K. Ramaswamy, J.
1. This case raises an interesting question of law. The admitted facts are that on September 6,1979 the claimant S.A. Gafer was proceeding on a moped bearing No. APC 6689 at about 9.00 a.m. When he was near Government Arts & Science College, one G. Prabhaker Naidu, the first respondent before the Tribunal below, riding the motor cycle bearing No. APC 1117 rashly and negligently coming from the opposite direction, dashed against the claimant. As a result, he sustained grievous injuries. Under Section 110-A of the Motor Vehicles Act (Act IV of 1939) a petition was laid before the Tribunal below against Prabhaker Naidu, Rajendra Naidu, the owner of the motor cycle bearing No. APC 1117 and the insurance company, the appellant herein. The claimant was examined as PW1 and two eye- witnesses were also examined. On a consideration of the evidence on record, it was found that Prabhaker Naidu had driven the motor vehicle rashly and negligently. The evidence of PW1, claimant, corroborates the evidence of the doctor, PW 4. The court below granted a sum of Rs. 35,000/- to the claimant with interest at 9 per cent as against the claim of Rs. 95,000/- against Prabhaker Naidu and the appellant insurance company. It dismissed the O.P. against the owner of the vehicle. Against the dismissal of the O.P. a& against the owner of the vehicle, the claimant filed cross-objections and the insurance company filed the present appeal as against the amount of compensation awarded. Thus the appeal and cross-objections are disposed of by a common judgment.
2. Mr. Srinivasa Rao, the learned Counsel for the insurance company, contended that as per Section 95 of the Act the appellant as insurer had undertaken to indemnify the damage that may be suffered by the insured, viz., the owner. The Tribunal having dismissed the O.P. against the owner and the liability of the insurance company being coextensive with that of the owner, the appellant also should have been absolved of the liability.
3. The learned Counsel for the respondent resisted the contention stating that Prabhaker Naidu was obviously proceeding on the vehicle with the permission of the owner, for his purpose and on his behalf; that when the vehicle was driven by Prabhaker Naidu with the ignition-key in his possession, a presumption can be drawn that Prabhaker Naidu is the owner or, at any rate he was driving the vehicle on behalf of the owner. Thereby, when Prabhaker Naidu caused injuries to the claimant by his rash and negligent driving, the owner is also liable. When the owner is liable, the insurer i.e., the appellant company is also coextensively liable.
4. The question, therefore, is whether the liability cast upon the insurance company is valid in law. From the aforesaid narration of events, the following indisputable facts emerge -- Rajendra Naidu is the owner of the motor vehicle who registered it with the appellant company under the contract, Exh. B-l, the contract was subsisting as on the date of the accident. Prabhaker Naidu had driven the vehicle at the time of the accident and he had in his possession the key of the ignition.
5. As per Section 2(19) of the Act 'Owner' means 'where a person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to motor vehicle which is the subject of a hire-purchase agreement, the person in possession of a vehicle under that agreement.' According to the said definition, the initial owner is the person who is in possession of the motor vehicle. Registration of every such vehicle is mandatory under Section 22 of the Act. Similarly, the transfer of such ownership can be effected only in the manner contemplated by, and indicated in Section 31 of the Act. In Moussell Bros. Ltd. v. London and North Western Railway Co., 1917 (2) KB 836, Atkin, J (as he then was) while considering the provisions of Section 123 and Section 42 of the Motor Vehicles Act (Sic.) held as follows:
I think that the authorities cited by My Lord make it plain that while prima facie a principal is not to be made criminally responsible for the acts of his servants, yet the legislature may prohibit an act or enforce a duty in such words as to make the 'prohibition' or the duty absolute; in which case the principle is liable if the act is in fact done by his servants. To ascertain whether a particular Act of Parliament has that effect or not regard must be had to the object of the statute, the words used, the nature of the duty laid down, the person upon whom it is imposed, the person by whom it would in ordinary circumstances be performed, and the person upon whom the penalty is imposed.
6. While interpreting the provisions of Section 42(1) and Section 123 of the Motor Vehicles Act, a Division Bench of Rajasthan High Court in State v. Bhagwan Singh, , held as follows:
If we examine the language of Section 123 of the Act we are led to arrive at the same conclusion. Section 123(1) makes the driver of a motor vehicle and also any other person who causes or allows the motor vehicle to be used as mentioned therein liable. He may be owner or he may be any other person. Thus for establishing an offence under Section 123 it must be proved that such person had caused or allowed the vehicle to be used. In the absence of such proof no conviction can be sustained. We are, therefore, of the opinion that Section 123 (1) does not cause any vicarious liability on the master for the act of the servant.
7. Their Lordships examined the contention whether in a case in which there is no valid permit at all for the use of the vehicle and if the vehicle is found on the road, the owner can be convicted on the ground that the vehicle could not have been brought on the road except with the express or implied permission of the owner. In that regard while drawing presumption under Section 114 of the Evidence Act the Division Bench held thus
The court may presume that the vehicle was being used on the road by the express or implied permission of the owner regard being had to the fact that in the ordinary circumstances the vehicle must be deemed to be in the possession of the owner and that ordinarily the owner may be deemed to have taken proper precaution that the vehicle may not be put to use by anyone without his permission. The owner may have put the vehicle in the garage or the key of the engine of the vehicle may be with the owner. The accused may then show that the vehicle had come on the road without his express of implied permission. Again in an appropriate case the court may accept such an explanation of the accused without any proof on behalf of the accused for the same.
8. Thereby the Division Bench held that when the vehicle was used- in different places, it must be deemed that it was done so with the express or implied permission of the owner. In Prdbhavati v. Anton Francis Nazareth, 1981 ACJ 445 Karnataka, a Division Bench of the Karnataka High Court considered the question whether the accident had occurred when the vehicle was driven by the cleaner with the implied permission of the owner. In that regard it was held thus:
It is no doubt true that RW 1 has deposed that the cleaner took away vehicle without his knowledge. He has deposed that his regular driver was Balappa. He has not cared to examine Balappa. It is a matter of common knowledge that the vehicle could not be started without the ignition-key. Unless Balappa gave the ignition-key, Yellappa could not take the vehicle. There is an initial presumption that this vehicle was driven for and on behalf of the owner. In the instant case, it is evident that the ignition-key was given by Balappa to Yellappa. There are a number of decided cases to show that if the driver allows an unauthorised person without competence to drive the vehicle, it will be a matter of negligence on the part of the driver in* he course of his employment and the owner becomes vicariously liable; so also the insurance company.
9. Thus it is held that when a person uses the vehicle with the ignition-key in his possession, it must be initially presumed that the vehicle is used with the permission of the owner and on his behalf and if any accident occurs, the owner becomes vicariously liable. When the owner is vicariously liable, the insurance company is also vicariously liable. Thus considered, the ratio decendi would run thus: the person in possession of the vehicle must be initially presumed to be the owner unless it is established otherwise. When a vehicle is used in a public place and the accident is caused due to rash and negligent driving of the driver of the vehicle or the person who drives the vehicle, and the vehicle is put to use in a public place with the permission of the owner, express or implied, the owner is vicariously liable with the user of the vehicle for the injuries caused to the victim and therefore the insurance company having undertaken the liability to indemnify the owner of the tortuous act committed is coextensively liable for the damage caused.
10. Accordingly, I hold that not only the owner Rajendra Naidu but also the driver of the vehicle Prabhaker Naidu as well as the insurance company are jointly and severally liable for the damage caused to the claimant. The appeal is accordingly dismissed. However, the claimant is entitled to interest at 12 per cent from the date of the claim till the date of realisation. The cross- objections are allowed in part to the extent of interest only. No costs.