North West Karnataka Road Transport Corporation Vs. Sri D. Kenchappa and ors. - Court Judgment

V. Jagannathan, J.

1. As common question of law arises for consideration in these two appeals, they are being disposed of by this common judgment.

2. In both the cases, the Tribunal has recorded a positive finding that the accidents in question were caused on account of the buses, which were driven under the control of the K.S.R.T.C. In both the cases, though the buses in question belong to the registered owners, the K.S.R.T.C. had taken them on hire under an agreement with the registered owners.

3. M.F.A. No. 8042/2006 is preferred by the N.W.K.R.T.C. aggrieved by the liability being put on it exclusively to satisfy the award amount and in M.F.A. No. 11440/2007, the liability was put on the Insurance Company with whom the registered owner had insured the bus. The contention of the Road Transport Corporation in both the cases is that the buses in question were owned by the registered owners, who had insured them with the Insurance Company and, therefore, the K.S.R.T.C. is not liable. Whereas, the contention of the Insurance Company, which is the appellant in M.F.A. No. 11440/2007 is that, at the relevant point of time, the buses were under the control of the K.S.R.T.C. pursuant to the agreements entered into between the K.S.R.T.C. and the registered owners and, therefore, it is the K.S.R.T.C., which is liable to satisfy the award amounts.

4. The facts, briefly stated, are that insofar as M.F.A. No. 8042/2006 is concerned, the claimant therein, who is R-1, had preferred the claim petition seeking compensation for the injuries sustained by him in the accident in question and according to him, when he was going on his motorcycle, the bus bearing No. KA-26/B-3465 belonging to the K.S.R.T.C. came from behind and dashed to the motorcycle on account of which he sustained the injuries. The Tribunal awarded Rs. 27,000/- as compensation and put the liability on the K.S.R.T.C. and in doing so, the Tribunal took note of the decision reported in 2005 ACJ 883 to hold that, on the date of the accident, the K.S.R.T.C. was deemed to be the owner of the bus and it was the K.S.R.T.C, which had full control and custody of the bus and, for this reason, it is the K.S.R.T.C. which is liable to pay the compensation.

5. Insofar as M.F.A. No. 11440/2007 is concerned, the claim petition was filed by the major sons of deceased Channaveeraiah and the said Channaveeraiah succumbed to the injuries sustained by him in the accident when the K.S.R.T.C. bus bearing No. KA-16/C-2526 dashed against him while he was going along the extreme left side of the road by towing his bicycle. The Tribunal awarded Rs. 4,09,000/- as compensation to the claimants and put the liability on the Insurance Company following the terms of the agreement between the K.S.R.T.C., which is the hirer, and the registered owner, indicating that the Insurance Company will be liable.

6. I have heard learned Counsel Shri D. Vijayakumar for the K.S.R.T.C. and learned Counsel Shri A.K. Bhat for the Insurance Company and, in view of the important question of law involved, learned Counsel Shri A.N. Krishnaswamy, Shri B.C. Seetharama Rao, Shri O. Mahesh and Sri Gangadhar Sangolli also assisted the Court.

7. Learned Counsel Shri D. Vijayakumar for the K.S.R.T.C. contended that, in both cases, the buses in question were insured by the registered owners and the insurance policies were also in force as on the date of the accidents. The K.S.R.T.C. had only hired the buses from the registered owners on certain terms and conditions as per the agreements and, therefore, it is the Insurance Company, which will have to be held liable to pay the compensation and not the K.S.R.T.C.

8. Referring to the terms and conditions of the agreements, the learned Counsel pointed out that the agreements clearly specify that the owners of the buses alone shall be solely liable for any claim arising out of any accident, damage or loss or hurt caused during the operation of the bus and that the K.S.R.T.C. shall not be liable for any claim arising out of the use of the bus, including the claims made in connection with the injuries or loss of life sustained by the passengers. Referring to the said clause in the agreements, the learned Counsel argued that it is the Insurance Company, which will have to be made liable, and not the K.S.R.T.C.

9. The learned Counsel also referred to the definition of 'owner' as contained in Section 2(30) of the Motor Vehicles Act, 1988 (in short 'the Act') to contend that the Act only contemplates the registered owner of the vehicle as the owner and, therefore, in the case on hand, it is the liability of the registered owner, which is to be indemnified by the Insurance Company, as the driver of the bus was under the employment of the registered owner and not under the K.S.R.T.C. The question of the K.S.R.T.C. becoming the owner of the vehicle cannot arise and moreover, it is for the registered owner to maintain the vehicle as per the terms and conditions of the agreement on day-to-day basis.

10. It is then contended by the learned Counsel that even from a perusal of the provisions of the Act, it is clear from Section 147 of the Act that it is the liability of the Insurance Company to pay the compensation and referring to Sub-section (5) of Section 147 of the Act, it is submitted that once there is an insurance policy in force, it is the insurer who will be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.

11. Learned Counsel Shri Vijayakumar also referred to various decisions in this connection and they are the ones reported in 1977 ACJ 343, : 1997 ACJ 1148, : ILR 2008 Karnataka 1323, : 1997 ACJ 1148, : AIR 1999 SC 1398, : 1999 ACJ 781, : 1999 ACJ 213, : 2004 (5) ALD 378, 2006 AIR SCW 1822 and : ILR 2008 Karnataka 1323, and also a recent decision of this Court reported in : ILR 2008 Karnataka 4832. The argument of the learned Counsel in the light of the aforesaid decisions referred to by him is that the K.S.R.T.C., though is the hirer of the buses in question, yet, it cannot be deemed as the owner of the bus. The learned Counsel also referred to the decision of the Apex Court in the case of Rajasthan State Road Transport Corporation v. Kailash Nath Kothari : 1997 ACJ 1148, to submit that even in the said case, the Insurance Company had paid the amount and the Apex Court did not observe in the said case that the Insurance Company is not liable. Therefore, in the light of the law laid down in the aforementioned cases, the question of K.S.R.T.C. being liable will not arise.

12. One other submission made by learned Counsel Shri Vrjayakumar is that the Act nowhere contemplates two policies being taken in respect of the same vehicle by two owners. Therefore, the liability put on the K.S.R.T.C. by the Tribunal, insofar as M.F.A. No. 8042/2006 is concerned, requires to be set aside and the Insurance Company will have to be made liable to satisfy the award amount.

13. On the other hand, learned Counsel Shri A.K. Bhat for the Insurance Company contended that the buses in question were fully under the custody and control of the K.S.R.TC. and the drivers of the buses were also under the control of the K.S.R.T.C. and as the K.S.R.T.C. alone had the exclusive right to ply on the route in question, the insured could not have permitted his driver to ply on the said route, contrary to the terms and conditions of the insurance policy. Referring to the terms and conditions of the agreement entered into between the K.S.R.T.C. and the registered owners, the learned Counsel submitted that a close look at the conditions would amply make it clear that the entire control of the driver was with the K.S.R.T.C. and, therefore, it is the K.S.R.T.C., which is to be held vicariously liable and as the K.S.R.T.C. has got its own insurance fund, the liability put on the Insurance Company by the Tribunal is, therefore, erroneous and against the law laid down by the Apex Court.

14. Referring to the Apex Court decision in Rajasthan State Road Transport Corporation v. Kailash Nath Kothari, (Supra) learned Counsel Shri A.K. Bhat argued that the facts and circumstances of the case before the Apex Court and the cases on hand are almost identical inasmuch as even in the said case, the bus in question was hired by R.S.R.T.C. and the bus could not have plied on the route in question except by the R.S.R.T.C. which had the necessary permit and further, the conductor of the bus was an employee of the R.S.R.T.C. and the passengers were being carried in the bus by paying prescribed fare to the bus conductor and, therefore, referring to the facts involved in the case before the Apex Court, the learned Counsel argued that the cases on hand are no different from the one which was the subject matter before the Supreme Court in the above mentioned decision and, as the Apex Court has held that the original owner can avoid his liability and the temporary employer or the hirer must be held vicariously liable, notwithstanding the fact that the driver would continue to be on the pay roll of the original owner, the learned Counsel submitted that the said decision and the law laid down by the Supreme Court squarely applies with all force to the instant case and, as such, the Tribunal could not have burdened the Insurance Company with the liability merely because the insurance policy stood in the name of the registered owner as on the date of the accident.

15. Yet another contention put forward on behalf of the Insurance Company is that Section 147 proviso makes it clear that the policy shall not be required to cover any contractual liability and, therefore, in the instant case, the Insurance Company was not obliged to cover the contractual liability that arises out of the agreement between the K.S.R.T.C. and the registered owner. Even for this reason also, the Tribunal could not have put the liability on the Insurance Company.

16. Learned Counsel Shri A.N. Krishna Swamy, who assisted the Shri A.K.Bhat, also pointed out that a careful reading of Section 149(2)(a)(i)(a) would make it clear that the Insurance Company can defend its action even on the ground that the vehicle, on the date of contract of insurance, was not covered by the permit and he also referred to Sub-clause (b) of Section 149(2) to contend that the policy would become void on the ground that it having been obtained by the non-disclosure of a material fact and referring to Sub-section (6) of Section 149, it was argued that the expression 'material fact' will have to be understood as has been explained in Sub-section (6) of Section 149. Reference was also made to the definition of 'owner' in Section 2(30) as well as to the definition of 'public service vehicle' in Section 2(35) to contend that, in the instant case, the K.S.R.T.C. is deemed to be the owner for all practical purposes at the relevant time when the accident occurred as it was the K.S.R.T.C. which had the complete control over the bus in question and, therefore, relying on the ruling of the Apex Court in R.S.R.T.C's case, it is argued that the principles laid down in the said case by the Supreme Court leaves no doubt as to the fact of the temporary employer or the hirer (K.S.R.T.C. in the instant case) becoming vicariously liable because the driver in question was under the command and control of the hirer and not under the command and control of the registered owner.

17. As far as the rulings referred to by the learned Counsel Shri Vrjayakumar is concerned, it is argued on behalf of the Insurance Company that the said rulings deal with the issue relating to transfer of vehicle and, therefore, in the light of the law laid down by the Apex Court in R.S.R.T.C's case and having regard to the statutory provisions contained in Section 147, the Insurance Company is not required to cover any liability arising out of the contract between K.S.R.T.C. and the registered owner. Apart from the decision of the Apex Court in R.S.R.T.C's case, reliance was also placed on another decision rendered by the High Court of Andhra Pradesh in the case of New India Assurance Co. Ltd. v. B.G. Suma : 2004 ACJ 883, to submit that a Division Bench of the said court has held that the hirer is the owner within the meaning of Section 2(30) and the said Corporation will be liable. The aforesaid ruling, therefore, applies to the instant case.

18. In the light of the above contentions urged on behalf of the Insurance Company and the rulings cited, the submission made by learned Counsel Shri A.K. Bhat is that the Tribunal was in error in putting the liability on the Insurance Company. As far as the quantum of compensation is concerned, it is submitted that the claimants being majors and not dependants on the deceased, the Tribunal could not have awarded higher sum under the head of loss of dependency but, at the most, under the head of loss to the estate, some amount could have been awarded.

19. In the light of the contentions put forward and the decisions cited and, in particular, in view of the law laid down by the Apex Court in R.S.R.T.C's case, the point for consideration in these appeals is, whether the K.S.R.T.C. can be said to be the owner of the buses in question and hence liable notwithstanding the agreement entered into between the K.S.R.T.C. and the registered owner.

20. The facts which are not in dispute are that the K.S.R.T.C. had hired the respective buses involved in the accidents and the registered owners had entered into an agreement with the K.S.R.T.C. in this regard. The relevant terms of the agreement, which is produced at Annexure R-1 in respect of the case which has given rise to M.F.A. No. 8042/2006, which are very relevant for our purpose, are the following:

7. The buses thus hired shall be operated as Stage Carriage/Contract carriage by NWKRTC in its divisions and such other routes specified by NWKRTC under its total and complete control. The operating conditions of the hired buses would be similar to those pertaining to NWKRTC owned buses in the divisions.

8. Each of the bus offered by the owner shall have two drivers, one in each shift of duty per day under the exclusive employment of the owner. The payment of salaries, allowances and statuary payments and obligations relating to the services of the drivers, engaged by the owner shall be the responsibility of the owner of the private buses alone. It shall be the responsibility of the owner of the buses to comply with all the requirements of the statutes, Acts, Rules and Regulations in force. The NWKRTC shall not be liable for any charges.

9. In case the owner of the private bus defaults in the discharge of any of his statuary liability, then NWKRTC reserves the right to deduct such amounts from the amount payable to the owner as is sufficient to discharge the liability, and if the liability is more than the amounts payable by NWKRTC to the owner, the owner alone shall be liable.

10. The NWKRTC shall provide the Conductors borne on its own service to each hired bus. The payment of salary and such other emoluments and other service benefits shall be the responsibility of the NWKRTC alone. The conductor shall be provided with tickets, waybill and other Conductor's equipments as deemed fit by NWKRTC. NWKRTC reserves the right to adopt any other means or method for collection of traffic and commercial revenue from the commuters and by the bus so hired. In case of any emergency, when requested by the NWKRTC, the owner of the private bus should also explore to and provide conductors on terms and conditions of NWKRTC for the temporary use in exigencies.

11. Every driver provided by the owner shall possess a valid H.T.V. Driving License and P.S.V. Badge. The Driver shall carry his H.T.C. License and P.S.V. Bagde while on duty and the Driver shall have an experience of at least 3 years of driving a Heavy transport/passenger vehicle.

12. The driver so provided shall wear such uniform as prescribed by the NWKRTC from time to time. He shall scrupulously follow instructions issued by the NWKRTC periodically. If and when the NWKRTC finds deficiency with the driver (provided by the owner) in behaviour or conduct or discharge of duties, upon notice by the NWKRTC, the owner shall replace him/her immediately by a substitute driver. In such events, when the owner fails to replace such of his/her employees even at the end of seven days of notice, the bus provided on hire by the owner with that driver shall be liable to be discontinued without any further notice.

xxx xxx xxx15. The owner shall deposit the R.C. Book and the Insurance policy of the bus with the NWKRTC duly exhibiting the copy of the R.C. Book in the bus under the safe custody of the driver. The driver provided by the owner shall be the custodian of the Fitness Certificate and the hired bus and its belongings and the NWKRTC shall not be liable for any claim whatsoever for loss or damages.

xxx xxx xxx18. The owner of the private bus shall keep the hired bus duly insured under a Motor Vehicle Comprehensive Insurance Policy covering all risks and all such costs shall be borne by the owner of the private bus.

xxx xxx xxx20. The owner of the private bus alone shall be solely liable for any claim arising out of any accident, damage or loss or hurt caused during the operation of the bus. The NWKRTC shall not be liable for any claims arising out of the use of the buses, including claims made in connection with the injuries or loss of life sustained by passengers or any other road user or to any property. Besides, all tortuous liability, if any, shall be borne by the owner or the insurer of the vehicle themselves. However, the accidents should be reported to the NWKRTC Office/Depot.

xxx xxx xxx22. The Conductor of the bus or the authorised employee of NWKRTC alone shall be entitled to collect all fare and luggage charges and neither the owner nor the driver shall have any claim to the fare and luggage charges or any amount so collected, or accrues to the NWKRTC or any STU of Karnataka.

xxx xxx xxx29. If and when required by NWKRTC, owing to any unforeseen circumstances or contingencies, if the bus so hired is required to be operated without a conductor, the owner of hired bus shall be liable to make the driver of the bus to do the job of a conductor.

If it is a conductor less service in which the driver issues the tickets, in such case, the owner of the bus shall make the driver issue the ticket to the passengers, collect the proceeds including the luggage charges etc, and remit/make over the entire proceeds to the NWKRTC Depot immediately on the completion of the duty. In such a case the owner will be entitled for an additional payment of Rupees 50 (fifty only) for that day when the driver is specifically entrusted with the additional work of issuing the tickets for the full day for a minimum of 7 hours duty.

30. The buses hired to NWKRTC by the owner will be operated by NWKRTC on different combination of routes different schedules. For any default by the owner or Driver of the hired buses, if the operation of the bus is less than the allotted Kms., per day the owner shall be paid for the actual kilometers operated by that hired bus on the day at the hiring rate applicable for the Kilometer slab for which the vehicle is allotted on that day for e.g., if the vehicle is allotted to perform a daily duty of 400 kms. per day, then the hire charges will be calculated at the rate applicable to the slab of 400 to 409 kms. And shall be paid for the actual kms., operated e.g., if the vehicle is operated for 180 kms. instead of 400 kms., the amount payable shall be (approximate 753.8) (180 kms.) = Rs. 1356.84 paise. The duty kms. Mean the total kilometer allotted to the bus on that day by NWKRTC (day means 24 hours from the commencement of duty).

xxx xxx xxx41. The owner shall carryout such repair, modification in regard to colour and body specifications as suggested by the NWKRTC within seven days.

xxx xxx xxx45. The principles underlying the ESMA Act shall be applicable to the services rendered by the owner and drivers provided by the owner for the hired Buses, and further their failure to ply the buses during strikes and such other industrial agitations shall attract in the termination of the contract and the forfeiture of the Security Deposit, among other forfeitures and penalties.

xxx xxx xxx49. If because of any default by the bus owner or by his/her drivers any consideration of any law, any liability on NWKRTC, the NWKRTC has the right to recover the amount either from the bills payable or the security deposit and to take further steps to recover to recover the balance from the private owner by any lawful means.xxx xxx xxx

21. As far as the agreement, which is at Ex.R-3, in respect of the case that has arisen in M.F.A. No. 11440/2007 is concerned, the relevant terms and conditions for our purpose are the following:

2) c) The paint scheme shall be as per KSRTC specifications. In the event of fading of paint, concerned D.C. may ask bus owner to get the bus repainted within 30 days of notice, which shall be binding on bus owner.

2) d) The owner of the private bus shall allow the authorised nominees of KSRTC to inspect the hired bus during body building process to help them in getting buses constructed of desirable standards and as per the KSRTC specifications

xxx xxx xxx8. ii) Every driver provided by the owner shall possess a valid H.T.V. Driving License and PSV Badge, with Karnataka RTO endorsement in case issued by the other State Authorities. The Driver shall carry his HTV License and PSV Badge while on duty and the Driver shall have an experience of at least 3 years of driving a Heavy transport/passenger vehicle. The bus owner should provide name, addresses and driving licence details of the drivers to be deployed on such hired buses by him to the Depot Manager of the Depot to which his bus is deployed. Any changes of the address should also be intimated in advance. Such Drivers shall be liable for checking by KSRTC officials against drunken driving by any means, including breath analyser. Any driver found drunk may be allowed to proceed on duty and the bus will be deemed as not made available to KSRTC for operations by the bus owner with all consequent effects. Besides, such driver may have to be removed by the bus owner from KSRTC operations forthwith in the interest of passengers safety.

8. iii) The Driver so provided shall wear such uniform as prescribed by the KSRTC from time to time. He shall scrupulously follow instructions issued by the KSRTC periodically. If and when the KSRTC finds deficiency wife the driver (provided by bus owner) in behaviour or conduct or discharge of duties, upon notice by the KSRTC, the owner shall replace him/her immediately by a substitute driver in such events, when the owner fails to replace such of his/her employees even at the end of fifteen days of notice, the bus provided on hire by the owner with that driver shall be liable to be discontinued without any further notice with all consequent effect of not providing the bus to the KSRTC.

xxx xxx xxx12. The owner of the private bus shall ensure that the vehicle provided always conforms to the emission norms prescribed as per the Law, Rules and Regulations in force and the owner shall take all steps to ensure this at his/her cost. He should display in the hired bus the emission certificate issued by the Competent Authority.

xxx xxx xxx14. The owner of the private bus shall keep the hired bus duly insured under a Motor Vehicle comprehensive insurance policy covering all risks and all such costs shall be borne by the owner of the private bus. In case of failure to have a valid comprehensive insurance policy. The bus will not be used for KSRTC's operations and it will be deemed that the bus has not been made available to KSRTC for scheduled operations, with all consequent effects. The insurance shall cover 61 passengers.

xxx xxx xxx16. (a) The owner of the bus alone shall be solely liable for any claim arising out of any accident, damage or loss or hurt caused during the operation of the bus. The KSRTC shall not be liable for any claims arising out of the use of the buses, including claims made in connection with the injuries or loss of life sustained by passengers, bus crew or any other road user or to any property/person. Besides, all tortuous liability if any, shall be borne by the owner or the insurer of the vehicle themselves. However the accidents should be reported to the KSRTC Office/Deport.

16. (b) KSRTC may make payment of ex-gratia amount to the victims in the event of accident of such private hired buses while on KSRTC operations as per the KSRTC's prevailing norms which shall be recovered from any amounts due to the owner of such private buses or from Security Deposit etc., Further, the owner of such of such private bus should make prompt payment of 'no fault liability' or any other claim under the law for such accident victims. In case KSRTC is compelled to make such payment on behalf of the owner of private buses, it shall be recovered from any amount due to the owner by KSRTC or receivable to him from Insurance Company or other debtors' etc. In case of non-payment to non-recovery of such amount by KSRTC within 15 days interest at 15% per annum shall also be recoverable. For days beyond 30 days KSRTC may detain and use the bus till payment of the amount or adjustment thereof towards hire charges payable.

16. c) It shall be the responsibility of the owner of the private bus to produce at his own cost, the Driver/Bus before the court of law and before the police authorities whenever required in case of accident or any other contingencies or on order or directions by the Judicial or Executive authorities. No hire charges shall be payable by KSRTC in such cases.

17. The KSRTC shall not be liable for any damage or loss caused to the bus hired, at any point of time including during the period of agitations, strikes, accidents, natural calamities etc.

18. The owner of the private bus shall be liable for and shall alone discharge or meet all claims including fines and penalties arising out of violation of traffic Rules and Regulations, Statutes, Acts, Rules, and Regulations etc, in force for act of omissions or commissions committed either by his/her drivers or by any other person not authorised to drive. The owner of the private bus shall be liable and shall meet and discharge any claim for compensation or damages on account of tortuous liability.

19. a) The owner of the private bus shall provide and make available bus/buses as per the contract to KSRTC on all days of operation in time as per the schedule departing time and also so as to cover the entire schedule Kms duty.

xxx xxx xxx20. i)(a) To pay Hire Charges to the owner at the rates indicated in the hiring rate charts at Annexure-A-1 & A-2 subject to the Rules, Terms and Conditions of the Contract. The hiring rate applicable shall be based on the scheduled kms of the route allotted to the hired bus, except as otherwise provided herein.xxx xxx xxx

22. From the terms and conditions which have been extracted above, it is clear that the bus in question was hired by the KSRTC and it was the KSRTC which was running the bus on the road for which the KSRTC had been granted necessary permit by the competent authority. The above terms and conditions also make it clear that even the KSRTC had specified the colour of the bus as well as the name board of the KSRTC put on the bus and apart from that, it also provide for the conductor of the KSRTC to collect the fares from the passengers on behalf of the KSRTC and thus it was the KSRTC which was in full control of the bus hired by it from the registered owner. The other conditions of the agreement also give rise to the very same inference being drawn. Except for the fact that the bus was owned by the registered owner, for all other purposes, the possession was with the KSRTC and the driver of the bus though an employee under the registered owner, yet was to drive the bus under instructions of the KSRTC. Therefore, the actual control of the bus was with the KSRTC and the driver could not have run the bus without following the instructions and directions given to him by the KSRTC in so far as the operation of the bus in the road specified by the KSRTC is concerned. As such, not only the possession was with the KSRTC pursuant to the agreement it had he entered into with the registered owner, but the entire control was with the KSRTC and the manner of control exercised by the KSRTC is very much evident from the above terms and conditions among other conditions of the agreement.

23. In the light of the above facts and circumstances of the case before us, and in the light of the agreement entered into between the KSRTC and the registered owner, the next point that arises for consideration is, whether it can be said that the KSRTC is the 'owner' of the bus in question. This takes us to the meaning of 'owner' Under Section 2(30) of the M.V. Act which is as under:

'owner' means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.

24. The Apex Court had an occasion to consider the meaning of the word 'owner' in the case of National Insurance Co. Limited v. Deepa Devi and Ors. decided on 11.12.2007 in Civil Appeal No. 5796/2007 and speaking for the Court, his lordship Hon'ble Sri S.B. Sinha J, observed thus:

Parliament either under the 1939 Act or the 1988 Act did not take into consideration a situation of this nature. No doubt, respondent Nos. 3 and 4 continued to be the registered owner of the vehicle despite the fact that the same was requisitioned by the District Magistrate in exercise of its power conferred upon it under the Representation of People Act. A vehicle is requisitioned by a statutory authority, pursuant to the provisions contained in a statute. The owner of the vehicle cannot refuse to abide by the order of requisition of the vehicle by the Deputy Commissioner. While the vehicle remains under requisition, the owner does not exercise any control thereover. The driver may still be the employee of the owner of the vehicle but he has to drive it as per the direction of the officer of the State, who is put in-charge thereof. Save and except for legal ownership, for all intent and purport, the registered owner of the vehicle loses entire control thereover. He has no say as to whether the vehicle should be driven at a given point of time or not. He cannot ask the driver not to drive a vehicle on a bad road. He or the driver could not possibly say that the vehicle would not be driven in the night. The purpose of requisition is to use the vehicle. For the period the vehicle remains under the control of the State and/or its officers, the owner is only entitled to payment of compensation therefor in terms of the act but he cannot exercise any control thereupon. In a situation of this nature, this Court must proceed on the presumption that the Parliament while enacting the 1988 Act did not envisage such a situation. If in a given situation, the statutory definitions contained in the 1988 Act cannot be given effect to in letter and spirit, the same should be understood from the common sense point of view.

25. In the case of Morbi Taluka Panchayat and Anr. v. Vikram Sinn Gambhir Sinh 2006 (1) T.A.C. 566 a Division Bench of the High Court of Gujarat also considered the definition of owner as contained in Section 2(19) of the M.V. Act, 1939 and under the 1988 Act and had to say the following:

Although, definition of 'owner' Under Section 2(19) of the Motor Vehicles Act, 1939 is not clear, however, position is clear on facts-possession and control of the vehicle being essential to determine liability. What was left in definition of 'owner' under Section 2(19) of the M.V. Act, 1939 has been made good in the new definition of 'owner' Under Section 2(30) of the M.V. Act, 1988. As per Section 2(3) of the M.V. Act, 1988, 'owner' means a person in whose name a motor vehicle stands registered and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.

26. The Apex Court in the case of Rajasthan State Road Transport Corporation v. Kailash Nath Kothari (Supra) dealt with the expression owner and made the following observations:

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. 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 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 RSRTC, 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 RSRTC on receiving fare from them. Owner was, therefore, not concerned with the passengers travelling in that bus on the particular route on payment of fare to RSRTC. 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 RSRTC for operation of the bus.

27. It is therefore clear from the above interpretation of the term 'owner' given by the Apex Court that if in a given situation the statutory definition contained in 1988 Act cannot be given effect to, the same should be understood from the common sense point of view having regard to the facts of each case.

28. Learned author Sarkar in his commentary on M.V. Act 1988 (3rd Edition 2007) dealing with the definition of 'owner' has observed thus at page. 21.

The case would be different if the vehicle is entrusted to an independent person under some agreement and it is in complete control of that independent person. In that case even if the registration is in the name of some one else, he cannot be made liable for any compensation. Reading all these provisions together, it is clear that the person in whose name the vehicle is registered by the registering authority shall be deemed to be the owner of the vehicle. There is nothing to show in this case that the vehicle was transferred by the appellant to any other person or that there was any agreement between the appellant and anyone else to ply the vehicle independently. That being so, it has to be held that the appellant was the owner of the vehicle at the relevant time and it cannot be urged that he was not the owner merely because the Insurance Company had insured the vehicle in somebody else's name.

Definition of 'owner' under Section 2(19) of the M.V. Act, 1939 is not clear, however, position is clear on facts-possession and control of the vehicle being essential to determine liability. What was left in definition of 'owner' under Section 2(19) of the M.V. Act, 1939 has been made good in the new definition of 'owner' under Section 2(30) of the M.V. Act, 1988. As per Section 2(30) of the M.V. Act, 1988 'owner' means a person in whose name a motor vehicle stands registered and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.

Thus, under the M.V. Act, the definition of owner is different than that of the 'owner' which is considered in the ordinary course of nature. A person who is in possession and who is getting the benefits of the vehicle is for the purposes of Motor Vehicles Act, the owner of the vehicle. The registered owner and the 'owner' cannot be equated for the purposes of the Motor Vehicles Act.

29. Two other cases dealing with the expression 'owner' which have been referred to by the learned author Sri S.P. Shankar in his book 'Claim Cases Made Easy' (I Edition 2003) also needs to be mentioned in this regard and at pages. 175 and 176 of the said book the learned author has quoted the interpretation given to the expression 'owner' thus:

High Court of Rajasthan in Automobile Transport (Rajasthan) Pvt. Ltd. and Anr. v. Dewalal and Ors. 1977 ACJ 150 held as under:

13. ...We are in respectful agreement with the views of the later decision of the Delhi High Court that the endorsement of the transfer in the records of the Registering Authority is not a condition precedent to transfer nor does it deal with the legality or validity of the transfer which must be determined by other provisions of the law. Moreover, even in Padmadevi's case, the learned Judge held both the transferor and the transferee are liable for the claim of damages caused by the accident. That view is in accordance with the Single Bench decision in Northern India General Insurance Co. Limited v. Kanwarj it Singh 1973 ACJ 119 wherein it was observed that the real owner would be liable for the tort committed by his driver because the vehicle was used for his purposes, whereas, registered owner would be liable because he gave himself out to be the owner of the vehicle by getting it registered in his name. Thus, a person though registered as owner may or may not be a real owner and for the purpose of awarding compensation it is the real owner who should be found out by the court on the facts of each case.

Murari Lal v. Gomati Devi and Ors. 1986 ACJ 316, the High Court of Rajasthan has held as under:

10. In common parlance, the word 'owner' has a different meaning and is understood in a different way. However, for the purpose of this Act, the said definition which is restricted and technical, will prevail over definition or meaning which is understood in common parlance. The person who is in possession of the vehicle and who is in charge of the vehicle and who is dealing with the vehicle for his benefit is the owner of it, as defined under Section 2(19) of the M.V. Act. This Court in the case of Automobile Transport (Rajasthan) Pvt. Ltd. v Dewalal 1977 ACJ 150 (Rajasthan), has held as under:

Thus, a person though registered as owner may or may not be the real owner and for the purpose of awarding compensation it is the real owner who should be found out by the court on the facts of each case.

30. Reading together the law laid down by the Apex Court in the aforementioned cases and other High Courts and the view expressed by the learned authors referred to by me above, it is clear that though a person may be a registered owner, yet for the purpose of awarding compensation, the courts will have to find out from the facts of each case as to who the real owner is. Applying the above principles to the case on hand and also in view of the conclusion reached that the vehicle in question was under the exclusive control of the KSRTC, in the light of the terms and conditions of the agreement entered into by it, in the cases on hand, it is the KSRTC which has to be held as the owner of the bus in question for the purpose of M.V. Act in the light of the definition as contained Under Section 2(30) of the Act and the interpretation given to it by the Apex Court.

31. Learned Counsel Sri Vijayakumar for the KSRTC while admitting that the bus in question was under control of the KSRTC, yet he strongly contended that in view of the agreement entered into between the registered owner and the KSRTC and in view of one of the conditions in the agreement also making it clear that in the event of any accident or injury being caused to any person, it is the registered owner who will have to shoulder the liability and this is clear from condition No. 20 of the agreement and therefore even if it is taken that the KSRTC is the owner at the relevant point of time, yet in view of the terms and conditions of the agreement, it is the registered owner who will have to be held liable and therefore the liability cannot be passed on to the KSRTC.

32. This contention put forward therefore raises the question as to whether the registered owner of the bus can be held liable. Before I consider the impact of the condition contained in the agreement, it is necessary to turn to the position in law having regard to the provisions of the M.V. Act 1988.

Section 147 of the Act reads thus:

147. Requirements of policies and limits of liability:

(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which:

(a) is issued by a person who is an authorised insurer; and

(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;

provided that a policy shall not be required:

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person injured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee-

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or

(c) if it is a goods carriage, being carried in the vehicle, or

ii) to cover any contractual liability.

Explanation - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.

(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, upto the following limits, namely:

(a) save as provided in Clause (b) the amount of liability incurred;

(b) in respect of damage to any property of a third party, a limit of rupees six thousand;

Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act; shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.

(4) Where a cover-note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover-note, notify the fact to the registering authority in whose records the vehicle to which the cover-note relates has been registered or to such other authority as the State Government may prescribe.

(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this Section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or these classes of persons.

33. A plain reading of the above provisions of Section 147 makes it clear that the policy of insurance will have to insure the person (the owner) against any liability which may be incurred by him (owner). Therefore, unless there is a liability fixed on the owner, the question of the insurance company indemnifying the owner will not arise. In other words, the Act presupposes that before calling upon the insurance company to satisfy the judgment and awards, it is a precondition that there must be actual liability being cast on the insured and unless such a liability exists, the question of the insurance company being saddled with the responsibility to satisfy the judgment and award, does not arise.

34. It is further made clear by the provision contained in Section 149(1) of the Act which reads as under:

149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks - (1) If, after a certificate of insurance has been issued under Sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy (or under the provisions of Section 163-A) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this Section, pay to the person entitled to the benefit of the decree any such sum not exceeding the sum assured payable thereunder, as if he were the. judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgements.

35. Therefore, it is amply clear from the wordings used in Sub-section (1) of Section 149 that it is only where a judgment or award is obtained against the person insured by the policy, only then that the insurer is required to satisfy the judgment and award and not otherwise.

36. In the two cases on hand, the bus in question was under the control of the KSRTC and it was the KSRTC which was the owner of the bus at the relevant point of time and the bus was run by the driver under the instructions and directions given by the KSRTC and as such, the question of the registered owner of the bus having anything to do with the manner of driving the bus or the road in which the bus was to be driven or had any control whatsoever over the driver concerned, therefore does not arise. Once no liability is there on the registered owner of the vehicle, calling upon the insurer to satisfy the award also cannot be construed as a possibility in law having regard to the above provisions of M.V. Act 1988. This view of mine is also supported by the decisions of the Apex Court as well as other High Courts to which we will have to turn our attention at this juncture.

37. In Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and Ors. referred to earlier, the Apex Court dealt with a case, the facts of which were almost identical to the facts of the present cases before us and after considering the facts which revealed that the vehicle was in possession and under control of the Corporation for the purpose of running on the specified route and was being used for carrying passengers on hire by the Corporation and further the driver was to carryout instructions, orders and directions of the Corporation, the Apex Court held that the privity of contract of the passengers of the bus was only with the Corporation to whom they had paid the fare and in the light of the said facts, the Apex Court went on to observe thus:

The general proposition of law and the presumption arising therefrom that an employer, that is the person who has the right to hire and fire the employee, is generally responsible vicariously for the tort committed by the concerned employee during the course of his employment and within the scope of his authority, is a rebuttable presumption. If the original employer is able to establish that when the servant was lent, the effective control over him was also transferred to the hirer, the original owner can avoid his liability and the temporary employer or the hirer, as the case may be, must be held vicariously liable for the tort committed by the concerned employee in the course of his employment while under the command and control of the hirer notwithstanding the fact that the driver would continue to be on the payroll of the original owner.

38. Apart from making the above observation, the Apex Court also found that the Condition No. 15 in the said case also made 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.

39. In the cases before us, a similar condition is found in the agreement.

40. In the agreement that is produced in MFA No. 11440/2007, condition No. 16(a) and 16(b) reads as under:

16(a) The owner of the bus alone shall be solely liable for any claim arising out of any accident, damage or loss or hurt caused during the operation of the bus. The KSRTC shall not be liable for any claims arising out of the use of the buses, including claims made in connection with the injuries or loss of life sustained by passengers, bus crew or any other road user or to any property/person. Besides, all tortuous liability if any, shall be borne by the owner or the insurer of the vehicle themselves. However the accidents should be reported to the KSRTC Office/Deport.

16(b) KSRTC may make payment of ex-gratia amount to the victims in the event of accident of such private hired buses while on KSRTC operations as per the KSRTC's prevailing norms which shall be recovered from any amounts due to the owner of such private buses or from Security Deposit etc., Further, the owner of such private bus should make prompt payment of 'no fault liability' or any other claim under the law for such accident victims. In case KSRTC is compelled to make such payment on behalf of the owner of private buses, it shall be recovered from any amount due to the owner by KSRTC or receivable to him from Insurance Company or other debtors' etc. In case of non-payment to non-recovery of such amount by KSRTC within 15 days interest at 15% per annum shall also be recoverable. For days beyond 30 days KSRTC may detain and use the bus till payment of the amount or adjustment thereof towards hire charges payable.

41. In the agreement that is produced in MFA No. 8042/2006, condition No. 49 reads thus:

49. If because of any default by the bus owner or by his/her drivers any consideration of any law, any liability comes on NWKRTC, the NWKRTC has the right to recover the amount either from the bills payable or the security deposit and to take further steps to recover the balance from the private owner by any lawful means.

42. Therefore, on the lines of the view taken by the Apex Court in RSRTC's case referred to above, in the two cases under consideration also, the KSRTC cannot avoid the liability to pay compensation both on facts and in law.

43. In the case of National Insurance Co. Limited v. Deepa Devi and Ors. the Apex Court was seized with a case where the facts revealed that a private car (Maruthi Gypsy) was requisitioned by the State for the purpose of deploying the same for election duty and the car was requisitioned by the Sub-Divisional Magistrate, Rampur through the Deputy Commissioner, Shimla and the vehicle was in possession of the said officer and on 17.11.1993 the said vehicle met with an accident. When the question arose as to who is liable to pay the compensation, the Apex Court after considering the law laid down in RSRTC's case, ultimately held that the State shall be liable to pay the compensation to the claims and not the registered owners of the vehicle.

44. In Morbi Taluka Panchayat v. Vikram Singh Gambhir Singh case referred to earlier, the facts revealed that the offending vehicle was given on hire and the offending vehicle was in control and was being used by the hirer for supply of water in water scarcity areas and the said vehicle, on account of being driven at excessive speed rashly and negligently, turned turtle and the claimant was injured. When the question arose as to who has to pay the compensation, a Division Bench of Gujarat High Court held that when a private carrier is allowed by the owner of a vehicle to be used by another for hire, liability of the insurance company ceases.

45. In the case of New India Assurance Co. Ltd. v. B.G. Suma and Ors. : 2004 (2) ACJ 883 the facts were, the APSRTC took the bus on hire from its owner, for being plied on route and the bus met with an accident resulting in death of a person. The question arose as to whether the APSRTC can be said to be the owner within the meaning of Section 2(30) of the Act and whether it can be held liable despite there being an insurance policy being taken by the registered owner. A Division Bench of the Court relying on the decision of the Apex Court in RSRTC's case held that the APSRTC will be liable and the registered owner and the insurance company of the bus are exempted from liability.

46. Therefore following the view taken by the Apex court in the two cases mentioned above, as well as by the Division Bench of the High Court of Andhra Pradesh in the case of New India Assurance Co. Ltd. v. B.G. Suma and Ors. in the case on hand also, notwithstanding the fact that the registered owner had insured his vehicle with the National India Assurance Co. Ltd., and policy being in force at the relevant time, yet, in view of the facts and circumstances of the case, and having regard to the law on the point as has been laid down by the Apex Court, the question of the Insurance company being made liable will not arise.

47. One other aspect which has to be considered is the contention put forward by the learned Counsel Sri Vijay Kumar, that the agreement between the registered owner and the KSRTC, has shifted the burden on the registered owner to shoulder out the liability and therefore the Insurance Company cannot say that it will not pay the compensation. Particular reference was made by the learned Counsel to the relevant terms and conditions of the two agreements. As far as this contention is concerned, learned Counsel appearing for the Insurance Company Sri A.K. Bhat, Sri A.N. Krishna Swamy, Sri B.C. Seetharama Rao and Sri Gangadhar Sangolli, put forward their submission that in view of the provisions of law contained in Section 147 of the Act, the policy shall not be required to cover any contractual liability. In other words, the contention of the learned Counsel for the Insurance Company is that when the Act itself does not require the Insurance company to cover the risk arising out of contractual liability and moreover when the said agreement is only between the KSRTC and the registered owner and the Insurance company is not a party to the said agreement, the question of the policy covering the liability arising out of the contract between the registered owner and the KSRTC therefore does not arise.

48. The said submission of the learned Counsel for the Insurance Company has to be considered as having sufficient force in it, because the proviso to Section 147 makes it clear that the policy shall not be required to cover any contractual liability. Even for this reason also, merely because of the agreement being in existence between the registered owner and the KSRTC, that itself will not be sufficient to burden the Insurance Company with the liability when the registered owner of the vehicle himself is not liable. Therefore, the argument of the learned Counsel Sri Vijay Kumar that as the bus in question was put to use and that the policy insured was in respect of the bus in question, therefore the Insurance Company should be made liable, cannot be accepted, because there can be no vicarious liability on the registered owner in the light of the facts and circumstances before us. When the registered owner himself is not made vicariously liable, the question of the Insurance Company coming forward and indemnifying the registered owner will not arise. A careful perusal of the provisions of the 1988 Act, will make it clear that it is only where the insured is made vicariously liable for the acts of his driver that the question of Insurance company indemnifying the insured will arise but not otherwise.

49. As far as the decisions cited by the learned Counsel Sri Vijay Kumar for KSRTC are concerned, most of the decisions referred to by him are concerned with the cases of transfer of vehicle from the registered owner. Other cases referred were not the cases where the vehicle in question was hired from the registered owner and hirer being in full control of the vehicle. Therefore, all those decisions will not be applicable to the cases before us. However, some decisions referred by him will have to be dealt with. The first one is the case of APSRTC v. Kenche Nagabhushanam : 2007 (6) ALT 627 and a learned Single Judge of the Andhra Pradesh High Court has taken the view that where the bus in question was hired by the Corporation, the ownership continues with the owner and so long as there is policy in force covering certain risks and notwithstanding the possession of the vehicle, the liability of the insurer does not cease to the extent of its liability against the third parties. This decision referred to and strongly relied upon by the learned Counsel Sri Vijay Kumar for the KSRTC does not in my view laid down the correct proposition of law as the Apex Court in RSRTC's case as well as in the latest decision in the case of National Insurance Co. Ltd. v. Deepa Devi has clearly laid down the law that it is the hirer who is liable to pay the compensation and therefore in view of the law laid down by the Apex Court in the two cases concerned, the decision of the learned Single Judge of the Hon'ble High Court therefore cannot be of much help to the KSRTC.

50. Moreover, the said view of the learned Single Judge is quite contrary to the law laid down by the Division Bench of the very same High Court in the case of New India Assurance Co. Ltd. v. B.G. Suma and Ors.

51. The other decision referred to by the learned Counsel Sri Vijay Kumar is the one reported in : 2004 (4) ALT 304 and in the said case of K. Mathura Bai and Ors. v. A. Shiva Nageswar Rao and Ors. the Division Bench of the High Court of Andhra Pradesh has held that the owner of the bus had given the same on hire to the APSRTC along with the driver under the contract and the Corporation having physical control and possession of the vehicle and running the same in the route earmarked to it, the Corporation must be held to be the owner of the vehicle and therefore the Court ruled that the Corporation is vicariously liable to pay compensation in the event of accident caused by the driver. This view taken by the Division Bench therefore is in consonance with the view taken by the Apex Court in RSRTC's case and other cases referred to by me in this regard. But having so held, the Division Bench there after wards went on to take the view that the vehicle being already insured by the owner, it need not again be insured by the Corporation and as the policy runs with the vehicle, liability of the insurer will not cease. This later view taken by the Court is once again against the law laid down by the Apex Court in RSRTC's case as well as the case of National Insurance Co. Ltd. v. Deepa Devi and Ors. as such this decision also cannot in any way help the case of KSRTC.

52. One more decision referred to by the learned Counsel Sri Vijay Kumar is in the case of United India Insurance Co. Ltd. v. S.R. Prasanna and Ors. : ILR 2008 Kar 1323. The facts and circumstances of the said case are entirely different from the one with which we are concerned, because the Court found in the said case that no oral evidence was let in by the Insurance Company nor any documents placed on record not even the policy of insurance and more over, the contentions were raised for the first time before the Court and there was also absence of relevant material placed in regard to the facts in issue and it is under these circumstances, the Court took the view that the Insurance Company is liable. This decision therefore is inapplicable and more over the said decision did not involve consideration of the agreement between the registered owner and the hirer and secondly, the said decision also did not take note of the law laid down by the Apex Court in RSRTC's case in particular. Even the other decision referred to by the learned Counsel Sri Vrjay Kumar namely the one reported in : ILR 2008 Kar 4832 is also not applicable to the case before us because in the said case, there is no consideration of any agreement between the hirer and the registered owner and the law laid down by the Apex Court in RSRTC's case was also not considered.

53. Having thus analysed the position in law as regards the liability vis-a-vis the hirer and the registered owner, the inevitable conclusion, based on the Apex Court ruling in the cases mentioned by me earlier and other cases and having regard to the provisions contained in the Act and taking into account the facts and circumstances of the case before us, is that the KSRTC is liable to pay the compensation and not the Insurance Company.

54. Coming to the quantum of compensation, learned Counsel Sri Vijay Kumar did not raise any grievance insofar as the compensation awarded in the case which has given raise to M.F.A. No. 8442/06 and the tribunal has awarded Rs. 27,000/- as compensation. Therefore no interference is called for as regards the quantum of compensation is concerned in this case.

55. However, as regards M.F.A. No. 11440/07 which has arisen out of M.V.C. No. 1253/05, is concerned, the tribunal has awarded Rs. 4,09,000/- as compensation to the claimants who are all the major sons of the deceased. Particularly under the head loss of dependency Rs. 3,96,000/- has been awarded. The contention put forward is that having regard to the fact that the claimants were all majors, the tribunal at the most could have awarded compensation only under the head loss of estate. In this regard, the reference was made to the decision of this Court in the case of A. Manavalagan v. A. Krishnamurthy and Ors. : ILR 2004 Kar 3268. In the said case, a Division Bench of this Court has held that in respect of the claimants who are not dependant, viz., employed wife, the question of loss of dependency may not arise and in such an event, the savings could be taken at 1/4 i.e., 25%. Applying the above principle to the instant case, under the head loss of estate, the tribunal at best could have awarded Rs. 1,48,500/-. The other amounts awarded can be maintained and thus the total compensation will come to Rs. 1,61,500/- and to the said extent, the award of the tribunal as far as the quantum of compensation is concerned needs to be modified.

For the foregoing reasons, the following order is passed:

The appeal M.F.A. No. 11440/07 filed by the Insurance Company is allowed and the judgment of the tribunal fastening the liability on the Insurance Company is set aside and the compensation now will have to be paid by the KSRTC alone. The quantum of compensation awarded is modified and the claimants will be entitled to Rs. 1,61,500/-.

M.F.A. No. 8042/06 filed by the KSRTC (NWKRTC) is dismissed.

The amount deposited by the New India Assurance Co. Ltd., be returned to it. In the event, the amount has already been disbursed to the claimants, then the National India Assurance Co. Ltd., is entitled to recover the same from the KSRTC.

As far as the NWKRTC and KSRTC are concerned, as they have been made liable to pay the compensation, the NWKRTC or KSRTC as the case may be, is at liberty to take necessary action as is available to it in law in the light of the bilateral agreement entered into between it and the registered owner.

This Court also places on record its appreciation for the able assistance rendered by the learned Counsel Sri A.N. Krishnaswamy, Sri B.C. Seetharama Rao, Sri O. Maheshand and Sri Gangadhar Sangolli.