Jeevan Reddy, J.
1. The respondent, S. Venkateswara Rao, owned a lorry, bearing No APK-720. It was engaged for carrying empty milk-cans from Pamarru Chilling Centre to Yelamarru village. It was insured with the New India Assurance Company Ltd., Vijayawada. It was driven by one B. Krishna Reddy, the driver employed by the respondent.
2. On 3-8-1973, while carrying the empty milk-cans, the driver, B. Krishna Reddy, took in the deceased, Moturi Hanumantba Rao, as a passenger in the lorry. The deceased also loaded a few manure bags into the lorry. The deceased was sitting in the cabin on the extreme left. Another woman was also travelling as a passenger, but in the rear. At about 3-15 p.m. the lorry met with an accident; resulting in the death of M. Hanumantha Rao and the woman travelling in the rear of the lorry. The legal representatives of the deceased Moturi Hanumantha Rao, thereupon, instituted O.P. No. 9/1974, claiming an amount of Rs. 25,000/- by way of compensation. The O.P was filed against the owner of the vehicle (respondent herein), and the Insurance Company. The claimants submitted that the lorry was driven by the driver rashly and negligently, resulting in the accident and, therefore, the owner and the Insurance Company are liable to pay compensation.
3. The owner (1st respondent) in his counter denied that the driver drove the vehicle rashly and negligently. He also disputed the quantum of compensation claimed by the claimants. The Insurance Company took an additional plea that it is not liable in any manner, because the deceased was travelling in the lorry contrary to the terms of the insurance-policy.
Three issues were framed by the Tribunal viz.:
(1) whether the accident is due to rash and negligent driving;
(2) whether the petitioners are entitled to compensation; if so, to what quantum and against which of the respondents and
(3) to what reliefs ?
4. On the first issue it was found by the Tribunal that the accident was the result of rash and negligent driving on the part of the driver, Krishna Reddy ; on the second issue, the Tribunal found that Rs. 10,000/- is the reasonable compensation ; but, it found that the Insurance Company cannot be made liable, inasmuch as the vehicle was a goods-vehicle, and the deceased was not in the employ of the owner, but was taken in as a passenger by the driver for his own reasons. The Tribunal observed that the insurance policy gives cover only to the employees of the ownar not exceeding sis in number, and travelling in the vehicle, in the course of their employment; since the deceased did not fall in this category, the Insurance Company was exonerated and the owner (1st respondent) alone was held liable for the said amount.
5. The owner (1st respondent) filed CM A No. 271 of 1977 in this Court, impleading the claimants, as also the Insurance Company as respondents. The learned single Judge allowed the appeal, following the Bench decision of this Court in Machiraju Visalakshi v. Treasurer, Council of India Mission of the Luthern Church in America, Guntur-2, 1978(11) An WR p. 51. Following the said decision, the learned single Judge held that in asmuch as the lorry was engaged only for carrying empty milk-cans and that, it was not part of the drivers duty, or job entrusted to him by his master, to pick up passengers on the way receiving money from them. The owner was, accordingly, held not liable for the negligence, or wrongful act of the driver. When the decision of the Supreme Court in Pushpabai v. Ranjit G. & P. Company was brought to the notice of the learned Judge, he
observed that in as much as the said decision affirms the principle of the earlier decision of the Supreme Court in Sitaram v. Santanu Prasad and also because the said decision too was referred
to, and applied by the Bench in Machiraju's case (supra), the said Bench decision is binding upon him. Hence this Letters Patent Appeal by the claimants. Only the owner (1st respondent) has been impleaded as respondent in this Letters Patent Appeal; the Insurance-Company is not made a respondent.
6. The contention of Sri T. Sankara Rao, the learned Counsel for the appellants/claimants, is that the learned single Judge was not right in observing that the decision in Pushpabai v. Ranjit G. & P. Company (supra) was referred to, and applied in Machiraju Visalakshmi case (supra). He submitted that the principle enunciated by the Bench in Machiraju Visilakshmi case (supra) clearly runs counter to the principle of the decision of the Supreme Court in Pushpabai's case (supra). He submitted that, according to the said decision of the Supreme Court, the owner is, and must be made liable for pacing the compensation.
7. On the other hand, it is contended by Sri A.L. Narayana Rao, the learned Counsel for the respondent-owner, that, since the taking in of the deceased as a passenger by the respondent's driver was outside his authority, and unauthorised, the owner cannot be made responsible for the negligence, or wrongful acts of the driver. He submitted that, the principle enunciated by the Bench of this Court in Machiraju Visalakshmi's case (supra) is the correct and valid one, and is not shaken in any manager by the decision of the Supreme Court in Pushpabai v. Ranjit G. & P. Company (supra).
8. The facts of Machiraju Visalakshi's case (supra) are almost identical with the facts of the present case. There too, the car was being driven by the driver on his master's business, to Guntur; on the way the driver picked up some passengers, receiving some money from them; the car met with an accident, resulting in the death of the passengers so picked up en route; on a claim being made by the legal representatives of the deceased, the Tribunal held the driver guilty of rash and negligent driving]; it also held that the passengers picked up by the driver were unauthorised passengers. Holding that the driver was not acting within the scope of his employment or authority, the Tribunal held the owner and the Insurance-Company not liable to pay the compensation; it made the driver alone liable to pay compensation. On appeal, a Bench of this Court affirmed the said finding on the following reasoning:
This is a case where the driver in the course of his employment was doing something for himself. The master had only ordered that the car should be taken with Yesudas to Guntur for servicing. He had never told the driver to pick up any passengers en route. The driver had picked up passengers on the way to make some money for himself. This is something which he did for himself and therefore, it cannot said that what he did for himself is also part of the duty or job entrusted to him. It was no part of the driver's duty or business to pick up passengers on the way. The fact that the master had permitted one known person to be taken in the vehicle will not give rise to a presumption that the master had permitted the driver to pick up passengers on the way and collect some fare from them. The master, as pointed out by the Supreme Court, is not liable for the negligence or wrongful act of his servant simply because it is committed at a time when the servant is engaged on his master's business. It must be committed in the course of that business, so as to form a part of it, and not be merely coincident in time with it.
9. The Bench relied upon the decision of the Supreme Court in Sitaram v. Santanu Prasad (supra), in support of its opinion. Learned Counsel for the appellant is, however, right in saying that this decision does not refer to, or deal with the subsequent decision of the Supreme Court in Pushpabai v. Ranjit G. & P. Company (supra), and thus his criticism that the learned single Judge was not right in his observation that the said subsequent decision of the Supreme Court was also considered by the Bench in its aforesaid decision, appears to be justified. Be that as it may, the more important question is whether the subsequent decision of the Supreme Court lays down a principle contrary to the one enunciated by the Bench in Machiraju Visalaksi's case (supra). For this purpose, it is necessary to examine the facts and the principle of the Supreme Court cases, viz., Sitaram v. Santanu Prasad (supra), as well as Pushpabai v. Ranjit G. & P. Company (supra).
10. In Sitaranm case (supra), the facts are these : Sitaram owned a motor-car ; he entrusted the same to the 2nd defendant for plying it as a taxi in Ahmedabad ; the 2nd defendant was thus in entire charge of plying the taxi. The 2nd defendant appointed the 3rd defendant as a cleaner for the taxi and was training him how to drive the car; on 11-4-1940, the 2nd defendant took the 3rd defendant to the office oft he Regional Transport Authority for obtaining a license for him ; a test was taken of the 3rd defendant's capacity to drive the car ; during that test the 3rd defendant drove the car with great speed, hit the pillar of the gate of the office and, in that process, pinned the plaintiff between the compound wall and the gate ; the plaintiff's leg was crushed, and was later amputated. The plaintiff thereupon filed a suit for damages against defendants 1 to 3, and the insurance Company ; the High Court decreed the suit in a sum of Rs. 25,000/- against defendants 1 to 3, while exonerating the Insurance Company. On appeal to Supreme Court, Hidayatullah, J., speaking for the majority, held the master (1st defendant) not liable for damages. While affirming the law that a master is vicariously liable for the acts of his servant, acting in the course of his employment and also affirming that, if the driver of a car taking the car on his master's business commits an accident, the master would be liable therefor, the learned Judge observed :
But it is equally well settled that if the servant, at the time of the accident, is not acting within the course of his employment but is doing something for himself the master is not liable. There is a presumption that a vehicle is driven on the master's business and by his authorised agent or servant but the presumption can be met. It was negatived in this case, because the vehicle was proved to be driven by an unauthorised person and on his own business. The de facto driver was not the driver or the agent of the owner but one who had obtained the car for his own business not even from the master but from a servant of the master. Prima facie, the owner would not be liable in such circumstances.
11. The learned Judge also discussed the law of agency in this connection, and held that an agent will make the principal responsible only so long as he does the act within the scope of his authority, or does so under the control of the principal. The learned Judge refused to subscribe to the extention of the said doctrine to take in all those acts which are done for the master's benefit, as was done in certain English cases. What is, however, relevant to notice in this case is that, the vehicle when it caused injuries to the plaintiff was not being driven by the driver, but by an agent, or employee of the driver, and for the purposes of such other person. It cannot be said in such circumstances that the driver was acting in the course of his employment in allowing such other person to use the vehicle for giving a test in connection with obtaining a driver's licence.
12. Now coming to Peshawars Case (supra), the facts are : M/s. Ranjit Ginning and Pressing Company, Private Ltd., owned a car ; on 18-12-196U the car was being driven by Madhavjibhai, the manager of the Company ; he was taking a certain amount of cash of the company for being delivered at Pandhurna ; the car was proceeding from Nagpur ; on the way, Madhavjibhai took in the deceased as a passenger, of course gratis; the car met with an accident leading to the death of the deceased : the legal representatives of the deceased then preferred a claim-petition under the Motor Vehicles Rules, in a sum of Rs. 1,00,000/-, before the Claims Tribunal; the Tribunal found that the accident was the result of negligent driving on the part of Madhavjibhai ; it held the company liable to pay compensation to the legal representatives of the deceased, on the principle of vicarious liability. The Company preferred an appeal. The appeal was allowed by the High Court on the ground that the owner cannot be held vicariously liable for the act of Madhavjibhai in taking in the deceased as a passenger, as the said act was neither in the course of his employment, nor under any authority whatsoever and that, there was no evidence that the owners of the vehicle were aware of the deceased being taken in the car as a passenger by their manager, Madhavjibhai. The High Court held that, so far as the owners are concerned, the deceased was no better than a trespasser. The High Court, purported to follow the decision of the Supreme Court in Sitaram's Case \supra), and certain English decisions referred to therein. On appeal, the Supreme Court considered two questions; the second of which alone is relevant for our purposes. The second question was "whether the incident took place during the course of the employment of the driver ?" The Supreme Court held that, inasmuch as Madhavjibhai, an employee of the Company (owner) was proceeding in the car in connection with the owner's work and inasmuch as he caused the death of the deceased by driving the car negligently he was acting in the course of his employment the owner is liable. Kailasam, J., speaking for the Bench, referred with approval to the judgment of Lord Justice Denning in Young v. Edward box and Company Limited (1951) 1, TLR 789 (at page 793). In that case, the foreman and the driver of a lorry belonging to the defendants, gave a lift to fellow workmen ; in the course of the journey, the workmen were injured on account of the negligence of the driver of the lorry, and they brought an action for damages. The defence of the owner was that the plaintiff, when on the lorry, was a trespasser ; the Traffic Manager of the defendant-Company (owner) pleaded that he had never given instructions to the foreman that he should arrange for lift being given to the plaintiff and his fellow-workmen on Sundays and that ; the foreman had no authority to the consent plaintiff's riding on the lorry. While the other two Lord Justices of the Court of Appeal held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman and that, the plaintiff was entitled to rely on that authority and in that respect the plaintiff was in the nature of a licensee, Lord Denning adopted a different reasoning. He held that though the plaintiff, when on the lorry, was a trespasser, so far as the defendants (owners) were concerned, the driver was acting in the course of his employment in giving the plaintiff a lift, and that was sufficient to make the defendants liable. This is how the learned Law Lord stated the position :
the first question is to see whether the servant was liable. If the answer is yes, the second question is to see whether the employer must shoulder the servant's liability. So far as the driver is concerned, his liability depends on whether the plaintiff was on the lorry with his consent, or not.... The next question is how far the employers are liable for their servant's conduct. In order to make the employers liable to the passenger it is not sufficient that they should be liable for their servant's negligence in driving. They must also be responsible for his conduct in giving the man a lift. If the servant has been forbidden, or is unauthorised, to give any one a lift, then no doubt the passenger is a trespasser on the lorry so far as the owners are concerned ; but that is not of itself an answer to the claim.... In my opinion, when the owner of a lorry sends his servant on a journey with it,' thereby putting the servant in a position not only to drive it, but also to give people a lift in it, then, he is answerable for the manner in which the servant conducts himself on the journey, not only in the driving of it, but also in giving lifts in it, provided, of course, that in so doing the servant is acting in the course of his employment.
13. Lord Denning held, on the facts of the case before him, that though the passenger was a trespasser so far as the employers were concerned, nevertheless the driver was acting in the course of his employment when he gave lift to the workman (plaintiff), and that is sufficient to make the employers liable. It is evident that the test applied by Lord Denning and the test adopted by the other two Law Lords, is not the same. According to one, even though the plaintiff is a trespasser vis-a-vis the owner, still the owner is held liable, because by allowing the driver to drive the vehicle, the owner has enabled him to take in passengers and is therefore responsible for his acts, so long as the driver is acting in the course of his employment, while according to the other, the plaintiff was treated as a licensee vis-a-vis the owner, on the ground that the driver, in such a situation, must be deemed to have had the ostensible authority to take in passengers, and also because the plaintiff is entitled to rely upon such ostensible authority. The Supreme Court approved both these tests. In paragraph 8, after referring to both the tests, the Court observed:
Applying the test laid down there can be no difficulty in concluding that the right to give leave to Purshottam to ride in the car was within the ostensible authority of the Manager of the company who was driving the car and that the Manager was acting in the course of his employment in giving leave to Purshottam. Under both the tests the respondents would be liable.
Then again, in paragraph 14, the following observations are made:
Before we conclude, we would like to point out that the recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of the employment" as ordinarily understood. We have referred to Sitaram Motilal Kalal v. Santanuprasad Jaishanker Bah where this Court accepted the law laid down by Lord Denning in Ormrod v. Crosville Motor Services Limited (1953) 2 All ER 753 (supra) that the owner is not only liable for the negligence of the driver if that driver is his servant acting in the course of his employment but also when the driver is, with the owner's consent, driving the car on the owner's business or for the owner's purposes. This extension has been accepted by this Court. The law as laid down by Lord Denning in Young v. Edward box and Co. Ltd., already referred to i.e., the first question is to see whether the servant is liable and if the answer is yes, the second question is to whether the employer must shoulder the servant's liability, has been uniformly accepted as stated in Salmond Law of Torts, 15th Ed , page 606, in Crown Proceedings Act, 1947 and approved by the House of Lords in Stavely Iron and Chemical Co. Ltd. v. Jones, 1956 Ac 627 and I.C.I. Ltd. v. Shatwell 1965 Ac 656.
Indeed, even on the meaning and scope of the expression "course of employment", the Supreme Court again accepted the extended meaning placed on it by Lord Denning in Nayarro v. Moregrand Ltd., (see paragraph 14), which aspect, of course, need not be elaborated here.
14. Applying the above test to the facts of the present case, it would be evident that the owner is liable. The driver, when he gave lift to the deceased, was acting in the course of his employment and that by itself, according to the dicta of Lord Denning, is sufficient to make the employer liable. It should also be noticed that, in this case, it was not the owner's case, nor is there any evidence to show that the driver was expressly prohibited from taking in passengers. It must, therefore, be held, even applying the other test adopted by the other two Law Lords in Young's case, that the driver had the right to give leave to the deceased to ride in the vehicle, and the right to give such leave must be held to be within the ostensible authority of the driver. It is true that in the case before the Supreme Court, i.e., Pushpabai v. Ranjit G. & P. Company (supra), the person who was driving the car was the Manager of the Company, but, it does not appear from the decision that only because he was a Manager, his authority to give leave to the deceased to ride in the vehicle was inferred. The more salutary test, however, appears to be the one enunciated by Lord Denning in Young's case, as indeed emphasized by the Supreme Court and which is also said to be consistent with modern times.
15. We, accordingly, hold that the Bench decision in Machiraju Visalakshi's case (supra) cannot be treated as good law in view of the decision of the Supreme Court in Pushpabais case (supra).
16. Mr. A.L. Narayana Rao, the learned Counsel for the respondent, placed reliance upon a recent Bench decision of this Court in New India Assurance Co. Ltd., Vijayawada v. K. Venkateshwara Rao in support of his contention that the owner cannot be held liable in such circumstances. We are afraid, the said decision does not come to his rescue. Firstly, it was a suit instituted by the owner of the lorry against the Insurance Company for recovery of the amount spent by him on repairs of the lorry which had met with an accident, and also for recovery of the amount which he was obliged to pay to the widow of the driver, under the Workmen's Compensation Act. One of the defences taken up by the Insurance Company was that, at the time the accident occurred, the driver was carrying certain unauthorised persons as passengers, which amounts to a violation of the Insurance-policy and, therefore, the insurer is not liable. While dealing with this contention, the Bench held, on the basis of the evidence on record, that the owner of the lorry had given specific directions to the driver not to carry any passengers for hire and, therefore, it must be held that the driver was not acting in the course of his employment when he permitted certain persons to travel in the lorry as passengers. However, the Bench held that the said circumstance cannot be a ground for exonerating the Insurance Company from its liability under the policy. We are unable to see any relevance the said principle has to the facts of the case herein. Moreover, the said decision does not refer to, or consider the decision of the Supreme Court in Pushpabais case (supra). There is no doubt a reference to the decision of the Supreme Court in Sitaram's case (supra), and also to the Bench decision, of this Court in Machiraju Visalakshi's case (supra); but, since the question at issue herein did not arise there, we do not find any discussion relevant to the problem faced by us.
17. In this appeal we have not gone into the question of liability of the Insurance Company, and we do not purpose to express any opinion on that aspect. The Insurance Company was held not liable by the Claims Tribunal, and there was no appeal by the claimants against it. No doubt the Insurance Company was made the 6th respondent in the appeal preferred by the owner of the lorry (C.M.A. No. 271/1977), but no argument was addressed by the owner, or by the claimants, about the liability of the Insurance Company. Above all, in this Letters Patent Appeal the Insurance Company is not made a party. In the absence of the insurer being a party to this Letters Patent Appeal, and without hearing it, it is not possible for us to go into, or pronounce upon the liability or otherwise of the Insurance Company. We, therefore, desist from expressing any opinion on the said aspect.
18. This decision of ours may appear to be rather harsh upon the owners of the vehicles who may complain that they are being made liable for the tortious acts of their drivers and that there is no justification for holding the owners liable for the unauthorised acts of their drivers done by them for their own private benefit; but, one must also look to the other side. By merely asking for, or agreeing to get into a lorry or vehicle, the persons so getting in cannot be said to have agreed to, or acquiesced in the rash or negligent driving leading to the accident, and to their death or injury ; it cannot be said that by travelling in the vehicle, they are in any manner contributing to the accident. Whether authorised or unauthorised, the passengers are not responsible for the negligent or rash driving of the driver of the vehicle, which leads to an accident, and/or injury or death. Just because a person is unauthorised passenger, he cannot be said to have bargained away his life or limb for the sake of a mere lift. If he suffers an injury or dies, he or his legal representatives, as the case may be, must be compensated for it, and the person who must compensate is the driver and his employer, on the theory of vicarious liability, provided the driver was acting in the course of employment at the relevant time. Indeed, the very concept of vicarious liability means that the owner is liable for the tortious acts committed by his servant or agent, in the course of his employment. Holding the owner liable only for those acts of the servant/agent, which are done within his authority, is nothing new ; such acts of the agent must be deemed to be the acts of the principal himself, under the law of agency. The real purport of the doctrine of vicarious liability comes in only where the owner is held liable for the tortious acts committed by the servant/agent in the course of his employment. Such a concept is not only consistent with the recent trend of law, as pointed out by the Supreme Court, but is also in the larger public interest, and must be given effect to by the Courts.
19. For the above reasons, the Letters Patent Appeal is allowed, the judgment of the learned single Judge is set aside, and the judgment and order of the Claims Tribunal is restored. The appellants shall be entitled to their costs throughout.