Uttar Pradesh State Road Transport Corp vs Kulsum & Ors

6. Thumbnail sketch of the facts is mentioned hereinbelow:-

7. While the mini bus was running on the specified route on 13.06.1998, at about 9.00 a.m., Vijay Pal Singh (deceased), along with his minor children namely, Km. Rupa (deceased), Rohit (deceased) and Km. Laxmi (deceased), was present near Gumti shop of a Barber at the side of National Highway, near Swastic Biscuit Factory, Police Chauki Mohammadpur, Post Safedabad, District Barabanki.

10. Although, all the above five claim petitions were allowed and different amounts of compensation were awarded by the Tribunal alongwith interest @ 12% per annum but, relying on a judgment of this Court in the case of Rajasthan State Road Transport Corporation Versus Kailash Nath Kothari and others reported in (1997) 7 SCC 481, the liability of payment has been fastened on the Corporation as, at the time of accident, the offending vehicle, i.e., the mini bus was being run by it under the contract.

11. Feeling aggrieved by the awards of the Tribunal, C.A. @ SLP(C)No.1969 of 2008 etc. ...(contd.) 6 Corporation preferred appeals and the owner of the bus, Ajai Vishan, filed cross objection against the finding on issue No. 4 recorded by the Tribunal, holding therein that Insurance Company was not liable to make payment and fastening the liability on the owner also, on account of alleged breach of Insurance Policy. However, it had a caveat that liability of the owner would arise only in case the Corporation fails to make the payment. The National Insurance Company Ltd., with which admittedly the said bus was insured for the relevant period, has been exonerated from payment of any compensation. Hence, the appeals.

31. Thus, in the light of the aforesaid, it is clear C.A. @ SLP(C)No.1969 of 2008 etc. ...(contd.) 2 that Insurance Company is trying to evade its liability on flimsy grounds or under misconception of law.

32. On account of the aforesaid discussions, it is crystal clear that actual possession of the vehicle was with the Corporation. The vehicle, driver and the conductor were under the direct control and supervision of the Corporation.

C.A. @ SLP(C)No.1969 of 2008 etc. ...(contd.) 2

Persons who are qualified to use the Vehicle:

44. In the light of the foregoing discussions, the Appeal filed by Insurance Company fails, wherein it has been directed that the amount would first be paid by the Company, with right to it to recover the same from owner of the vehicle. This we hold so, as the liability of the Insurance Company is exclusive and absolute.

C.A. @ SLP(C)No.1969 of 2008 etc. ...(contd.) 2

46. Apart from the above, learned counsel for Insurance Company could not point out any legal embargo which may give right to it to deny the payment of compensation.

Thus, legally or otherwise liability has to be fastened on the Insurance Company only.

47. In the light of the aforesaid discussion, the Appeals of the Corporation are allowed. The impugned judgment and order passed by High Court qua the Corporation are hereby set aside and quashed and we hold that the Insurance Company would be liable to pay the amount of compensation to the claimants.

48. Appeals filed by the Corporation thus stand allowed and the Appeal filed by the Insurance Company stands C.A. @ SLP(C)No.1969 of 2008 etc. ...(contd.) 2 dismissed with costs. Counsel's fee quantified at Rs.

10,000/- in each Appeal.