G.C. Bharuka, J.
1. The Karnataka State Road Transport Corporation (in short, the 'Corporation'), constituted under the provisions of the Road Transport Corporation Act, has preferred this appeal questioning the correctness of the judgment and award dated 4-11-1998 passed by the Claims Tribunal, Ranebennur, in M.V.C. No. 335 of 1996 awarding compensation of Rs. 9,18,000/- with 6% p.a. interest from the date of petition till payment on account of the death of one Munilal Jain, whose legal heirs have been arrayed as respondents.
2. It is not in dispute that on 4-8-1995 the deceased Munilal Jain was travelling in a bus of the Corporation bearing No. KA-01/F-5958 from Bangalore towards Ranebennur. When the bus came near Aimangal Petrol Bunk on National Highway No. 4, it combed with one on-coming truck bearing No. MH/F. 8278, as result of which the bus hit the roadside tree resulting instantaneous death of said Munilal Jain. The legal heirs of the deceased Munilal Jain preferred claim petition before the Tribunal against the Corporation as also the owner and insurer of the truck. But drivers of none of the vehicles involved in the accident were either made parties to the claim petition nor they were issued notice for contesting the compensation proceedings. Further, the owners also for one or the other reason did not examine them as witnesses in order to avoid their liability towards compensation. As a matter of fact, no evidence at all was led on behalf of the Corporation and the owner of the truck. Still, the Tribunal in para 14 of the impugned judgment has recorded a finding of fact that the accident in question had taken place because of rash and negligent driving of the driver of the Corporation bus and has thus fastened the entire liability on the Corporation completely exonerating the owner and the insurer.
3. Learned Counsel appearing for the Corporation has apart from assailing the determination of quantum of compensation has further questioned the finding of the Tribunal attributing the entire negligence only to the driver of the Corporation's bus. It has been submitted that though the Corporation for certain reasons could not examine its driver, but nonetheless since collusion between the two vehicles is admitted and though the driver of the truck was not examined, the Tribunal on mere surmises or on inadmissible evidence could not have made the Corporation liable to pay the entire compensation.
4. In our opinion, a material question of law of wider general importance arise for consideration in the present appeal, viz., whether keeping in view the statutory provisions contained in the Motor Vehicles Act, 1988 (in short, the 'Act') and the respective rules framed thereunder, as also even otherwise the drivers of the vehicles involved in the accident has to be necessarily made a party in the compensation proceedings?
5. For examining the above question we find it necessary to refer Sections 168 and 174 of the Motor Vehicles Act, 1988 (in short, 'the Act') which read as under:
'168. Award of the Claims Tribunal.--(1) On receipt of an application for compensation made under Section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and alter giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of Section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award, the Claims Tribunal shall specify the amount which shall be paid bythe insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be:
Provided xxx xxx xxx.
174. Recovery of money from insurer as arrear of land revenue.--Where any amount is due from any person under an award, the Claims Tribunal may, on an application made to it by the person entitled to the amount, issue a certificate for the amount to the Collector and the Collector shall proceed to recover the same in the same manner as an arrear of land revenue'.
6. Under Section 168 of the Act, the Claims Tribunal has been empowered to make an award and it is required to record its finding on the following issues:
(i) the amount of compensation payable to the claimants;
(ii) the person or persons to whom the said compensation shall be payable; and
(iii) the extent of amount which shall be payable by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be,
7. For determining the said issues, as provided in Section 168 itself, it is incumbent upon the Claims Tribunal to hold an inquiry into the claim of compensation after affording an opportunity of being heard to the parties concerned including the insurer. Now the question to be determined is as to who are the parties in whose presence the inquiry is to be held and after determination of the amount of compensation, on whom the liability to pay the same is to be fastened.
8. The legislative intent contained in Section 168 of the Act clearly empowers the Tribunal to specify, depending upon the facts and circumstances of the case, that part or whole of the compensation may be required to be paid either by the driver or the owner or the insurer or all or any of them. But this finding has to be recorded after hearing of the parties namely the insurer, the owner as well as the driver.
9. Further, if the Tribunal finds that the owner and driver are liable to pay the compensation because of rash and negligent driving of the vehicle then the driver and the owner will be the joint tort-feasors whereas the insurer will be liable to make good the compensation as an indemnifier. Therefore, in a case where the vehicle is not insured, like in the present case, both the joint tort-feasors can be proceeded against under Section 174 of the Act for recovery of compensation amount as an arrear of land revenue.
10. In the case of Minu B. Mehta and Another v Balkrishna Ramchandra Nayan and Another, a three Judges Bench of the Supreme Court has held that (para 21):
'The liability of the owner of the car to compensate the victim in a car accident due to negligent driving of his servant is based on the Law of Tort. Regarding the negligence of the servant, the owner is made liable on the basis of vicarious liability. Before the master could be made liable it is necessary to prove that the servant was acting during the course of his employment and that he was negligent'.
(emphasis supplied)
11. In Clerk and Lindsell on Torts (14th Edition, 1975) it has been stated that :
'. . . For vicarious liability to arise three things have to be established: a master-servant relationship; that the servant committed a tort; and that he did so in the course of his employment'.
(emphasis supplied)
12. On the question as to the nature of vicarious liability of the master for the tortuous act of the servant, Salmond on 'Torts' (18th Edition, 1981) states:
'A master is jointly and severally liable for any tort committed by his servant while acting in the course of employment. This is by far the most important of the various cases in which vicarious responsibility or vicarious liability is recognised by the law. Vicarious liability means that one person takes or supplies the place of another so far as liability is concerned.. . '.
(emphasis supplied)
13. In Jones v Manchester Corporation , Denning, L.J. said:
'In all these cases it is of importance to remember that when a master employs a servant to do something for him, he is responsible for the servant's conduct as if it were his own. If the servant commits a tort in the course of his employment, then the master is a tort-feasor as well as the servant. The master is never treated as an innocent party.
(emphasis supplied)
14. A Division Bench of this Court in the case of General Manager, Karnataka State Road Transport Corporation v Vijayalaxmi, after noticing the above English propositions though held that a case of vicarious liability is a case of joint tort-feasors but nonetheless took the view that:
'There is, therefore, no substance in the contention that in an action against the master for the tortuous act of the servant, the latter himself is a necessary party and that his non-joinder is fatal to the action.
The case being one of joint and several liability the master alone can be sued; but, of course, in the action the tort of the servant, in the course of the employment, must be established'.
(emphasis supplied)
15. From the above it is clear that all the authorities are in agreement that even for fastening the liability of compensation on the master, the Tribunal has to record a finding that the accident had taken place because of the negligence of the driver. Certainly unless such a finding is recorded, the master cannot be held to be a joint tort-feasor and consequently vicariously liable.
16. Now falling back to the main issue, we have to put to ourselves as to whether a person can be condemned of acting negligently and face civil consequence arising therefrom like: (a) of fastening joint liability of paying compensation; (b) a judicial stigma of being negligent in discharge of his duty; (c) facing adverse evidence in any future or other proceedings; and (d) of running the risk of losing future promotional or other employment prospect; even without having an opportunity of hearing and putting forth his defence? The answer has to be simply in negative.
17. It is now too settled that no person can be condemned or subjected to any action or order having civil consequences unless a reasonable opportunity of hearing is granted to him -- S.L. Kapoor v Jagmohan and Others . In the case of Mohinder Singh Gill and Another v Chief Election Commissioner, New Delhi and Others , it has been held that:
'. . . But what is a civil consequence, let us ask ourselves, by passing verbal booby-traps? 'Civil consequences' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence'.
18. Therefore, examining the question at hand, both keeping in view the clear Legislature mandate contained in Section 168 of the Act as also the law laid down by the Supreme Court and the requirement of fair play and natural justice, it has to be held that whenever a claim for compensation is laid on an allegation that a motor accident has taken place because of rash and negligent driving of the driver of the offending vehicle, then before recording any finding adverse to the driver, a reasonable opportunity of hearing has to be afforded to him by issuance of notice through the owner of the vehicle involved or at the last known address of such driver.
19. So far as the Division Bench of this Court in the case of General Manager, Karnataka State Road Transport Corporation, supra, is concerned the plea of non-joinder of the driver was raised as a technicaldefence but it was not shown to the Court that the driver was not examined even as a witness to defend the Corporation's case. Moreover, in this case as well the Court had held that even for fixing the vicarious liability, the tort of the driver has to be established, which certainly cannot be done for the reasons noticed above at the back of the driver.
20. For the said reasons we are of the considered opinion that the driver of the offending vehicle has to be afforded reasonable opportunity of hearing in a proceeding seeking compensation under Chapter XII of the Act. Admittedly, in the present case the driver was neither made a party nor was even otherwise granted a reasonable opportunity of hearing for even substantial compliance of the requirements of natural justice. Accordingly, the impugned judgment and award are set aside. The case is remanded to the Tribunal for its disposal in accordance with law. It is clarified that steps for service of notice on the driver may be taken through the General Manager of the appellant-Corporation. Parties to bear their own costs.
21. Before parting it is clarified that if despite grant of opportunity, the driver fails to appear before the Tribunal or despite appearance fails to come out with a reasonable defence pertaining to the cause of accident, then the owners including the appellant-Corporation will be justified in drawing appropriate disciplinary proceedings against such drivers and draw appropriate inference leading to suitable penalty in accordance with law.
22. Registrar General of this Court is directed to ensure the circulation of this judgment among all the Judicial Officers in the State.