WP/26375/2006 of S. Srinivasulu, Vs The Andhra Pradesh State Road Transport Corporation, on 28 December 2006

O R D E R:

This writ petition is filed questioning theproceedings dated 02-11-2006 issued by the 3[rd]respondent proposing to deduct Rs.50,000/- from the hirecharges payable to the petitioner towards compensationawarded by the Lok Adalat, Khammam in O.P.No.728 of2005.

The petitioner is the owner of the bus bearingNo.24U 4500. It is not in dispute that the said vehiclewas hired to the first respondent-Andhra Pradesh StateRoad Transport Corporation (for short ‘the Corporation’) under an agreement, whichis still subsisting. On 20-11-2003, the said bus met withan accident at Khammam in which one Smt.GumpulaRani was injured. The said injured filed O.P.No.728 of2005 before the Motor Accidents Claims Tribunal,Khammam claiming compensation of Rs.1,00,000/-. Admittedly, the petitioner was not made a party to thesaid claim petition and the Corporation alone was madea party. It appears that the matter was compromisedbefore the Lok adalat on 24-06-2006 in which theCorporation agreed to pay compensation of a sum ofRs.50,000/-. Accordingly, an award was passed on 24-06-2006. Thereafter, the impugned proceeding wereissued by the Corporation proposing to deduct theamount of Rs.50,000/- from the hire charges payable tothe petitioner. Aggrieved by the same, the present writ petition is filed.

I have heard the learned counsel for the petitioneras well ass the learned standing counsel appearing forthe Corporation.

The learned counsel for the petitioner contendedthat the Corporation alone shall be made liable forpayment of the sum awarded in O.P.No.728 of 2005 andtherefore the impugned action is arbitrary and illegal.

On the other hand, the learned Counsel for theCorporation while referring to Clause-5(iv) of the HireAgreement contended that the owner of the vehicle shallbe responsible for all claims payable under theprovisions of the Motor Vehicles Act, 1988 and the Rulesmade thereunder.

Clause-5(iv) of the Hire Agreement runs as under :

“The owner shall be responsible for all claimsthat may arise due to statutory violations out ofthe operations, like claim due to accidentspayable under the provisions of M.V. Act 1988Rules and APSRTC shall under no circumstances be made liable or responsible to paycompensation that may be awarded by MotorAccidents Claims Tribunal or Tribunals in respectof accidents.”

It is relevant to note that the Supreme Court inRAJASTHAN STATE ROAD TRANSPORT CORPORATION vs.

KAILASH NATH KOTHARI[[1]]while declaring an identicalclause as against public policy, held as under :

“The expression owner must include, in a givencase, the person who was actually in possessionand control of the vehicle and under whosedirections and commands, the driver was obligedto operate the vehicle. To confine the meaning of‘owner’ to the registered owner only would in acase where the vehicle is in the actual possession and control of the hirer, not be proper for thepurpose of fastening of liability in case of anaccident. The liability of the owner is vicariousfor the tort committed by its employee during thecourse of his employment and it would be aquestion of fact in each case as to on whom canvicarious liability be fastened in the case of anaccident.”

Following the above decision in similarcircumstances, the action of the respondent Corporation in withholding the hire charges was held arbitrary andillegal.

In the circumstances, the action of the impugnedproceedings dated 2-11-2006 cannot be sustained andthe same is set aside; and the Writ Petition isaccordingly disposed of. No costs.

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G. ROHINI, J

Dated: 28-12-2006KLP

[1]AIR 1997 SC 3444 = (1997) 7 SCC 481