HON’BLE SRI JUSTICE K.S.APPA RAO M.A.C.M.A.No.556 of 2008 Date: 22-7-2011 Between The New India Assurance Company Ltd., Rep. by its Divisional Manager, Divisional Office, No.1/164, Prakash Road, Tirupati … Appellant/Respondent No.2 and M.Doraswamy Reddy … Respondent/Petitioner V.Sreedevi and another … Respondents/Respondents 1 and 3 HON’BLE SRI JUSTICE K.S.APPA RAO M.A.C.M.A.No.556 of 2008 Judgment: Being aggrieved by the order and decree dated 01-11-2007 in M.V.O.P.No.332 of 2005 on the file of the Motor Accidents Claims Tribunal cum V Additional District and Sessions Judge, Tirupati, Chittoor district the present civil miscellaneous appeal is filed by the appellant-Insurance Company. 2. The appellant herein is the 2nd respondent-Insurance Company and the 1st respondent is the claimant in M.V.O.P.No.332 of 2005 before the tribunal below. The claimant filed the said O.P., claiming compensation of Rs.1,00,000/- for the injuries sustained by him in a road traffic accident that occurred on 05-7-2004. The tribunal below, while assessing the evidence on record, awarded compensation of Rs.70,000/- under all heads. Being aggrieved, the present civil miscellaneous appeal is filed by the Insurance Company. 3. The learned Standing Counsel for the appellant-Insurance Company mainly urged that the finding of the tribunal below fastening the liability against the 3rd respondent-Andhra Pradesh State Road Transport Corporation (‘the Corporation’ for short) jointly and severally along with the Insurance Company is not sustainable. 4. While placing reliance on a judgment in Branch Manager, Oriental Insurance Co. Ltd., Labbipet v. Javvaji Bhaskar Rao[1] he further urged that when the bus is hired by the Corporation the driver, though employee of registered owner, or under the control of the Corporation, they alone would be vicariously liable to pay compensation for the tort committed by the driver and that the insurer of the offending bus, cannot be made jointly and severally liable to pay the award amount. 5. The learned counsel for the 1st respondent-claimant mainly urged that the vehicle was insured with the Insurance Company and there is a valid insurance coverage on the offending vehicle and though the vehicle was given hire to the Corporation and therefore, all the respondents are jointly and severally liable to pay the compensation to the claimant. 6. Now, the point for consideration is -- whether the Insurance Company is exonerated from the liability on the ground that the bus was hired by the Corporation ? 7. Point:- The factum of accident is not disputed. The tribunal below while evaluating the evidence on record directed the Insurance Company and the Corporation to deposit the amount of Rs.35,000/- each with interest at 7.5% per annum from the date of petition till the date of realisation. 8. R.W.1 is a Senior Assistant working in the Insurance Company. He deposed that the Insurance Company issued Ex.B-1 policy and the offending vehicle was leased to the Corporation. Therefore, the Insurance Company is not liable to indemnify the liability. 9. R.W.2 is working as a Junior Assistant in the Corporation, Tirupati. His evidence is that the owner of the offending bus (1st respondent therein) entered into a lease with the Corporation and gave an undertaking to the effect that she would reimburse the liability, if any, on behalf of the Corporation. R.W.2 marked Ex.B-2 attested copy of hired agreement. Ex.B-3 is the undertaking given by the owner of the offending bus through her advocate and as per the terms of the agreement, the owner and the insurer are liable to pay the compensation and the Corporation is not liable to pay the compensation. 10. As seen from the judgment in Javvaji Bhaskar Rao’s case (1 supra) relied on by the learned Standing Counsel for the appellant- Insurance Company that there was no privity of contract between the owner of the offending bus and the Corporation. In the present case on hand, there is a privity of contract and also an undertaking between the owner of the vehicle and the Corporation as per Exs.B-2 and B-3, respectively. As seen from Ex.B-2, attested copy of agreement and Ex.B-3, undertaking given by the owner of the offending bus that she is the owner of the vehicle and that she will reimburse the liability, if any, on behalf of the Corporation. 11. Admittedly, the offending vehicle in question was given on lease to the Corporation by its owner. As on the date of accident, as per Ex.B-1 policy there is valid insurance coverage against the offending vehicle. When the policy is in existence and has a valid coverage, it is for the insurer to indemnify the liability on behalf of the owner of the offending vehicle. 12. In view of the evidence of P.W.2 and the documentary evidence under Exs.B-1 and B-2, it is a clear case where the Insurance Company should indemnify the compensation. However, as the vehicle in question was involved in the accident when the contract is subsisting with the Corporation, all the respondents in the M.V.O.P., viz., the owner of the offending bus, the Insurance Company and the Corporation are jointly and severally liable to pay compensation to the claimant. 13. In view of the facts of the present case on hand, the judgment in Javvaji Bhaskar Rao’s case (1 supra) relied on by the learned Standing Counsel for the appellant-Insurance Company does not hold water as the same is not applicable to the present set of facts of the case on hand. 14. Therefore, the civil miscellaneous appeal fails and all the respondents in the M.V.O.P., viz., the owner of the offending bus, the Insurance Company and the Corporation are jointly and severally liable to pay compensation to the claimant. 15. It is brought to the notice of this Court by the learned Standing Counsel for the appellant-Insurance Company that 50% of amount of compensation was deposited by the Insurance Company and if at all they succeed, they may be permitted to recover from the claimants. 16. It is obvious that if ultimately the appellant-Insurance Company succeeds in the appeal they are at liberty for recovery of the same if they are otherwise entitled to. 17. The present appellant-Insurance Company against whom the award is passed directing it to pay 50% of the amount of compensation, the same is questioned in this appeal. Hence, the observations made in the present appeal are with regard to the aforesaid 50% of the award granted against the appellant herein. 18. Accordingly, the civil miscellaneous appeal is disposed of. No costs. ___________________ K.S.APPA RAO, J. 22nd July, 2011. Ak HON’BLE SRI JUSTICE K.S.APPA RAO M.A.C.M.A.No.556 of 2008 22nd July, 2011. (Ak) [1] 2009(3) ALD 53