il Appeal No 1249 of 1976
Appeal by Special Leave from the Judgment and Order dated the 23 3 1976 of the Bombay High Court in C No 44975 from Original Decree
FS Nariman I M Patel and BR Agarwala for the Appel lants
RD Hattangadi George Kurien and Mrs Urmila Sirur for
No 1
K Singhvi and VN Ganpule for the applicantInter vener
The Judgment of Court was delivered by This appeal is by special leave under Article 136 of the Constitution by the two appellants against the judgment of the 888 Bombay High Court dismissing their appeal against the judg ment of the Additional Motor Accidents Claims Tribunal for Greater Bombay and confirming the award passed by the tribu nal in favour of the respondents and directing the Tribunal to decide the question of the liability of the Insurance Company on its application that its liability is limited to Rs 20000 under section 110E of the referred to as the Act after giving opportunity to the parties
The applicant in Application No 727 of 1969 before the Motor Accidents Claims Tribunal for Greater Bombay is one Dr Balkrishna Ramchandra Nayan practising in Bombay and is the respondent in this appeal
On 14th April 1969 at about 100 pm the respondent was driving his car No MRC 4450 towards Fort side on Dr Annie Besant Road
With him was sitting on the left side in the front seat Malati M Deshmukh his nurse
The road has stone dividers in the middle of the road
When the car approached Lotus cinema the truck owned by the appellants and insured with the Insurance Company who were opposite parties 1 to 3 before the Motor Accidents Claims Tribunal came from the opposite direction at a high speed and dashed against the right side of the car
Due to the impact the car was damaged and the 1st respondent and Malati M Deshmukh were injucted
Re spondent 1 had to undergo treatment
He was operated on the day of the accident itself and was patient in his own Nursing Home for a month till 15th May 1969
According to him his right arm was operated and kept in plaster and that he had become permanently disabled in discharging his duties as a surgeon and that he had incurred a loss during the closure of the Nursing Home rind loss of income due to permanent injury along with other claims
He claimed a sum of Rs 3 lakhs by way of general and special damages with interest thereon from the date of his application
The owners of the vehicle fried a written statement refuting the claim of the applicant
According to them while the motor lorry was proceeding from Haji Ali towards Worli they had taken all precautions to keep the lorry in road worthy condition and that at the material time the axle brake ring of the motor lorry came out and the driver therefore lost control of the vehicle and because of this defect which can develop in a running car the driver lost control of the  steering wheel
According to them the lorry prior to the accident was being driven at a moderate speed with due care and caution
They contended that the accident did not occur on account of rash and negligent driving on the part of the driver
They also denied the claim of various items of compensation made by the applicant
The Motor Accidents Claims Tribunal framed four issues
The first 2 issues were whether the applicant had proved that the driver of the lorry was driving the vehicle in rash and negligent manner and whether the opposite party had proved that at the time of the accident the axle brake ring of the motor lorry came out and the driver lost control of the motor lorry
The other 2 issues related to the ques tion as to whether the applicant received the injuries as a result of this accident and whether he was entitled to the compensation claimed by him
889 The applicant examined himself and Malati M Deshmukh who was travelling with him at the time of the accident regarding the incident
He also examined P Ws 2 and 3 PW 2 a nurse to prove his income from his profession and PW 3 a doctor who treated him
On behalf of the appellant 6 witnesses were examined in support of their case that the accident was due to a mechanical failure and not due to any rashness or negligence on the part of the driver
The Tribunal after elaborately discussing the oral and documentary evidence adduced before it found that the acci dent was due to the rash and negligent driving of the driver of the lorry and the defence set up that the accident was due to mechanical failure of the lorry was unacceptable
The Claims Tribunal accepting the evidence of the appli cant and a Customs Officer Mr Jawakar who was examined as DW4 on the side of the appellants came to the conclusion that when the doctor was in the traffic lane nearer to the road divider the lorry crossed the road divider and hit the car
The defence witness himself stated that the lorry came after crossing the central barricade
The lorry went off the track and went on the wrong side and collided with the oncoming car of the applicant who was in his car
Refer ring to his notes the witness stated that the right side of the lorry went and hit the right side of the car of the applicant
The portion of the lorry upto the driver s seat collided with the right side of the car
Both the wheels of the front side of the lorry had crossed the central reservation tract and so also the right rear wheel was on the wrong side and only the left rear wheel was just near the edge of the central reservation tract towards Lotus cinema
On the face of the evi dence of the doctor and their own witness DW4 who was travelling in the lorry there could be no denying the fact that the lorry crossed the middle of the road
Relying on the evidence of the two witnesses as well as the doctrine of res ispa 1oquitur the Claims Tribunal right ly found that the applicant had established rash and negli gent driving on the part of the driver and the lorry
The Accidents Claims Tribunal has also discussed elaborately the defence set up on behalf of the owners of the lorry and rejected it
The plea that was taken in the pleadings was that at the time of the accident Axle Brake Ring of the lorry came out
The expert examined on behalf of the owner Jimmy Dara Engineer DW 6 stated that he had never heard of any such part as axle brake ring and he has never seen such a part
The owners subsequently explained that what they meant by Axle Brake Ring was drag link on the rod end
The Claims Tribunal also referred to the evidence of the expert examined on behalf of the owners and remarked that the nut on the pin could not be blown off all of a sudden and that the driver unless he was negligent could feel the change if there was anything wrong with the drag link end and can stop the vehicle immediately
Rejecting the evidence of the driver and relying on the evidence of the expert on the side of the defence that even if there was any defect the vehicle could be stopped within 4 or 5 feet and need not cover the distance which it did the Claim Tribunal also found that the defect which the defence wit ness Motor Vehicle Inspector Partapsingh Chavan DWI saw when he examined the 890 lorry on 22nd April 1969 could not be accepted as the owners of the lorry could have played mischief and created evidence before inspection on 22nd April 1969
Criticising the conduct of the owners as unworthy of their status the Claims Tribunal totally rejected the defence
Regarding the compensation the Claims Tribunal fixed the amount at Rs143400 together with interest at 6 per cent
This sum was apart from a sum of Rs500 which was found payable to Malati M Deshmukh who had sustained injuries
The Claims Tribunal directed the owners as well as the insurers jointly to pay the amount to the respondent Dr Balkrishna Ramachandra Nayan
It also directed the oppo site parties and insurers to pay Rs 1000 as costs and Rs100 as costs of Malati M Deshmukh
The Claims Tribunal fixed a sum of Rs 73779 as the loss sustained by the doctor for a period of 4 years from the date of the accident
It also for a subsequent period of 7 years fixed the future loss at Rs 9000 a year and a total amount of Rs 63000
In addition it awarded a sum of Rs 5000 for discomfort and inconvenience suffered by the doctor
Thus the total compensation that was granted amount ed to Rs 143400
As already stated the interest was awarded from the filing of the application till payment
The insurance company as well as the owners of the lorry preferred appeal against the award of the Tribunal in Appeal No 449 of 1975 before the High Court of Bombay
Though the appeal was filed on behalf of the insurance company and the owners of the lorry during the hearing of the appeal it was contended on behalf of the insurance company that in any event the liability of the insurance company under the policy could not exceed Rs20000
The High Court on the question of whether there was negligence on the part of the driver of the lorry or not found itself in complete agreement with the Claims Tribunal and observed that it was for the lorry driver and owners to establish as to how the lorry crossed the road dividers went on the wrong side and mounted on the Fiat Car coming from the opposite direction
Agreeing with the Tribunal it found that the driver was negligent
The High Court concurred with the reasons
and findings of the Tribunal
It also held in the Circumstances of the case that the principle res ipsa loquitur applied
The High Court also rejected the defence taken by the owners that the injury was due to a mechanical defect and not due to the negligence
After referring to the evidence and the reasoning of the Tribunal
on the defence set up by the owners the High Court came to the conclusion that the plea about the breaking of the tie rod was not proved satisfactorily by the owners
The High Court regarding the defence raised found itself in complete agreement with the conclusion arrived at by the Tribunal observing that the Tribunal rightly disbelieved the defence plea and came to the conclusion after careful consideration of the evidence of the driver Customs Officer and other evidence in the case that it was the driver who was negli gent
891 Regarding the quantum of damages the High Court ex pressed its opinion that the Tribunal had made best efforts and tried to determine the compensation in a just manner on the facts and circumstances of the case
It confirmed the amount as awarded by the Tribunal and dismissed the appeal
The High Court dismissed the appeal of the owners and the insurance company and confirmed the award passed by the Tribunal
But it gave liberty to the insurance company to apply to the Claims Tribunal on depositing Rs 20000 with interest from the date of the application to the date of the deposit for determination of the question that the liability of the insurance company is limited only to Rs 20000
The High Court directed the Tribunal to decide the question of the liability of the insurance company on its application under section
110E by giving opportunity to the parties to put forward their cases
Insurance company was directed to pay the costs of all the parties
It also provided that the claimant was at liberty to withdraw Rs 20000 with interest when deposited by the insurance company
The order also made it clear that the right of the applicant to recover the balance of the awarded amount from the other party or from the insurance company will not in any way be affected
The appeal to this court is preferred by the owners
The insurance company is impleaded as the second respondent in the appeal before us
Mr Nariman the learned counsel appearing for the owners submitted that the High Court did not hear arguments on the question whether the accident took place due to rash and negligent driving of the lorry and therefore the ques tion will have to be gone into by this Court or remanded for fresh disposal
We find that the High Court has given a clear finding in paragraph 30 of its judgment that the Tribunal rightly disbelieved the plea and held that it was the
driver who was negligent and that they fully concur with the reasons and findings of the learned Member of the Tribunal
In the face of the clear finding we are unable to accept the plea of the learned counsel that this question was not gone into by the High Court
We find ourselves in complete agreement with the finding of the Tribunal and the High Court that it was due to rash and negligent driving of the lorry that the car in which the applicant and Malati M Deshmukh were travelling was hit causing injuries to both of them
We accept the testimony of the doctor and DW 4 Jawakar that the lorry crossed the road dividers ran into the wrong side and hit the car which was driven by the applicant
We have no hesitation in accepting the concur rent findings of the High Court and the Claims Tribunal that the accident was due to the rash and negligent driving of the lorry driver
We have also no hesitation in reject ing the testimony of the defence that there was some mechan ical defect which resulted in the tie rod end breaking
We find ourselves in agreement with the reasoning of the Claims Tribunal that the evidence on the side of the owners is contradictory and the testimony of the expert destroys the plea of any mechanical defect set up by them
In this con nection we may also point out that in order to succeed in a 9 206SCI77 892 defence that the accident was due to a mechanical defect the owners will have to prove that they had taken all necessary precautions and kept the lorry in a roadworthy condition
No such attempt was made to establish that all necessary precautions were taken to keep the lorry in a roadworthy condition and that the defect occurred in spite of the reasonable care and caution taken by the owners
In order to sustain a plea that the accident was due to the mechanical defect the owners must raise a plea that the defect was latent and not discoverable by the use of reason able care
The owner is not liable if the accident is due to a latent defect which is not discoverable by reasonable care
The law on this subject has been laid down in Hen derson vs Henry E Jenkins  Sons1
In that case the lorry driver applied the brakes of the lorry on a steep hill but they failed to operate
As a result the lorry struck and killed a man who was emerging from a parked vehicle
The defence was that brake failure was due to a latent defect not discoverable by reasonable care on driver s part
It was found that the lorry was five years old and had done at least 150000 miles
The brakes were hydrauli cally operated
It was also found after the accident that the brake failure was due to a steel pipe bursting from 7mm
to 1mm
The corrosion had occurred where it could not be seen except by removing the pipe completely from the vehicle and this had never been done
Expert evidence showed  that it was not a normal precaution to do this if as was the case the visible parts of the pipe were not corroded
The corrosion was unusual and unexplained
An expert witness said it must have been due to chemical action of some kind such as exposure to salt from the roads in winter or on journeys near the sea
The House of Lords held that the burden of proof which lay on the defendants to show that they had taken all reasonable care had been dis charged
The defect remained undiscovered despite due care As the evidence had shown that something unusual had hap pened to cause this corrosion it was necessary for the defendants to show that they neither know nor ought to have known of any unusual occurrence to cause the breakdown
See Bingham s Motor Claims Cases Seventh Ed p 219
The burden of proving that the accident was due to a mechanical defect is on the owners and it is their duty to show that they had taken all reasonable care and that de spite such care the defect remained hidden
In this case in the written statement all that is pleaded is that the axle brake ring of the lorry came out and the driver lost control of the motor lorry and that the defect can develop in a running vehicle resulting in the driver s losing control of the steering wheel
Though it was stated that all precautions were taken to keep the lorry in a road worthy condition it was not specifically pleaded that the defect ie the axle brake ring coming out is a latent pleaded and could not have been discovered by the use of reasonable care
This lack of plea is in addition to the lack of evidence and the fact that the defence set up has been rightly rejected by the Tribunal
1 1970 AC2821969 3 All ER 756 893 Mr Nariman then submitted that the quantum of compensa tion awarded was very high
He submitted that even accord ing to the figures relied on by the High Court it was in error in coming to the conclusion that for a period of 4 years from the date of the accident the claimant has suf fered a damage of Rs 73779
The learned counsel submit ted that though during the first year there was a loss of Rs 3530 in subsequent years he earned various amounts and in one year he earned Rs 7981 which would mean that during subsequent years his loss would not have been
more than Rs10000 and as admittedly the Nursing Home was kept as a going concern the award of Rs 10000 per year for the four years would be very high
We have considered this conten tion carefully but taking all the circumstances into account we do not feel called upon to interfere with the quantum arrived at by the Tribunal and confirmed by the High Court
The learned Counsel also submitted that the provision for Rs 63000 for the 7 years as the likely loss due to the doctor s disability is also very high
In this case also we do not feel called upon to interfere with the quantum arrived at by the Tribunal as well as the High Court
Last ly the learned counsel submitted that in any event the interest awarded from the date of the application is not justified
We do not think we will be justified in interfer ing with the amount of interest awarded by the High Court from the date of the filing of the application
On the above findings we confirm the award passed by the Claims Tribunal in favour of the applicantrespondent No 1 for Rs 143400 with interest at 6 per annum from the date of the filing of the application and also a sum of Rs500 granted to Malati M Deshmukh and the costs awarded
The liability of the owners and the insurance company will be joint and several and the respondent would be at liberty to proceed against either or both of them to realise the amount awarded in his favour
We have now to consider the direction given by the High Court regarding the determination of the liability as be tween the insurance company and the owners
The owners and the insurance company were represented by the same counsel before the Tribunal and before the High Court the learned counsel on behalf of the insurance company pleaded that its liability is limited to Rs 20000 only
The High Court has given liberty to the insurance company to apply on depositing Rs 20000 with interest as directed for determi nation of the question that the liability of the insurance company is limited to Rs 20000
The High Court also directed the Tribunal to decide the liability of the insur ance company on the insurance company filing such an appli cation after giving notice to all the parties
The insur ance company has not appealed against the judgment and decree of the High Court and we see no reason for interfer ing with the order
On the insurance company complying with the directions of the High Court by depositing Rs 20000 with interest as specified the matter will be remitted to the Tribunal for determination of the question whether the liability of the insurance company is limited to Rs20000 only
It is made clear that so far as the award made in 894 favour of the applicantrespondent is concerned he will be at liberty to proceed against the owners as well as the insurance company jointly and severally
With these direc tions the appeal is dismissed with the cost of the first respondent
This should normally conclude the judgment but we feel it desirable that we must deal with the question of law that has been dealt with at considerable length by the High Court as to whether it is incumbent on the claimant to prove negligence before he would become entitled to compensation
The High Court after concurring with the findings of the Tribunal and holding that the driver was negligent proceeded to state that it would not have been necessary for them to say anything more but for the fact that taking into account the importance of matter and in public interest it would be appropriate to express its view that it is not necessary to prove negligence on the part of a driver before claiming compensation
Both the learned Judges have written lengthy judgments fully discussing the matter and have come to the conclusion that the fact of an injury resulting from the accident involving the use of a car on the public road is the basis of a liability and that it is not necessary to prove any negligence on the part of the driver
We find that a Bench of the Andhra Pradesh High Court has held in Haji Zakaria and Others vs Naoshir Cama and others 1 that the liability of the insured and consequently of the insurer to compensate a third party dying or being injured on account of the use of the insured vehicle is irrespective of whether the death injury etc has been caused by rash and negligent driving
Though this question does not arise in this appeal as the two High Courts have expressed an opinion which in our view has no basis either in the Legislative history or on a construction of the relevent provisions of the Motor Vehi cles Act we feel it necessary to state the position of law
The liability of the owner of the car to compensate the victim in a car accident due to the negligent driving of his servant is based on the law of tort
Regarding the negli gence 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 negli gent
The number of the vehicles on the road increased phenomenally leading to increase in road accidents
To remedy the defect various steps were taken
In England the owners of the vehicle voluntarily insured against the risk of injury to other road users
With  the increase of traffic and accidents it was found that in a number of cases hardship was caused where the person inflicting the injury was devoid of sufficient means to compensate the person afflicted
In order to meet this contingency the Road Traffic Act 1930 The Third Parties Rights against Insur ers Act 1930 and the Road Traffic Act 1934 were enacted in England
A system of compulsory insurance was enacted by the Road Traffic Act 1930
Its object was to reduce the number of cases where judgment for personal injuries 1 AIR 1976 AP 171 895 obtained against a motorist was not met owing to the lack of means of the defendant in the running down action and his failure to insure against such a liability
It is suffi cient to state that compulsory insurance was introduced to cover the liability which the owner of the vehicle may incur
The Indian law introduced provisions relating to compulsory insurance in respect of third party insurance by introducing Chapter VIII of the Act
These provisions almost wholly adopted the provisions of the English law
The relevant sections found in the three English Acts Road Traffic Act 1940 the Third Parties Right against Insur ers Act 1930 and the Road Traffic Act 1934 were incorpo rated in Chapter VIII
Before a person can be made liable to pay compensation for any injuries and damage which have been caused by his action it is necessary that the
person damaged or injured should be able to establish that he has some cause of action against the party responsible
Causes of action may arise out of actions for wrongs under the common law or for breaches of duties laid down by stat utes
In order to succeed in an action for negligence the plaintiff must prove 1 that the defendant had in the circumstances a duty to take care and that duty was owed by him to the plaintiff and that 2 there was a breach of that duty and that as a result of the breach damage was suffered by the plaintiff
The master also becomes liable for the conduct of the servant when the servant is proved to have acted negligently in the course of his employment
Apart from it in common law the master is not liable for as it is often said that owner of a motor car does not become liable because of his owning a motor car
The purpose of enactment of Road Traffic Acts and making insurance compulsory is to protect the interests of the successful claimant from being defeated by the owner of the vehicle who has not enough means to meet his liability
The safeguard is provided by imposing certain statutory duties namely the duty not to drive or permit a car to be driven unless the car is covered by the requisite form of third party insurance
Section 94 of the Act provides that no person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place unless there is in force in relation to the use of the vehicle by that person or that other person as the case may be a policy of insurance complying with the requirements of the Chapter
Section 95 of the Act is very important and that specifies the requirements of policies and limits of liabil ity
Section 951a and b of the Act are extracted
They run as follows 95
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 or by a co operative socie ty allowed under section 108 to transact the business of an insurer and 896 b insures the person or classes of persons specified in the policy to the extent speci fied in sub section 2 i against any liability which may be incurred by him in respect of the death or of bodily injury to any person or damage to any property of a third party caused by or aris ing 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      Under section 951bi of the Act it is required that policy of insurance must be a policy which insures the person against any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place
It may be noted that what is intended by the policy of insurance is insuring a person against any liability which may be incurred by him
The insurance policy is only to cover the liability of a person which he might have incurred in respect of death or bodily injury
The accident to which the owner or the person insuring is liable to the extent of his liability in respect of death or bodily injury and that liability is covered by the insurance
It is therefore obvious that if the owner has not incurred any liability in respect of death or bodily injury to any person there is no liability and it is not intended to be covered by the insurance
The li ability contemplated arises under the law of negligence and under the principle of vicarious liability
The provisions as they stand do not make the owner or the insurance company liable for any bodily injury caused to a third party arising out of use of the vehicle unless the liability can be fas tened on him
It is significant to note that under sub clause ii of section 951b of the Act the policy of insurance must insure a person against the death 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
Under section 95 1b clause ii of the Act the liability of the person arises when bodily injury to any passenger is caused by or use of the vehicle in a public place
So far as the bodily injury caused to a passenger is concerned it need not be due to any act or liability in curred by the person
It may be noted that the provisions of section 95 are similar to section 361 of the English Road Traffic Act
1930 the relevant portion of which is to the effect that a policy of insurance must be policy which insures a person in respect of any liability which may be incurred by him in respect of death or bodily injury to any person caused by or arising out of the use of the vehicle on road
The expression liability which may be incurred by him is meant as covering any liability arising out of the use of the vehicle
It will thus be seen that the person must be under a liability and that liability alone is cov ered by the insurance policy
897 Section 96 of the Act also makes the position Clear
It provides that when a judgment in respect of such a liability as is required to be covered by a policy is obtained against any person insured by the policy then the insurer shall pay to the person entitled the benefit of the decree as if he were a judgment debtor
The liability is thus limited to the liability as is covered by the policy
The main contention of Mr Hattangodi who supported the view of the High Court that negligence need not be proved is that Chapter VIII of the Act is a consolidating and amending Act relating to motor vehicles and their use on a public place and as such it contains the entire law procedural as well as substantive and that the common law or law of torts is no more applicable and if death or bodily injury arises out of the use of motor vehicles in a public place a liabil ity arises
Strong reliance was placed by him on section 110A of the Act which provides for application for compensa tion arising out of an accident to the Claims Tribunal
The learned counsel would submit that under section 110B the Claims Tribunal after holding an inquiry may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom the compensation shall  be paid
According to counsel when an injury is caused by the use of the vehicle in a public place the Claims Tribunal is at liberty to award an amount of compensation which appears to it to be just
This plea ignores the basic requirements of the owner s liability and the claimant s right to receive compensation
The owner s liability arises out of his failure to discharge a duty cast on him by law
The right to receive compensation can only be against a person who is bound to compensate due to the failure to perform a legal obligation
If a person is not liable legally he is under no duty to
compensate any one else
The Claims Tribunal is a tribunal constituted by the State Government for expeditious disposal of the motor claims
The general law applicable is only common law and the law of torts
If under the law a person becomes legally liable then the person suffering the injuries is entitled to be compensated and the Tribunal is authorised to determine the amount of compensation which appears to be just
The plea that the Claims Tribunal is entitled to award compensa tion which appears to be just when it is satisfied on proof of injury to a third party arising out of the use of a vehicle on a public place without proof of negligence if accepted would lead to strange results
Section 1101 of the Act empowers the State Government to constitute one or more Motor Accidents Claims Tribunals for such area as may be specified for the purpose of adjudi cating upon claims for compensation in respect of accidents involving the death or bodily injury to persons
The power is optional and the State Government may not constitute a Claims Tribunal for certain areas
When a claim includes a claim for compensation the claimant has an option to make his claim before the Civil Court
Regarding claims for compensation therefore in certain eases Civil Courts also have jurisdiction
If the contention put forward is accept ed so far as the Civil 898 Court is concerned it would have to determine the liability of the owner on the basis of common law or torts while the Claims Tribunal can award compensation without reference to common law or torts and without coming to the conclusion that the owner is liable
The concept of owner s liability without any negligence is opposed to the basic principles of law
The mere fact that a party received an injury arising out of the use of a vehicle in a public place cannot justi fy fastening liability on the owner
It may be that a person bent upon committing suicide may jump before a car in motion and thus get himself killed
We cannot perceive by what reasoning the owner of the car could be made liable
The proof of negligence remains the lynch pin to recover compensation
The various enactments have attempted to mitigate a possible injury to the claimant by providing for payment of the claims by insurance
In Halsbury s Laws of England 3rd Ed Vol 32 at paragraph 751 at p 366 the nature of insurance required is stated as follows  The conditions to be fulfilled in order to render the use of a motor vehicle lawful are 1 that there must be a policy of insur ance
in force in relation to the use of the vehicle on a road and 2 that it must be a policy complying with the relevant statutory requirements
 At paragraph 752 at page 366 the general nature of liabili ties required to be covered are stated as under In order to comply with the statutory requirements a policy must provide insurance cover in respect of any liability which may be incurred by such person persons or classes of persons as are specified in the policy in respect of the death of or bodily injury to any person subject to specific exceptions caused by or arising out of the use of the vehicle on a road The authorised insurers issuing a policy pursuant to the statutory requirements are obliged to indemnify the person specified in the policy in respect of any liability which the policy purports to cover in the case of that person or classes of persons
 Paragraph 758 at p 369
These passages clearly indicate that the nature of the liability required to be covered is the liability which may be in curred by or arising out of the use of a vehicle on a road by the person
A person is not liable unless he contravenes any of the duties imposed on him by common law or by the statute
In the case of a motor accident the owner is only liable for negligence and on proof of vicarious liability for the acts of his servant
The necessity to provide effective means for compensating the victims in motor accidents should not blind us in determining the state of law as it exists today
Justice Vaidya in this judgment under appeal after referring various decisions expressed his view as follows  It is not necessary to discuss all these cases because in any view in none of those cases was the question agitated 899 as to what exactly was meant by tort in the context of automobile accidents and injuries resulting
therefrom for which more often than not human minds hands or legs are not always accountable in the later half of the twentieth century
The question has engaged the minds of jurists all over the common law world   The learned Judge proceeded further to observe that whether we apply the test of torts or not the liability to pay compensation arises when the injuries are caused by the use of the motor vehicle and the Tribunal can adjudicate upon the liability and determine just compensation
The learned Judge further observed In my opinion public good re quires that everyone injured viz by the use of motor vehicle must immediately get compensation for the injury
Every person has a right to safety and security of his person irrespective of fault or negligence or carelessness or efficient functioning of the motor vehicle
Every person has a right to claim compensation so that is the only way of remedying the injury caused to him in a modern urbanised industrialised and automobile ridden life
 In a separate judgment Justice Mridul has expressed himself in the same tenor
The learned Judge after referring to section 951b i and 1bii of the Act observed that perimeters of liability in clauses i and ii must be held to be the same because to both the liability of the owner or the driver exists and is made compulsorily insura ble
The learned Judge while noting the difference in the wording of the two clauses observed that it is inconceiva ble that the legislature would intend absolute liability in cases covered by clause ii and not in cases covered by clause i
The reasoning of the two learned Judges is unacceptable as it is opposed to basic principles of the owner s liabili ty for negligence of his servant and is based on a complete misreading of the provisions of Chapter VIII of the Act
The High Court s zeal for what it considered to be protection of public good has misled it into adopting a course which is nothing short of legislation
Equally unacceptable is the view of the Bench of the Andhra Pradesh High Court in Haji Zakaria and others vs Nashir Cama and others1 wherein the court concluded without any hesitation that the liability to compensate arises when death or bodily injury to any person or damage to any property of a third party is caused by or arising out of the use of the vehicle in a public place and to infer the qualifications or limitations that such death or bodily injury should have been caused before such liability arises only on account of rash and negligent driving would amount to introducing something which is not there and would be violating and transgressing the Clear provisions of the statute and intention of the legislature
1 AIR 1975 AP 171
900 The Patna High Court in New India Assurance Co Ltd vs Sumant Devi and Others1 held that the liability of the insurance company is absolute but is only limited to the extent provided by the insurance policy
As against this view all the other High Courts have held that the liability to compensate arises only on a finding of negligence
It may not be out of place to mention that those automobile accidents are subject to the law of negligence
Modern proposals consistently favour the Social Insurance model under which benefits are payable directly by the fund with out any reference at all to the injurer while retaining an option for the victim to claim either limited benefits on a nonfault basis or full damages for negligence
Consistent with this line of thinking is the judgment of the Kerala High Court in Kesavan Nair vs State Insurance Officer2 where Justice Krishna Iyer expressed himself thus Out of a sense of humanity and having due regard to the handicap of the innocent victim in establishing the negligence of the operator of the vehicle a blanket liabili ty must be cast on the insurers
 Modern legislation has also provided insurance cover for all air and rail passen gers and recently by amendment of section 95 of the Act against death or bodily injury to passengers of a public service vehicle caused by or arising out of the use of a vehicle in a public place
In a recent judgment of Madras High Court a Division Bench is AAO Nos
607 of 1973 and 296 of 1974 Ms
Ruby Insurance Co Ltd vs V Govindaraj and others delivered on 13th December 1976 has suggested the necessity of having social insurance to provide cover for the claimants irre spective of proof of negligence to a limited extent say Rs250 to Rs 300 a month
It has also suggested that instead of a lump sum payment which does not often reach the claimants a regular monthly payment to the dependants by the nationalised insurance company or bank would be desira ble
Unless these ideas are accepted by the legislature and embodied in appropriate enactments Courts are bound to administer and give effect to the law as it exists today
We conclude by stating that the view of the learned Judges of the High Court has no support in law and hold that proof of negligence is necessary before the owner of the insurance company could be held to be liable for the payment compensa tion in a motor accident claim case
But as we have found that the vehicle owner was liable for negligence of the driver and have upheld the amount of damages awarded we dismiss this appeal with cost to the first respondent
PBR Appeal dismissed


Summary:
While the respondent was travelling in his car the appel lant s truck driven by a driver hit the car and caused injuries to the respondent and damaged the car
The Claims Tribunal awarded compensation to the respondent and the High Court upheld the Tribunal s award
In the course of the judgment the High Court however observed that every person has a right to security and safety of his person irrespective of the fault or negligence or carelessness and that every person has a right to claim compensation irre spective of proof of negligence on the part of the driver
It further observed that the perimeters of liability in cls
i and ii of section 951b must be held to be the same because in both the liability of the owner of the driver exists and is made compulsorily insurable and that it could not be said that the legislature intended absolute liability in cases covered by cl
ii and not in cases covered by cl
HELD Proof of negligence is necessary before the owner or the insurer could be held liable for payment of compensa tion in motor vehicle accident claims
The High Court s views are opposed to basic principles of the owner s liabil ity for negligence of his servant and are based on a com plete misreading of the provisions of Chapter VIII of the Motor Vehicles Act
900 F 1
Before a person can be made liable to pay compensa tion for any injuries and damage caused by his action
it is necessary that the person injured should be able to establish that he has some cause of action against the party responsible
In order to succeed in an action for negligence the plaintiff must prove 1 that the defendant had in the circumstances a duty to take care and that duty was owed by him to the plaintiff and 2 that there was a breach of that duty and that as a result of the breach damage was suffered by the plaintiff
The master also becomes liable for the conduct of the servant when the servant is proved to have acted negligently in the course of his employment
895 C D 2a The purpose of making insurance compulsory is to protect the interests of the successful claimant from being defeated by the owner of the vehicle who has not enough means to meet his liability
The safeguard is provided by imposing certain statutory duties namely the duty not to
drive or permit a car to be driven unless the car is covered by third party insurance
1895 F b Under section 951bi of the Act the policy of insurance must be a policy which insures against any liabil ity which may be incurred in respect of death or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place
The accident to which the owner or the person insuring is liable is to the extent of his liability in respect of death or bodily injury and that liability is covered by the insurance
It is therefore obvious that if the owner has not incurred any liability in respect of death or bodily injury to any person there is no liability and it is not intended to be covered by the insurance
The liabil ity contemplated arises under the law of negligence and under the principle of vicarious liability
The provisions of the section do not make the owner or the insurance compa ny liable for any bodily injury caused to a third party arising out of the use of the vehicle unless the liability can be fastened on him
896 D F 887 c Under sub cl
ii of section 951b of the Act the policy of insurance must insure a person against death 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
So far as the bodily injury caused to a passenger is concerned it need not be due to any act or liability incurred by the person
The expression liability which may be incurred by him in sub cl
i is meant to cover any liability arising out of the use of the vehicle
Therefore the person must be under a liability and that liability alone is covered by the insurance policy
896 F H d The owner s liability arises out of his failure to discharge a duty cast on him by law
The right to receive compensation can only be against a person who is bound to compensate due to the failure to perform a legal obliga tion
If a person is not liable legally he is under no duty to compensate any one else
The Claims Tribunal is a tribu nal constituted by the State Government for expeditious disposal of the motor vehicles claims
The general law applicable is only common law and the law of torts
If under the law a person becomes legally liable then the person suffering the injuries is entitled to be compensated and the tribunal is authorised to determine the amount of compensation which appears to be just
The plea that the Claims Tribunal is entitled to award compensation which appears to be just when it is satisfied on proof of injury to a third party arising out of the use of a vehicle on a public place without proof of negligence if accepted would lead to strange results
897 E F 3
The power to constitute one or more Motor Vehicle Claims Tribunals under section 1101 is optional and the State Government may not constitute a Claims Tribunal for certain areas
When a claim includes a claim for compensation the claimant has an option to make his claim before the Civil Court
In claims for compensation therefore in certain cases Civil Courts also have jurisdiction
If the contention put forward is accepted so far as the Civil Court is concerned it would have to determine the liability of the owner on the basis of common law or torts while the Claims Tribunal can award compensation without reference to common law or torts and without coming to the conclusion that the owner is liable The concept of owner s liability without any negligence is opposed to the principles of law
The mere fact that a party received an injury arising out of the use of a vehicle in a public place cannot justify fastening liability on the owner
It may be that a person bent upon committing suicide may jump before a car in motion and thus get himself killed
In such cases the owner cannot be made liable
Proof of negligence remains the lynch pin to recover compensation
897 H 898 A B Haji zakariaand others vs Naoshir Cama and others AIR 1976 AP171 and New India Assurance Co Ltd vs Sumitra Devi and others  not approved
Kesavan Nair vs State Insurance Officer and Ms Ruby Insurance Co Ltd vs V Govindaraj and others AAO 607 of 1973 and 296 of 1974 decided by the Madras High Court on December 13 1976 referred to