Case Note & Summary
The appeal arises from a motor accident that occurred on 27 April 1985 near village Apegaon. Truck No. MWN 581, driven by Rajendra Deshmukh, was carrying labourers and their family members when it fell on a curve, resulting in six deaths and several injuries. Claim petitions were filed before the Motor Accident Claims Tribunal, Ahmednagar (MACP Nos. 8/1986 to 13/1986 and 180/1987) against the driver, the owner (appellant), Ranwad Parisar Vikas Pratisthan, Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd., and the United India Insurance Company Ltd. The claimants alleged that the truck was entrusted by the owner to the trust and the sugar factory for carrying labourers, and the vehicle was insured, making all opponents liable. The owner admitted ownership and insurance, but contended that he had entrusted the vehicle to the trust and factory and thus they were responsible. The trust and factory denied liability, stating that the labourers were supplied through a contractor, Sardar Dilawar Khan Pathan, and no fare was collected; therefore, there was no employer-employee relationship. The insurance company denied liability on the ground that the policy covered a goods vehicle and carrying passengers was a breach entailing no cover. It also contended that the owner had suppressed the fact that government permission to carry passengers had been obtained before the policy was issued. The Tribunal, by common judgment dated 31 May 1994, held the driver and owner jointly and severally liable and discharged the insurance company, trust, and sugar factory. The owner appealed to the High Court. The High Court, while hearing the appeals, noted that the provisions of the Motor Vehicles Act would apply to determine the insurer's liability, but the judgment text is incomplete, and the final decision is not mentioned.
Headnote
A) Motor Vehicles Act - Insurance Liability - Breach of Policy - Motor Vehicles Act, 1939 - The insurance company contended that the goods vehicle was carrying passengers in violation of policy terms, hence it was not liable. Tribunal accepted this and discharged the insurer. High Court considered applicability of MV Act provisions regarding insurer's obligations. (Paras 1-8) Held, Not mentioned.
B) Law of Torts - Vicarious Liability - Delegation of Duty - Motor Vehicles Act, 1939 - The owner argued that he had entrusted the vehicle to the trust and sugar factory, who should be liable; the trust and factory denied liability citing absence of employment relationship with the deceased/injured. High Court examined whether the owner could shift liability and whether the trust/factory could be held responsible. (Paras 1-8) Held, Not mentioned.
C) Motor Accident Claims - Liability of Insurer - Knowledge of Permission to Carry Passengers - Insurance company alleged that the owner suppressed the fact that government permission to carry passengers had been granted prior to the policy, constituting non-disclosure. High Court examined whether this affected the insurer's liability. (Paras 1-8) Held, Not mentioned.
Issue of Consideration
Whether the insurance company and other respondents (trust and sugar factory) are jointly and severally liable to pay compensation to the claimants, or whether the owner and driver alone are liable; Whether the tribunal rightly discharged the insurance company on the ground of breach of policy as the goods vehicle was used for carrying passengers.
Law Points
- motor accident claims
- liability of insurance company
- breach of policy conditions
- carriage of passengers in goods vehicle
- vicarious liability
- contract of employment
- necessity of privity
- owner's liability
Case Details
2010 LawText (BOM) (06) 3
First Appeal Nos. 254, 255, 256, 257, 258, 259 of 1996
C.S. Gaikwad, C.E. Gaikwad, N.K. Kakade, Shri Kadam
Najma Nurkha Shaikh, Latif Nurkha Shaikh, Samsuddin Mohiddin Shaikh, Aminbi Shamsuddin Shaikh, Salma Shamshuddin Shaikh, Rajendra s/o Nilkanth Deshmukh, Deepak Shahadu Sonawane, Ranwad Parisar Vikas Pratisthan, Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd., The United India Insurance Co. Ltd., and others
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Nature of Litigation
First appeals filed by the owner of a truck against the common judgment of the Motor Accident Claims Tribunal, Ahmednagar, which held the owner and driver liable for compensation while discharging the insurance company, trust, and sugar factory.
Remedy Sought
The appellant-owner sought to set aside the Tribunal's award insofar as it exonerated the insurance company, Ranwad Parisar Vikas Pratisthan, and Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd., and to hold them jointly and severally liable to pay compensation.
Filing Reason
The Tribunal discharged the other respondents from liability, holding only the owner and driver responsible. The owner challenged this finding on the ground that the vehicle was insured and had been entrusted to the trust and factory, who should bear the liability.
Previous Decisions
The Motor Accident Claims Tribunal, Ahmednagar, vide common judgment dated 31 May 1994, in MACP Nos. 8/1986 to 13/1986 and 180/1987, held the driver and the appellant-owner liable to pay compensation to the claimants, while dismissing the claim against the insurance company, trust, and sugar factory.
Issues
Whether the insurance company can avoid liability on the ground that the goods vehicle was used for carrying passengers in breach of the insurance policy conditions.
Whether the trust (Ranwad Parisar Vikas Pratisthan) and the sugar factory (Kakasaheb Wagh Sahakari Sakhar Karkhana Ltd.) are liable to pay compensation to the claimants.
Whether the owner can delegate his liability to the trust and sugar factory by entrusting the vehicle to them.
Whether the absence of a direct employment relationship between the trust/factory and the deceased/injured absolves the trust and factory from liability.
Submissions/Arguments
Appellant (owner) argued that he had entrusted the vehicle to Ranwad Parisar Vikas Pratisthan and the sugar factory, and therefore they were liable to pay compensation, and that the insurance company was liable as the vehicle was duly insured.
Respondents trust and sugar factory contended that the passengers were not in their employment, but were hired through a contractor (Sardar Dilawar Khan Pathan), and no fare or reward was collected, hence no liability could be fastened on them.
Insurance company argued that the policy covered a goods vehicle and carrying passengers violated the terms, and that the owner had suppressed the fact that government permission to carry passengers was obtained prior to issuing the policy, thus it was not liable.
Judgment Excerpts
On 27-4-1985 at about 4 a.m. near village Apegaon some labourers and members of their families were being carried in truck no. MWN 581 driven by Rajendra Deshmukh. On a curve, the truck driver could not control the truck and it fell on the side. As a result, six persons died and several others were injured.
Procedural History
Claim petitions MACP Nos. 8/1986 to 13/1986 and 180/1987 were filed before the Motor Accident Claims Tribunal, Ahmednagar, by the legal representatives of the deceased and injured, seeking compensation. The Tribunal, by common judgment dated 31-05-1994, held the driver and the owner (appellant) liable and dismissed the claims against the insurance company, trust, and sugar factory. The owner filed First Appeals Nos. 254 to 259 of 1996 before the High Court of Judicature at Bombay, Bench at Aurangabad.
Acts & Sections
- Motor Vehicles Act, 1939:
