the Contract Act, 1872. Had it been a case that it was the sole liability of the RSRTC to pay off the award amount, then, it could have been inferred that the agreement entered into by RSRTC with bus owner was just to get rid of its statutory liability and resultantly against the public policy. But this is not the case here. Learned counsel for the appellant has also contended that when the vehicle owner can recover the amount of compensation at first paid by him to the claimants under the insurance policy from the insurer company, then on the same analogy appellant RSRTC is also entitled to recover the amount of claim initially paid by him to the claimants from the bus owner under the terms of the agreement dated 23.7.1979. Learned counsel appearing for the respondent No.1 has not been able to meet this argument. I find substance in this argument. When realization of the amount from the insurer company is not against the public policy, on the same analogy, condition No.15 mentioned in the said agreement dated 23.7.1979 cannot be termed as against the public policy. 18. In fact, Section 23 of the Contract Act is relevant provision as regards the agreement which are opposed to public policy. When realization of the amount from the insurer company is not against the public policy, on the same analogy, condition No.15 mentioned in the said agreement dated 23.7.1979 cannot be termed as against the public policy. 18. In fact, Section 23 of the Contract Act is relevant provision as regards the agreement which are opposed to public policy. But in my considered view, no such element exists in the said agreement, which can be termed as opposed to public policy, so, this agreement cannot be considered to be hit by provisions of Section 23 of the said Act. 19. Learned counsel for the respondent has relied upon the judgment passed in Raj. State Road Transport Corporation v. Kailash Nath Kothari & Ors., reported in (1997) 7 SCC p.481. I have carefully gone through this judgment wherein Hon’ble Apex Court while upholding the judgments passed by Motor Accident Claim Tribunal and the High Court, held that despite condition No.15 of the agreement, which was similar to the case in hand, liability imposed on the RSRTC to pay the award amount to claimants in the motor accident claim petition filed under Section 110-A of the Motor Vehicles Act, 1939 was found correct. 20. Hon’ble Supreme Court, in that case, was addressing the issue of liability of RSRTC to pay the claim amount to the claimants. But here the issue is whether RSRTC, after paying claim amount to the claimants, can recover it from the bus owner, pursuant to condition No.15 of the agreement entered into by both of them. Thus, the issues pending consideration in both the cases are quite distinct. Hence, this judgment is not directly applicable to this case in hand. 21. However, the aspect of condition No.15 of the agreement being against public policy, as opined by the High Court, was of course, before Hon’ble the Supreme Court but that was left open while observing as follows : “18. Reliance placed by learned counsel for the appellant on Condition No.15 of the agreement (supra) in our view is misconceived. 21. However, the aspect of condition No.15 of the agreement being against public policy, as opined by the High Court, was of course, before Hon’ble the Supreme Court but that was left open while observing as follows : “18. Reliance placed by learned counsel for the appellant on Condition No.15 of the agreement (supra) in our view is misconceived. Apart from the fact that this clause in the agreement between the owner and the RSRTC, to the extent it shifts the liability for the accident from the RSRTC to the owner, may be against the public policy as opined by the High Court, though we are not inclined to test the correctness of that proposition of law (emphasis added) because on facts, we find that RSRTC cannot escape its liability to pay compensation. The second part of Condition No.15 makes it abundantly clear that the RSRTC did not completely shift the liability to the owner of the bus because it provided for reimbursement to it in case it has to pay compensation arising out of an accident.”| 22. Thus, in view of the above observation as also the discussions made herein above, Condition No.15 of the said agreement, insofar as it did not completely shift the liability to the owner of the bus but only provided for reimbursement of claim amount to RSRTC, in my considered opinion, cannot be termed as against the public policy. The conclusion drawn by learned trial Court cannot, thus, be sustained. 23. Learned trial Court has also dealt with issue No.1 in light of the provisions contained in Section 175 of the Motor Vehicles Act whereby jurisdiction of the civil court has been barred. Provisions contained in Section 175 of the Motor Vehicles Act is reproduced as below : “175. Bar on jurisdiction of Civil Courts.- Where any Claims Tribunal has been constituted for any area, no Civil Court shall have jurisdiction to entertain any question relating to any claim for compensation which may be adjudicated upon by the Claims Tribunal for that area, and no injunction in respect of any action taken or to be taken by or before the Claims Tribunal in respect of the claim for compensation shall be granted by the Civil Court.” 24. On perusal of above Section, it is very much clear that the jurisdiction of civil court has been barred only to the extent it relates to claim for compensation, which may be adjudicated upon by the Claims Tribunal for that area but the subject matter of this suit is altogether different. The claim arising out of the bus accident had already been decided by the concerned Tribunal and in compliance of the award passed by it, the payment had already been made. The subject matter of this suit is Condition No.15 of the agreement which essentially is the contract of indemnity entered into by the RSRTC and the bus owner, and that is completely independent of the provisions of the Motor Vehicles Act. 25. In view of above, the conclusion arrived at by trial Court in regard to issue No.1 is found erroneous and cannot be sustained. It is relevant to mention here that issue No.3 had also been decided against the plaintiff by learned trial Court on the basis of the conclusion arrived at in regard to issue No.1. Hence, the decision of this issue is also found erroneous. This is related to the rate of interest applicable on the amount to be indemnified by respondent No.1. Though interest rate was claimed by the Plaintiff/appellant @ 18% per annum, in light of the prevalent market rate of interest and other attending circumstances, it is deemed fit that the interest may be awarded @ 9% per annum on the amount paid by the appellant which is Rs. 1,50,937/-, from the date of payment to the claimants till its realization from respondent No.1. 26. Issue No.2 has been decided against the plaintiff appellant. Though this issue is not properly worded, but it appears that encompass of this issue is related to the liability of respondent defendant No.2, which is insurer company to pay the amount to appellant. Learned trial Court has decided this issue on the premise that there is no privity of contract between the plaintiff appellant and defendant No.2 i.e. insurer company. This appears to be factually true. Hence, it cannot be inferred that appellant RSRTC can realize the amount of the award from respondent No.2. Learned trial Court has decided this issue on the premise that there is no privity of contract between the plaintiff appellant and defendant No.2 i.e. insurer company. This appears to be factually true. Hence, it cannot be inferred that appellant RSRTC can realize the amount of the award from respondent No.2. Learned counsel for the appellant has relied upon the judgment of Andhra Pradesh High Court in case of The A.P.S.R.T.C., Mushirabad, Hyderabad v. Kanche Nagabhushanam @ Bhushanam & Ors., reported in 2008 2 ALD 602 which lays down that so long as insurance policy is in force, liability of the insurer does not cease even in case of transfer of ownership of the insured vehicle. This is not the case here. The ownership of the bus still lies with the bus owner and has not been transferred to RSRTC. Hence on the strength of this decision, RSRTC cannot be held entitled to recover the amount of compensation from the insurance company i.e. respondent No.2. However, as the privity of contract exists between respondent No.1 and respondent No.2, the issue remains open to be decided at a relevant occasion, whether and to what extent respondent No.1 can recover the amount from respondent No.2 in regard to the insurance policy of bus number RSB-1956. 27. Issues No.4 and 5 have been decided by learned trial Court in favour of the plaintiff appellant. No cross objection has been preferred on behalf of the respondents in this regard. Hence, no discussion is required to be made on these issues. 28. In view of whatever stated above, the judgment and decree dated 21.12.1996 is quashed and set aside qua the respondent No.1 and it is held that the appellant is entitled to recover the amount of Rs. 1,50,937/- along with interest amount @ 9% per annum from the date of payment of this award amount to the claimants till realization of the same from respondent No.1. The appeal is dismissed qua the respondent No.2 – Insurance Company. The appeal is partly allowed accordingly.